DURA AUTOMOTIVE SYSTEMS INC - 10-K Annual Report

Back to GetFilings.com

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

OR

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

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 0-21139

DURA AUTOMOTIVE SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)

DELAWARE 38-3185711
(State of Incorporation) (I.R.S. Employer Identification No.)
2791 RESEARCH DRIVE 48309
ROCHESTER HILLS, MICHIGAN (Zip Code)
(Address of Principal Executive Offices)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(248) 299-7500
---------------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
CLASS A COMMON STOCK, PAR VALUE $.01 PER SHARE
---------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934, during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

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

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]

As of March 1, 2005, 18,665,286 shares of Class A Common Stock of the
Registrant were outstanding. The aggregate market value of the Class A Common
Stock of the Registrant as of June 30, 2004 (based upon the last reported sale
price of the Common Stock at that date by the Nasdaq National Market System),
excluding shares owned beneficially by affiliates, was approximately
$147,123,747.

Information required by Items 10, 11, 12, 13 and 14 of Part III of this
Annual Report on Form 10-K incorporates by reference information (to the extent
specific sections are referred to herein) from the Registrant's Proxy Statement
for its annual meeting to be held May 18, 2005 (the "2005 Proxy Statement").
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

DURA AUTOMOTIVE SYSTEMS, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

1

PART I

ITEM 1. BUSINESS

(A) GENERAL DEVELOPMENT OF BUSINESS

GENERAL

Dura Automotive Systems, Inc. (a Delaware Corporation) is a holding company
whose predecessor was formed in 1990. Dura Automotive Systems, Inc. and its
subsidiaries (collectively referred to as "Dura") is a leading independent
designer and manufacturer of driver control systems, seating control systems,
glass systems, engineered assemblies, structural door modules and exterior trim
systems for the global automotive and recreation & specialty vehicle ("RVSV")
industries.

Dura sells its products to every major North American, Asian and European
automotive original equipment manufacturer ("OEM") and most RVSV OEM. Dura has
59 manufacturing and product development facilities located in the United States
("U.S."), Brazil, Canada, China, Czech Republic, France, Germany, Mexico,
Portugal, Slovakia, Spain and the United Kingdom ("UK"). Dura also has a
presence in Japan and India through alliances or technical licenses. Dura has
initiated plans to open a manufacturing facility in Romania to support Eastern
European automakers in 2005.

Over the past fifteen years, the automotive components supply and RVSV
industries have undergone significant consolidation and globalization as OEMs
reduced their supplier base. In order to lower costs and improve quality, OEMs
are awarding sole-source contracts to full-service suppliers who are able to
supply larger portions of a vehicle on a global basis. The OEMs' criteria for
supplier selection include not only cost, quality and responsiveness, but also
full-service design, engineering and program management capabilities. OEMs are
seeking suppliers capable of providing complete systems and modules rather than
suppliers who only provide separate component parts. In addition, they require
suppliers to have the capability to design and manufacture their products in
multiple geographic markets.

In response to these trends, over the past several years Dura pursued a
disciplined growth strategy that has provided a wider variety of product,
manufacturing and technical capabilities. Dura has broadened its geographic
coverage and strengthened its ability to supply products on a global basis. As a
full-service supplier with strong OEM relationships, Dura expects to continue to
benefit from the supply base consolidation trends.

Dura has continued to focus on the diversification of its customer and
product base. Approximately 58% of 2004 revenues were generated from sales to
the top automotive OEM's in the world including, General Motors ("GM"), Ford,
Toyota, DaimlerChrysler, Renault-Nissan, Volkswagen, PSA Group ("PSA"), Honda
and BMW. In addition, the trend toward module sourcing has enabled Dura to
expand its customer base to include large Tier 1 automotive suppliers, including
Lear Corporation ("Lear") and Johnson Controls, Inc. ("JCI") which accounted for
approximately 12% of Dura's revenues in 2004. Additionally, approximately 15% of
Dura's revenues in 2004 came from RVSV customers including Fleetwood, Winnebago,
Coachmen, Jayco and numerous aftermarket distribution channels.

INDUSTRY TRENDS

Dura's performance and growth is directly related to certain trends within
the automotive and RVSV markets.

Increasing Electronic and Technological Content. The electronic and
technological content of vehicles continues to expand, largely driven by
consumer demand for greater vehicle performance, functionality, and affordable
convenience options as a result of increased communication abilities in vehicles
as well as increasingly stringent regulatory standards for energy efficiency,
emissions reduction, and increased safety. Mechatronics, which generally refers
to systems that integrate software algorithms and electronic circuit boards to
drive mechanical actuation devices, continues to grow in popularity as a means
of optimizing vehicle performance by allowing intelligent interaction between
driver commands and vehicle response decisions. This environment will present
substantial growth opportunities to suppliers with the capability to design both
the

2

mechanical and electronic portions of mechatronic systems and deliver optimized
system performance and value to OEM customers.

Utilization of Light-Weight Materials. Concern over the environmental
impact of the automotive industry has been growing, resulting in European and
U.S. regulations of vehicle emissions becoming more stringent. The automotive
manufacturer's need to improve overall fuel economy in vehicles has led to the
trend toward minimizing vehicle weight. The use of light-weight materials such
as aluminum is on the rise and heavier traditional materials such as steel and
iron are being replaced whenever possible.

Platform Derivatives. Automakers continue to expand the number of unique
models offered from vehicle platforms to provide increased options for vehicle
buyers. Platform derivatives often include a combination of sedans, wagons,
SUVs, crossovers, minivans, hatchbacks and a growing number of other
configurations on a single platform. Additionally, many vehicle platforms offer
certain vehicle models that deliver higher performance through the use of
lighter weight materials and enhanced power trains. The expansion in derivatives
drives an overall increase in platform volume, comprised of several lower volume
model configurations. To maintain a competitive cost structure while expanding
offerings, automakers seek innovative technologies and suppliers that can offer
solutions based on flexible manufacturing concepts that reduce capital and
tooling expenses. Suppliers with technologies that contribute to space frame
architectures for door and body components are able to provide significant
investment advantages for platform derivatives below 100,000 units.

Optimizing Product Value. In order to continue to respond to increasingly
competitive market pricing dynamics, suppliers are establishing comprehensive
plans to remove waste from the enterprise value stream. This includes optimizing
the design of products and manufacturing processes above previous generations
for improved efficiency and value. Suppliers with the ability to generate
savings through processes such as six sigma, lean manufacturing, value analysis
and value engineering ("VA/VE"), and warranty analysis, coupled with strong
execution and disciplines in advanced product quality planning ("APQP") will be
successful in offering continuous improvement in value.

System and Module Sourcing. OEMs increasingly seek suppliers capable of
manufacturing complete systems or modules of a vehicle rather than suppliers who
only produce individual components. By outsourcing complete systems or modules,
OEMs are able to reduce their costs associated with the design and integration
of different components and improve quality by enabling their suppliers to
assemble and test major portions of the vehicle prior to beginning production.
Often the modules are supplied to OEM factories on a just-in-time basis, which
involves the complex sequencing of discrete modules with specific vehicle build
schedules. Suppliers with in-line-vehicle-sequencing ("ILVS") capabilities will
have access to these contract opportunities. Dura continues to invest in and
expand its ILVS capabilities for products such as complex glass modules and
exterior trim packages.

While current OEM purchasing strategies do not allow for single outsourcing
of interior mechanical assemblies, Dura believes that the trend toward module
outsourcing will change this environment. As a result, the buying power of
emerging interior suppliers will increase rapidly as sourcing responsibility is
delegated through modular outsourcing. This anticipated change in outsourcing
strategies will present Dura with significant opportunities to provide "one stop
shopping" for complete automotive and RVSV interior mechanisms.

Global Expansion into Emerging Markets. Regions such as Asia, Latin
America and Eastern Europe are expected to experience significant growth in
vehicle demand over the next ten years. Suppliers and OEMs are positioning
themselves to reach these emerging markets in a cost-effective manner by
expanding their geographic presence and marketing products that can be designed
in one vehicle center but customized, produced and sold in many different
geographic markets, thereby reducing design costs and take full advantage of
low-cost manufacturing locations. OEMs increasingly are requiring their
suppliers to have the capability to design and manufacture their products in
multiple geographic markets.

Ongoing Industry Consolidation. OEMs have continued to reduce their
supplier base, awarding sole-source contracts to full-service suppliers. As a
result, OEMs currently work with a smaller number of suppliers

3

each of which supplies a greater proportion of the total vehicle. Suppliers with
sufficient size, geographic scope and financial resources can best meet these
requirements. This environment provides an opportunity to grow by obtaining
business previously provided by other non full-service suppliers and by
acquiring suppliers that further enhance product, manufacturing and service
capabilities. OEMs rigorously evaluate suppliers on the basis of product
quality, cost control and reliability of delivery, product design capability,
financial strength, new technology implementation, facilities and overall
management. Suppliers that obtain superior ratings are considered for new
business. These OEM practices resulted in significant consolidation of component
suppliers in certain segments. Dura believes that opportunities exist for
further consolidation within the vehicle component supply industry. This is
particularly true in Europe, which has many suppliers with relatively small
market shares.

BUSINESS STRATEGY

Dura's primary business objective is to capitalize on the technology,
globalization and system sourcing trends in the automotive supply and RVSV
industries in order to be the leading provider of the systems Dura supplies to
customers worldwide.

Presently, Dura is focusing on the following key strategies:

Focus on Core Businesses. Dura continues to bolster its organic growth
strategy by seeking complimentary partnerships and investments that provide a
competitive advantage and growth opportunities for its core businesses. As part
of this strategy, Dura has placed a greater emphasis on achieving higher returns
on its investments, as well as on each business line.

Accelerate Investments in New Product and Process Technologies. Dura
intends to accelerate its investments in new product and manufacturing process
technologies to strengthen and differentiate its product portfolio. Dura also
intends to continue its efforts to develop innovative products and manufacturing
processes to serve its customers better globally and improve its product mix and
profit margins.

Maximize Low-Cost Production Capabilities. Dura continuously implements
strategic initiatives designed to improve product quality while reducing
manufacturing costs. In addition, Dura continually evaluates opportunities to
maximize its facility and asset utilization worldwide. Dura also seeks to
capitalize on opportunities to expand its manufacturing capabilities in low-cost
regions of the world, which are anticipated to develop into future domestic
sales to emerging markets.

Reduce Debt. Dura strives to continuously strengthen its balance sheet by
increasing its cash flow and applying proceeds from growth initiatives toward a
reduction of debt. Dura has worked to maximize its cash flow available for debt
reduction by boosting operating efficiencies, implementing a disciplined capital
expenditure program and divesting non-core operating assets. Dura intends to
continue leveraging its existing asset base through a disciplined capital
expenditure program focused on return on invested capital. In addition, Dura
intends to focus on strategic partnerships and alliances that do not require
significant upfront cash investments to pursue new business opportunities.

COMPANY HISTORY

Dura was formed in 1990 by Hidden Creek Industries ("Hidden Creek"), Onex
Corporation ("Onex"), J2R Corporation ("J2R") and certain others for the purpose
of acquiring certain operating divisions from the Wickes Manufacturing Company
("Wickes"). Onex is a publicly owned holding company based in Canada. Hidden
Creek is a private industrial management company that is a partnership comprised
of Onex and J2R and is based in Minneapolis, Minnesota. Hidden Creek has
provided certain strategic, financial and acquisition services to Dura and has
been its strategic partner since Dura's inception, which has enabled its
management to devote their attention to Dura's existing operations. After
assisting Dura achieve a sufficient size and stability, Onex, J2R and Hidden
Creek divested their remaining Class B common stock in 2004 and are no longer
affiliated with Dura.

Dura's primary business objective has been to capitalize on the
consolidation, globalization and system sourcing trends in the automotive supply
and recreation vehicle industries in order to be the leading provider of
4

the systems Dura supplies to OEMs worldwide. A key element of Dura's growth
strategy has been to add to its ability to provide complete systems to its OEM
customers. Historically, Dura's growth has come from acquisitions. Throughout
the 1990's and early 2000's Dura's growth through acquisition included acquiring
the following businesses:

In addition to the acquisitions listed above, through the integration
process Dura identified certain businesses as non-core and divested them as
appropriate. Today all of these acquired businesses have been fully integrated
and are managed as one company.

PRODUCTS

Dura is a leading independent designer and manufacturer of driver control
systems, seating control systems, glass systems, engineered assemblies,
structural door modules and exterior trim systems for the global automotive and
RVSV industries.

Although a portion of Dura's products are sold directly to OEMs as finished
components, Dura uses most of its products to produce "systems" or "subsystems,"
which are groups of component parts located throughout the vehicle which operate
together to provide a specific vehicle function.

5

A brief summary of each of Dura's principal product categories is set forth
below:

CUSTOMERS AND MARKETING

In 2004, approximately 72 percent of total worldwide light vehicle
production occurred outside of North America. Dura derives a significant amount
of its revenues from sales to OEMs located outside of North America. In Europe,
Dura supplies its products primarily to Volkswagen, GM, Ford, BMW, PSA (Peugeot
and Citroen), Renault-Nissan, and DaimlerChrysler.

The North American automotive industry is led by GM, Ford, Toyota and
DaimlerChrysler. New domestic manufacturers as a whole accounted for
approximately 28 percent of the market in 2004. In North America, Dura supplies
its products primarily to Ford, GM, DaimlerChrysler and Lear. Dura has also
expanded its global presence through acquisitions and internal growth. Dura has
added new customers and increased penetration into certain existing customers
such as BMW, Volkswagen, Toyota, Renault-Nissan, Honda and PSA.

See Note 11 to the consolidated financial statements for more information
relating to revenues and long-lived assets for each geographic area referenced
above.

6

The following is a summary of Dura's significant customers based on sales
from continuing operations for 2004, 2003 and 2002:

Dura's automotive customers award contracts for a particular car platform,
which may include more than one car model. Such contracts range from one year to
the life of the models, which is generally three to seven years, and do not
require the customer to purchase a minimum number of parts. Dura also competes
for new business to supply parts for successor models. Because Dura supplies
parts for a broad cross-section of both new and mature models, its reliance on
any particular model is minimized. Dura manufactures products for many of the
most popular car, light truck, sport utility and mini-van models in North
America and Europe.

Major customers for Dura's RVSV products include Fleetwood, Winnebago,
Thor, Damon, Jayco, Coachmen, Monaco, Motor Coach and Navistar. Sales and
engineering groups are located in Elkhart, Indiana to service these customers.
Customers in the RVSV products market generally negotiate annual pricing
contracts without firm order commitments or long purchase order lead times.
Therefore, the RVSV group does not have a significant backlog of orders at any
particular time.

Dura's sales and marketing efforts are designed to create overall awareness
of its engineering, design and manufacturing capabilities and to have Dura
considered and selected to supply its products for new and redesigned models of
its OEM customers. Dura's sales and marketing staff works closely with Dura's
design and engineering personnel to prepare the materials used for bidding on
new business as well as to provide a consistent interface between Dura and its
key customers. Most of Dura's sales and marketing personnel have engineering
backgrounds which enable them to understand and participate in the design and
engineering aspects of acquiring new business as well as ongoing customer
service. Dura currently has sales and marketing personnel located in every major
region in which it operates. When deemed appropriate, Dura also participates in
industry trade shows and advertises in industry publications.

DESIGN AND ENGINEERING SUPPORT

Dura believes that engineering service and support are key factors in
successfully obtaining new business. Dura utilizes program management with
dedicated program teams, which have full design, development, test and
commercial issues under the operational control of a single manager. In
addition, Dura has established cross-functional teams for each new program to
ensure efficient product development from program conception through product
launch.

Dura continuously expands the multi-geographic-flexibility of its product
development and manufacturing capabilities to support its customer's
globalization plans. In doing so, Dura offers design, sales and

7

manufacturing support near key customers in the major regions of the world. In
2004, Dura added a technology and sales center in Velizy, France, near the
design headquarters of Renault-Nissan, and PSA; began construction of a new
manufacturing facility in Timisoara, Romania; and relocated its RVSV business
from Rockford, Illinois, to Elkhart, Indiana, central to RVSV customers.

Separate advanced technology groups have been established to maintain
Dura's position as a technology leader. The advanced technology groups have
developed many innovative features in Dura's products, including many features
that were developed in conjunction with Dura's customers. Dura utilizes computer
aided designs ("CAD") in the design process, which enables Dura to share data
files with its customers via compatible systems during the design stage, thereby
improving function, fit and performance within the total vehicle. Dura also
utilizes CAD links with its manufacturing engineers to enhance manufacturability
and quality of the designs early in the development process.

Dura has approximately 600 patents granted or in the application process.
The patents granted expire over several years beginning in 2005. Although Dura
believes that, taken together, the patents are significant, the loss or
expiration of any particular patent would not be material to Dura.

MANUFACTURING

Dura employs a number of different manufacturing processes. Dura primarily
utilizes flexible manufacturing cells in both the mechanism and cable assembly
processes. Manufacturing cells are clusters of individual manufacturing
operations and work stations grouped in a circular configuration, with the
operators placed centrally within the configuration. This provides flexibility
by allowing efficient changes to the number of operations each operator
performs. When compared to the more traditional, less flexible assembly line
process, cell manufacturing allows Dura to maintain its product output
consistent with its customers' requirements and reduce the level of inventory.
Dura also pioneered and employs "Super-cell" configurations which locate primary
capital equipment centrally among secondary assembly equipment, to reduce
in-process inventory, improve quality, and reduce manufacturing costs.

Assemblies such as jacks, parking brake levers, gear shifters and latches
consist of between 5 and 50 individual components, which are attached to form an
integrated mechanism. Although these assembly operations are generally performed
in manufacturing cells, high-volume, automated assembly machines are employed
where appropriate. The assembly operations construct the final product through
hot or cold forging machines, staking and riveting the component parts. A large
portion of the component parts are purchased from Dura's outside suppliers.
However, Dura manufactures its own stampings, a process that consists of passing
sheet metal through dies in a stamping press to form the metal into
three-dimensional parts. Dura produces stamped parts using single-stage and
progressive dies in presses, which range up to 800 tons. Through continuous
improvement teams, which stress employee involvement, manufacturing processes
are regularly upgraded to increase flexibility and efficiency; improve operating
safety and quality; and minimize changeover times of the dies and fixtures.

Dura's seat systems, door systems and body components use similar processes
coupled with roll forming and stretch bending. Roll forming is a continuous
process in which coiled steel is passed through a series of rollers which
progressively form the metal into a consistently shaped section. When viewed
from one end, the profile may be u-shaped for glass channels and roof rails.
More complex shapes are processed for upper door profiles. Stretch bending
involves clamping a length of the rolled profile at numerous points and then
twisting or bending the metal to form contoured surfaces, such as door frames.
Door and body components also require welding, grinding and polishing operations
to provide a smooth finish.

Cables are manufactured using a variety of processes, including plastic
injection molding, extrusion, wire flattening, spring making and zinc
diecasting. Wire is purchased from outside suppliers and then woven into
contra-twisted layers on tubular stranders and bunching machines to produce up
to 19-wire stranded cable. Corrosion resistance is provided by a proprietary,
ceramic coating applied during the stranding process. The cable then is
plastic-coated by an extrusion process to provide a smooth, low friction surface
that results in high efficiency and durability. Conduit is then produced by
flattening and coiling wire, which is then extruded with a protective coating.
Proprietary strand and conduit cutting machines enable efficient processing.
8

Assembly operations are arranged in cells to minimize inventory, improve
quality, reduce scrap, improve productivity and enhance employee involvement.
The cables are assembled with various attachments and end fittings that allow
the customer to install the cables to the appropriate mating mechanisms.

Dura's glass systems broadly include two categories of products:
mechanically framed glass and molded framed glass. Mechanically framed glass
products are produced by putting glass panes through a series of processes,
which include adding handles, hinges, aluminum and steel based edge frame
assemblies, electrical connectors and fasteners. The production of molded framed
glass products involves two primary molding processes: Reaction Injection
Molding ("RIM") and High Pressure Injection Molding ("HPIM"). Both processes
provide a "surround" to the glass panes that incorporates the styling, sealing
and mechanical attachment features of the product. Dura's ability to utilize
either process provides OEMs with the maximum advantage in terms of cost,
styling imperatives and robustness. The glass panes used in the production of
Dura's glass systems are primarily purchased from outside suppliers. Dura
produces certain of its RVSV glass panes internally.

Dura utilizes frequent communication meetings at all levels of
manufacturing to provide training and instruction as well as to assure a
cohesive, focused effort toward common goals. Dura encourages employee
involvement in all aspects of its business and views such involvement as a key
element in its success. Dura also aggressively pursues involvement from its
suppliers, which is necessary to assure a consistent high quality and on time
delivery of raw materials and components. Where practical, Dura utilizes
component suppliers in the design and prototype stages of the new product
development to facilitate the most comprehensive, state-of-the-art designs
available. Dura has made substantial investments in manufacturing technology and
product design capability to support its products. This includes modern
manufacturing equipment, fineblanking, sophisticated CAD systems and
highly-trained engineering personnel. These advanced capabilities enable Dura to
deliver superior product quality at globally competitive prices.

QUALITY

The automotive industry has established a global quality management system
requirement known as ISO/TS 16949:2002. This requirement was specifically
designed by the automotive sector and is recognized by all automotive
manufacturers worldwide. Independent auditors must register suppliers as ISO/TS
16949:2002 compliant, no later than December 31, 2006 as a condition of doing
business with specific automotive customers. Third party registration can only
be obtained by demonstrating continuous improvement in manufacturing capability
and support processes. Dura achieved ISO/TS 16949:2002 registrations at over 90%
of its global automotive facilities as of December 31, 2004. The remaining
facilities will transition by December 31, 2005. In addition, Dura maintains
registration to the ISO 9000 quality management system for facilities that serve
the RVSV markets.

Dura's facilities have been recognized by its customers with various
awards, such as the DaimlerChrysler Gold Award, GM Target for Excellence, Honda
Delivery Performance Award, Isuzu Quality Achievement Award, Lear Hall of Fame
Award, Nissan Quality Master Award, Nummi Delivery Performance Award, Subaru
Quality Achievement Award, Toyota Quality Performance Achievement and Volkswagen
Premier Supplier Award. Dura has also received an "A" rating at Peugeot and
Renault.

Moreover, Dura's RVSV group has been the recipient of Fleetwood Industries
Circle of Excellence: Quality Supplier Award for many years as well as WDA
Supplier of the Year.

Dura maintains an environmental management system at its automotive
manufacturing locations. The system meets the ISO-14001 standard and is
registered by independent auditors. The system assists Dura in being a clean
corporate citizen and provides a framework for managing environmental aspects.

COMPETITION

Dura operates in a highly competitive environment. Dura principally
competes for new business at the beginning of the development of new models and
upon the redesign of existing models. New model development generally begins two
to five years before the OEMs manufacture such models for the public.

9

Once a supplier has been designated to supply parts for a new program, an OEM
usually will continue to purchase those parts from the designated producer for
the life of the program, although not necessarily for a redesign. Competitive
factors in the market for Dura's products include product quality and
reliability, cost, timely delivery, technical expertise and development
capability, new product innovation and customer service. The number of Dura's
competitors has decreased due to the supplier consolidation resulting from
changing OEM policies. Some of our competitors have substantial size, scale and
financial resources.

In addition, there is substantial and continuing pressure by the OEMs to
reduce costs, including the cost of products purchased from outside suppliers
such as Dura. Historically, Dura has been able to generate sufficient production
cost savings to offset these price concessions.

Dura is a leading independent designer and manufacturer of driver control
systems, seating control systems, glass systems, engineered assemblies,
structural door modules, exterior trim systems and appliances for the global
automotive and RVSV industries. Set forth below is a brief summary of Dura's
most significant competitors in several major product categories:

(1) Driver Control Systems:

Automotive Cables. Dura is the leading producer of automotive cables in
both North American and Europe. Major competitors include Teleflex Incorporated
("Teleflex"), Ficosa International, S.A. ("Ficosa") and Hi-Lex Corporation
("Hi-Lex") in North America and Kuester & Co. GmbH ("Kuester"), Ficosa and Sila
Holding Industriale ("Sila") in Europe.

Parking Brakes. Dura is the leading producer of parking brakes in North
America. Traditional parking brake competitors include Flex-N-Gate, Magna
International Inc. ("Magna"), Ficosa, Otscon and Aisin Seiki. Competitors in the
electronic parking brake market include Kuester, TRW and Siemens VDO.

Transmission Shifters. Dura is a leading producer of transmission shifters
in North America. Major competitors include Grand Haven Stamped Products,
Teleflex, and Tokai Rika. Dura's competitors in Europe include Teleflex, Ficosa,
and Sila.

Pedal Systems. Dura's primary competitors in pedal systems include
Teleflex, KSR and Magna in North America.

(2) Seating Control Systems:

Dura's primary competitors are the in-house operations of Lear, Intier
(Magna), JCI, and Faurecia. In addition, independent competitors include Brose
Fahrzeagteile Glaswerke GmbH & Co. ("Brose"), C. Rob Hammerstein GmbH & Co. KG,
Fischer and Keiper Recaro GmbH & Co.

(3) Glass Systems:

Dura's primary competitors in glass systems are Magna, Pilkington, PPG
Inc., Guardian Industries, Inc. and Hehr International, Inc. in North America
and Sekurit and Pilkington in Europe.

(4) Engineered Assemblies:

Hood Latches. Dura is a leading producer of hood latches in North America.
Dura's primary competitors include Magna, Aisen Seiki and Pyeong HWA.

Jacks. Dura is a leading producer of jacks in North America. Dura's
primary competitors include Flex-N-Gate and Bosal.

Tire Carriers. Dura is a leading producer of tire carriers in North
America. Dura's primary competitors are Flex-N-Gate, Mivrag Cold Forming
Technology Ltd., Edscha and Fabco.

Hardware. Dura is a leading producer of RVSV hardware in North America.
Dura's primary competitors include Cequent (TriMas Corporation), Shelby
Industries and Lippert Components, Inc.

10

(5) Structural Door Modules:

In this product group, Dura competes in door modules and window lift
systems as well as other product areas. The primary competitors for door modules
in North America and Europe include Brose, Delphi, ArvinMeritor, Magna, Matra,
Wagon, Amerimax and Phillips and for window lift systems in North America, Dura
competes with ArvinMeritor, Brose, Hi-Lex and Magna.

(6) Exterior Trim Systems:

Dura's primary competitors in Europe for roof trim moldings, side frame
trim, A, B, & C-pillar cappings and body color trim include WKW and Aries.

(7) Appliances:

Dura's primary competitors for RVSV appliances include Suburban
Manufacturing (division of Airxcel) and Maytag Appliances/Magic Chef RV
Products.

Dura's competitors in Asia and South America include many of the same
companies listed above by product category, who have opened facilities or formed
joint ventures in these regions with existing manufacturers.

SUPPLIERS AND RAW MATERIALS

Dura's principal raw materials include (1) coil steel and resin in
mechanism production, (2) metal wire and resin in cable production and (3) glass
in window systems. Dura does not manufacture or sell primary glass. The types of
steel Dura purchases include hot and cold rolled, galvanized, organically coated
and aluminized steel. In general, the wire used by Dura is produced from steel
with many of the same characteristics with the exception that it has a higher
carbon content. Dura utilizes plastic resin to produce the protective coating
for cables and transmission shifter components. Dura employs just-in-time
manufacturing and sourcing systems enabling it to meet customer requirements for
faster deliveries while minimizing its need to carry significant inventory
levels. Dura does not carry inventories of raw materials or finished products in
excess of those reasonably required to meet production and shipping schedules.

Overall, raw steel and purchased parts with steel content accounted for the
most significant component of Dura's raw materials costs in 2004. Steel prices
increased significantly during 2004 to historical highs. This increase had a
negative impact on Dura's gross profit in 2004. Due to increased steel prices in
2004 and continuing into 2005, Dura has entered into shorter term, 3 to 6 month
supply agreements in 2005 with steel service centers. These arrangements do not
contain minimum purchase requirements. These relationships allow Dura to order
precise quantities and types of steel for delivery on short notice, thereby
permitting Dura to maintain lower inventories. In addition, Dura occasionally
"spot buys" steel from service centers to meet customer demand, engineering
changes or new part tool trials. Dura established a five-point strategy early in
2004 in an effort to mitigate the effect of rising steel prices on its results
of operations. This strategy included delaying increases from raw material
suppliers; working to minimize the increase from suppliers of purchased parts
with steel content; selling steel offal and scrap at the highest possible price;
increase cost reduction programs throughout the business; and lastly negotiate
price relief from customers. Dura's results of operations will continue to be
adversely affected by higher steel prices unless it is successful in passing
along these increases to Dura's customers or otherwise offset these operating
costs.

Other raw materials or components purchased by Dura include tools and dies,
motors, fasteners, springs, rivets and rubber products, all of which are
available from numerous sources.

PRODUCT WARRANTY MATTERS

Dura faces an inherent business risk of exposure to product liability and
warranty claims in the event that its products fail to perform as expected and
such failure of the products results, or is alleged to result, in bodily injury
and/or property damage. Dura cannot assure that it will not experience any
material warranty or product liability losses in the future or that it will not
incur significant costs to defend such claims. In addition,
11

if any of the products are or are alleged to be defective, Dura may be required
to participate in a recall involving such products. Each OEM has its own policy
regarding product recalls and other product liability actions relating to its
suppliers. However, as suppliers become more integrally involved in the vehicle
design process and assume more of the vehicle assembly functions, OEMs are
increasingly looking to their suppliers for contribution when faced with product
liability claims. A successful claim brought against Dura or a requirement to
participate in a product recall may have a material adverse effect on Dura's
business. OEMs are also increasingly requiring their outside suppliers to
guarantee or warrant their products and bear the costs of repair and replacement
of such products under new vehicle warranties. Depending on the terms under
which Dura supplies products to an OEM, an OEM may hold Dura responsible for
some or all of the repair or replacement costs of defective products under new
vehicle warranties, when the product supplied did not perform as represented.

Dura carries insurance for certain legal matters including product
liability; however, Dura no longer carries insurance for recall matters, as the
cost and availability for such insurance, in the opinion of management, is cost
prohibitive or not available. Dura has established reserves for matters that are
probable and estimable in amounts management believes are adequate to cover
reasonable adverse judgments not covered by insurance. Based upon the
information available to management and discussions with legal counsel, it is
the opinion of management that the ultimate outcome of the various legal actions
and claims that are incidental to Dura's business will not have a material
adverse impact on the consolidated financial position, results of operations, or
cash flows of Dura; however, such matters are subject to many uncertainties, and
the outcomes of individual matters are not predictable with assurance.

The following are recent product warranty matters:

In June 2000, Dura settled two product recall matters involving speed
control and secondary hood latches manufactured for Ford through a cost sharing
agreement with Ford. In connection with the settlement, Dura paid $40.0 million
($20 million in July 2000, followed by three equal payments totaling $20 million
in July 2001, July 2002 and July 2003) to resolve Ford's claims relating to
these recalls.

In September 2002, Dura settled a product recall matter involving a parking
brake mechanism manufactured for Land Rover (Ford). In connection with the
settlement, Dura agreed to pay Pound Sterling 2.8 million (approximately $4.5
million) and in return, Dura received a release from further liability as a
result of this recall.

In December 2002, Renault-Nissan issued a claim to Dura requesting payment
for a recall of its Almera and Tino vehicles due to alleged malfunctions of the
parking brake mechanism. This recall included approximately 125,000 vehicles
manufactured world-wide. In September 2004, Dura settled this matter with
Renault-Nissan. Dura agreed to pay Euro 3.0 million (approximately $3.7 million)
and in return, Dura received a release from further liability as a result of
this recall.

In September 2004, Lear issued a letter to Dura requesting participation by
Dura relating to a recall of Ford Windstar vehicles involving seat latches. The
recall included approximately 335,000 vehicles. Dura has conducted its own
investigation of this matter and believes it has met Lear's specific design
specifications. Based on these facts, Dura believes it has no responsibility for
this recall.

In January 2005, Ford notified Dura of a field service action on its
Explorer vehicle due to alleged malfunction of the rear liftgate that was
manufactured by Dura. The field action was instituted by Ford in September 2004
on a maximum of 956,000 vehicles. Ford has alleged that Dura has some
responsibility for the malfunction but has not quantified what amount it is
seeking from Dura. Dura is currently reviewing the materials provided to it by
Ford in January 2005, and has recently requested additional information from
Ford with respect to this matter. Based on its investigation of the matter to
date, Dura does not believe that it has any responsibility for this matter;
however, because Dura's review of this matter is not complete, it is unable to
predict the ultimate resolution.

12

ENVIRONMENTAL MATTERS

Dura is subject to the requirements of federal, state, local and foreign
environmental and occupational health and safety laws and regulations. While
Dura devotes resources designed to maintaining compliance with these
requirements, there can be no assurance that Dura operates at all times in
complete compliance with all such requirements. Dura could be subject to
potentially significant fines and penalties for any noncompliance that may
occur. Although Dura has made and will continue to make capital and other
expenditures to comply with environmental requirements, Dura does not expect to
incur material capital expenditures for environmental controls in 2005.

Some of Dura's operations generate hazardous substances. Like all
manufacturers, if a release of hazardous substances occurs or has occurred at or
from any of Dura's current or former properties or at a landfill or another
location where Dura has disposed of wastes, Dura may be held liable for the
contamination, and the amount of such liability could be material.

In 1995, the Michigan Department of Environmental Quality requested that
Dura and Wickes conduct an environmental investigation at and around Dura's
Mancelona, Michigan facility, which Dura acquired from Wickes in 1990. The
investigation detected trichloroethylene ("TCE") in groundwater at the facility
and offsite locations. Dura has not used TCE since it acquired the Mancelona
facility, although TCE may have been used by prior operators. Dura has arranged
and paid for the sampling of several residential drinking water wells in the
area and for the replacement of drinking water wells found to contain TCE above
drinking water standards. Dura may incur additional costs to further
investigate, monitor or remediate the contamination, and possibly to provide
additional alternative drinking water supplies. In April 1999, Dura settled
certain potential claims asserted by a ski resort with respect to possible
future impact on the resort's water supply wells.

The Mancelona groundwater contamination matter is subject to an indemnity
from Wickes. In connection with Dura's acquisition of certain assets from Wickes
in 1990, Wickes agreed to indemnify Dura with respect to certain environmental
liabilities associated with Wickes' operation of the subject facilities subject
to a $750,000 basket up to a $2.5 million cap (which has not been reached). Dura
will be obligated to indemnify Wickes with respect to any liabilities above such
cap. Wickes has acknowledged that Dura made a timely and adequate claim for
indemnification with respect to the Mancelona matter, and has been paying
indemnification claims relating to the Mancelona matter, subject to a
reservation of rights.

In 1998, Dura acquired Universal. The seller in the Universal transaction
agreed to indemnify Dura for environmental liabilities arising from the
operation of the acquired facilities prior to the acquisition. Following the
acquisition, pursuant to the indemnity, the seller continued to address certain
environmental matters, including the cleanup of TCE-contaminated soil at Dura's
Butler, Indiana facility. In 1998, the seller filed for reorganization under the
federal bankruptcy laws and ceased performing its obligations under the
indemnity. In March 1999, the seller requested bankruptcy court approval to
reject their contractual indemnity obligations to Dura. Subject to Dura's right
to seek repayment in the bankruptcy proceeding, it is likely that Dura will be
responsible for completing the cleanup at its Butler facility. Although Dura
cannot provide complete assurance, it does not expect costs to complete the
cleanup will be material.

In 1998, Dura entered into a partial consent decree to settle its liability
for past costs at the former Excel Main Street Well Field Site in Elkhart,
Indiana, where TCE was found in a municipal well field near the Elkhart
facility. Dura is one of several potentially responsible parties involved at the
site. Under the settlement, Dura has a continuing payment obligation for
operation and maintenance of a groundwater treatment system and for a soil vapor
extraction system. These obligations will likely continue for several years. The
annual cost to operate these systems is not material. In addition, Dura expects
to receive certain payments from other parties involved at the site.

Dura is involved as a potentially responsible party at several waste
disposal sites. Although the environmental laws provide for joint and several
liability at such sites, liability is typically allocated among the viable
parties involved. Dura believes that it has no liability at some of these sites,
and that adequate reserves are in place for current estimates of Dura's share of
liability at the other sites. Dura cannot provide complete

13

assurance, however, that its liability at these sites will not materially exceed
the current amount of Dura's reserves.

SEASONALITY

Essentially all of Dura's business is directly related to automotive and
RVSV OEM production, which has demonstrated seasonality and is highly cyclical
and depends on general economic conditions, consumer spending and confidence.
Any significant reduction in vehicle production by automotive and RVSV OEMs
would have a material adverse effect on Dura's business.

Dura's business is moderately seasonal as its primary North American
customers historically halt operations for approximately two weeks in July for
vacations and model changeovers and its European customers generally reduce
production during the month of August. Accordingly, third quarter results may
reflect this cyclicality.

EMPLOYEES

As of December 31, 2004, Dura employed approximately 8,800 people in North
America, 7,200 in Europe and 1,000 in other regions of the world. A substantial
number of Dura's employees are members of unions. In the U.S. and Canada, Dura
has collective bargaining agreements with several unions including: the UAW; the
CAW; and the International Association of Machinists and Aerospace Workers.
Virtually all of Dura's unionized facilities in the U.S. and Canada have a
separate contract with the union which represents the workers employed there,
with each such contract having an expiration date independent of its other labor
contracts. The majority of Dura's European and Mexican employees are members of
industrial trade union organizations and confederations within their respective
countries. Many of these organizations and confederations operate under national
contracts, which are not specific to any one employer. Although Dura believes
that its relationship with its union employees is generally good, there can be
no assurance that Dura will be able to negotiate new agreements on favorable
terms. In the event Dura is unsuccessful in negotiating new agreements, these
facilities could be subject to work stoppages, which could have a material
adverse effect on the operations of Dura.

EXECUTIVE OFFICERS OF THE REGISTRANT

Lawrence A. Denton joined Dura as President and Chief Executive Officer in
January 2003. From 1996 until 2002, Mr. Denton was President of Dow Automotive,
a $1.3 billion business unit of The Dow Chemical Company. Prior to that, he
spent 24 years with Ford, where he held a variety of senior management positions
with increasing responsibility in manufacturing, quality, sales and marketing,
engineering and purchasing. Mr. Denton is also currently a member of the Board
of Directors of the Original Equipment Suppliers Association, the Motor &
Equipment Manufacturer's Association, Kettering University, the Detroit Economic
Club and Autotemp Company.

14

Keith R. Marchiando was appointed Vice President and Chief Financial
Officer effective March 1, 2005. Mr. Marchiando served as Dura's vice president
and corporate controller since joining Dura in April 2003. Prior to joining
Dura, in 1997 Mr. Marchiando joined The Dow Chemical Company and was
instrumental in the formation of Dow Automotive, a $1.3 billion business unit,
where he held the position of global finance director. Mr. Marchiando began his
career at Ford in 1990, where he held finance positions of increasing
responsibility in manufacturing, purchasing and product development.

John J. Knappenberger has served as Vice President of Administration of
Dura since December 1995. Mr. Knappenberger assumed responsibility for sales and
marketing in June 1997 and information technology in March 1999. Prior to
joining Dura, Mr. Knappenberger was Director of Quality for Carrier
Corporation's North American Operations, manufacturers of heating and air
conditioning systems, from February 1992. From 1985 to 1991, Mr. Knappenberger
was employed by TRW, a supplier of components to the automotive industry,
beginning as Director of Quality in 1985 for the Steering and Suspension
Division and becoming Vice President, Quality for the Automotive Sector in 1990.

Theresa L. Skotak has served as Vice President of Human Resources since May
2002. From March 1999 until May 2002 Ms. Skotak served as Director of Corporate
Human Resources and from April 1997 until March 1999, Ms. Skotak served as
Director of Human Resources for Excel. Prior to that Ms. Skotak was the Director
of Human Resources, N.A. for the Assembly and Test Division of Lucas Industries.

Milton D. Kniss has served as Vice President of Operations of Dura since
January 1994 and President of the Control Systems Division since October 2000.
From April 1991 until January 1994, Mr. Kniss served as Director of Michigan
Operations for Dura. Mr. Kniss joined the predecessor in 1981 as a Divisional
Purchasing Manager, served as Plant Manager of East Jordan, Michigan from 1982
until 1986, and Plant Manager of Gordonsville, Tennessee until 1991.

Alfred C. Liddell has served as Vice President of Dura and President of the
Atwood Mobile Products Division since January 2004. From July 2003 to January
2004, Mr. Liddell was Vice President of Operations of the Atwood Mobile Products
Division. From October 2000 to July 2003, Mr. Liddell served as Vice President
of Control Systems, Europe. Mr. Liddell joined Dura in 1986 and served as
Director of Operations for the Cable Business Unit from 1996 to 1998, the
Shifter Business Unit from 1998 to 1999 and the Body and Glass N.A. Business
Unit from 1999 to 2000.

Jurgen von Heyden has served as Vice President of Dura and President of the
Body & Glass Division since February 2000. Mr. von Heyden served as Managing
Director of Dura Body & Glass Systems GmbH in Plettenberg, Germany from March
1999 to February 2000. Prior to the acquisition of Excel, Mr. von Heyden served
as the Managing Director/CEO of Excel's European Body & Glass division since
1997. Before joining Excel he was the Managing Director of Happich, later
becoming Becker-Group. Mr. von Heyden has been in the automotive supplier
industry since 1984 with professional training of Diplom-Ingenieur and Diplom-
Wirtschaftsingenieur.

There are no family relationships between any of Dura's executive officers
or directors.

(B) SAFE HARBOR PROVISIONS

Forward-looking statements included in this Form 10-K are made pursuant to
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are typically identified by use of the words
such as "may," "will," "should," "expect," "anticipate," "believe," "estimate"
and similar words, although some forward-looking statements may be expressed
differently. There are certain important factors that could cause future results
to differ materially from those that might be anticipated based on some of the
statements made in this report. Investors are cautioned that all forward-looking
statements involve risks and uncertainty. Actual results may differ materially
from those in forward-looking statements as a result of various factors
including, but not limited to:

- Reliance on Major Customers and Selected Vehicle Programs. Dura's
largest customers, Ford, GM, Lear, Volkswagen and DaimlerChrysler,
represented approximately 19 percent, 12 percent, 11 percent, 9 percent
and 8 percent, respectively, of Dura's 2004 revenues. Any significant
reduction in the demand
15

for vehicles manufactured by Ford, GM, DaimlerChrysler or Volkswagen or products
manufactured by Lear for which Dura produces components and assemblies or for
certain other key vehicle models or groups of related vehicle models sold by any
of Dura's other major customers could have a material adverse effect on
Dura's existing and future revenues and net income.

- Industry Cyclicality and Seasonality. The automotive and RVSV end
customer markets are highly cyclical and both markets are dependent on
consumer spending. Economic factors adversely affecting automotive and
RVSV production and consumer spending could adversely impact Dura. Dura
typically experience decreased volumes during the third quarter of each
year due to the impact of scheduled OEM plant shutdowns in July and
August for vacations and new model changeovers. In addition, because Dura
has significant fixed production costs, relatively modest declines in its
customers' production levels can have a significant adverse impact on its
profitability.

- Failure to Obtain Business Related to New and Redesigned Model
Introductions. The failure of Dura to obtain new business on new models
or to retain or increase business on redesigned existing models could
adversely affect Dura.

- Highly Competitive Vehicle Supply Industry. The vehicle component supply
industry is highly competitive. There is substantial and continuing
pressure from the OEMs to reduce costs, including the cost of products
purchased from outside suppliers such as Dura. If Dura is unable to
generate sufficient cost savings in the future to offset price
reductions, its gross margin could be adversely affected.

- Failure to Obtain Raw Materials at Favorable Prices. Numerous raw
materials are used in the manufacture of Dura's products. Dura's
principal raw materials include (1) coil steel and resin in mechanism
production, (2) metal wire and resin in cable production and (3) glass in
window systems. The types of steel Dura purchases includes hot and cold
rolled, galvanized, organically coated and aluminized steel. Overall, raw
steel and purchased parts with steel content accounted for the most
significant component of Dura's raw material costs in 2004. The domestic
steel industry has experienced substantial financial instability due to
numerous factors, including energy costs and the effect of foreign
competition and demand. The prices of Dura's principal raw materials
continually fluctuate. Moreover, Dura may be materially and adversely
affected by the failure of its suppliers to perform as expected. In
addition, Dura may be unable to pass on the increased costs of raw
materials to its customers. Dura's inability to pass on increased raw
material costs to its customers could adversely affect its business,
results of operations and financial condition.

- Product Liability Exposure. Dura faces an inherent business risk of
exposure to product liability claims from its customers and consumers in
the event that its products allegedly fail to perform to specifications
or result in personal injury or death, and there can be no assurance that
Dura will not experience material product liability losses in the future
or that Dura will not incur significant costs to defend these claims. In
addition, if any Dura designed products are or are alleged to be
defective, Dura may be required to participate in a product recall
involving those products. Each OEM has its own policy regarding product
recalls and other product liability actions relating to its suppliers.
However, as suppliers become more integrally involved in the vehicle
design process and assume more system integration functions, OEMs are
increasingly looking to their suppliers for contribution when faced with
product recalls, product liability or warranty claims. Dura cannot assure
you that the future costs associated with providing product warranties
will not be material.

- Work Stoppages and Other Labor Matters. A significant number of Dura's
employees are unionized. Dura cannot assure you that it will not
encounter strikes, further unionization efforts or other types of
conflicts with labor unions or its employees. Any of these factors may
have an adverse effect on Dura or may limit Dura's flexibility in dealing
with its workforce. In addition, many OEMs and their suppliers have
unionized workforces. Work stoppages or slow-downs experienced by Dura's
customers or their other suppliers could result in slow-downs or closures
of assembly plants where Dura's products are included in assembled
vehicles. In the event that one or more of Dura's customers experience a
material work stoppage, such work stoppage could have a material adverse
effect on Dura's business.
16

- Substantial Leverage. Dura has a significant amount of indebtedness.
Dura's ability to service its indebtedness will depend on its future
performance, which will be affected by prevailing economic conditions and
financial, business, regulatory and other factors. Certain of these
factors are beyond Dura's control. In addition, since a portion of Dura's
indebtedness is at variable rates of interest or has been effectively
converted to a variable rate, Dura will be vulnerable to increases in
interest rates, which could have a material adverse effect on its results
of operations, liquidity and financial condition.

- Significant Foreign Operations. Dura has significant operations in
Europe, Canada and Latin America. Certain risks are inherent in
international operations, including:

- The difficulty of enforcing agreements and collecting receivables
through certain foreign legal systems;

- Foreign customers may have longer payment cycles than customers in the
U.S.;

- Tax rates in certain foreign countries may exceed those in the U.S. and
foreign earnings may be subject to withholding requirements or the
imposition of tariffs, exchange controls or other restrictions;

- General economic and political conditions in countries where Dura
operates may have an adverse effect on its operations in those
countries;

- The difficulties associated with managing a large organization spread
throughout various countries; and

- Required compliance with a variety of foreign laws and regulations.

In addition, Dura generates a significant portion of its revenues and
incurs a significant portion of its expenses in currencies other than U.S.
dollars. To the extent that it is unable to match revenues received in foreign
currencies with costs paid in the same currency, exchange rate fluctuations in
any such currency could have an adverse effect on Dura's financial results. The
strengthening of the European currencies in relation to the U.S. dollar had a
positive impact on Dura's revenues in 2004 and a negative impact on gross profit
and consolidated debt levels.

(C) AVAILABLE INFORMATION

Dura maintains a website on the Internet at www.duraauto.com. Dura makes
available free of charge through its website, by way of a hyperlink to a
third-party SEC filing website, its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to those
reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange
Act. Such information is available as soon as such reports are filed with the
SEC.

ITEM 2. PROPERTIES

Dura's world headquarters is located in Rochester Hills, Michigan. Dura
leases this facility, which is approximately 100,000 square feet, a portion of
which is used for product development activities.

Dura believes that the productive capacity and utilization of its
facilities is sufficient to allow Dura to conduct its operations in accordance
with its business strategy. All of Dura's owned facilities are subject to

17

liens under its revolving credit facility ("2003 Credit Agreement"). The
following table shows the principal facilities of Dura as of December 31, 2004:

Dura's manufacturing facilities have a combined square footage in excess of
7,305,000, approximately 82 percent of which is owned and approximately 18
percent is leased. Going forward, Dura will continue to evaluate its worldwide
capacity utilization and may consolidate the operations of certain of its
manufacturing facilities and technical centers.

In some cases, several of Dura's manufacturing sites, technical centers
and/or product development centers and sales activity offices are located at a
single multi-purpose site. As of December 31, 2004, Dura had sites that contain
technical design and development capabilities in each of the major regions that
support customers around the world.

Dura believes that substantially all of its property and equipment is in
good condition and that it has sufficient capacity to meet its current
manufacturing needs. Utilization of Dura's facilities varies with automotive and
RVSV production volumes and general economic conditions.

ITEM 3. LEGAL PROCEEDINGS

Dura is involved in routine litigation incidental to the conduct of its
business. Dura does not believe that any litigation to which it is currently a
party will have a material adverse effect on its business or financial
condition.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of stockholders during the fourth
quarter of 2004.

18

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Class A Common Stock is traded on The Nasdaq Stock Market, Inc.
("Nasdaq") under the symbol "DRRA." The following table sets forth, for the
periods indicated, the low and high closing sale prices for the Class A common
stock as regularly quoted on Nasdaq.

As of March 1, 2005, there were approximately 906 holders of record of the
outstanding Class A common stock.

Dura has not declared or paid any dividends on its Common Stock in the past
and does not anticipate paying dividends in the foreseeable future. Any future
payment of dividends is within the discretion of the Board of Directors and will
depend upon, among other factors, the capital requirements, operating results
and financial condition of Dura. In addition, Dura's ability to pay dividends is
limited under the terms of the $400.0 million 8 5/8 percent senior unsecured
notes ("Senior Notes") indenture and $458.5 million and Euro 100.0 million 9
percent senior subordinated notes ("Subordinated Notes") indenture and by the
terms of its 2003 Credit Agreement. See "Management's Discussion and Analysis of
Results of Operations and Financial Condition-Liquidity and Capital Resources."

ITEM 6. SELECTED FINANCIAL DATA

The selected consolidated financial data for Dura presented below for, and
as of the end of each of the years in the five-year period ended December 31,
2004, is derived from Dura's Consolidated Financial Statements which have been
audited by Deloitte & Touche LLP, an independent registered public accounting
firm. The consolidated financial statements at December 31, 2004 and 2003 and
for each of the three years in the period ended December 31, 2004 and the
independent auditor's report thereon are included elsewhere in this report. The
consolidated financial statements at December 31, 2002, 2001 and 2000 and for
the years ended December 31, 2001 and 2000 are not included herein. This
selected consolidated financial data should be read in conjunction with
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" and Dura's Consolidated Financial Statements and Notes to
Consolidated Financial Statements, included elsewhere in this report. The
comparability of the information in the table below is impacted by (i) the
adoption of certain new accounting pronouncements, including Statement of
Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets" ("SFAS No. 142") on January 1, 2002, Financial Accounting Standards
Board ("FASB") Interpretations ("FIN") 46, "Consolidation of Variable Interest
Entities -- An Interpretation of Accounting Research Bulletin No. 51", ("FIN
46") effective December 31, 2003, SFAS No. 145, "Rescission of FASB Statements
No. 4, 44, and 64; Amendment of FASB Statement No. 13; and Technical
Corrections" and SFAS No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities", ("SFAS No. 146") effective January 1, 2003, (ii) Dura's
disposal of the Mechanical Assemblies Europe business, which has been accounted
for as a discontinued operation, and (iii) the Creation Group acquisition, all
of which are more fully discussed in the Management's

19

Discussion and Analysis of Results of Operations and Financial Condition section
included elsewhere in this report.

- ---------------

(a) Dura adopted the provisions of FIN 46 effective December 31, 2003, resulting
in the reclassification of the $55,250 of Mandatorily Redeemable Trust
Preferred Securities from the mezzanine section of the balance sheet to a
long-term liability.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION

This discussion should be read in conjunction with Dura's Consolidated
Financial Statements and the Notes to Consolidated Financial Statements included
elsewhere in this report.

OVERVIEW

Dura's results of operations were impacted by several global economic
factors during 2004 including vehicle production volumes, steel pricing and
foreign exchange.

20

Total North American automotive vehicle production in 2004 was
approximately 15.7 million units as compared to 15.9 million units in 2003 and
16.4 million units in 2002. North American vehicle production during 2004
continued to be favorably impacted by the ongoing sales incentives provided by
the OEM's; however, the domestic OEM's continued to lose market share to the new
domestic OEMs. European vehicle production was approximately 20.1 million units
in 2004, 19.5 in 2003 and 19.2 million in 2002. Approximately 59% of Dura's
total revenues were generated in North America during 2004 as compared to 60% in
2003 and 67% in 2002. The ratio decreased slightly versus the prior year as the
impact of the stronger Euro and lower North American automotive production more
than offset the impact of increased North American sales due to the full-year
impact of the Creation Group acquisition completed in July 2003 and a record
production year in the recreation vehicle industry. Dura's cost of production is
higher in Europe as compared to North America; thus, its future profitability
could be impacted as volumes change and /or as new business is awarded, should
its current cost structure and revenue mix by geographic location remain
consistent.

Steel prices escalated in 2004 resulting in a negative impact to Dura's
results of operations for the year. Dura established a five-point strategy early
in 2004 in an attempt to mitigate the effect on gross profit; however, it was
unable to completely offset the increases. In addition to the cost reduction
efforts relating to steel, Dura is taking numerous actions to improve its cost
structure, including the various restructuring activities and plant
consolidations undertaken during 2004. These actions will continue into 2005 as
Dura works to maximize its facility and asset utilization worldwide. From a
geographic standpoint, the impact of steel was felt more severely in Dura's
domestic operations as steel pricing increased more significantly in North
America during 2004.

Given the significance of Dura's operations in Europe, the strengthening of
the Euro against the dollar during 2004 resulted in a $116.5 million positive
impact to revenue as compared to 2003. Should the strength of the Euro stabilize
at its current levels, or continue to increase in 2005, Dura would anticipate
continued growth of the proportion of its revenues from Europe, resulting in a
corresponding increase in cost of sales and downward pressure on gross margin
for the reasons noted above. The strength of the Euro also has a significant
impact on Dura's consolidated debt levels. At December 31, 2004, approximately
$143.3 million of Dura's debt is denominated in Euro or other foreign
currencies. The strengthening of the European currencies during 2004 had an
approximate $10.4 million negative impact on Dura's total debt levels, holding
all other factors constant.

COMPARISON OF YEAR ENDED DECEMBER 31, 2004 TO YEAR ENDED DECEMBER 31, 2003

Revenues. Revenues for the year ended December 31, 2004 increased by
$111.7 million, or 4.7 percent, to $2,492.5 million from $2,380.8 million for
2003. Factors that favorably impacted revenue in 2004 included the strengthening
of foreign currencies in relation to the U.S. dollar of $116.5 million, the
effect of the acquisition of the Creation Group of $84.8 million and a
strengthening RVSV market of $18.8 million. Factors that offset these favorable
items were the impact of lower North American production volumes and selling
price reductions.

Cost of Sales. Cost of sales for the year ended December 31, 2004
increased by $124.9 million, or 6.0 percent, to $2,214.1 million from $2,089.2
million for 2003. Cost of sales as a percentage of revenues for the year ended
December 31, 2004 was 88.8 percent, which is slightly up compared to 87.8
percent for 2003. The increase is due to the strengthening of foreign currencies
in relation to the U.S. dollar of approximately $96.7 million, the acquisition
of the Creation Group and the impact of elevated steel pricing. These increases
were partially offset by operational and purchasing cost reductions.

Selling, General, and Administrative Expense. Selling, general, and
administrative expenses for the year ended December 31, 2004 decreased by $4.4
million, or 2.9 percent, to $150.5 million from $154.9 million in 2003. As a
percentage of revenue, selling, general and administrative expenses decreased to
6.0 percent for 2004, compared to 6.5 percent for 2003. The decrease as a
percentage of sales is primarily the result of Dura's continued effort to
redeploy or eliminate certain of its selling, general and administrative
expenses and lower employee benefit costs, partially offset by the impact of
foreign exchange. Dura's goal is to reallocate certain of

21

its selling, general and administrative expenses to further support organic
growth while maintaining a 6.0 percent expense as a percentage of revenue.

Facility Consolidation and Other Charges.

Facility Consolidations: During the fourth quarter of 2004, Dura closed
its Bondoufle, France sales and engineering facility and relocated to Velizy,
France, which is located near its French OEM customers. This action resulted in
a restructuring charge of $0.3 million related to facility closure and other
costs.

During the second quarter of 2004, in order to improve capacity
utilization, Dura announced a plan to consolidate certain of its Body & Glass
Division product lines in Europe. This action resulted in a restructuring charge
of $1.5 million and $2.5 million in the second and third quarters of 2004,
respectively, relating primarily to severance, which completed the facility
consolidation charges to be incurred related to this action. Additionally, there
was a $0.2 million adjustment to decrease the reserve in the fourth quarter of
2004. Costs incurred and charged to the reserve as of December 31, 2004 amounted
to $2.1 million in severance related costs. In addition, during the second
quarter of 2004, Dura announced a plan to exit two manufacturing facilities in
Rockford, Illinois and combine the business with other Dura operations. Dura
also announced the relocation of its Atwood Mobile Products division
headquarters from Rockford, Illinois to Elkhart, Indiana. These actions resulted
in a restructuring charge of $1.7 million, $1.2 million, and $0.8 million in the
second, third and fourth quarters of 2004, relating primarily to severance.
Costs incurred and charged to the reserve as of December 31, 2004 amounted to
$1.7 million in severance related costs. Dura also expensed as incurred
approximately $0.3 million and $1.8 million of facility closure and other costs
in the third quarter and fourth quarters of 2004, of which $0.2 million is
related to equipment write-downs. Dura expects to incur additional restructuring
charges related to the exit of the Rockford facilities of approximately $0.9
million relating to severance and facility closure costs through December 31,
2005.

During the first quarter of 2004, in order to improve capacity utilization,
Dura announced a plan to exit its Brookfield, Missouri facility and combine the
business with other Dura operations. This action resulted in a restructuring
charge of $0.1 million, $0.4 million, $0.2 million and $0.2 million in the
first, second, third and fourth quarters of 2004, respectively, relating
primarily to severance. Dura also expensed as incurred approximately $0.1
million of facility closure and other costs in each of the second, third and
fourth quarters of 2004. Costs incurred and charged to the reserve as of
December 31, 2004 amounted to $0.2 million in severance related costs. Dura
expects to incur $0.3 million of additional restructuring charges associated
with the exit of the Brookfield facility through December 31, 2005. In addition,
during the first quarter of 2004, Dura announced a plan to exit its Pikeville,
Tennessee facility and combine the business with other Dura operations. This
action resulted in a restructuring charge of $0.4 million and $0.5 million in
the first and second quarters of 2004, respectively, relating to severance.
Costs incurred and charged to the reserve as of December 31, 2004 amounted to
$0.8 million in severance related costs. In continuation of these actions, Dura
expensed as incurred approximately $0.1 million of facility closure and other
costs in the second and third quarters of 2004, combined. Netted in this charge
is an additional $0.2 million related to fixed asset write-downs and a $0.2
million adjustment to reduce the facility consolidation charge in the third
quarter. Dura does not expect to incur any additional restructuring charges
related to the exit of the Pikeville facility.

During the fourth quarter of 2003, Dura announced a plan to exit its Melun,
France facility and combine the business with other Dura operations. This action
resulted in a fourth quarter 2003 restructuring charge of $0.7 million relating
to severance. Dura also expensed as incurred approximately $0.1 million of
facility closure and other costs incurred during the fourth quarter of 2003.
Costs incurred and charged to the reserve as of December 31, 2004 amounted to
$0.7 million in severance related costs. In continuation of these actions, Dura
recorded an additional restructuring charge of $0.2 million for facility closure
and other costs and adjusted the severance reserve down by $0.2 million in the
second quarter of 2004. Dura may incur an immaterial amount of additional
restructuring charges related to facility and other costs associated with the
exit of the Melun facility through March 31, 2005.

During the fourth quarter of 2003, in order to improve capacity
utilization, Dura announced a plan to restructure its Pamplona, Spain facility
and combine certain businesses with other Dura operations. This

22

action resulted in a fourth quarter 2003 restructuring charge of $1.3 million,
including severance of $1.2 million and facility closure and other costs of $0.1
million. Dura also expensed as incurred approximately $0.2 million of facility
closure and other costs incurred during the fourth quarter of 2003. These costs
are reflected as facility consolidation and other charges in the 2003
consolidated statement of operations and were accounted for in accordance with
SFAS No. 146. Costs incurred and charged to the reserve as of December 31, 2003
amounted to $1.1 million in severance related costs. Dura expects to incur no
additional restructuring charges related to this action.

In the fourth quarter of 2003, Dura adopted a plan to sell its Cauvigny,
France facility for total proceeds of $0.8 million, and to contribute $2.1
million to the buyer. This action resulted in a fourth quarter 2003
restructuring charge of $2.2 million, including the planned payments to the
buyer of $2.1 million and facility closure and other costs of $0.1 million. Dura
also expensed as incurred approximately $2.4 million during the fourth quarter
of 2003, consisting principally of asset impairment. Costs incurred and charged
to the reserve as of December 31, 2004 amounted to $2.3 million in facility
closure and other costs including the impact of foreign exchange. In
continuation of these actions, Dura expensed as incurred approximately $0.3
million and $0.1 million in the first and second quarters of 2004, respectively,
of additional facility closure and other costs, which completed the facility
consolidation charges to be incurred related to this action.

During the third quarter of 2003, Dura continued its plan to exit certain
of its non-core products and exited its thermostats product line in North
America. Dura previously exited its European thermostat business in conjunction
with the divestiture of its Mechanical Assemblies Europe business. This North
American action resulted in a third quarter 2003 restructuring charge of $0.6
million, including asset impairment of $0.2 million and other facility
consolidation costs of $0.4 million. These costs are reflected as facility
consolidation and other charges in the 2003 consolidated statement of operations
and were accounted for in accordance with SFAS No. 146. Dura does not expect to
incur any additional restructuring charges related to the exit of the North
American thermostats product line.

During the third quarter of 2003, in order to improve capacity utilization,
Dura announced a plan to exit its Mount Carroll, Illinois facility and combine
the business with other Dura operations. This action resulted in a third quarter
2003 restructuring charge of $0.4 million relating to severance. In continuation
of these actions, Dura recorded $0.2 million of additional restructuring charges
related to severance in the fourth quarter of 2003. Dura also expensed as
incurred certain facility closure and other costs of $0.2 million during the
third quarter of 2003. These costs are reflected as facility consolidation and
other charges in the 2003 consolidated statement of operations and were
accounted for in accordance with SFAS No. 146. Costs incurred and charged to the
reserve as of December 31, 2003 amounted to $0.6 million in severance costs.
Dura does not expect to incur any additional restructuring charges related to
the exit of the Mount Carroll facility.

During the second quarter of 2003, Dura announced a plan to exit its
Fulton, Kentucky facility. This action resulted in a second quarter 2003
restructuring charge of $1.5 million, including severance of $0.3 million and
facility closure and other costs of $1.2 million. In continuation of these
actions during 2003, Dura recorded $1.3 million of additional restructuring
charges, including severance of $1.2 million and facility closure and other
costs of $0.1 million. Dura also expensed as incurred approximately $2.5 million
and $3.4 million of certain facility closure and other costs incurred during the
third and fourth quarters of 2003, respectively. During 2004, Dura continued
such actions and recorded $0.2 million and $0.4 million in the first and third
quarters, respectively, of additional restructuring charges for severance
related costs. Dura also expensed as incurred $0.1 million, $0.2 million, and
$0.1 million in the first, second and fourth quarters of 2004, respectively,
related to severance costs and $0.2 million of facility closure and other costs
in the first quarter of 2004. Costs incurred and charged to the reserve as of
December 31, 2004 amounted to $1.7 million in severance related costs and $1.4
million in facility closure and other costs. Dura does not expect to incur any
additional restructuring charges related to the exit of the Fulton facility.

Costs incurred and charged to the reserve related to the consolidation of
the Livonia, Michigan facility as of December 31, 2003 amounted to $0.7 million
in severance related costs. The decision to exit the Livonia facility resulted
in a reduction in the work force of approximately 10 salaried and 88 hourly
employees, all of

23

which have been terminated as of December 31, 2003. The restructuring actions
were completed by December 31, 2003.

During the third quarter of 2002, in order to improve capacity utilization,
Dura announced a plan to combine its Benton Harbor, Michigan and Butler, Indiana
facilities in North America. This action resulted in a third quarter 2002
restructuring charge of $1.1 million, including severance of $0.6 million and
facility closure costs of $0.5 million, accounted for in accordance with
Emerging Issues Task Force ("EITF") 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (Including
Certain Costs Incurred in a Restructuring)" ("EITF 94-3"). Additionally, Dura
expensed as incurred certain equipment relocation costs of $0.1 million. The
decision to close the Benton Harbor facility resulted in a reduction in the work
force of approximately 12 salaried and 44 hourly employees, all of which have
been terminated as of December 31, 2003. The restructuring actions were
completed by September 30, 2003. Dura expensed as incurred certain equipment
relocation costs of $0.3 million and other costs of $0.4 million during the
fourth quarter of 2002, and an additional $0.1 million of other costs during the
first quarter of 2003 related to the closure of the Benton Harbor facility.
Costs incurred and charged to the reserve as of December 31, 2003 amounted to
$0.6 million in severance related costs and $0.5 million in facility closure
costs. These costs are reflected as facility consolidation and other charges in
the 2003 consolidated statement of operations.

Asset Impairments: During 2004, Dura recorded $7.1 million in asset
impairment charges related to building write-downs for the facility
consolidation actions taken during 2004 and 2003. These costs are reflected as
facility consolidation and other charges in the consolidated statement of
operations and were accounted for in accordance with SFAS No. 144, "Accounting
for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144").

Amortization Expense. Amortization expense for the year ended December 31,
2004 was $0.4 million, which is unchanged compared to $0.4 million in 2003.

Interest Expense. Interest expense for the year ended December 31, 2004
increased by $7.6 million, or 9.3 percent, to $89.5 million from $81.9 million
in 2003. The increase in interest expense is due to the prospective
classification of the Minority Interest - Dividends on Trust Preferred
Securities included as a component of interest expense on a gross basis in
accordance with Dura's adoption of FIN 46 effective December 31, 2003. In
addition, interest expense increased due to higher average interest rates on
LIBOR based borrowings during 2004.

Loss on Early Extinguishment of Debt. The loss for the year ended December
31, 2003 represents the write-off of debt issuance costs in connection with the
termination of Dura's existing amended and restated $1.15 billion credit
agreement entered into in March 1999 ("1999 Credit Agreement") (see Liquidity
and Capital Resources below).

Income Taxes. The effective tax rate for the year ended December 31, 2004
was 22.7 percent compared to the 2003 effective tax rate of 34.0 percent. The
2004 rate was favorably impacted by a tax holiday benefit in the Czech Republic,
the impact of tax planning strategies and the overall mix of income and loss
between the U.S. and foreign operations. In addition, during 2004, Dura
experienced higher earnings in certain jurisdictions where effective tax rates
are lower than the U.S. effective tax rate.

Minority Interest. Minority interest for the year ended December 31, 2004
has been classified as a component of interest expense on a gross basis in
accordance with Dura's adoption of FIN 46 effective December 31, 2003. Minority
interest for the year ended December 31, 2003 represents dividends, net of
income tax benefits, on the $55.3 million 7 1/2 percent Convertible Trust
Preferred Securities ("Preferred Securities") which were issued on March 20,
1998.

Income from Continuing Operations. Income from continuing operations for
the year ended December 31, 2004 decreased by $12.7 million, or 50.4 percent, to
$12.5 million from $25.1 million in 2003. The decrease is primarily due to
weaker North American automotive production volumes and elevated steel pricing
as described above. These decreases to income from continuing operations were
partially offset by a decrease in the provision for income taxes, also described
above.
24

Discontinued Operations. Discontinued operations for the year ended
December 31, 2004 was a loss of $0.7 million, an improvement of $2.1 million, or
73.2 percent from the loss of $2.8 million in 2003. These amounts relate to
adjustments associated with the March 2003 divestiture of Dura's Mechanical
Assemblies Europe business. The adjustments principally related to the
finalization of certain retained liabilities of the discontinued operations in
2004. We do not believe that future charges will be significant.

The Mechanical Assemblies Europe divestiture was treated as a discontinued
operation under SFAS No. 144. The results of operations of the Mechanical
Assemblies Europe business and the related charges have been classified as
discontinued operations in the consolidated statements of operations.

At December 31, 2004, Dura had remaining reserves related to the
divestiture of the Mechanical Assemblies Europe business of $18.7 million,
primarily related to the facilities retained by Dura, principally lease costs,
and are anticipated to be completed in 2021. Also included in the $18.7 million
is $3.0 million of acquisition integration reserves related to facility
closures. The reserve as of December 31, 2004 includes an increase related to
foreign exchange of $0.5 million and net adjustments to the long-term lease
commitment and other reserves of $1.2 million. Costs incurred and charged to the
reserve during 2004 included $1.3 million related to facility closure and other
costs and a $0.6 million adjustment to decrease the reserve.

New Accounting Pronouncements. In December 2004, the FASB revised SFAS No.
123, "Accounting for Stock-Based Compensation" ("SFAS No. 123")with SFAS No.
123R: Share Based Payment ("SFAS No. 123R"). This Statement supercedes
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees" ("APB No. 25"), which resulted in no stock-based employee
compensation cost related to stock options if the options granted had an
exercise price equal to the market value of the underlying common stock on the
date of grant. SFAS No. 123R requires recognition of employee services provided
in exchange for a share-based payment based on the grant date fair market value.
Dura is required to adopt SFAS No. 123R as of July 1, 2005. As of the effective
date, this Statement applies to all new awards issued as well as awards
modified, repurchased, or cancelled. Additionally, for stock-based awards issued
prior to the effective date, compensation cost attributable to future services
will be recognized as the remaining service is rendered. Dura may also elect to
restate prior periods by applying a modified retrospective method to periods
prior to the effective date. Dura is in the process of determining which method
of adoption it will elect (see Note 6 to the consolidated financial statements
for SFAS No. 123 required disclosures).

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs" ("SFAS
No. 151"). This Statement requires that abnormal amounts of idle facility
expense, freight, handling costs, and spoilage be recognized as current period
charges. The Statement also requires that fixed production overhead be allocated
to conversion costs based on the normal capacity of the production facilities.
SFAS No. 151 is effective for inventory costs incurred by Dura beginning in
fiscal year 2006. Dura does not believe the adoption of this Statement will have
a material impact on its consolidated financial position or results of
operations.

In May 2004, the FASB issued FASB Staff Position ("FSP") FAS 106-2,
"Accounting and Disclosure Requirements Related to the Medicare Prescription
Drug, Improvement and Modernization Act of 2003". This FSP provides guidance on
accounting for the effects of the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 ("the Act"), to employers that sponsor postretirement
health care plans where the prescription drug benefits available under the plan
are actuarially equivalent to Medicare Part D and thus qualify for the subsidy
under the Act and the expected subsidy will offset or reduce the employer's
share of the cost of the underlying postretirement prescription drug coverage on
which the subsidy is based. The FSP also requires certain disclosures related to
the impact of the Act. Dura adopted this FSP on July 1, 2004. The adoption of
this FSP did not have a material impact on Dura's consolidated balance sheet or
results of operations.

In December 2003, the FASB issued SFAS No. 132(R), "Employers' Disclosures
about Pensions and Other Postretirement Benefits -- An Amendment of FASB
Statements No. 87, 88, and 106" ("SFAS No. 132(R)")a revision to SFAS No. 132,
"Employers' Disclosure about Pensions and Other Postretirement Benefits -- An
Amendment of FASB Statements No. 87, 88, and 106" ("SFAS No. 132"). SFAS No.
132(R) does not change the measurement or recognition related to pension and
other postretirement plans required by SFAS No. 87, "Employers' Accounting for
Pensions" ("SFAS No. 87"),
25

SFAS No. 88, "Employers' Accounting for Settlements and Curtailments of Defined
Benefit Pension Plans and for Termination Benefits" ("SFAS No. 88"), and SFAS
No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions"
("SFAS No. 106") and retains the disclosure requirements contained in SFAS No.
132. SFAS No. 132(R) requires additional disclosures about the assets,
obligations, cash flows and net periodic benefit cost of defined benefit pension
plans and other defined benefit postretirement plans. SFAS No. 132(R) is
effective for financial statements with fiscal years ending after December 15,
2003, with the exception of disclosure requirements related to foreign plans and
estimated future benefit payments which are effective for fiscal years ending
after June 15, 2004. Dura has included the required disclosures in Note 12 to
its consolidated financial statements. The adoption of SFAS No. 132(R) did not
impact Dura's consolidated balance sheet or results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity"
("SFAS No. 150"). SFAS No. 150 requires issuers to classify as liabilities (or
assets in some circumstances) freestanding financial instruments that embody
obligations for the issuer. Generally, SFAS No. 150 is effective for financial
instruments entered into or modified after May 31, 2003 and is otherwise
effective at the beginning of the first interim period beginning after June 15,
2003. The adoption of SFAS No. 150 did not have a significant impact on Dura's
consolidated balance sheet or results of operations.

In January 2003, the FASB issued FIN 46. The Interpretation addresses the
consolidation of variable interest entities, including entities commonly
referred to as special purpose entities. Dura is required to apply FIN 46 to all
new variable interest entities created or acquired after January 31, 2003. In
October 2003, the FASB issued FIN 46-6, "Effective Date of FIN 46, Consolidation
of Variable Interest Entities" ("FIN 46-6"). FIN 46-6 extended the required
effective date of FIN 46 for variable interest entities created or acquired
prior to February 1, 2003. Dura was required to apply FIN 46 to such entities
effective December 31, 2003. The application of FIN 46 resulted in a
reclassification of the Preferred Securities from the mezzanine section of the
balance sheet for 2003 to a long-term liability. In addition, Minority
Interest -- Dividends on Trust Preferred Securities, Net has been classified in
the statement of operations as a component of interest expense on a gross basis,
for periods subsequent to December 31, 2003.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure" ("SFAS No. 148"), which amends SFAS
No. 123. SFAS No. 148 provides alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, SFAS No. 148 amends the disclosure requirement of
SFAS No. 123 to require more prominent and more frequent disclosures in
financial statements of the effects of stock-based compensation. The transition
guidance and annual disclosure provisions of SFAS No. 148 were effective for
fiscal years ending after December 15, 2002. The interim disclosure provisions
were effective for financial reports containing condensed financial statements
for interim periods beginning after December 15, 2002. The adoption of the new
disclosure provisions of SFAS No. 148 did not impact Dura's consolidated balance
sheet or results of operations.

In November 2002, the FASB issued FIN 45, "Guarantor's Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FIN 45"). FIN 45 clarifies the requirements for a
guarantor's accounting for and disclosure of certain guarantees issued and
outstanding. The initial recognition and initial measurement provisions of FIN
45 were applicable to guarantees issued or modified after December 31, 2002. The
disclosure requirements of FIN 45 were effective for financial statements of
interim or annual periods ending after December 15, 2002. The adoption of FIN 45
did not have a significant impact on Dura's consolidated balance sheet or
results of operations.

In June 2002, the FASB issued SFAS No. 146. SFAS No. 146 addresses
financial accounting and reporting for costs associated with exit or disposal
activities and nullifies EITF 94-3. The principal difference between SFAS No.
146 and EITF 94-3 relates to SFAS No. 146's requirements for the timing of
recognition of a liability for a cost associated with an exit or disposal
activity. SFAS No. 146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is incurred. Under
EITF 94-3, a liability for an exit cost was recognized at the date of an
entity's commitment to an exit plan. SFAS No. 146

26

must be applied prospectively for exit or disposal activities that are initiated
after December 31, 2002. SFAS No. 146 also increases the disclosure requirements
associated with exit or disposal activities. During 2003, Dura applied the
provisions of SFAS No. 146 in connection with its various facility consolidation
initiatives, and will continue to apply the provisions of SFAS No. 146 should
additional exit or disposal activities be initiated in the future.

In April 2002, the FASB issued SFAS No. 145. This statement eliminates the
automatic classification of gain or loss on extinguishment of debt as an
extraordinary item of income and requires that such gain or loss be evaluated
for extraordinary classification under the criteria of APB Opinion No. 30
"Reporting Results of Operations" ("APB No. 30"). This statement also requires
sale-leaseback accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions, and makes various other
technical corrections to existing pronouncements. This statement was effective
for Dura beginning January 1, 2003. The application of this statement resulted
in a reclassification of the loss on early extinguishment of debt recorded
during 2002 of $5.5 million from an extraordinary item to a component of income
from continuing operations. In addition, in connection with the termination of
Dura's 1999 Credit Agreement, Dura wrote off debt issuance costs of
approximately $2.9 million during the fourth quarter of 2003, which was also
classified as a component of income from continuing operations in accordance
with this statement.

COMPARISON OF YEAR ENDED DECEMBER 31, 2003 TO YEAR ENDED DECEMBER 31, 2002

Revenues. Revenues for the year ended December 31, 2003 increased by $20.5
million, or 0.9 percent, to $2,380.8 million from $2,360.3 million for 2002.
Factors that favorably impacted revenue in 2003 included the partial year impact
of the acquisition of the Creation Group of $61.5 million, the strengthening of
the European currencies in relation to the U.S. dollar of $167.5 million and an
increase in new business in Dura's core products. Factors that offset these
favorable items included the impact of decreased volumes in the North American
automotive market of approximately $75.0 million, continued weaknesses in the
European automotive market impacted revenue by approximately $30.0 million and
the run-out of Dura's conventional window regulator business of approximately
$109.0 million.

Cost of Sales. Cost of sales for the year ended December 31, 2003
increased by $54.2 million, or 2.7 percent, to $2,089.2 million from $2,035.0
million for 2002. Cost of sales as a percentage of revenues for the year ended
December 31, 2003 was 87.8 percent, which is slightly up compared to 86.2
percent for 2002. The increase is due to the strengthening of the European
currencies in relation to the U.S. dollar of approximately $137.8 million and
increased employee benefit costs, pa