WOLVERINE TUBE INC - FORM 10-K/A

Attached files

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EX-31.2 - WOLVERINE TUBE INC	v169742_ex31-2.htm
EX-31.1 - WOLVERINE TUBE INC	v169742_ex31-1.htm
EX-32.1 - WOLVERINE TUBE INC	v169742_ex32-1.htm
EX-32.2 - WOLVERINE TUBE INC	v169742_ex32-2.htm
EX-23.1 - WOLVERINE TUBE INC	v169742_ex23-1.htm

Table of Contents

Index to Financial Statements

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment No. 3)

x	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2008,

¨	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 1-12164

WOLVERINE TUBE, INC.

(Exact name of registrant as specified in its charter)


Delaware		63-0970812
(State of Incorporation)		(IRS Employer Identification No.)

200 Clinton Avenue West, 10 th Floor Huntsville, Alabama		35801
(Address of principal executive offices)		(Zip Code)

(256) 353-1310

(Registrant’s Telephone Number, including Area Code)

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

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

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ¨ NO x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES x NO ¨

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

Note: The registrant, as a voluntary filer, is not subject to the filing requirements under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) but has been filing all reports required to be filed by those sections for the preceding 12 months.

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 the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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


Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company x
(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 29, 2008 was approximately $28,691,721 based upon the closing price of $0.72 for the Common Stock reported for such date on the Over the Counter Bulletin Board. For purposes of this disclosure, shares of Common Stock held by executive officers, directors, and other affiliates of the registrant have been excluded because such persons may be deemed to be affiliates.

Indicate the number of shares outstanding of each class of Common Stock, as of the latest practicable date:


Class		Outstanding as of June 10, 2009
Common Stock, $0.01 par value		40,623,736 Shares

EXPLANATORY NOTE

This Amendment No. 3 to the Wolverine Tube, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 is being filed for the sole purpose of setting forth the complete text of Item 8 as amended by Amendments No. 1 and 2 pursuant to Rule 12b-15 of Regulation 12B.

This Amendment does not amend, update or change any other items or disclosures in the Original Filing and does not reflect events occurring after the Original Filing. No other changes are being made by means of this filing.

Item 8.

Financial Statements


		Page
Consolidated Statements of Operations—For the years ended December 31, 2008 and 2007		48
Consolidated Balance Sheets—December 31, 2008 and 2007		49
Consolidated Statements of Stockholders’ Equity—For the years ended December 31, 2008 and 2007		50
Consolidated Statements of Cash Flows—For the years ended December 31, 2008 and 2007		51
Notes to Consolidated Financial Statements		52
Report of Independent Registered Public Accounting Firm		99

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Consolidated Statements of Operations


	Year ended December 31,
(In thousands except per share amounts)	2008			2007
Net sales	$	815,801		$	1,011,019
Cost of goods sold		788,930			960,817

Gross profit		26,871			50,202
Selling, general and administrative expenses		26,716			30,428
Net (gain) on divestitures		(26,348	)		—
Advisory fees and expenses		984			6,014
Goodwill impairment		46,560			—
Restructuring and impairment charges		5,820			75,097

Operating loss		(26,861	)		(61,337	)
Other (income) expense:
Interest expense, net		17,356			21,325
Amortization expense		3,054			2,491
Loss on sale of receivables		484			2,531
Embedded derivatives mark to fair value		(3	)		(15,755	)
Other, net		604			1,239

Loss from continuing operations before minority interest and income taxes		(48,356	)		(73,168	)
Minority interest		541			—
Equity in earnings of unconsolidated subsidiary		(332	)		—
Income tax expense		677			3,476

Net loss from continuing operations		(49,242	)		(76,644	)
Income (loss) from discontinued operations, net of taxes		769			(21,583	)

Net loss		(48,473	)		(98,227	)
Less: Accretion of convertible preferred stock and beneficial conversion feature conversion feature		5,021			4,618
Preferred stock dividends		6,810			13,284

Net loss applicable to common shares	$	(60,304	)	$	(116,129	)


Income(Loss) per common share—Basic
Continuing operations	$	(1.50	)	$	(4.97	)
Discontinued operations		0.01			(1.13	)

Net loss per common share	$	(1.49	)	$	(6.10	)


Income(Loss) per common share—Diluted
Continuing operations	$	(1.50	)	$	(4.97	)
Discontinued operations		0.01			(1.13	)

Net loss per common share	$	(1.49	)	$	(6.10	)


Shares used in computing income (loss) per share:
Basic		40,624			19,038
Diluted		40,624			19,038

See accompanying notes to the consolidated financial statements.

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Consolidated Balance Sheets


	December 31,
(In thousands except share and per share amounts)	2008			2007
Assets
Current assets
Cash and cash equivalents	$	33,537		$	63,303
Restricted cash		37,738			2,126
Accounts receivable, net of allowance for doubtful accounts of $392 thousand in 2008 and $613 thousand in 2007		38,626			108,398
Inventories		53,284			104,742
Assets held for sale		3,680			43,001
Derivative assets		291			975
Prepaid expenses and other assets		5,380			11,561

Total current assets		172,536			334,106
Property, plant and equipment, net		52,004			69,078
Goodwill		—			46,703
Intangible assets and deferred charges, net		2,634			4,284
Notes receivable		585			815
Investment in unconsolidated subsidiary		9,373			—

Total assets	$	237,132		$	454,986

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	34,713		$	55,861
Accrued liabilities		19,035			26,072
Derivative liabilities		5,415			925
Deferred income taxes		1,601			677
Short-term borrowings		19,759			90,939

Liabilities of discontinued operations		—			1,853

Total current liabilities		80,523			176,327
Long-term debt		117,911			146,021
Pension liabilities		45,552			17,616
Postretirement benefits obligation		4,662			18,776
Accrued environmental remediation		9,628			21,458
Deferred income taxes, non-current		—			3,064
Other liabilities		2,981			112

Total liabilities		261,257			383,374
Series A Convertible Preferred Stock, par value $1,000 per share, 90,000 shares authorized; 54,494 and 50,000 shares issued and outstanding as of December 31, 2008 and 2007, respectively		13,908			4,393
Series B Convertible Preferred Stock, par value $1,000 per share, 25,000 shares authorized; 10,000 and no shares issued and outstanding as of December 31, 2008 and 2007, respectively		9,700			—
Stockholders’ equity (deficit)
Common stock, par value $0.01 per share; 180,000,000 shares authorized; 40,623,736 shares issued and outstanding as of December 31, 2008 and 2007		406			406
Additional paid-in capital		142,588			146,815
Accumulated deficit		(151,281	)		(95,998	)
Accumulated other comprehensive income (loss), net		(39,446	)		15,996

Total stockholders’ equity (deficit)		(47,733	)		67,219

Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	237,132		$	454,986

See accompanying notes to the consolidated financial statements.

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

and Comprehensive Income (Loss)


	Common Stock			Additional Paid-In Capital			Retained Earnings (Accumulated deficit)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
(In thousands except number of shares)	Shares	Amount		Additional Paid-In Capital			Retained Earnings (Accumulated deficit)			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
Balance at December 31, 2006	15,090,843	$	151	$	91,904		$	5,896		$	(9,389	)	$	88,562

Net loss from operations	—		—		—			(98,227	)		—			(98,227	)
Translation adjustments	—		—		—			(1	)		11,432			11,431
Change in fair value of derivatives	—		—		—			—			2,906			2,906
Net pension actuarial gain	—		—		—			—			8,276			8,276
Amortization of net pension actuarial income	—		—		—			—			727			727
Pension curtailment gain	—		—		—			—			378			378
Termination of Montreal pension and post retirement benefits	—		—		—			—			1,542			1,542

Total comprehensive loss	—		—		—			—			—			(72,967	)
Accrued dividends on preferred stock	—		—		—			(3,666	)		—			(3,666	)
Stock compensation	—		—		2,347			—			—			2,347
Amortization and vesting of restricted stock	88,301		—		282			—			—			282
Rights offering, net	25,444,592		255		27,255			—			—			27,510
Preferred stock offering, net	—		—		26,426			—			—			26,426
Accretion of preferred stock and beneficial conversion feature	—		—		(4,618	)		—			—			(4,618	)
Beneficial conversion feature, net	—		—		12,837			—			—			12,837
Foreign currency adjustment	—		—		—			—			124			124
Deemed dividend	—		—		(9,618	)		—			—			(9,618	)

Balance at December 31, 2007	40,623,736	$	406	$	146,815		$	(95,998	)	$	15,996		$	67,219

Net loss from operations	—		—		—			(48,473	)		—			(48,473	)
Translation adjustments	—		—		—			—			(15,523	)		(15,523	)
Change in fair value of derivatives	—		—		—			—			(4,627	)		(4,627	)
Net pension actuarial loss	—		—		—			—			(35,292	)		(35,292	)

Total comprehensive loss	—		—		—			—			—			(103,915	)
Accrued dividends on preferred stock	—		—		—			(6,810	)		—			(6,810	)
Stock compensation	—		—		792			—			—			792
Amortization and vesting of restricted stock	—		—		2			—			—			2
Accretion of preferred stock	—		—		(5,021	)		—			—			(5,021	)

Balance at December 31, 2008	40,623,736	$	406	$	142,588		$	(151,281	)	$	(39,446	)	$	(47,733	)

See accompanying notes to the consolidated financial statements.

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Consolidated Statements of Cash Flows


	Year ended December 31,
(In thousands)	2008			2007
Operating Activities
Loss from continuing operations	$	(49,242	)	$	(76,644	)
Income (loss) from discontinued operations		769			(21,583	)

Net loss		(48,473	)		(98,227	)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		7,055			9,528
Amortization		3,179			2,586
Deferred income taxes		(1,949	)		2,767
Gain on early extinguishment of debt		(858	)		—
Minority interest in Chinese subsidiary		541			—
Equity in earnings of unconsolidated subsidiary		(332	)		—
Impairment of assets held for sale and goodwill		46,950			48,983
Loss on disposal of fixed assets		—			46
Non-cash environmental, restructuring and other charges		(559	)		10,577
Change in fair value of embedded derivative		—			(15,755	)
Stock compensation expense		847			2,629
Net gain on divestitures		(26,348	)		—
Changes in operating assets and liabilities:
Accounts receivable, net		25,769			(1,575	)
Purchase of accounts receivable		—			(43,882	)
Inventories		33,712			1,399
Income taxes		(286	)		(1,303	)
Prepaid expenses and other		7,899			(2,579	)
Accounts payable		(7,761	)		17,094
Accrued liabilities, including pension, postretirement benefit, and environmental		(20,873	)		11,327

Net cash provided by (used in) continuing operating activities		17,744			(34,802	)
Net cash provided by (used in) discontinued operating activities		(9,754	)		11,588

Net cash provided by (used in) operating activities		7,990			(23,214	)
Investing Activities
Additions to property, plant, and equipment		(3,821	)		(2,708	)
Proceeds from sale of assets		6,440			375
Purchase of patents		(368	)		(176	)
Investment purchases		—			(1,618	)
Proceeds from sale of interest in Chinese subsidiary		19,419			—
Change in restricted cash		(35,612	)		3,503

Net cash used in continuing investing activities		(13,942	)		(624	)
Net cash provided by (used in) discontinued investing activities		64,796			(1,309	)

Net cash provided by (used in) investing activities		50,854			(1,933	)
Financing Activities
Financing fees and expenses paid		(1,895	)		(110	)
Payments under revolving credit facilities and other debt		(968	)		(3,663	)
Borrowings from revolving credit facilities and other debt		—			230
Issuance of preferred stock		14,194			45,179
Proceeds from common stock rights offering, net of costs		—			27,510
Purchase or repayment of senior notes		(97,661	)		—
Other financing activities		—			77
Payment of dividends		(2,042	)		(2,958	)

Net cash provided by (used in) continuing financing activities		(88,372	)		66,265
Net cash provided by (used in) discontinued financing activities		1			(24	)

Net cash provided by (used in) financing activities		(88,371	)		66,241
Effect of exchange rate on cash and equivalents		(239	)		4,855

Net increase (decrease) in cash and equivalents		(29,766	)		45,949
Cash and equivalents at beginning of year		63,303			17,354

Cash and equivalents at end of year	$	33,537		$	63,303


Supplemental disclosure of cash flow:
Interest paid	$	20,836		$	21,874
Income taxes paid, net	$	2,230		$	2,736

See accompanying notes to the consolidated financial statements.

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

1. Overview of Operations

Wolverine Tube, Inc. (the Company, Wolverine, we, our, or us) is a global manufacturer of copper and copper alloy tube, fabricated products, and metal joining products. Our focus is on custom-engineered, higher value-added tubular products, including fabricated copper components and metal joining products, which enhance performance and energy efficiency in many applications, including: commercial and residential heating, ventilation and air conditioning, refrigeration, home appliances, industrial equipment, power generation, and petrochemicals and chemical processing.

During 2008, our common stock was traded on the OTC Bulletin Board and Pink Sheets under the symbol “WLVT.” Effective December 1, 2008, our common stock was removed from the OTC Bulletin Board and continues to be listed on the Pink Sheets.

On February 1, 2007, we announced a recapitalization plan that would provide significant equity proceeds to Wolverine. We completed the first phase of this recapitalization plan, a private placement of 50,000 shares of Series A Convertible Preferred Stock with an initial dividend rate of 8%, for $50.0 million, to The Alpine Group, Inc. (“Alpine”) and Plainfield Asset Management LLC (“Plainfield”) on February 16, 2007. As part of this plan, we agreed to conduct a common stock rights offering to our common stockholders, which we completed on October 29, 2007, raising approximately $28.0 million in equity proceeds. In addition, in connection with their initial investment, Alpine and Plainfield received an option to purchase additional shares of Series A Convertible Preferred Stock, at a price of $1,000 per share, up to an amount that would be sufficient to increase their aggregate ownership to 55.0% of our outstanding common stock on an as-converted, fully diluted basis following the completion of the rights offering. Alpine exercised this option on January 25, 2008 to purchase an additional 4,494 shares of Series A Convertible Preferred Stock for $4.5 million. Additionally, Alpine purchased $10.0 million of our Series B Convertible Preferred Stock, which has substantially the same terms and conditions as and ranks equal in rights and seniority with our outstanding Series A Convertible Preferred Stock, except for an initial annual dividend rate of 8.5%. We raised approximately $92.5 million in gross equity proceeds in 2007 and 2008 from these transactions.

Since 2007, we have pursued a financial restructuring plan with respect to our 7.375% and 10.5% Senior Notes, our secured revolving credit facility and our receivables sale facility in anticipation of their maturities in 2008 and 2009. In light of market conditions, which have negatively affected our ability to execute such a global refinancing strategy, we took certain actions to address the repayment of the 7.375% Senior Notes at their maturity on August 1, 2008. We extended the maturity of our receivables sale facility and our secured revolving credit facility to February 19, 2009. Further, on March 20, 2008, we refinanced $38.3 million of our 7.375% Senior Notes held by Plainfield by exchanging them for 10.5% Senior Exchange Notes due March 28, 2009. The proceeds from the equity transactions, along with net proceeds of $24.9 million from the sale of our STP business in February 2008, $9.5 million from the sale of 30.0% of our Wolverine Tube Shanghai Co., Ltd. (“WTS”) operation in March 2008, $1.4 million from the sale of our Booneville, Mississippi facility, and approximately $41.2 million from the sale of our London, Ontario plumbing tube business in July 2008, coupled with available cash from operations and from our extended liquidity facilities, were sufficient to repurchase or repay the balance of the 7.375% Senior Notes on or before their maturity on August 1, 2008. On February 29, 2008, we repurchased $12.0 million in face amount of our 7.375% Senior Notes at a discount below the face value of the notes and on April 8, 2008, we repurchased an additional $25.0 million in face amount of our 7.375% Senior Notes, also at a discount below the face value of the notes, leaving $61.4 million in face amount of our 7.375% Senior Notes, which we repaid at maturity on August 1, 2008. On September 15, 2008, we sold an additional 20% of our WTS subsidiary, raising $10.1 million.

See Note 4, Recapitalization Plan, of the Notes to the Consolidated Financial Statements for further details.

The Series A and Series B Convertible Preferred Stock are convertible into shares of Wolverine common stock at the option of the holders, in whole or in part, at any time. We may defer payment of the dividend in certain circumstances. We are entitled to defer dividends on the preferred stock to the extent that we do not have cash or financing available to us to cover the full quarterly dividend amount in compliance with our contractual obligations. With respect to the Series A Convertible Preferred Stock, any deferred dividend will accrue at an annual rate of 10.0% if the dividend payment date is before January 31, 2012 and at an annual rate of 12.0% per annum if the dividend payment date is on or after January 31, 2012. Any deferred dividend with respect to the Series B Convertible Preferred Stock will accrue at an annual rate of 10.5% if the dividend payment date is before January 31, 2012 and at an annual rate of 12.5% per annum if the dividend payment date is on or after January 31, 2012. Furthermore, the dividend rate on both the Series A Convertible Preferred Stock and Series B Convertible Preferred Stock is subject to additional adjustment, as provided below, as long as certain conditions are not satisfied. Due to restrictions on cash available to pay preferred stock dividends imposed by the indenture governing our 10.5% Senior Notes due 2009, we have deferred $5.8 million in preferred stock dividends that accrued through the period ended December 31, 2008, as reflected in the Consolidated Balance Sheets in accrued liabilities. We intend to continue to defer future dividends until we meet certain conditions under our new financing arrangement.

Table of Contents

Index to Financial Statements

In addition, if at any time after June 16, 2007 with respect to the Series A Convertible Preferred Stock, or June 30, 2008 with respect to the Series B Convertible Preferred Stock, the shares of common stock into which the applicable series of preferred stock are convertible are not registered for resale under the Securities Act of 1933, then the dividend rate on the applicable series of preferred stock will increase by 0.5% for each quarter in which this condition remains unsatisfied, up to a maximum increase of 2.0%. With respect to the Series A Convertible Preferred Stock as of June 16, 2007, we did not satisfy this condition. As a result, the dividend rate on the Series A Convertible Preferred Stock was subject to the 0.5% increase for the quarter ended July 31, 2007, bringing the applicable dividend rate to 8.5%. The Series A Convertible Preferred Stock stockholders agreed to retain the dividend rate at 8.5% through June 30, 2008. Since June 30, 2008, no further waivers have been received for either the Series A Convertible Preferred Stock or the Series B Convertible Preferred Stock. Due to certain restrictions imposed under the federal securities laws upon the amount of our securities that may be registered for resale by the preferred stockholders, as affiliates of Wolverine, we continue to be unable to satisfy the resale condition applicable to both the Series A Convertible Preferred Stock and Series B Convertible Preferred Stock. As a result, our dividend rate on each series may ultimately increase by a maximum of 2.0%. With the deferral of dividends and the dividend rate adjustment as discussed above, combined with the adjustments for failure to meet the resale condition, the maximum dividend rate on the Series A Convertible Preferred Stock could rise to 12.0% prior to January 31, 2012 or 14.0% on or after January 31, 2012 and on the Series B Convertible Preferred Stock could rise to 12.5% prior to January 31, 2012 and 14.5% on or after January 31, 2012. As of December 31, 2008, we are accruing dividends on both the Series A Convertible Preferred Stock and the Series B Convertible Preferred Stock at 12.0%.

The Company’s financial statements have been presented on the basis that it is a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

On April 28, 2009 the Company successfully completed an Exchange Offer which refinanced approximately $121.6 million 10.5% Senior Notes and 10.5% Senior Exchange Notes with 15% Senior Exchange Notes as described in Note 33, Subsequent Events, in the Notes to the Consolidated Financial Statements. The Senior Secured Notes mature in a lump sum on March 31, 2012. After completing this refinancing, the Company had domestic cash balances of approximately $15.0 million on April 28, 2009.

The Company believes that its available cash and cash anticipated to be generated through operations is expected to be adequate to fund the Company’s liquidity requirements, although there can be no assurances that the Company will be able to generate such cash. Additionally, the Company does not currently have in effect a revolving credit agreement or other capital commitments to supplement its existing cash and anticipated cash resources, if necessary, to meet its liquidity requirements materially in excess of the Company’s current expectations. The uncertainty about the Company’s ability to achieve its projected results and the absence of such credit or capital commitments raises substantial doubt about the Company’s ability to continue as a going concern. The Company expects to continue to actively manage and optimize its cash balances and liquidity, working capital, operating expenses and product profitability, although there can be no assurances the Company will be able to do so.

2. Summary of Significant Accounting Policies

The significant accounting policies followed by us are described below:

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Wolverine and its subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation. Certain reclassifications are made to conform previously reported data to the current presentation. Such reclassifications had no impact on total assets, total liabilities, net loss, or stockholders’ equity.

Uses of Estimates

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, inventories, goodwill, intangible assets, and other long-lived assets, legal contingencies, guarantee obligations, assumptions used in the calculation of income taxes, retirement and other post-employment benefits, and customer incentives, among others. These estimates and assumptions are based on management’s best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity, foreign currency and energy markets, and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods.

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Index to Financial Statements

Revenue Recognition Policy

Revenues are generally recognized when title to products transfer to an unaffiliated customer, and the product is shipped. Sales are made under normal terms and usually do not require collateral, as historically collection of our receivables is reasonably assured. Revenues are recorded net of estimated returns and allowances and volume discounts. The reserve for sales returns and allowances is calculated by applying a historical percentage against certain receivables.

Sales taxes collected from customers and remitted to governmental authorities are accounted for an a net basis and therefore are excluded from revenues in the consolidated statement of operations.

Cash Equivalents

We consider all highly liquid short-term investments purchased with a maturity of three months or less to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Restricted Cash

We classify cash deposits securing certain transactions that are restricted from use by the Company in the ordinary course of business as Restricted Cash. See Note 5, Restricted Cash, for a description of the Restricted Cash at December 31, 2008 and 2007.

Allowance for Doubtful Accounts

The allowance for doubtful accounts ensures that trade receivables are not overstated due to issues of collectibility and are established for certain customers based upon a variety of factors: including past due receivables, macroeconomic conditions, significant current events, and historical experience. Specific reserves for individual accounts may be established due to a customer’s inability to meet their financial obligations, such as in the case of bankruptcy filings or the deterioration in a customer’s operating results or financial position. As circumstances related to customers change, estimates of the recoverability of receivables are adjusted.

Sales of Accounts Receivable

Our Company’s sales of our receivables to a special-purpose entity are accounted for as a sale in accordance with SFAS No. 140 (“SFAS 140”), Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities – a replacement of FASB Statement No. 125.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. Inventory costs include material, labor, and factory overhead. Our maintenance and operating supplies inventory is valued using an average cost method to determine cost. Obsolete or unsaleable inventories are reflected at their estimated net realizable values.

Total inventories in 2008 and 2007 included the following classifications:


(In thousands)	2008		2007
Finished products	$	27,990	$	47,620
Work-in-process		10,646		28,726
Raw materials		9,262		16,768
Supplies		5,386		11,628

Totals	$	53,284	$	104,742

Included in finished goods are consignment inventories of $12.3 million at December 31, 2008 and $16.3 million at December 31, 2007. These consignments are at various locations throughout the United States.

Property, Plant, and Equipment

Land, buildings, and equipment are carried at cost. Expenditures for maintenance and repairs are charged directly against operations, while major renewals and betterments are capitalized. When properties are retired or otherwise disposed of, the original cost and accumulated depreciation are removed from the respective accounts, and the profit or loss resulting from the disposal is reflected in operations. Depreciation is provided over the estimated useful lives of the assets, generally on the straight-line method. Depreciation for financial reporting purposes for office and other equipment is 5 to 7 years, computers and other service equipment 5 to 7 years, heavy machinery 20 to 30 years, land improvements according to their useful life, building and building improvements the lesser of their useful life or 39 years, and other machinery 10 years.

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Impairment of Long-Lived Assets

Impairment of long-lived assets is recognized under the provisions of SFAS No. 144 (“SFAS 144”), Accounting for the Impairment or Disposal of Long-Lived Assets. When facts and circumstances indicate that long-lived assets used in operations may be impaired, and the undiscounted cash flows estimated to be generated from those assets are less than their carrying values, an impairment charge is recorded equal to the excess of the carrying value over fair value. Long-lived assets held for disposal are valued at the lower of the carrying amount or estimated fair value less cost to sell.

Employment-Related Benefits

Employment-related benefits associated with pensions and postretirement health care are expensed as actuarially determined. The recognition of expense is impacted by estimates made by management, such as discount rates used to value certain liabilities, investment rates of return on plan assets, increases in future wage amounts and future health care costs. Our Company uses third-party specialists to assist management in appropriately measuring the expense and liabilities associated with employment-related benefits.

We determine our actuarial assumptions for the U.S. and Canadian pension and post retirement plans, after consultation with our actuaries, on December 31 of each year to calculate liability information as of that date and pension and postretirement expense for the following year. We began using the Hewitt yield curve method to determine the appropriate discount rate.

The expected long-term rate of return on plan assets of the various plans reflects projected returns for the investment mix of the various pension plans that have been determined to meet each plans’ objectives. The expected long-term rate of return on plan assets is selected by taking into account the expected mix of invested assets, the fact that the plan assets are actively managed to mitigate downside risks, the historical performance of the market in general and the historical performance of the retirement plan assets over the past 10 years.

In September 2006, the FASB issued SFAS No. 158 (“SFAS 158”), Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, which amends SFAS No. 87 (“SFAS 87”), Employers’ Accounting for Pensions, and SFAS No.106, (“SFAS 106”), Employers’ Accounting for Postretirement Benefits Other Than Pensions, to require recognition of the overfunded or underfunded status of pension and other postretirement benefit plans on the balance sheet. Under SFAS 158, gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS 87 and SFAS 106 that have not yet been recognized through net periodic benefit cost are recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic cost. As required by SFAS 158, we adopted the balance sheet recognition provisions at December 31, 2006.

Income Taxes

Under SFAS No. 109 (“SFAS 109”), Accounting for Income Taxes, deferred tax liabilities and assets are recorded for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. Property, plant, and equipment, inventories, prepaid pension, postretirement benefit obligations, and certain other accrued liabilities are the primary sources of these temporary differences. Deferred income taxes also include net operating losses and tax credit carryforwards. Our Company establishes valuation allowances to reduce deferred tax assets to amounts it believes are more likely than not to be realized. These valuation allowances are adjusted based upon changing facts and circumstances.

We also apply the principles of FASB Interpretation (FIN) No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes. FIN 48 dictates a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognizing of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. Under the provisions of FIN 48, to the extent we have uncertain tax positions we classify them as other non-current liabilities on the Consolidated Balance Sheets unless they are expected to be paid in one year. Penalties and tax-related interest expense are reported in other expense, net and interest and amortization expense, net, respectively, on the Consolidated Statements of Operations. The adoption of FIN 48 in 2007 had no effect on our consolidated financial statements.

Goodwill

Goodwill is evaluated utilizing SFAS No. 142 (“SFAS 142”), Goodwill and Other Intangible Assets. Under this statement, goodwill is presumed to have an indefinite useful life and, thus, is not amortized, but tested no less than annually for impairment using a lower of cost or fair value approach.

During the third quarter of 2008 and 2007, we conducted a goodwill impairment review, and prepared updated valuations using a discounted cash flow approach based on forward-looking information regarding market share, revenues, and costs. Following our decision to sell our Small Tube Products (“STP”) business, we retested the goodwill assigned to this operation. Taking into account the projected proceeds from the sale, we impaired goodwill by $30.8 million associated with this business. We then retested the remainder of our goodwill and determined there was no further impairment subsequent to the STP sale for 2007. During our annual goodwill impairment review during the third quarter of 2008, we determined that an additional goodwill impairment loss was probable and could be reasonably estimated. Based on a preliminary impairment assessment, the Company recorded a goodwill

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impairment loss of $44.0 million in the third quarter of 2008. The Company determined the fair value of the reporting unit using a discounted cash flow model with the assistance of a third-party valuation specialist. The impairment of goodwill was principally related to the deterioration in profitability of our business located in Carrollton, Texas, and the low market price of our common stock, resulting in a substantially depressed enterprise value. The Step 2 analysis under SFAS 142 revealed that the entire amount of goodwill was indeed impaired and the remaining $2.6 million was written off in the fourth quarter of 2008.

Earnings (Loss) per Common Share

Using the Two-Class Method as prescribed in SFAS No. 128, Earnings per Share, after determining earnings (loss) applicable to common stockholders, per share amounts are calculated by dividing net income (loss) by the weighted average number of common shares outstanding. Where applicable, diluted earnings (loss) per share were calculated by including the effect of all dilutive securities, including stock options, and unvested restricted stock. To the extent that stock options and unvested restricted stock are anti-dilutive, they are excluded from the calculation of diluted earnings (loss) per share.

Derivatives and Hedging Activities

Our operations and cash flows are subject to fluctuations due to changes in commodity prices and foreign currency exchange rates. We use derivative financial instruments to manage the impact of commodity prices and foreign currency exchange rate exposures, though not for speculative purposes. Derivatives used are primarily commodity forward contracts.

We apply the provisions of SFAS No. 133 (“SFAS 133”), Accounting for Derivative Instruments and Hedging Activities, for most of our Company’s derivatives. Some of our derivatives are designated as either a hedge of a recognized asset or liability or an unrecognized firm commitment (fair value hedge), or a hedge of a forecasted transaction (cash flow hedge). For fair value hedges, both the effective and ineffective portion of the changes in the fair value of the derivative, along with any gain or loss on the hedged item that is attributable to the hedged risk, are recorded directly to operations. The effective portion of changes in fair value of derivatives that are designated as cash flow hedges are recorded in other comprehensive income, until the hedged item is realized, when the gain (loss) previously included in accumulated other comprehensive income (loss) is recognized in operations. Our foreign currency hedges are accounted for under SFAS No. 52 (“SFAS 52”), Foreign Currency Translation.

Fair Value Measurements

On January 1, 2008, the Company adopted the provisions of SFAS No. 157 (“SFAS 157”), Fair Value Measurements, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, delays the effective date of SFAS 157 until fiscal years beginning after November 15, 2008 for all nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis.

Currently the Company is only measuring its derivative assets and liabilities at fair value. As required by SFAS 157, the Company has categorized its financial assets and liabilities measured at fair value into a three-level fair value hierarchy. The fair-value hierarchy established in SFAS 157 prioritizes the inputs used in valuation techniques into three levels as follows:

•

Level 1 – Observable inputs – quoted prices in active markets for identical assets and liabilities. For the Company, level 1 financial assets and liabilities consist of commodity derivative contracts;

•

Level 2 – Observable inputs other than the quoted prices in active markets for identical assets and liabilities – includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets; and

•

Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions.

The following table presents the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of December 31, 2008:


(In millions)	Level 1			Level 2	Level 3	Total
Assets:

Derivatives (recorded in derivative assets)	$	0.3		—	—	$	0.3
Liabilities:

Derivatives (recorded in derivative liabilities)	$	(5.4	)	—	—	$	(5.4	)

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Additionally, the provisions of SFAS 157 were not applied to fair value measurements of the Company’s reporting units (Step 1 of goodwill impairment tests performed under SFAS 142) and nonfinancial assets and nonfinancial liabilities measured at fair value to determine the amount of goodwill impairment (Step 2 of goodwill impairment tests performed under SFAS 142).

On January 1, 2009, the Company will be required to apply the provisions of SFAS 157 to fair value measurements of nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. The Company is in the process of evaluating the impact, if any, of applying these provisions on its financial position and results of operations.

In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active, which was effective immediately. FSP FAS 157-3 clarifies the application of SFAS 157 in cases where the market for a financial instrument is not active and provides an example to illustrate key considerations in determining fair value in those circumstances. The Company has considered the guidance provided by FSP FAS 157-3 in its determination of estimated fair values during 2008.

We use the following methods in estimating fair value disclosures for financial instruments:

Cash and cash equivalents, restricted cash, accounts receivable, and accounts payable: The carrying amount reported in the Consolidated Balance Sheets for these assets approximates their fair value because of the short maturity of these instruments.

Secured revolving credit facility and long-term debt: The carrying amount of our borrowings under our secured revolving credit facilities approximates fair value. The fair value of our 10.5% Senior Notes and any derivative financial instruments are based upon quoted market prices.

Derivatives: The fair value of our foreign currency, and commodity derivative instruments are determined by reference to quoted market prices.

The following table summarizes fair value information for our financial instruments:


	2008				2007
(In thousands)	Carrying value		Fair Value		Carrying value		Fair value
Cash and cash equivalents	$	33,537	$	33,537	$	63,303	$	63,303

Restricted cash	$	37,738	$	37,738	$	2,126	$	2,126

Accounts receivable	$	38,626	$	38,626	$	108,398	$	108,398

Accounts payable	$	34,713	$	34,713	$	55,861	$	55,861

Investments held in rabbi trust (trading portfolio)	$	—	$	—	$	1,618	$	1,618

Senior Notes	$	137,656	$	115,629	$	235,919	$	224,889

Other debt	$	14	$	14	$	1,041	$	1,041

Foreign currency exchange contracts	$	—	$	—	$	4	$	4

Derivative assets	$	291	$	291	$	975	$	975

Derivative liabilities	$	5,415	$	5,415	$	925	$	925

Environmental Expenditures

Environmental expenditures that pertain to our current operations and relate to future revenues are expensed or capitalized consistent with our capitalization policy. Expenditures that result from the remediation of an existing condition caused by past operations, and that do not contribute to future revenues, are expensed when a triggering event, such as a facility closure, occurs or when a reportable condition is discovered or made known that might impair an existing long-lived asset. Liabilities, which are undiscounted, are recognized for remedial activities when the cleanup is probable and the cost can be reasonably estimated.

Stock Options

We recognize compensation expense in accordance with SFAS No. 123R (“SFAS 123R”), Share-Based Payment, for all stock-based awards made to employees and directors equal to the grant-date fair value for all awards that are expected to vest. This expense

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is recorded over the expected life of each separate vesting tranche. The majority of our compensation expense related to our stock-based payment award is recorded in Selling General & Administrative expenses. We determine the grant-date fair value of our share-based payment awards using a Black-Scholes model.

Translation to U.S. Dollars

Assets and liabilities denominated in foreign currency are translated to U.S. dollars at rates of exchange at the balance sheet date. Revenues and expenses are translated at average exchange rates during the period. Translation adjustments arising from changes in exchange rates are included in the accumulated other comprehensive income (loss) component of stockholders’ equity. Realized exchange gains and losses are included in “amortization and other, net” in the Consolidated Statements of Operations.

Research and Development Costs

Expenditures relating to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. Research and development costs were approximately $2.1 million and $2.3 million in 2008 and 2007, respectively.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation, See Note 3, Restatement and Correction of Prior Period Errors, of the Notes to the Consolidated Financial Statements for further details.

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 159 (“SFAS 159”), The Fair Value Option for Financial Assets and Financial Liabilities –Including an amendment of FASB Statement No 115. SFAS 159 permits entities to choose to measure certain financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. We believe that the carrying value of our assets and liabilities closely approximates fair value. Therefore, we have elected not to adopt the fair value option included in SFAS 159.

In March 2008, the FASB issued SFAS No. 161 (“SFAS 161”), Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133. This statement requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improving the transparency of financial reporting. Entities are required to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under SFAS 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. We will adopt this new accounting standard effective January 1, 2009 and believe implementing this standard will not have a material impact on our Company’s consolidated financial statements.

In April 2008, the FASB issued FASB Staff Position (FSP) FAS 142-3, Determination of the Useful Life of Intangible Assets. FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS 142. FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The Company is currently evaluating the impact, if any, of adopting FSP FAS 142-3 on its financial position and results of operations.

In June 2008, the FASB’s Emerging Issues Task Force (EITF) reached a consensus on EITF Issue No. 07-5 (EITF 07-5), Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock. This EITF Issue provides guidance on the determination of whether such instruments are classified in equity or as a derivative instrument and is effective for the fiscal year beginning on January 1, 2009. The Company is currently evaluating the impact, if any, of adopting EITF 07-5 on its financial position and results of operations.

In November 2008, the FASB’s Emerging Issues Task Force reached a consensus on EITF Issue No. 08-6 (EITF 08-6), Equity Method Investment Accounting Considerations. EITF 08-6 continues to follow the accounting for the initial carrying value of equity method investments in APB Opinion No. 18, The Equity Method of Accounting for Investments in Common Stock, which is based on a cost accumulation model and generally excludes contingent consideration. EITF 08-6 also specifies that other-than-temporary impairment testing by the investor should be performed at the investment level and that a separate impairment assessment of the underlying assets is not required. An impairment charge by the investee should result in an adjustment of the investor’s basis of the impaired asset for the investor’s pro-rata share of such impairment. In addition, EITF 08-6 reached a consensus on how to account for an issuance of shares by an investee that reduces the investor’s ownership share of the investee. An investor should account for such transactions as if it had sold a proportionate share of its investment with any gains or losses recorded through earnings. EITF 08-6 also addresses the accounting for a change in an investment from the equity method to the cost method after adoption of SFAS No. 160. EITF 08-6 affirms the existing guidance in APB 18, which requires cessation of the equity method of accounting and application of FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, or the cost method under APB 18, as appropriate. EITF 08-6 is effective for transactions occurring on or after December 15, 2008.

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In December 2008, the FASB issued FASB Staff Position (FSP) FAS 132(R)-1 (FSP FAS 132(R)-1), Employers’ Disclosures about Postretirement Benefit Plan Assets. FSP FAS 132(R)-1 provides guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan. FSP FAS 132(R)-1 also includes a technical amendment to FASB Statement No. 132(R), effective immediately, which requires nonpublic entities to disclose net periodic benefit cost for each annual period for which a statement of income is presented. The Company has disclosed net periodic benefit cost in Notes 16 and 17. The disclosures about plan assets required by FSP FAS 132(R)-1 must be provided for fiscal years ending after December 15, 2009. The Company is currently evaluating the impact of the FSP on its disclosures about plan assets.

3.	Correction of Prior Period Errors

This Form 10-K includes immaterial corrections for the year ended December 31, 2007 consolidated financial statements for errors in inventory and foreign currency.

The tables below reflect the revisions to the impacted accounts for the immaterial corrections to the Company’s previously filed financial statements included in its Form 10-K for the year ended December 31, 2007. In order to reconcile to the consolidated financial statements herein, amounts which reflect reclassifications for discontinued operations occurring in 2008 have been displayed as discontinued operations in the table below (see Note 7, Discontinued Operations, for details).

Consolidated Statements of Operations


(In thousands)	As reported	Adjustment		Discontinued Operations		As revised
Cost of goods sold	1,165,083	2,096		(206,362	)	960,817

Other, net	2,605	(899	)	(467	)	1,239

Net loss	97,030	1,197		—		98,227

Consolidated Balance Sheets


(In thousands)	As reported			As revised
Accounts receivable, net	$	107,375		$	108,398
Inventory*		110,768			104,742
Accumulated deficit	$	(94,187	)	$	(95,998	)
Accumulated other comprehensive income, net of tax		15,872			15,996
* Includes reclassification of $3.3 million of critical spares from inventory to fixed assets

Consolidated Statements of Cash Flows


(In thousands)	For the twelve months ended December 31, 2007 (as reported)			Adjustment			Discontinued operations			For the twelve months ended December 31, 2007 (as revised)
Income (loss) from continuing operations	$	(71,673	)	$	(1,197	)	$	(3,774	)	$	(76,644	)
Net loss		(97,030	)		(1,197	)		—			(98,227	)

Changes in operating assets and liabilities:
Accounts receivable, net		(8,504	)		(1,023	)		7,952			(1,575	)
Inventories		(1,309	)		1,168			1,540			1,399

Such adjustments have also been corrected in our Note 30, Consolidating Financial Information.

4.	Recapitalization Plan

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described in the Preferred Stock Purchase Agreement, Alpine purchased an additional 4,494 shares of Series A Convertible Preferred Stock on January 25, 2008 for $4.5 million in order to maintain the fully diluted ownership by Alpine and Plainfield in Wolverine at 55.0%.

We have pursued a financial restructuring plan with respect to our 10.5% and 7.375% Senior Notes, our secured revolving credit facility and our receivables sale facility. In light of market conditions, which negatively affected our ability to execute such a comprehensive refinancing strategy, during 2008, we took certain actions to be in a position to retire the 7.375% Senior Notes on their maturity date of August 1, 2008. We extended the maturity of our secured revolving credit facility and our receivables sale facility to February 19, 2009. In February 2008, we sold substantially all of the assets of our STP business for net proceeds of $22.1 million plus a working capital payment to us of approximately $2.8 million. In March 2008, we sold 30.0% of our WTS subsidiary for $9.5 million. On March 20, 2008, Plainfield refinanced $38.3 million of the 7.375% Senior Notes held by it by exchanging them for 10.5% Senior Exchange Notes due March 28, 2009 and Alpine purchased 10,000 shares of our Series B Convertible Preferred Stock for $10.0 million, under terms substantially similar to the Series A Convertible Preferred Stock. On April 21, 2008 we sold our Booneville, Mississippi facility, which was closed in January 2008, for $1.4 million. In July 2008, we sold our London, Ontario wholesale and commercial tube business for net proceeds of approximately $41.2 million. These actions provided the liquidity required to repurchase or repay the outstanding 7.375% Senior Notes on or before their maturity in August 2008. On February 29, 2008, we repurchased $12.0 million in face amount of our 7.375% Senior Notes at a discount below the face value of the notes and on April 8, 2008, we repurchased an additional $25.0 million in face amount of our 7.375% Senior Notes, also at a discount below the face value of the notes, leaving $61.4 million in face amount of our 7.375% Senior Notes, which we paid at maturity on August 1, 2008. On September 15, 2008, we sold an additional 20.0% of our WTS subsidiary, raising $10.1 million.

On February 26, 2009, we announced the commencement of an offer (the Exchange Offer) to each of the holders of our 10.5% Senior Exchange Notes and our 10.5% Senior Notes due March 28, 2009 and April 1, 2009, respectively, to exchange these notes for new Senior Secured Notes in order to refinance those maturities. The Exchange Offer was successfully consummated on April 28, 2009. $83.3 million of the 10.5% Senior Notes and $38.3 million of the 10.5% Senior Exchange Notes were exchanged for 15.0% Senior Secured Notes. The remaining $16.1 million of 10.5% Senior Notes were repaid on April 28, 2009. See Notes 14 and 33, Financing Arrangements and Debt and Subsequent Events, respectively, for a description of the Exchange Offer and a description of the new Senior Secured Notes.

5.	Restricted Cash

Our liquidity is affected by restricted cash balances, which are included in current assets and are not available for general corporate use, of $37.7 million and $2.1 million as of December 31, 2008, and December 31, 2007, respectively. Restricted cash at December 31, 2008 included $16.9 million related to deposits for margin calls on our metal hedge programs, $19.9 million on deposit with Wachovia Bank to cover our letters of credit, and $0.9 million of other restricted cash deposits. Restricted cash at December 31, 2007 of $2.1 million included $1.0 million related to deposits for margin calls on our metal and natural gas hedge programs, and $1.1 million of other restricted cash deposits.

6.	Investment in Unconsolidated Chinese Subsidiary

On March 14, 2008, the Company sold a 30.0% indirect equity interest in Wolverine Tube Shanghai Co., Ltd. (WTS) to Wieland for $9.5 million. The agreement provided to Wieland an option to purchase between April 2011 and April 2013 an additional 20.0% equity interest in WTS. On September 15, 2008, the Company and Wieland entered into an agreement, which granted to Wieland the right to immediately exercise the option to purchase the additional 20.0% equity interest in WTS for a purchase price of $10.1 million. Following the completion of the exercise of the 20.0% purchase option, Wieland has a 50.0% indirect ownership in the equity of WTS. From September 15, 2008, the results of WTS are accounted for using the equity method because neither party controls WTS. The payment of the $10.1 million is subject to a post-closing adjustment at the end of the first fiscal quarter of WTS in 2011 based upon the financial performance of WTS during the period beginning March 31, 2008 through the end of the first fiscal quarter of 2011. In no event will the Company be required to make a post-closing adjustment payment in excess of $2.5 million to Wieland nor will Wieland be required to make a post-closing adjustment payment in excess of $7.5 million to the Company. The $2.5 million floor has been recorded in accrued liabilities in the consolidated balance sheets. The total gain on the sale of the 50.0% interest was $12.3 million.

At September 15, 2008, the option to purchase the additional 20.0% equity interest in WTS had a non-cash embedded derivative value of $1.3 million. With the exercise of the purchase option, the embedded derivative has been eliminated. Pursuant to the agreements to purchase the stock, Wolverine and Wieland will cause WTS to apply for approval under Chinese law to add directors to the Board of WTS and change certain voting and other corporate governance matters of WTS. The parties have until July 31, 2009 to obtain these approvals. If the approvals are not obtained by July 31, 2009, Wolverine and Wieland have agreed to unwind the transactions contemplated by the Agreement by Wolverine returning to Wieland the $19.6 million cash purchase price, plus interest, and certain commissions, if any, received by Wieland, and Wieland returning to Wolverine any distributions that it has received as a result of its indirect equity interest in WTS. Management believes that the requisite approvals for the matters discussed above will be obtained.

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7.	Discontinued Operations

On February 29, 2008, we sold substantially all of the assets and liabilities of our STP business located in Altoona, Pennsylvania. Accordingly, we have restated all years such that all assets, liabilities, and operations associated with the STP business are presented as a discontinued operation. On November 6, 2008, the Company received a working capital settlement in the Company’s favor of approximately $2.8 million. Further, based on the projected net proceeds from the sale, $30.8 million of goodwill associated with STP was impaired in 2007.

On July 8, 2008, we closed on the sale of our Wolverine Tube Canada Inc. (WTCI), subsidiary located in London, Ontario, Canada. The subsidiary produced wholesale and commercial products for sale in the North American markets. In the transaction, we sold 100% of the issued and outstanding share capital of our wholly owned subsidiary for $41.2 million. In addition, certain currency translation adjustments aggregating approximately $3.6 million included in accumulated other comprehensive income (loss) were reclassified to earnings. Additionally, we sold certain accounts receivable of Wolverine in the amount of $2.4 million, and we received $1.8 million owed by the Canadian subsidiary to Wolverine for inventory purchased prior to the sale. Exiting the WTCI business constitutes an exit of the wholesale business for Wolverine, therefore, we classified WTCI results as discontinued operations in all reported financial statements in this Form 10-K.

See the table below for the net income results for the twelve months ended December 31, 2008 and 2007 of the discontinued operations prior to the impairment of goodwill:


	Twelve months ended December 31,
(In thousands)	2008		2007
Net sales	$	138,691	$	304,705
Income (loss) before income taxes		859		(16,543	)
Income taxes		90		5,040

Net income (loss)	$	769	$	(21,583	)


Net income (loss) per common share – Basic	$	0.01	$	(1.13	)
Net income (loss) per common share – Diluted	$	0.01	$	(1.13	)

8.	Prepaid Expenses and Other

Prepaid expenses and other assets are as follows at December 31:


(In thousands)	2008		2007
Prepaid expenses	$	5,380	$	9,491
Prepaid raw materials		—		2,070

Total	$	5,380	$	11,561

9.	Derivatives

We are exposed to various market risks, including changes in commodity prices, foreign currency exchange rates, and interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices. In the ordinary course of business, we enter into various types of transactions involving financial instruments to manage and reduce the impact of changes in commodity prices, foreign currency exchange rates, and interest rates. These transactions are entered into in accordance with our Wolverine Tube, Inc. Derivative Management Policy, which outlines our policy regarding the types of derivatives permitted, the purpose of entering such derivatives, operating and trading limitations, and approvals necessary for entering into them. We do not enter into derivatives or other financial instruments for trading or speculative purposes.

Commodity Price Risk

For the majority of our customers, the price they pay for a product includes a metal charge that represents the previous monthly average COMEX price for metal. For certain other customers, the metal charge represents the market value of the copper used in that product as of the date we ship the product to the customer. Our prior month average COMEX pricing model is expected to serve as a natural hedge against changes in the commodity price of copper and allows us to better match the cost of copper with the selling price to our customers. However, as an accommodation to our customers, we often enter into fixed price commitments to purchase copper on their behalf in order to fix the price of copper in advance of shipment. We account for these transactions as cash flow hedges under SFAS 133.

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The fair values of these derivatives are recognized in derivative assets and liabilities in the Consolidated Balance Sheets. The net change in the derivative assets and liabilities and the underlying amounts are recognized in the Consolidated Statements of Operations under cost of goods sold. Amounts held in Other Comprehensive Income are reclassified to earnings at the point customer commitments are realized. Information regarding this type of derivative transaction is as follows:


	For the Year Ended December 31,
(In millions)	2008			2007
Gains (losses) arising from ineffectiveness included in operations	$	0.3		$	(0.3	)
Gains (losses) reclassed from other comprehensive income (OCI) to operations	$	(0.4	)	$	1.1


	December 31,
(In millions)	2008			2007
Aggregate notional value of derivatives outstanding	$	11.9		$	20.1
Period through which derivative positions currently exist		December 2009			September 2008
Losses in fair value of derivatives	$	(4.9	)	$	(0.5	)
The change in fair value due to the effect of a 10% adverse change in commodity prices to current fair value	$	(0.7	)	$	(2.0	)
Deferred losses included in OCI	$	(5.1	)	$	(0.5	)
Losses included in OCI to be recognized in the next 12 months	$	(5.1	)	$	(0.5	)
Number of months over which gain in OCI is to be recognized		12			9

We have firm-price purchase commitments with some of our copper suppliers under which we agree to buy copper at a price set in advance of the actual delivery of that copper to us. Under these arrangements, we assume the risk of a price decrease in the market price of copper between the time this price is fixed and the time the copper is delivered. In order to reduce our market exposure to price changes, at the time we enter into a firm-price purchase commitment, we also often enter into commodity forward contracts to sell a like amount of copper at the then-current price for delivery to the counterparty at a later date. We account for these transactions as cash flow hedges under SFAS 133. The net change in the derivative assets and liabilities and the underlying amounts are recognized in the Consolidated Statements of Operations under cost of goods sold. Amounts held in OCI are reclassified to earnings at the point purchase commitments are realized. Information on this type of derivative transaction is as follows:


	For the Year Ended December 31,
(In millions)	2008			2007
Losses arising from ineffectiveness included in operations	$	—		$	(0.3	)
Gains (losses) reclassed from OCI to operations	$	(0.9	)	$	0.8


	December 31,
(In millions)	2008		2007
Aggregate notional value of derivatives outstanding	$	—	$	3.5
Period through which derivative positions currently exist		n/a		March 2008
Losses, in fair value of derivatives	$	—	$	(0.1	)
The change in fair value due to the effect of a 10% adverse change in commodity prices to current fair value	$	—	$	(0.3	)
Deferred gains included in OCI	$	—	$	0.1
Gains included in OCI to be recognized in the next 12 months	$	—	$	0.1
Number of months over which gain in OCI is to be recognized		n/a		3

We have entered into commodity forward contracts to sell copper in order to hedge or protect the value of the copper carried in our inventory from price decreases. We account for these forward contracts as fair value hedges under SFAS 133. The fair value of these derivatives are recognized in derivative assets and liabilities in the Consolidated Balance Sheets. The net change in the derivative assets and liabilities and the underlying amounts are recognized in the Consolidated Statements of Operations under cost of goods sold. Information on this type of derivative transaction is as follows:


	For the Year Ended December 31,
(In millions)	2008		2007
Gains arising from ineffectiveness included in operations	$	0.4	$	0.0


	December 31,
(In millions)	2008			2007
Aggregate notional value of derivatives outstanding	$	0.4		$	10.3
Period through which derivative positions currently exist		March 2009			March 2008
Gains in fair value of derivatives	$	0.1		$	0.3
The change in fair value due to the effect of a 10% adverse change in commodity prices to current fair value	$	(0.6	)	$	(1.0	)

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On February 16, 2007, we entered into a silver consignment arrangement with a bank. The amount of silver available to us under our new consignment facility is insufficient to satisfy all of our silver requirements. Consequently, we must purchase and hold in inventory a minimal amount of silver. We have entered into commodity forward contracts to sell silver in order to hedge or protect the value of the silver carried in our inventory from future price decreases. We account for these forward contracts as fair value hedges under SFAS 133. The net change in the derivative assets and liabilities and the underlying amounts are recognized in the Consolidated Statements of Operations under cost of goods sold. Information on this type of derivative transaction is as follows:


	For the Year Ended December 31,
(In millions)	2008		2007
Gains arising from ineffectiveness included in operations	$	0.3	$	0.5


	December 31,
(In millions)	2008		2007
Aggregate notional value of derivatives outstanding	$	—	$	2.0
Period through which derivative positions currently exist		n/a		December 2008
Loss in fair value of derivatives	$	—	$	—
The change in fair value due to the effect of a 10% adverse change in commodity prices to current fair value	$	—	$	(0.2	)

Prior to 2008, we also entered into commodity futures contracts to purchase natural gas to reduce our risk of future price increases. The Decatur, Alabama facility was the largest user of natural gas, and as a result of the significant reduction in operations at that facility in December 2007, there is no longer a need for these commodity futures contracts. As a result, all of our outstanding natural gas contracts were settled at the end of December 2007. Until the contracts were settled, we accounted for these transactions as cash flow hedges under SFAS 133. The net change in the derivative assets and liabilities and the underlying amounts was recognized in the Consolidated Statements of Operations under cost of goods sold. Information on this type of derivative transaction is as follows:


	For the Year Ended December 31,
(In millions)	2008		2007
Losses arising from ineffectiveness included in operations	$	—	$	(1.9	)
Losses reclassed from OCI to operations	$	—	$	—


	December 31,
(In millions)	2008		2007
Aggregate notional value of derivatives outstanding	$	—	$	—
Period through which derivative positions currently exist		n/a		n/a
Gains in fair value of derivatives	$	—	$	—
The change in fair value due to the effect of a 10% adverse change in commodity prices to current fair value	$	—	$	—
Deferred losses included in OCI	$	—	$	—
Gains included in OCI to be recognized in the next 12 months	$	—	$	—
Number of months over which gain in OCI is to be recognized		n/a		n/a

Foreign Currency Exchange Risk

We are subject to market risk exposure from fluctuations in foreign currencies. Foreign currency exchange forward contracts may be used from time to time to hedge the variability in cash flows from the forecasted payment or receipt of currencies other than the functional currency. We do not enter into forward exchange contracts for speculative purposes. These forward currency exchange contracts and the underlying hedged receivables and payables are carried at their fair values, with any associated gains and losses recognized in current period earnings. These contracts cover periods commensurate with known or expected exposures, generally within three months. As of December 31, 2008, we had no forward exchange contracts outstanding to sell foreign currency.

Material Limitations

The disclosures with respect to the above-noted risks do not take into account the underlying commitments or anticipated transactions. If the underlying items were included in the analysis, the gains or losses on the futures contracts may be offset. Actual results will be determined by a number of factors that are not generally under our control and could vary significantly from those factors disclosed.

We are exposed to credit losses in the event of nonperformance by counterparties on the above instruments, as well as credit or performance risk with respect to our hedged customers’ commitments. Although nonperformance is possible, we do not anticipate nonperformance by any of these parties.

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10.	Property, Plant, and Equipment

Property, plant, and equipment (excluding assets held for sale) at December 31 are as follows:


(In thousands)	2008			2007
Land and improvements	$	4,018		$	6,143
Building and improvements		22,542			26,216
Machinery and equipment		104,547			131,000
Critical spare parts		3,677			3,316
Construction-in-progress		2,402			2,071

		137,186			168,746
Less accumulated depreciation		(85,182	)		(99,668	)

Totals	$	52,004		$	69,078

11.	Assets Held for Sale

The following indicates the components of assets held for sale for the years ended December 31, 2008 and 2007:

Assets Held for Sale 2008


(In thousands)	Decatur, Alabama
Land	$	3,680

Total assets held for sale	$	3,680

Assets Held for Sale 2007


(In thousands)	Combined			Decatur, Alabama		Booneville, Mississippi		Altoona, Pennsylvania			Montreal, Quebec
Receivables	$	6,569		$	—	$	—	$	6,569		$	—

Inventory		9,837			—		—		9,837			—

Other assets		1,276			—		—		1,276			—

Land		7,657			3,680		158		—			3,819

Building		7,452			—		1,595		4,768			1,089

Equipment		10,210			3,629		1,560		2,998			2,023


Total assets held for sale	$	43,001		$	7,309	$	3,313	$	25,448		$	6,931


Total liabilities held for sale	$	(1,853	)	$	—	$	—	$	(1,853	)	$	—

On September 13, 2006, we announced the planned closure of our manufacturing facilities located in Jackson, Tennessee and Montreal, Quebec. According to plan, the operations at the Montreal, Quebec and Jackson, Tennessee facilities were phased out by the end of the 2006 and the assets were classified as held-for-sale.

On November 6, 2007, we announced the planned realignment and restructuring of the Company’s North American operations to include the closure of our Booneville, Mississippi facility and the significant downsizing of our Decatur, Alabama operations. These actions were in line with our strategy of focusing resources on the development and sale of high-performance tubular products, fabricated tube assemblies, and metal joining products.

During the fourth quarter of 2007, we determined that selling our Altoona, Pennsylvania facility would be in line with the Company’s long-term strategic plan. As a result, we classified the Altoona facility’s building and equipment as held-for-sale, under the guidelines of SFAS 144, and based an estimated fair value on the subsequent sales value of the property.

During the first quarter of 2008, we recorded an impairment of $0.4 million before taxes for the land and building at our Booneville, Mississippi location. The impairment charge was recorded to adjust the carrying value to the sales value agreed by the purchaser. In April 2008, we consummated the sale of the Booneville property and buildings for $1.4 million. The majority of the

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Booneville equipment was included in the sale; however, a portion was not, and was subsequently moved to our Decatur, Alabama facility, bringing the total value of our domestic equipment held for sale at the end of the second quarter of 2008 to $0.6 million. During the third quarter of 2008, in part as a result of the sluggish economy, the remaining equipment held for sale was completely written off.

During the first quarter on February 29, 2008, we completed the sale of our STP business in Altoona, Pennsylvania, which resulted in a reduction of $25.4 million in assets held for sale and a reduction of $1.9 million in liabilities of discontinued operations.

During the third quarter, on September 25, 2008, we sold our Montreal plant.

The Decatur, Alabama property is in a less economically depressed area in north central Alabama and currently is the benefactor of growth associated with the military, military support, and space industries. Issues with the Decatur facility include its size, age, and potential environmental issues depending on the use of the property. Its location on the Tennessee River in water deep enough for mooring or docking commercial or large private vessels has appeal to both commercial and industrial users. We have estimated a net fair value of approximately $3.7 million for a sale of the property since the land could potentially be attractive for commercial development; however, the demolition and removal of the buildings and building materials on the site, net of recoveries, would be costly but necessary unless a buyer would need the existing facilities on the property. We continue to utilize a portion of the Decatur facility for product development and it houses our sales and administrative functions. However, the entire property is listed as held for sale.

The following is a summary of the asset impairment charge by location and amount, which has been included in “Restructuring and Other Charges” in the accompanying Consolidated Statements of Operations for the years ended December 31, 2008 and 2007:

Fixed Asset Impairment Charge for 2008


(In thousands)	Combined		Decatur, Alabama			Booneville, Mississippi
Equipment	$	350	$	(741	)	$	391

Total	$	350	$	(741	)	$	391

Fixed Asset Impairment Charge for 2007


(In thousands)	Combined		Decatur, Alabama		Booneville, Mississippi		Jackson, Tennessee
Building	$	4,603	$	4,262	$	341	$	—

Equipment		44,380		35,872		2,317		6,191


Total	$	48,983	$	40,134	$	2,658	$	6,191

12.	Intangible Assets and Deferred Charges

Intangible assets and deferred charges include debt issuance and patent costs. Debt issuance costs are deferred and amortized over the terms of the debt to which they relate using a method which approximates the interest method. Patents are amortized over the remaining term of the patent.

Intangible assets and deferred charges subject to amortization, including the intangible assets from our acquisitions detailed in Note 4, Recapitalization Plan, are as follows:


	December 31, 2008					December 31, 2007
	Gross Carrying Amounts		Accumulated Amortization			Gross Carrying Amounts		Accumulated Amortization
Patents and trademarks		1,478		(206	)		1,110		(196	)
Deferred financing fees		16,194		(15,453	)		14,298		(11,825	)
Other deferred charges		621		—			1,151		(254	)

	$	18,293	$	(15,659	)	$	16,559	$	(12,275	)

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For the years ended December 31, 2008, and 2007, amortization expense for other intangible assets was $3.7 million and $3.5 million, respectively. The approximate future annual amortization for other intangible assets is as follows:


Years ending December 31:
2009	$	786
2010		45
2011		46
2012		45
2013		46
Thereafter		1,666

Total	$	2,634

13.	Accrued Liabilities

Accrued liabilities are as follows at December 31:


(In thousands)	2008		2007
Interest	$	3,673	$	6,934
Income taxes		247		393
Reserve for restructuring		—		4,468
Fair value of derivatives and unsettled derivative liabilities		5,415		925
Worker’s compensation		1,679		1,715
State and local taxes		375		3,809
Dividends		5,785		708
Other accrued operating expenses		7,276		8,045

Total	$	24,450	$	26,997

14.	Financing Arrangements and Debt

Long-term debt consists of the following at December 31:


(In thousands)	2008			2007
Senior Notes, 7.375%, due August 2008	$	—		$	136,750
Discount on 7.375% Senior Notes		—			(17	)
Senior Notes, 10.5%, due April 2009		94,400			99,400
Discount on 10.5% Senior Notes		(44	)		(214	)
Senior Exchange Notes, 15.0%, due March 2012		38,300			—
Other foreign subsidiaries		—			1,017
Capitalized leases		14			24

Total debt		137,670			236,960
Less short-term borrowings		(19,759	)		(90,939	)

Total long-term debt	$	117,911		$	146,021

Aggregate maturities of long-term debt are as follows:


(In thousands)
2012	$	117,911

Total	$	117,911

On April 28, 2009, we refinanced the 10.5% Senior Notes and the 10.5% Senior Exchange Notes by exchanging $121.6 million of these notes for 15% Senior Secured Notes due 2012 for an exchange fee of 3% of the principal balance of the exchanged notes ($3.6 million). The remaining $16.1 million of Existing Notes were paid in full on April 28, 2009. Accordingly, in our Consolidated Balance Sheet as of December 31, 2008 and in the above, we classified $117.9 million of the 10.5% Senior Notes as long-term debt. See note 33, Subsequent Events, for additional information

In March 2008, Plainfield refinanced $38.3 million of the 7.375% Senior Notes held by it by extending the maturity date to March 28, 2009 with an increase in the interest rate to 10.5%, and Alpine purchased $10.0 million of our Series B Convertible Preferred Stock under terms substantially similar to the Series A Convertible Preferred Stock, the proceeds of which will be used to retire a portion of our 7.375% Senior Notes. Accordingly, in our Consolidated Balance Sheet as of December 31, 2007, and in the above, we classified $46.9 million ($48.3 million net of associated fees of $1.4 million) of our 7.375% Senior Notes as long-term debt.

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Liquidity Facilities

As of December 31, 2008, our liquidity facilities consisted of a receivables sale facility of up to $35.0 million and a secured revolving credit facility of up to $19.9 million. In addition, we maintained a silver consignment facility under which we may request consignments of silver with an aggregate value up to the lesser of $16.0 million or 85.0% of the aggregate undrawn face amount of letters of credit required to be provided to the facility provider.

Receivables Sale Facility

On April 28, 2005, we established a Receivables Sale Facility. The limit on the facility was adjusted from time to time and at December 31, 2008 was $35.0 million.

In accordance with the provisions of SFAS140, we include in accounts receivable in our consolidated balance sheets the portion of receivables sold to DEJ98 Finance, LLC (DEJ), our receivables finance subsidiary, which have not been resold by DEJ to the Purchasers. At December 31, 2008 and 2007, there was no outstanding amount of investment by the Purchasers under the agreements. As such, the accounts receivable in the consolidated balance sheets was not impacted at December 31, 2008 and 2007. Availability under our receivables sale facility as of December 31, 2008 was $12.4 million, with no outstanding advances. The receivables sale facility was terminated on February 19, 2009.

Secured Revolving Credit Facility

On April 28, 2005, we entered into an amended and restated secured revolving credit facility with Wachovia Bank. On December 9, 2008, we reduced the maximum aggregate borrowing availability to $19.9 million. The $19.9 million was fully utilized by various letters of credit supporting our silver consignment facility and our insurance programs. The $19.9 million of Letters of Credit were fully cash collateralized. This amount is included in our restricted cash balance in our December 31, 2008 Consolidated Balance Sheet. This facility was terminated on February 19, 2009.

Silver Consignment Facility

On February 16, 2007, we entered into a silver consignment facility with HSBC Bank USA N.A. (HSBC). Under the consignment facility as of December 31, 2008, we may from time to time request from HSBC, and HSBC may in its sole discretion provide, consignments of silver with an aggregate value of up to the lesser of (a) $16.0 million or (b) 85% of the aggregate undrawn face amount of letters of credit required to be provided to HSBC pursuant to the consignment facility.

The consignment facility included customary representations, warranties, covenants, and conditions with which we must comply in order to access the consignment facility. In addition, the consignment of silver to us by HSBC under the consignment facility was conditioned on HSBC’s prior receipt and the continued effectiveness of letters of credit in an aggregate amount such that the value of all outstanding consigned silver under the consignment facility is not more than 85% of the aggregate undrawn face amount of the letters of credit.

The HSBC consignment facility is a demand facility. Consequently, upon demand by HSBC, all outstanding consigned silver (or the value thereof) and all other obligations under the consignment facility will become due and payable, and HSBC may draw on the letters of credit to cover such amounts. The facility terminated on February 19, 2009, and HSBC drew on the letters of credit to cover the cost of the consigned silver that we simultaneously purchased. The balance of the letters of credit was refunded to us by Wachovia.

Under our silver consignment and forward contracts facility in place at December 31, 2008, we had $10.3 million of silver in our inventory under the silver consignment facility, with a corresponding amount included in accounts payable and $2.1 million committed to under the forward contracts facility.

7.375% Senior Notes due 2008

There was $136.8 million in principal amount of 7.375% Senior Notes outstanding at December 31, 2007. On February 29, 2008, we repurchased $12.0 million in face amount of our 7.375% Senior Notes at a discount below the face value of the notes. On March 20, 2008, we refinanced $38.3 million of our 7.375% Senior Notes held by Plainfield by exchanging them for 10.5% Senior Exchange Notes. On April 8, 2008, we repurchased an additional $25.0 million in face amount of our 7.375% Senior Notes, also at a discount below the face value of the notes, leaving $61.4 million in face amount of our 7.375% Senior Notes, which we repaid at maturity on August 1, 2008.

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10.5% Senior Notes and 10.5% Senior Exchange Notes

The 10.5% Senior Notes were issued on March 27, 2002, and the 10.5% Senior Exchange notes were issued on March 20, 2008.

On February 26, 2009, we announced the commencement of an offer (the “Exchange Offer”) to each of the holders of our 10.5% Senior Exchange Notes and our 10.5% Senior Notes due March 28, 2009 and April 1, 2009 respectively, to exchange these notes for new notes in order to refinance those maturities. The Exchange Offer was successfully consummated on April 28, 2009. $83.3 million of the 10.5% Senior Notes and $38.3 million of the 10.5% Senior Exchange Notes were exchanged for Senior Secured Notes due 2012. The remaining $16.1 million of 10.5% Senior Notes were repaid on April 28, 2009. See Note 33, Subsequent Events, for a description of the Exchange Offer and a description of the new Senior Secured Notes.

Other Credit Facilities

Wolverine Tube Europe has a credit facility with a Netherlands bank, payable on demand and providing for available credit of up to 2.9 million euros or approximately $4.0 million. At December 31, 2008, we had no outstanding borrowings under this facility. There were approximately 0.4 million euros or approximately $0.6 million in borrowings as of December 31, 2007. Collateral has been given to the Netherlands bank in the form of a pledge of all future debts and a pledge for all stocks. In addition, Wolverine Tube Europe B.V. has granted the bank a guarantee regarding the property lease agreement in the amount of 29.8 thousand euros or approximately $41.5 thousand.

15.	Interest Expense

The following table summarizes interest expense, net:


	Year Ended December 31,
(In thousands)	2008			2007
Interest expense – bonds and other	$	18,637		$	21,811
Interest expense – revolver		—			54
Interest income		(1,197	)		(482	)
Capitalized interest		(84	)		(58	)

Interest expense, net	$	17,356		$	21,325

16.	Retirement and Pension Plans

In September 2006, the FASB issued SFAS 158. We adopted the provisions of the statement as of December 31, 2006. This statement requires balance sheet recognition of the overfunded or underfunded status of pension and postretirement benefit plans. Under SFAS 158, actuarial gains and losses, prior service costs or credits, and any remaining transition assets or obligations that have not been recognized under previous accounting standards must be recognized in accumulated other comprehensive income (loss) in equity, net of tax effects, until they are amortized as a component of net periodic benefit cost. In addition, the measurement date (the date at which plan assets and the benefit obligation are measured) is required by SFAS 158 to be our Company’s fiscal year-end, which is consistent with the measurement date we use.

In January 2006, we announced the modernization of our retirement program for the majority of our active U.S. employees. As part of the retirement benefit modernization program, we froze both our U.S. qualified defined benefit plan and Supplemental Benefit Restoration Plan, effective February 28, 2006. Additionally, we terminated the 2002 Supplemental Executive Retirement Plan (the “Executive Plan”) in December 2005. On March 1, 2006, we made enhancements to our 401(k) plan for the employees impacted by the freeze of the defined benefit plan. These enhancements include an automatic 3% contribution to each affected employee’s 401(k) account, a match (the percentage of which is determined annually for the next year) of employees’ discretionary contributions, the addition of a success sharing component to the 401(k) plan, and the provision of transition contributions for five years, based upon an employee’s age and years of service.

We recorded expense with respect to the 401(k) plans for the years ended December 31, 2008 and 2007 as shown in the table below:


(In thousands)	2008		2007
401(k) employer match	$	310	$	496
3% defined contribution		1,075		1,627
Success share		—		776
Transition credit		468		767

Total	$	1,853	$	3,666

The 401(k) employer match and the 3% defined contribution programs were funded during 2008.

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U.S. Qualified Retirement Plan

We have a U.S. defined benefit pension plan (U.S. Retirement Plan) that is noncontributory covering the majority of all our U.S. employees fulfilling minimum age and service requirements. Benefits are based upon years of service and a prescribed formula based upon the employee’s compensation. As mentioned above, on February 28, 2006, we froze the benefits available under this plan. As a result of the freeze, all future benefit accruals ceased for U.S. Retirement Plan participants as of February 28, 2006. Participants maintain U.S. Retirement Plan benefits accrued through that date.

On February 29, 2008, the Company sold substantially all the assets and liabilities of its Altoona, Pennsylvania STP manufacturing facility (discussed previously in this report). The pension obligation for employees who had retired before the time of the sale was retained by the Company. The expenses for this program through February 29, 2008 for STP are in the Consolidated Statement of Operations as discontinued operations. The pension obligation for the STP retirees at December 31, 2008 is reflected in the Consolidated Balance Sheet.

The weighted average asset allocations for our U.S. Retirement Plan at December 31, 2008 and 2007 are as follows:


	2008		2007
Equity securities	52	%	59	%
Debt securities	47		39
Cash and equivalents	1		2

Total	100	%	100	%

The investment policy of our U.S. Retirement Plan states that the overall target allocation of investments should be 60% equities and 40% bonds. The investment policy of our U.S. Retirement Plan states that all assets selected for the portfolio must have a readily ascertainable market value and must be readily marketable. The policy expressly prohibits certain types of assets or transactions including commodities, futures, private placements, warrants, purchasing of securities on margin, selling short, options, derivatives, interest rate swaps, limited partnerships, and real estate.

The investment policy of our U.S. Retirement Plan states that investments in equity securities must be of good quality and diversified so as to avoid undue exposure to any single economic sector, industry, or group or individual security. The policy states that investments in debt securities should be rated “A” or better, allowing debt securities with a rating of “BBB” as long as the total amount rated “BBB” does not exceed 10% of the debt securities portfolio at the time of purchase and as long as the debt securities portfolio maintains an overall rating of at least “A.” The investment policy limits the debt securities of any one issuer, excluding investments in U.S. government guaranteed obligations, and states that no debt securities should have a maturity of longer than 30 years at the time of purchase.

The U.S. Retirement Plan uses a December 31 measurement date.

The amounts recognized in the Consolidated Balance Sheets before taxes are as follows at December 31:


(In thousands)	2008			2007
Accrued benefit liability — non-current	$	(44,561	)	$	(16,602	)

The accumulated other comprehensive income (loss) for the years ended December 31, 2008 and 2007, was a net actuarial loss of $53.9 million and $14.9 million, respectively.

Certain assumptions utilized in determining the benefit obligations for the U.S. Retirement Plan for the years ended December 31 are as follows:


	2008		2007
Discount rate	6.90	%	6.55	%
Rate of increase in compensation	N/A		N/A

A summary of the components of net periodic pension cost for the U.S. Retirement Plan for the years ended December 31 is as follows:


(In thousands)	2008			2007
Interest cost		9,401			9,481
Expected return on plan assets		(11,172	)		(10,750	)
Amortization of net actuarial loss		—			1,046

Net periodic pension income	$	(1,771	)	$	(223	)

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The amortization of our net actuarial loss under the Qualified Pension Plan in 2007 of $1.0 million is the amortization of total unrecognized losses as of January 1, 2007 that exceeds 10% of our projected benefit obligation. We had no unrecognized losses that exceed 10% of our projected benefit obligation as of January 1, 2008 to amortize. The table below illustrates the changes in plan assets and projected benefit obligation recognized in accumulated other comprehensive income (loss), before taxes.


(In thousands)	2008		2007
Net pension actuarial (gain) loss	$	38,982	$	(8,158	)
Amortization of net pension actuarial loss		—		(1,046	)
Pension curtailment gain		—		(547	)

Total recognized in accumulated other comprehensive income (loss)	$	38,982	$	(9,751	)

We estimate there will be approximately $4.0 million net actuarial loss that will need to be amortized from accumulated other comprehensive income (loss) during 2009.

Certain assumptions utilized in determining the net periodic benefit cost for the years ended December 31 are as follows:


	2008		2007
Discount rate	6.55	%	5.92	%
Rate of increase in compensation	N/A		N/A
Expected long-term rate of return on plan assets	8.25	%	8.25	%

The expected long-term rate of return on plan assets is selected by taking into account the expected weighted averages of the investments of the assets, the fact that the plan assets are actively managed to mitigate downside risks, the historical performance of the market in general and the historical performance of the U.S. Retirement Plan assets over the past 10 years. For the 10-year period ended December 31, 2008 and 2007, the U.S. Retirement Plan assets have provided a weighted average rate of return of 7.2% and 8.5%, respectively.

The accumulated benefit obligations at December 31, 2008 and 2007 were $144.9 million and $153.1 million, respectively. The following table sets forth a reconciliation of the projected benefit obligation for the years ended December 31:


(In thousands)	2008			2007
Benefit obligation at the beginning of the year	$	153,103		$	161,673
Interest costs		9,401			9,481
Actuarial gain		(7,369	)		(8,955	)
Benefits paid		(10,274	)		(8,549	)
Curtailment		—			(547	)

Benefit obligation at the end of the year	$	144,861		$	153,103

The actuarial gain for the year ended December 31, 2008 results from a $4.6 million gain due to personnel experience and a $2.8 million net gain due to the change in the discount rate from 6.55% to 6.90%. The actuarial gain for the year ended December 31, 2007 resulted from a $2.6 million loss due to personnel experience and a $11.5 million gain due to the change in the discount rate from 5.92% to 6.55%.

The following table sets forth a reconciliation of the plan assets for the years ended December 31:


(In thousands)	2008			2007
Fair value of plan assets at the beginning of the year	$	136,501		$	134,262
Company contributions		9,253			835
Actual return on plan assets		(35,180	)		9,953
Benefits paid		(10,274	)		(8,549	)

Fair value of plan assets at the end of the year	$	100,300		$	136,501

In 2009, with regard to the U.S. Retirement Plan, we anticipate making mandatory contributions totaling $2.9 million as required by funding regulations or laws.

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Index to Financial Statements

The following table sets forth the funded status of the plan and the amounts recognized in our Consolidated Balance Sheets at December 31:


(In thousands)	2008			2007
Funded status	$	(44,561	)	$	(16,602	)
Unrecognized amount in accumulated other comprehensive income (loss)		53,864			14,882

Recognized amount	$	9,303		$	(1,720	)

The expected future benefits payments for the plan are as follows:


(In thousands)
2009	$	10,263
2010		10,390
2011		10,521
2012		10,675
2013		10,972
2014-2018		58,279

U.S. Nonqualified Pension Plans

Our Company previously had two nonqualified pension plans in the United States. The Restoration Plan was established as of January 1, 1994. The Restoration Plan is a non-funded, defined benefit pension plan that provides benefits to employees identical to the benefits provided by the U.S. Retirement Plan, except that under the U.S. Retirement Plan final average annual compensation for purposes of determining plan benefits for 2006 was capped at $220,000 by Internal Revenue Code. Benefits under the Restoration Plan are not subject to this limitation. However, Restoration Plan benefits are offset by any benefits payable from the U.S. Retirement Plan. We announced the freezing of the Restoration Plan, effective February 28, 2006. As a result of the freeze, all future benefit accruals ceased for Plan participants as of February 28, 2006. Participants maintain Plan benefits accrued through that date.

The U.S. nonqualified pension plans use a December 31 measurement date.

The amounts recognized in the Consolidated Balance Sheets before taxes are as follows at December 31:


(In thousands)	2008			2007
Accrued benefit liability-current	$	(80	)	$	(126	)
Accrued benefit liability-noncurrent		(991	)		(1,014	)

Total amount recognized	$	(1,071	)	$	(1,140	)

As of December 31, 2008, included in accumulated other comprehensive income (loss) was a net actuarial loss of $50,000.

Certain assumptions utilized in determining the benefit obligations for the nonqualified pension plans for the years ended December 31 are as follows:


	2008		2007
Discount rate	6.90	%	6.34	%
Rate of increase in compensation	N/A		N/A

A summary of the components of net periodic pension cost for the nonqualified pension plans for the years ended December 31 is as follows:


(In thousands)	2008		2007
Interest cost	$	67	$	68
Amortization of net actuarial loss		—		6

Net periodic pension cost	$	67	$	74

The table below illustrates the changes in plan assets and projected benefit obligation recognized in other comprehensive income (loss), before taxes, under the U.S. Nonqualified Pension Plan.


(In thousands)	2008			2007
Net actuarial loss	$	(56	)	$	(21	)
Amortization of net actuarial loss		—			(5	)

Total recognized in accumulated other comprehensive income (loss)	$	(56	)	$	(26	)

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Index to Financial Statements

We estimate there will be no net actuarial loss that will need to be amortized from accumulated other comprehensive income (loss) during 2009.

Certain assumptions utilized in determining the net periodic benefit cost for the years ended December 31 are as follows:


	2008		2007
Discount rate	6.3	%	5.83	%
Rate of increase in compensation	N/A		N/A

The unfunded accumulated benefit obligation for the nonqualified pension plan was $1.1 million at December 31, 2008 and $1.1 million at December 31, 2007. The following table sets forth a reconciliation of the projected benefit obligation for the years ended December 31:


(In thousands)	2008			2007
Benefit obligation at the beginning of the year	$	1,140		$	1,173
Interest costs		67			68
Actuarial gain		(56	)		(21	)
Benefits paid		(80	)		(80	)

Benefit obligation at the end of the year	$	1,071		$	1,140

The following table sets forth a reconciliation of the plan assets for the years ended December 31:


(In thousands)	2008			2007
Fair value of plan assets at the beginning of the year	$	—		$	—
Company contributions		80			80
Benefits paid		(80	)		(80	)

Fair value of plan assets at the end of the year	$	—		$	—

In 2009, we anticipate making payments to participants of $0.1 million, which represents the equivalent of the normal amount of benefits.

The following table sets forth the funded status of the plan and the amounts recognized in our Consolidated Balance Sheets at December 31:


(In thousands)	2008			2007
Funded status	$	(1,071	)	$	(1,140	)
Unrecognized amount in accumulated other comprehensive income (loss)		50			106

Recognized amount	$	(1,021	)	$	(1,034	)

The expected future benefits payments for the plan are as follows:


(In thousands)
2009	$	80
2010		80
2011		81
2012		81
2013		80
2014-2018		486

Canadian Plans

Prior to the sale of our London, Ontario operation on July 8, 2008, we sponsored a defined contribution profit-sharing retirement plan for our London, Ontario facility employees who are required to contribute 4% of regular wages, subject to a maximum contribution limit specified by Canadian income tax regulations. This plan went with the sale of the London, Ontario operation. Company contributions were $0.5 million in 2008 and $0.7 million in 2007.

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Index to Financial Statements

We had two noncontributory defined benefit pension plans covering substantially all our employees at the Montreal, Quebec facility. The two plans were the Wolverine Tube (Canada) Inc. Pension Plan for Salaried Employees (the “Salaried Plan”) and the Wolverine Tube (Canada) Inc. Pension Plan for Operational Employees (the “Operational Plan”). We contributed the actuarially determined amounts annually into the plans. Benefits for the hourly employees were based on years of service and a negotiated rate. Benefits for salaried employees were based on years of service and the employee’s highest annual average compensation over five consecutive years.

On January 31, 2007, in connection with the closure of our Montreal, Quebec facility, the plans were terminated. On February 23, 2007, we purchased annuities for the retirees in these plans from plan assets. These plans were settled in the third quarter of 2007 when all remaining participants’ benefits were distributed. In accordance with SFAS 158, we reflected in third quarter earnings of 2007, the accumulated other comprehensive income (loss) at the time of settlement of $1.3 million representing unamortized actuarial losses. We also recognized a settlement gain of $1.5 million which was partially offset by a curtailment loss of $0.8 million in the third quarter. As a result of closing and settling the plans in 2007, there were no amounts related to these plans on the Company’s Consolidated Balance Sheets at December 31, 2007 and 2008.

A summary of the components of net periodic pension cost for the Canadian plans to terminate and settle the plans for the year ended December 31, 2007 is as follows:


(In thousands)	Salaried Plan			Operational Plan
Interest cost	$	313		$	547
Expected return on plan assets		(96	)		(325	)
Effect of settlement		1,940			—
Effect of curtailment		—			(1,178	)

Net periodic pension cost	$	2,157		$	(956	)

In April 2007, annuities were purchased for all retirees. Other vested recipients were paid on a lump-sum basis on the settlement date. At the end of 2007, all obligations under this plan were satisfied. The following table sets forth a reconciliation of the projected benefit obligation for the Canadian plans for the year ended December 31, 2007:


(In thousands)	Salaried Plan			Operational Plan
Benefit obligation at the beginning of the year	$	11,871		$	20,099
Interest costs		314			547
Benefits paid		(12,953	)		(21,640	)
Effect of curtailment		—			(803	)
Effect of settlement		(292	)		—
Foreign currency exchange rate changes		1,060			1,797

Benefit obligation at the end of the year	$	—		$	—

The following table sets forth a reconciliation of the plans assets for the Canadian plans for the year ended December 31, 2007:


(In thousands)	Salaried Plan			Operational Plan
Fair value of plan assets at the beginning of the year	$	10,695		$	18,500
Actual return on plan assets		96			325
Company contribution		1,207			1,161
Benefits paid		(12,953	)		(21,640	)
Foreign currency exchange rate changes		955			1,654

Fair value of plan assets at the end of the year	$	—		$	—

17.	Postretirement Benefit Obligation

We sponsor a health care plan and life insurance plan that provides post retirement medical benefits to substantially all our full-time U.S. and Canadian employees who have worked 10 years after age 50 (52 for employees of our Altoona, Pennsylvania facility), and spouses of employees who die while employed after age 55 and have at least five years of service. This plan is contributory, with retiree contributions being adjusted annually. The plan was modified twice in 2005 to grant retiree coverage at active rates, without regard to the age requirement to one executive officer and to exclude employees who are not yet age 55 (age 57 for employees located in Altoona, Pennsylvania) or older as of February 28, 2006 from subsidized retiree medical coverage. We have plans that provide life insurance to substantially all our full-time U.S. and Canadian employees.

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Index to Financial Statements

On February 29, 2008, the Company sold substantially all the assets and liabilities of its STP manufacturing facility (see note 7, Discontinued Operations). The post retirement benefit obligation for employees who had retired before the time of the sale was retained by the Company. The expenses for this program through February 29, 2008 for STP are in the Consolidated Statement of Operations as discontinued operations. The post retirement benefit obligation for the STP retirees at December 31, 2008 are reflected in the Consolidated Balance Sheet.

On July 8, 2008, the Company sold its stock in WTCI, which at the time of sale was substantially all the assets and liabilities of our London operation. Prior to the closing of the sale of WTCI, in a reorganization to remove certain assets and liabilities that were not being purchased, the Company removed from WTCI the postretirement benefit obligation for Montreal together with the postretirement benefit obligation for a limited number of retirees from the Company’s Fergus, Ontario, Canada facility closed in 2002. The liability for Montreal and Fergus was recorded on the Company’s Wolverine Tube Canada Limited Partnership. The postretirement benefit obligation associated with WTCI at the time of the sale was assumed by the purchaser in the transaction. The expenses for this program through July 8, 2008 for London are in the Consolidated Statement of Operations as discontinued operations. Due to the timing of the sale of WTCI, there are no amounts reflected at December 31, 2008 on the Consolidated Balance Sheet.

On September 13, 2006, the Company announced its intent to close its Montreal, Quebec, Canada plant (“Montreal”) and terminate the employees, thereby freezing the number of participants eligible for the postretirement benefit plan. On September 25, 2008, the Company sold Montreal land, building, and certain pieces of equipment. The combined benefit obligation retained for the Montreal and Fergus retirees at December 31, 2008 and 2007 was $1.5 million and $2.6 million, respectively.

The amounts recognized in the Consolidated Balance Sheets before taxes are as follows at December 31:


(In thousands)	2008			2007
Accrued benefit liability – current	$	(755	)	$	(955	)
Accrued benefit liability – non current		(4,662	)		(18,776	)

Total amount recognized	$	(5,417	)	$	(19,731	)

As of December 31, 2008, included in accumulated other comprehensive income (loss) was a net actuarial loss of $3.2 million.

Net periodic postretirement benefit cost for the years ended December 31 includes the following components:


(In thousands)	2008			2007
Service cost	$	74		$	322
Interest cost		379			995
Amortization of prior service cost		(31	)		(49	)
Amortization of net actuarial gain		(1,089	)		(679	)
Effect of curtailment		(370	)		(207	)

Net periodic postretirement benefit cost (gain)	$	(1,037	)	$	382

The change in benefit obligation for the years ended December 31 includes the following components:


(In thousands)	2008			2007
Benefit obligation at the beginning of the year	$	19,731		$	18,532
Sale of London facility		(10,653	)		—
Service cost		74			322
Interest cost		379			995
Participants’ contributions		464			543
Actuarial (gain)		(1,304	)		(959	)
Benefits paid		(1,534	)		(1,487	)
Reduction in benefit obligation due to curtailment gain		(545	)		(264	)
Foreign currency exchange rate changes		(1,195	)		2,049

Benefit obligation at the end of the year	$	5,417		$	19,731

The following table reconciles the beginning and ending balances of the fair value of plan assets for the following years:


(In thousands)	2008			2007
Fair value at beginning of year	$	—		$	—
Company contributions		797			338
Plan participant’s contributions		464			1,201
Benefits paid		(1,261	)		(1,539	)

Fair value at end of year	$	—		$	—

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Index to Financial Statements

The following table sets forth the funded status of the plans at December 31:


(In thousands)	2008			2007
Funded status	$	5,417		$	19,731
Unrecognized amount in accumulated other comprehensive income (loss)		(3,181	)		(6,439	)

Recognized amount	$	2,236		$	13,292

The following chart shows the estimated Future Benefit Payments for U.S. and Canadian plans for the next five years, and the aggregate for the five fiscal years thereafter.

Expected Future Benefit Payments


(In thousands)	Payments
2009	$	814
2010		844
2011		875
2012		870
2013		847
2014-2018		3,702

As indicated in Note 2, Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements, under SFAS 158 gains and losses, prior service costs and credits, and any remaining transition amounts under SFAS 106 that have not yet been recognized through net periodic benefit cost will be recognized in accumulated other comprehensive income (loss), net of tax effects, until they are amortized as a component of net periodic cost.

The following chart sets forth the amounts recognized in accumulated other comprehensive income (loss) at December 31, 2008:


(In thousands)	2008
Prior service cost	$	(5	)
Net gain		(3,176	)

Total accumulated comprehensive income (loss)	$	(3,181	)

The following table sets forth the amounts in accumulated other comprehensive income (loss) expected to be recognized as components of net periodic benefit cost during fiscal year 2009:


(In thousands)	2009
Amortization of prior service costs	$	(32	)
Amortization of net gain		(846	)

Total expected fiscal year 2009 contribution	$	(878	)

The table below illustrates the changes in plan assets and projected benefit obligation recognized in accumulated other comprehensive income (loss) under the Medical and Life Insurance Plans:


(In thousands)	2008
Net actuarial (gain)/loss	$	(1,358	)
Amortization of net actuarial (gain)/loss		1,092
Prior service cost		(43	)
Amortization of prior service cost		32
(Gain)/loss due to curtailment		(545	)
Amortization of (gain)/loss due to curtailment		369

Total recognized in other comprehensive loss	$	(453	)

The weighted average discount rate used in determining the postretirement benefit obligation was 7.07% and 5.44% at December 31, 2008 and December 31, 2007, respectively. The weighted average discount rate used to determine net periodic benefit cost was 6.58% and 5.30% at December 31, 2008 and December 31, 2007, respectively.

Expected contributions to be paid to the U.S. and Canadian plans during the fiscal year of 2009 is $0.8 million.

For purposes of determining the U.S. cost and obligation for pre-Medicare postretirement medical benefits, an 8.0% annual rate of increase in the per capita cost of covered benefits (i.e., health care trend rate) was assumed for our U.S. Plan, grading down to an ultimate rate of 5.0% in 2015.

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Index to Financial Statements

An 9.5% annual rate of increase in the health care trend rate was assumed for our Canadian Plan, and is expected to decrease 1% per year to an ultimate rate of 4.5%. Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage change in the assumed health care cost trend rate would have had the following effects:


(In thousands)	1% Increase		1% Decrease
U.S. Plan:
Effect on total of service and interest cost components	$	5	$	(5	)
Effect on postretirement benefit obligation	$	79	$	(72	)
Canadian Plan:
Effect on total of service and interest cost components	$	3	$	(3	)
Effect on postretirement benefit obligation	$	36	$	(38	)

18.	Environmental Matters

We are subject to extensive environmental regulations imposed by federal, state, provincial, and local authorities in the U.S., Canada, China, Portugal, and Mexico, with respect to emissions to air, discharges to waterways, and the generation, handling, storage, transportation, treatment,, and disposal of waste materials. We have received various communications from regulatory authorities concerning certain environmental responsibilities. We have incurred, and may continue to incur, liabilities under environmental statutes and regulations. Some of these liabilities relate to contamination of sites we own or operate or have previously owned or operated (including contamination caused by prior owners and operators of such sites, or adjoining properties), as well as the off-site disposal of hazardous substances.

We have established an accrual of approximately $9.6 million for undiscounted estimated environmental remediation costs at December 31, 2008. The total cost of environmental assessment and remediation depends on a variety of regulatory, technical and factual issues, some of which are not known or cannot be anticipated. While we believe that the accrual, under existing laws and regulations, is adequate to cover presently-identified environmental remediation liabilities as we presently understand them, there can be no assurance that such amount will be adequate to cover the ultimate costs of these liabilities, or the costs of environmental remediation liabilities that may be identified in the future.

Our Company accrued $8.6 million to cover potential environmental responsibilities related to the significant downsizing of operations at our Decatur facility. This includes complete closure of the industrial wastewater treatment system; disposal of industrial waste associated with the facility closure; delineation of any potential soil and groundwater contamination from previously reported events; and reports and analysis prepared for environmental agency approval.

We have $1.0 million accrued to meet expected additional costs associated with soil and groundwater contamination remediation at our Ardmore, Tennessee facility. On December 28, 1995, we entered into a Consent Order and Agreement with the Tennessee Division of Superfund, relating to the Ardmore facility, under which the Company agreed to conduct an investigation. That investigation has revealed contamination, including elevated concentrations of volatile organic compounds, in the soil and groundwater in areas of the Ardmore facility. Under the terms of the Order, we submitted a Remedial Investigation and Feasibility Study (RI/FS) Work Plan, which Tennessee accepted on October 30, 1996, and have initiated this Work Plan. We began the Work Plan in September 2005, which continued through December 31, 2008. Based on a recommendation by our environmental consultants in October of 2008 we have adjusted our Ardmore, Tennessee accrual to $1.0 million in anticipation of continuing monitoring and remediation efforts for an additional five years. We will continue the Work Plan and assess our progress with the state of Tennessee until such time the necessary remediation is complete.

We believe our operations are in substantial compliance with all applicable environmental laws and regulations. We utilize an active environmental auditing and evaluation process to facilitate compliance. However, future regulations and/or changes in the text or interpretation of existing regulations may subject our operations to more stringent standards. While we cannot quantify the effect of such changes on our business, compliance with more stringent requirements could make it necessary, at costs which may be substantial, to retrofit existing facilities with additional pollution-control equipment and to undertake new measures in connection with the storage, transportation, treatment, and disposal of by-products and wastes.

19.	Litigation

Our facilities and operations are subject to extensive environmental laws and regulations, and we are currently involved in various proceedings relating to environmental matters (see Note 18, Environmental Matters, of the Notes to the Consolidated Financial Statements). We are not involved in any other legal proceedings that we believe could have a material adverse effect upon our business, operating results, or financial condition.

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Index to Financial Statements

20.	Income Taxes

The components of loss from continuing operations before income taxes for the years ended December 31 are as follows:


(In thousands)	2008			2007
U.S.	$	(62,963	)	$	(77,092	)
Foreign		14,607			3,924

Total	$	(48,356	)	$	(73,168	)

The provision for income taxes for the years ended December 31 consists of the following:


(In thousands)	2008			2007
Current expense (benefit):
U.S. federal	$	—		$	—
Foreign		(20,013	)		1,617
State		156			30

Total current		(19,857	)		1,647


Deferred expense (benefit):
U.S. federal and state		(1,283	)		1,808
Foreign		21,817			21

Total deferred		20,534			1,829


Total income tax expense – continuing operations		677			3,476
Income tax benefit – discontinued operations		90			5,040

Total income tax expense	$	767		$	8,516

Deferred income taxes included in our Consolidated Balance Sheets reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the carrying amount for income tax return purposes. Significant components of our deferred tax assets and liabilities are as follows at December 31:


(In thousands)	2008			2007
Deferred tax liabilities:
Property, plant and equipment	$	(30,245	)	$	(29,815	)
Intangibles		4,870			(4,559	)
Inventory		(6,804	)		(6,146	)
Other		(9,075	)		(11,242	)

Total deferred tax liabilities		(41,254	)		(51,762	)


Deferred tax assets:
Environmental remediation reserves		3,611			7,126
Net operating loss carryforward		23,307			24,945
Restructuring reserves		26,791			31,236
Pension obligation		8,699			17,688
Other		6,743			11,707

Total deferred tax assets		69,151			92,702
Valuation allowance		(29,498	)		(44,681	)

Total deferred tax assets net of valuation allowance		39,653			48,021

Net deferred tax liability	$	(1,601	)	$	(3,741	)

Reconciliation of differences between the statutory U.S. federal income tax rate and our effective tax rate follows for the years ended December 31:


(In thousands)	2008			2007
Income tax benefit at federal statutory rate	$	(16,925	)	$	(25,609	)
Increase (decrease) in taxes resulting from:
State and local taxes		(853	)		(2,604	)
Effect of difference between U.S. and foreign rates		18,696			331
Embedded derivative		—			(5,514	)
Items related to Canada sale		5,334			—
Goodwill		5,884			—
Other permanent differences		421			49
Foreign dividend repatriation		—			3,121
Increase (decrease) in valuation allowance		(10,859	)		35,006
Other		(1,021	)		(1,304	)

Income tax expense – continuing operations	$	677		$	3,476
Income tax benefit – discontinued operations		90			5,040

Total income tax expense	$	767		$	8,516

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Index to Financial Statements

During 2008, the Company sold the stock of its Canadian operations. After filing the Company’s Canadian tax returns for the change in control, the remaining foreign net operating losses (“NOLs”) transferred with the ownership. During 2007, the Company experienced an ownership change, which caused a limitation on the utilization of NOLs incurred prior to the ownership change from being utilized in future years. As such, the gross deferred tax asset related to the NOLs was reduced to reflect the amount that could be utilized. There was a corresponding decrease in the valuation allowance resulting in no impact on results from operations due to this adjustment. At December 31, 2008, we have U.S. federal and state NOL carryforwards available to be utilized of $61.8 million and $59.4 million, respectively. These NOL carryforwards expire at various times beginning in 2009 through 2028.

During 2008, there was a net decrease in the valuation allowance for U.S. and foreign deferred tax assets from $44.2 million to $29.5 million. This change was attributable to the decrease in the valuation allowance due to the transfer of ownership of our Canadian operations mentioned above, partly offset by an increase attributable to the current year U.S. loss. The increase for the current year loss resulted in a $10.3 million charge to operations. All net deferred tax assets have a valuation allowance against them. At December 31, 2008, we are in a net deferred tax liability position of $1.6 million primarily as a result of the remaining accrual for withholding taxes on the planned repatriation of undistributed foreign earnings as discussed below in the amount of $1.4 million.

At December 31, 2007, the undistributed earnings of our foreign subsidiaries amounted to approximately $47.7 million. During 2007, Management re-evaluated their position under Accounting Principles Board (“APB”) Opinion No. 23 and determined that $20.0 million of the foreign earnings were not going to be indefinitely reinvested. Accordingly, $2.9 million of foreign withholding taxes were accrued as of December 31, 2007 leaving foreign withholding taxes of approximately $1.8 million that would also be payable upon remittance of any previously unremitted earnings at December 31, 2007. The exact amount of the charge depends on the pending technical corrections to the legislation and expected interpretive guidance to be issued by the Internal Revenue Service. During 2008 the Company repatriated dividends of $8.0 million from its Wolverine Tube Shanghai affiliate. In 2007 the Company had accrued withholding taxes of $1.5 million, which due to changes in the withholding tax laws of China was not assessed at the time of repatriation. As a result, income tax expense for 2008 was lowered by the reversal of these previously accrued withholding taxes.

Uncertain Tax Positions

Effective January 1, 2007, Wolverine Tube adopted FIN 48, Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109. FIN 48 dictates a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. The adoption of FIN 48 in the first quarter of 2007 resulted in a reclassification of certain liabilities, but had no impact on results from operations.

As part of the ongoing review of the company’s FIN 48 liabilities, management determined in 2007 and again in 2008 that while its uncertain tax positions in the U.S. and Canada (2007 only, as the stock of our Canadian operations were sold in 2008) still exist, there is no longer a need for a separate liability for uncertain tax positions (“UTPs”). As such, in 2007 we reduced the UTP liability and corresponding deferred tax asset. The impact of this adjustment on prior periods was not material. The liability for UTPs for 2007 and 2008 are reflected as a reduction in the deferred tax assets related to the NOL carryforwards. Since there is a full valuation allowance against the deferred tax assets attributable to the NOLs in these tax jurisdictions, the Company cannot foresee an event which would give rise to either (1) paying any cash taxes due to an examination of a previously filed tax return or (2) any assets being impaired (such as the NOL). In 2008, the Company identified UTPs related to one of its foreign operations. The impact on results from operations to establish a reserve for this UTP was a charge of $0.4 million.

Penalties and tax-related interest expense are reported in other expense, net and interest and amortization expense, net, respectively, on the Consolidated Statements of Operations. As of December 31, 2008, no amounts have been recognized in the financial statements relative to FIN 48 in the United States as we have significant NOL carryforwards in the tax jurisdictions where we have uncertain tax positions and we would utilize these NOLs in the event of an adjustment resulting from an audit by the respective taxing authority.

Wolverine and its subsidiaries file income tax returns in the United States as well as various foreign countries and state jurisdictions. The Internal Revenue Service has examined the tax years up through 2004 and all subsequent years are still open to examination. The statue of limitations on state jurisdictions vary between two and four years past the filing date. Open years are either 2004 or 2005 to present, based on the state authority.

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Index to Financial Statements

In the provisions of the purchase and sale agreement for the Canadian operation sale, the Company was indemnified for tax claims on open tax audits up to $1.0 million Canadian dollars ($0.8 million US). Years currently under review include 2006, 2007, and the partial year of 2008. Based on prior audit results in this jurisdiction, the Company has accrued $0.5 million Canadian dollars ($0.4 million US) as a contingent liability for audit results, which may exceed the indemnification.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:


(In thousands)
Balance at beginning of year	$	4,518
Deletions based on tax positions related to the current year including the effects of the sale of our Canadian operations		(3,583	)
Additions for tax positions of prior years		—
Settlements		—

Balance at end of year	$	935

None of the Company’s liability for gross unrecognized tax benefits as of December 31, 2008 would affect the Company’s effective tax rate, if recognized. Management is also unaware of any items which would result in a significant increase (or decrease) in the unrecognized tax benefits disclosed above.

21.	Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive loss at December 31, are as follows:


(In thousands)	Foreign Currency Translation Adjustment			Unrealized Gain (Loss) on Cash Flow Hedges			Pension Liability Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2006	$	12,049		$	(3,424	)	$	(18,014	)	$	(9,389	)
Activity in 2007		11,556			(518	)		10,923			21,961
Reclassification adjustment for realized cash flow hedge losses		—			3,424			—			3,424

Balance at December 31, 2007		23,605			(518	)		(7,091	)		15,996
Activity in 2008		(15,523	)		(5,145	)		(35,292	)		(55,960	)
Reclassification adjustment for realized cash flow hedge losses		—			518			—			518

Balance at December 31, 2008	$	8,082		$	(5,145	)	$	(42,383	)	$	(39,446	)

22.	Common Stock

All holders of common stock are entitled to receive dividends when and if declared by our Board, provided that all dividend requirements of the cumulative preferred stock have been paid. Additionally, the payment of dividends on our common stock is restricted under the terms of our various financing agreements. To date, no dividends have been paid to the holders of the common stock and there are no immediate plans to declare a dividend.

23.	Stock-Based Compensation Plans

The 1993 Equity Incentive Plan (the “1993 Equity Plan”) provided for the issuance of stock options, restricted shares, stock appreciation rights, and other additional awards to key executives and employees. The maximum number of shares provided for under the 1993 Equity Plan was 2,075,000 at a price as determined by our Compensation Committee. All options granted under the plan were issued at the market value at the date of the grant. Options granted prior to 1999 under the 1993 Equity Plan vested 20% on each anniversary thereafter and terminate on the tenth anniversary of the date of grant. Options granted in 1999 and subsequent years under the 1993 Equity Plan vested 33.3% on each anniversary thereafter and terminate on the tenth anniversary of the date of grant. Options granted under prior plans remain outstanding but are governed by the provisions of the 1993 Equity Plan. The 1993 Equity Plan was terminated by its terms in 2003.

On March 22, 2001, the Board adopted the 2001 Stock Option Plan for Outside Directors (the “2001 Directors’ Plan”) providing for the issuance of options for the purchase of up to 250,000 shares of our common stock. The 2001 Directors’ Plan allows us to compensate and reward our directors. The terms of the 2001 Directors’ Plan provides for the issuance of stock options to outside directors at the fair market value on the date of grant. The initial options granted at the time the Director joins the Board vest at 33.3% per year, but must be held one year before exercising. All subsequent grants vest immediately. All options terminate on the tenth anniversary of the date of grant.

In the third quarter of 2001, we made available to our U.S. and Canadian stock option holders under the 1993 Equity Plan and the 1993 Directors’ Plan the right to exchange options whose exercise price was $20.00 per share or greater, for new options to purchase one share for every two shares exchanged. We made the Exchange Offer available because a large number of stock options had exercise prices that were significantly higher than current trading prices of our common stock, and thus the stock options did not provide our employees and outside directors the incentive to acquire and maintain stock ownership in the Company and to participate

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in the Company’s long-term growth and success. As a result of this exchange of options, 836,860 shares with an average option price of $30.48 were canceled, 38,000 of which were under the 1993 Directors’ Plan. On April 11, 2002 we granted 383,075 stock options, 19,000 of which were under the 1993 Directors’ Plan. New options granted under the 1993 Equity Plan have an exercise price of $8.60 per share, which was the closing price of our common stock on April 11, 2002. New options granted under the 1993 Directors’ Plan have an exercise price of $8.84 per share, which was determined by the average market price of our stock on April 11, 2002 and the four preceding trading days. A stock option holder must have continued to have been employed by us or provide service to us through April 11, 2002 in order to have been eligible to receive the new options granted.

The 2003 Equity Incentive Plan (the “2003 Equity Plan”) was adopted by the Board on March 25, 2003 and was approved by the stockholders on May 14, 2003, and was amended on July 24, 2003. The 2003 Equity Plan provides for the issuance of awards in the form of stock options, restricted shares, stock appreciation rights and other additional awards to key executives and employees. The maximum number of shares of common stock that may be issued under the plan is limited to 850,000 shares, provided that no more than 250,000 shares may be issued in the form of awards other than options or stock appreciation rights. The duration of the 2003 Equity Plan is 10 years.

On March 29, 2007, the Board approved the 2007 Non-Qualified Stock Option Plan (the “2007 Plan”), which provides for the grant of non-qualified stock options to certain employees and consultants. While there are still outstanding options, which have been issued under various plans, all stock options issued after March 29, 2007 are done so under, and governed by, the 2007 Plan.

In the first quarter of 2007, the 2007 Plan was adopted by the Board. The 2007 Plan provides for the granting of non-qualified stock options to certain of our consultants and employees. The 2007 Plan is administered and interpreted by a committee appointed by the Board. The maximum aggregate number of shares reserved and available for grant under the 2007 Plan is the lesser of (a) 25,000,000 shares of our common stock or (b) 15% of the outstanding shares of our common stock calculated on a fully-diluted basis. The grants vest 20% ratably at each anniversary date of the grant for five years. The grants under the 2007 Plan have a 10-year term. As part of the administration of the 2007 Plan, all of the outstanding restricted stock was immediately vested. There are no provisions in the 2007 Plan for restricted stock.

Upon adoption of SFAS 123(R), the Company elected to value its stock-based payment awards granted using the Black-Scholes option-pricing model (Black-Scholes model), which was previously used for pro forma information. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The Black-Scholes model requires the input of certain assumptions. The determination of fair value of stock-based payment awards on the date of grant using the Black-Scholes model is affected by our stock price as well as the input of other subjective assumptions, including: expected stock price volatility, the expected pre-vesting forfeiture rate, and the expected option term (the amount of time from the grant date until the options are exercised or expire). Expected volatility is determined based upon actual historical stock price movements over the expected option term. Expected pre-vesting forfeitures are estimated based on actual historical pre-vesting forfeitures for the expected option term. The expected option term is calculated using the “simplified” method permitted by Staff Accounting Bulletin No. 107, which the Company has applied in its adoption of SFAS 123(R). Our options have characteristics significantly different from those of traded options, and changes in the assumptions can materially affect the fair value estimates.

2008 Grants

Alpine Grant

During the fourth quarter of 2008, the Board granted an option to purchase 540,294 shares, to Alpine, as consultants, pursuant to the 2007 Plan. The Alpine Option vests ratably at a rate of 20% on each anniversary of the original grant date.

The applicable exercise prices for vested option shares under the Alpine Option are as follows:


	Exercise Price		Shares	12/31/2008 Option Costs		Valuation
40% of stock options	$	0.740	216,118	$	0.083	$	17,938
30% of stock options	$	0.950	162,088	$	0.078	$	12,643
30% of stock options	$	1.490	162,088	$	0.070	$	11,346

The Alpine Option has a 10-year term, subject to early termination in the event that Alpine’s consulting relationship with us is terminated prior to the end of such term. Upon such early termination, the Alpine Option will remain exercisable as to all vested portions and will be terminated as to all unvested portions. In addition, vesting of the Alpine Option will be accelerated in the event that we fail to offer to extend the term of the Management Agreement between us and Alpine, dated February 16, 2007 (the “Management Agreement”). If we offer to extend the term of the Management Agreement, but Alpine declines to accept such offer, any unvested portion of the Alpine Option will terminate as of the expiration of the term of the Management Agreement. Under the Alpine Stock Option Agreement, if on the six-month anniversary of the effective date of the Management Agreement, we have not yet named a CEO, Alpine will automatically receive, on each of the six-month and 18-month anniversaries of the effective date of the Management Agreement, an option to purchase an additional amount of shares of common stock equal to 0.5% of the total shares authorized under the 2007 Plan, with each such option having the same exercise prices as the initial Alpine Option. As of August 16, 2008, we had not named a CEO. Accordingly, during the fourth quarter, the Board approved an additional option grant to Alpine in accordance with the terms of the Alpine Stock Option Agreement.

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Employee Grants

During the first quarter of 2008, the Board granted options to purchase 12,500 shares of our common stock having a fair value at the time of the grant of $5,000 under the 2007 Plan to certain employees. The exercise price for the options was $0.60, and was based on the closing market value of our common stock on the date of the grants. The option grants vest ratably at a rate of 20% on each of the five anniversaries from the grant date. The option grants have a 10-year term.

During the second quarter of 2008, the Board granted options to purchase 32,000 shares of our common stock having a fair value at the time of the grant of $16,000 under the 2007 Plan to certain employees. The exercise price for the options ranged from $0.73 to $0.83, and was based on the closing market value of our common stock on the date of the grants. 25,000 of the option grants vest ratably at a rate of 20% on each of the five anniversaries from the grant date. The option grants have a 10-year term. The remaining 7,000 shares granted to Board members also have a 10-year term, but vest immediately.

During the third quarter of 2008, the Board granted options to purchase 1,120,463 shares of our common stock having a fair value at the time of the grant of $0.5 million under the 2007 Plan to certain employees.

The applicable exercise prices for vested option shares granted are as follows:


	Exercise Price		Shares	Option Costs		Valuation
40% of stock options	$	0.74	432,185	$	0.39 – 0.62	$	213,019
30% of stock options	$	0.95	344,139	$	0.36 – 0.58	$	157,258
30% of stock options	$	1.49	344,139	$	0.32 – 0.52	$	137,421

The option grants vest ratably at a rate of 20% on each of the five anniversaries from the grant date. The option grants have a 10-year term.

Our stock option plans are summarized as follows:


	2007 Plan		2003 Equity Plan		2001 Directors’ Plan		1993 Directors’ Plan		1993 Equity Plan		Option Price		Weighted- Average Exercise Price
Outstanding at December 31, 2007	8,753,059		459,143		122,122		72,611		898,060		$	1.10 - $22.25	$	2.68
Anti-dilutive effect of Rights Offering	4,707,474		—		—		—		—			—		—
Granted	1,698,257		40,000		7,000		—		—		$	0.74 - $1.49	$	1.00
Exercised	—		—		—		—		—			—		—
Forfeited	(1,841,275	)	(117,403	)	(82,202	)	(44,420	)	(271,609	)	$	0.74 - $22.25	$	2.79


Outstanding at December 31, 2008	13,317,515		381,740		46,920		28,191		626,451		$	0.74 - $22.25	$	1.64


Exercisable at:
December 31, 2007	—		459,143		120,122		72,611		898,060		$	2.76 - $22.25	$	9.29
December 31, 2008	2,323,859		341,740		41,920		28,191		626,451		$	0.74 - $22.25	$	3.64

There were no stock options exercised during the fiscal years ended December 31, 2008 and 2007. As such, the Company has no intrinsic value associated with its stock options to report. Because the stock options were ‘underwater’ at the end of 2008, the vested options had no fair value.

The determination of the fair value of the stock option awards granted during the year ended December 31, 2008, using the Black-Scholes model, incorporated the assumptions set forth in the following table. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. Expected volatility is based on historical volatility. Expected life is based on historical experience and consideration of changes in option terms.


Range of Assumptions used		Year ended December 31, 2008
Expected stock price volatility		68.67%-103.6%
Expected life (in years)		6.9
Risk-free interest rate		1.87%-3.61%
Expected dividend yield		0%

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The Company recorded stock-based compensation expense for the years ending December 31, as follows:


(In thousands)	2008		2007
Stock-based compensation expense
Non-qualified stock options	$	845	$	2,347
Restricted stock		2		282

Total stock-based compensation expense	$	847	$	2,629

As of December 31, 2008, the Company had not yet recognized compensation expense on the following non-vested awards:


(In thousands)	Non-vested Compensation		Average Remaining Recognition Period (Months)
Non-qualified stock options	$	525	46
Restricted stock awards		27	54

Total	$	552	54

The range of exercise prices of the exercisable options and outstanding options at December 31, 2008 are as follows:


Weighted Average Exercise Price	Number of Exercisable Options	Number of Outstanding Options	Weighted Average Remaining Life (Years)
$0.74 - $4.11	2,536,347	13,575,003	8.4
$4.12 - $8.23	34,420	34,420	4.3
$8.24 - $12.34	611,278	611,278	3.7
$12.35 - $16.45	166,616	166,616	1.1
$16.46 - $20.57	9,500	9,500	1.2
$20.58 - $24.68	4,000	4,000	0.1

Totals	3,362,161	14,400,817	8.5

Restricted stock award activity for the year ended December 31, 2008 is summarized below:


	Shares	Weighted Average Grant-Date Fair Value per Award
Unvested restricted stock awards – January 1, 2008	—	$	—
Granted	40,000	$	0.74
Vested	—		—
Cancelled or expired	—		—

Unvested restricted stock awards – December 31, 2008	40,000	$	0.74

24.	Commitments and Contingencies

We lease certain assets such as motorized vehicles, distribution and warehousing space, computers, office equipment, and production testing equipment. Terms of the leases, including purchase options, renewals and maintenance costs, vary by lease. Minimum future rental commitments under our operating leases having non-cancelable lease terms in excess of one year totaled approximately $2.8 million as of December 31, 2008 and are payable as follows: $0.9 million in 2010, $0.7 million in 2011, $0.6 million in 2012, and $0.6 million in 2013. Rental expense for operating leases was $2.9 million in 2008 and $3.4 million in 2007

At December 31, 2008, we had commitments to purchase approximately 26.8 million pounds of copper in 2009 from suppliers to be priced at COMEX at either the date of shipment or average for the month plus an average premium of approximately $0.01 per pound. Based upon COMEX copper price at December 31, 2008 (including the aforementioned premium) of $1.41 per pound, this commitment totals approximately $37.8 million.

In February 2009, the Pension Benefit Guaranty Corporation (the “PBGC”) advised the Company that it may be required to securitize or otherwise accelerate funding of certain pension related obligations as a result of the closure and/or sale of certain operations of the Company. The PBGC has not made a final determination of the amount or timing of any payments. Since February 2009, the Company and the PBGC have been engaged in discussions regarding this matter. Based upon these discussions and in consultation with special counsel, the Company believes it is reasonably possible that the matter will ultimately be resolved through an agreement

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with the PBGC to fund an amount to be determined and paid in the future. The Company believes any such agreement would result in accelerated funding of the already accrued pension obligations. Accordingly, no additional pension accrual is required at December 31, 2008 since the amount and timing of additional contributions, if any, cannot be reasonably estimated.

25.

Goodwill

In accordance with SFAS 142, Goodwill and Other Intangible Assets, we performed our annual impairment test of goodwill as of July 31, 2008. As a result of our Step 1 analysis under SFAS 142, we preliminarily determined that a goodwill impairment loss was probable and could be reasonably estimated. Based on the preliminary impairment assessment, the Company recorded a goodwill impairment loss of $44.0 million in the third quarter of 2008. The Company determined the fair value of the reporting unit using a discounted cash flow model with the assistance of a third-party valuation specialist. The impairment of goodwill was principally related to the deterioration in profitability of our business located in Carrollton, Texas and the low market price of our common stock, resulting in a substantially depressed enterprise value. Subsequently, the Step 2 under SFAS 142 analysis was performed by a third party, and it was determined that all of the reporting unit’s goodwill was impaired. As a result, in the fourth quarter of 2008, the remaining $2.6 million of goodwill was impaired and subsequently written off of the books.

The changes in the carrying amount of goodwill for the year ended December 31, 2007 and 2008 are as follows:


Balance as of January 1, 2007	$	46,486
Exchange rate differences		217

Balance as of December 31, 2007		46,703
Impairment loss		(46,560	)
Exchange rate differences		(143	)

Balance as of December 31, 2008	$	—

26.	Industry Segments and Foreign Operations

For internal purposes, we prepare business unit operating statements (operating segment level), which include net sales, metal costs, production costs, operating income, and Earnings Before Interest Taxes Depreciation Amortization (“EBITDA”) for one operating segment (or business unit): Wolverine Tube Consolidated. Historically, we have reviewed the financial operations of our business from a wholesale and commercial standpoint. In the first quarter of 2008, we closed our facility in Decatur, Alabama, which included substantially all of our wholesale business. In July 2008 we sold the London, Canada facility, which produced the remaining amount of our wholesale products and dissolved the wholesale business unit at that time. The wholesale business segment results were previously reported within our wholesale segment reporting group. The related revenue and expenses of the wholesale segment were at one time material to our consolidated results, and this business unit was dissolved rather than being merged into another business unit. Accordingly, we have removed the historical results for the wholesale segment. In addition, no goodwill was allocated to this business unit and no intangible assets on the books prior to the dissolution of the business unit. Accordingly, there was no related write-off of goodwill or write-down of intangible assets as a result of the dissolution of this business unit.

The accounting policies for the reportable segment are the same as those described in Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements. With the elimination of our Wholesale Products segment, the Company now has only one business segment.

Our manufacturing operations are primarily conducted in the U.S. We also have manufacturing facilities in Shanghai, China, Esposende, Portugal, and Monterrey, Mexico.

Sales to unaffiliated customers and long-lived assets are based on our Company’s location providing the products:


(In thousands)	U.S.		Canada		Other Foreign Operations		Consolidated
Year ended December 31, 2008:
Sales	$	693,620	$	2,818	$	119,363	$	815,801
Long-lived assets		39,448		—		15,189		54,637

Year ended December 31, 2007:
Sales	$	890,052	$	3,691	$	117,276	$	1,011,019
Long-lived assets		85,062		—		20,788		105,850

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27.	Restructuring and Other Charges

On September 13, 2006, we announced the planned closure of our manufacturing facilities located in Jackson, Tennessee, and Montreal, Quebec. In addition, we also announced moving our U.S. wholesale distribution facility into the Decatur, Alabama plant location. According to plan, the operations at the Montreal, Quebec and Jackson, Tennessee facilities were phased out by the end of the 2006. The consolidation of the U.S. wholesale distribution facility was also completed by the end of 2006. The two facilities that were closed employed approximately 400 persons at the time of the closure announcement.

We continue to serve most of our customers previously supplied by these closed facilities through alternate means. Customers of the Jackson plant are now serviced through our global value added strategic sourcing programs. Production of wholesale and industrial copper tube formerly manufactured in our Montreal facility was successfully transferred to our other facilities.

On November 6, 2007, we announced the planned realignment and restructuring of the Company’s North American operations to include the closure of our Booneville, Mississippi facility and the commodity depot warehouse located at the Decatur, Alabama site and the significant downsizing of our Decatur, Alabama operations by eliminating substantially all the manufacturing operations at that site. These actions are in line with our strategy of focusing resources on the development and sale of high performance tubular products, fabricated tube assemblies, and metal joining products. Additionally, we announced the elimination of approximately 40% of our corporate, general and administrative positions.

We estimated impairment and restructuring charges of approximately $67.1 million in connection with the closure of the Booneville, Mississippi facility, the significant downsizing of our Decatur operations and the reduction in our corporate staff. Approximately $50.8 million of the impairment and restructuring charge represents a non-cash reduction of the carrying value of certain assets. The remaining $16.3 million represents for cash charges related to severance, other employee-related costs, plant closure, and environmental expenses. Our total incurred charges at the end of December 31, 2008 for these facilities were $70.3 million. These actions resulted in the reduction of approximately 440 full-time and 50 temporary employees. The 40% reduction in corporate and general and administrative employees eliminated about 40 positions.

Restructuring expenses (credits) for the years ended December 31, 2008 and 2007 are as follows:


(In thousands)	2008			2007
Montreal, Quebec	$	1,446		$	2,503
Jackson, Tennessee		(3	)		7,138
U.S. wholesale distribution relocation		—			41
Decatur, Alabama		2,321			60,951
Commodity Depot		(201	)		533
Booneville, Mississippi		1,979			3,736
Corporate and General & Administrative reduction		278			195

Total	$	5,820		$	75,097

The following set forth the major types of costs associated with our active restructuring activities:

Montreal, Quebec Closing


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Impair and liquidate current assets	$	9,322	$	4,053	$	81
Employee-related costs		9,932		10,785		199
Environmental remediation		11,538		11,577		39
Post closing costs		4,629		3,239		1,144
Other costs currency		438		244		(17	)
Fixed asset impairment		14,796		14,796		—

Total	$	50,655	$	44,694	$	1,446

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Jackson, Tennessee Closing


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Impair and liquidate current assets	$	762	$	746	$	—
Employee-related costs		388		302		—
Environmental remediation		75		86		—
Post closing costs		339		869		(3	)
Other costs		695		657		—
Fixed asset impairment		14,760		20,950		—

Total	$	17,019	$	23,610	$	(3	)

Wholesale Distribution Relocation


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Cost to move inventory	$	40	$	—	$	—
Building lease termination		328		392		—
Other costs		5		7		—
Fixed asset impairment		71		71		—

Total	$	444	$	470	$	—

Commodity Depot Closing


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Impair and liquidate current assets	$	495	$	250	$	(245	)
Other costs		—		2		2
Employee-related costs		38		80		42

Total	$	533	$	332	$	(201	)

Booneville, Mississippi Closing


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Impair and liquidate current assets	$	915	$	915	$	—
Employee-related costs		149		156		5
Post closing costs		1,230		1,595		1,583
Fixed asset impairment		2,658		3,049		391

Total	$	4,952	$	5,715	$	1,979

Corporate Selling General & Administrative Reduction


(In thousands) Major Type Costs	Estimated Charges			Cumulative incurred through December 31, 2008			Incurred for the Year December 31, 2008
Employee-related costs	$	336		$	532		$	189
Postretirement benefit gain		(213	)		(208	)		—
Other		400			149			89

Total	$	523		$	473		$	278

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Decatur, Alabama Closing


(In thousands) Major Type Costs	Estimated Charges		Cumulative incurred through December 31, 2008		Incurred for the Year December 31, 2008
Impair and liquidate current assets	$	6,517	$	6,517	$	—
Employee-related costs		2,980		3,031		(105	)
Environmental remediation		8,601		8,608		7
Post closing costs		1,931		4,223		1,880
Other costs		966		759		539
Fixed asset impairment		40,134		40,134		—

Total	$	61,129	$	63,272	$	2,321


Grand Total	$	135,255	$	138,566	$	5,820

At December 31, 2008 and 2007, we had $8.6 million and $13.0 million, respectively, of accruals related to the realignment and restructuring of the Company’s North American operations as outlined above. The $8.6 million accrual at the end of 2008 relates to potential environmental charges at our Decatur, Alabama facility.

28.	Earnings (Loss) Per Share

For the year ended December 31, 2008, we accounted for earnings (loss) per share in accordance with EITF 03-6, which established standards regarding the computation of earnings (loss) per share by companies that have securities other than common stock that contractually entitle the holder to participate in dividends and earnings of the Company. EITF 03-6 requires earnings available to common stockholders for the period, after deduction of preferred stock dividends, be allocated between the common and preferred stockholders based on their respective rights to receive dividends. Basic earnings (loss) per share are then calculated by dividing the net income (loss) allocable to common stockholders by the weighted average number of shares outstanding. EITF 03-6 does not require the presentation of basic and diluted earnings (loss) per share for securities other than common stock. Therefore, the following earnings (loss) per share amounts only pertain to common stock.

Under the guidance of EITF 03-6, diluted earnings (loss) per share is calculated by dividing income (loss) allocable to common stockholders by the weighted average common shares outstanding plus potential dilutive common stock such as stock options, unvested restricted stock, and preferred stock. To the extent that stock options, unvested restricted stock, and preferred stock are anti-dilutive, they are excluded from the calculation of diluted earnings (loss) per share in accordance with SFAS 128.

For the 12 months ended December 31, 2008, the basic (loss) per share is calculated by dividing net loss available to common stockholders (which is income from continuing operations, plus the costs associated with the accretion of preferred stock and the preferred stock dividends) by the weighted average common shares outstanding during the year. For the 12 months ended December 31, 2007, the calculation for basic (loss) per share and diluted (loss) per share is the same (dividing net loss by the weighted average common shares outstanding) because the preferred stockholders do not share in the net losses.

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The calculation of loss per share for the 12 months ended December 31, 2008 is presented below:


(In thousands, except per share data)	2008			2007
Basic Earnings Per Share
Net loss	$	(48,473	)	$	(98,227	)
Less: accretion of convertible preferred stock and beneficial conversion feature		5,021			4,618
Less: preferred stock dividends		6,810			13,284

Net loss applicable to common stockholders	$	(60,304	)	$	(116,129	)
Income (loss) from discontinued operations		769			(21,583	)

Net loss from continuing operations		(61,073	)		(94,546	)

Amount allocable to common stockholders from continuing operations (1)		100	%		100	%
Amount allocable to common stockholders from discontinued operations (1)		41	%		100	%
Net loss from continuing operations allocated to common stockholders		(61,073	)		(94,546	)
Net income (loss) from discontinued operations allocable to common stockholders	$	315		$	(21,583	)


Basic weighted average number of common shares (2)		40,624			19,038


Basic income (loss) per share – Two-class Method
Continuing operations		(1.50	)		(4.97	)
Discontinued operations (1)	$	0.01		$	(1.13	)

Net loss per common share		(1.49	)		(6.10	)


Diluted Earnings Per Share
Net loss available to common stockholders	$	(60,304	)	$	(116,129	)
Plus: accretion of convertible preferred stock and beneficial conversion feature		5,021			4,618
Plus: preferred stock dividends		6,810			13,284

Loss available to common stockholders in addition to assumed conversions		(48,473	)		(98,227	)
Income (loss) from discontinued operations		769			(21,583	)

Net loss from continuing operations available to common stockholders in addition to assumed conversions	$	(49,242	)	$	(76,644	)

Amount allocable to common stockholders (1)		100	%		100	%
Net loss from continuing operations allocable to common stockholders	$	(61,073	)	$	(94,546	)
Net income (loss) from discontinued operations allocable to common stockholders	$	315		$	(21,583	)

Diluted weighted average number of common shares (2)		40,624			19,038

Diluted income (loss) per share – Two-class Method
Continuing operations	$	(1.50	)	$	(4.97	)
Discontinued operations		0.01			(1.13	)

Net loss per common share	$	(1.49	)	$	(6.10	)

Amount allocable to common stockholders is calculated as the weighted average number of common shares outstanding divided by the sum of common and preferred shares outstanding for the year ended December 31, 2008 and 2007, respectively. In computing basic EPS using the Two-Class Method, we have not allocated the loss available to common stockholders for the year ended December 31, 2008 between common and preferred stockholders as the preferred stockholders do not have a contractual obligation to share in the net losses.

2)	We had stock options of 14.4 million and 10.3 million shares for the year ended December 31, 2008 and 2007, respectively. The assumed conversion of our Series A Convertible Preferred Stock is 49.6 million and our Series B Convertible Preferred Stock is 9.1 million shares.

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Index to Financial Statements

29.	Quarterly Results of Operations (Unaudited)

The following is a summary of the unaudited quarterly results of operations for the years ended December 31, 2008 and 2007:


(In thousands, except per share data)	March 30			June 29			September 28			December 31
2008 Two-Class Method
Net income (loss)	$	4,192		$	(11,859	)	$	(23,908	)	$	(16,898	)
Less: accretion of convertible preferred stock and beneficial conversion feature		1,255			1,255			1,255			1,256
Less: preferred stock dividends		1,191			1,625			1,951			2,043

Net income (loss) applicable to common stockholders	$	1,746		$	(14,739	)	$	(27,114	)	$	(20,197	)
Income (loss) from discontinued operations		6,146			(5,769	)		403			(11	)

Net loss from continuing operations		(4,400	)		(8,970	)		(27,517	)		(20,186	)

Amount allocable to common stockholders from continuing operations		100	%		100	%		100	%		100	%
Amount allocable to common stockholders from discontinued operations		41	%		100	%		41	%		100	%
Net loss from continuing operations allocated to common stockholders		(4,400	)		(8,970	)		(27,517	)		(20,186	)
Net income (loss) from discontinued operations allocable to common stockholders	$	2,515		$	(5,769	)	$	165		$	(11	)

Basic weighted average number of common shares		40,624			40,624			40,624			40,624
Diluted weighted average number of common shares		40,812			40,624			40,664			40,664

Basic income (loss) per share – Two-Class Method
Continuing operations	$	(0.11	)	$	(0.22	)	$	(0.68	)	$	(0.50	)
Discontinued operations		0.06			(0.14	)		0.00			0.00

Net loss per common share	$	(0.05	)	$	(0.36	)	$	(0.68	)	$	(0.50	)


Diluted income (loss) per share – Two-Class Method
Continuing operations	$	(0.11	)	$	(0.22	)	$	(0.68	)	$	(0.50	)
Discontinued operations		0.06			(0.14	)		0.00			0.00

Net loss per common share	$	(0.05	)	$	(0.36	)	$	(0.68	)	$	(0.50	)


2007 Two Class Method

Net income (loss) available to common stockholders	$	(3,002	)	$	13,299		$	(3,477	)	$	(105,047	)
Plus: accretion of convertible preferred stock and beneficial conversion feature		852			1,255			1,255			1,256
Plus: preferred stock dividends		10,118			1,000			1,104			1,062

Income (loss) available to common stockholders in addition to assumed conversions	$	(13,972	)	$	11,044		$	(5,836	)	$	(107,365	)

Income (loss) from discontinued operations		3,034			2,388			765			(27,770	)

Net income (loss) from continuing operations available to common stockholders in addition to assumed conversions		(17,006	)		8,656			(6,601	)		(79,595	)

Amount allocable to common stockholders from continued operations		100	%		25	%		100	%		100	%
Amount allocable to common stockholders from discontinued operations		100	%		25	%		25	%		100	%
Net income (loss) from continuing operations allocable to common stockholders	$	(17,006	)	$	2,164		$	(6,601	)	$	(79,595	)
Net income (loss) from discontinued operations allocable to common stockholders	$	3,034		$	597		$	191		$	(27,770	)

Basic weighted average number of common shares		15,132			15,176			15,178			30,667
Diluted weighted average number of common shares		15,132			15,176			15,178			30,667

Basic income (loss) per share – Two-Class Method
Continuing operations	$	(1.12	)	$	0.14		$	(0.43	)	$	(2.60	)
Discontinued operations		0.20			0.04			0.01			(0.91	)

Net income (loss) per common share	$	(0.92	)	$	0.18		$	(0.42	)	$	(3.51	)


Diluted income (loss) per share – Two-Class Method
Continuing operations	$	(1.12	)	$	0.14		$	(0.43	)	$	(2.60	)
Discontinued operations		0.20			0.04			0.01			(0.91	)

Net income (loss) per common share	$	(0.92	)	$	0.18		$	(0.42	)	$	(3.51	)

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Index to Financial Statements

Net income (loss) and earnings per share for the period ended December 31, 2007, have been corrected to reflect an immaterial error of approximately $1.3 million related to the adjustment of the preferred stock embedded derivative fair value, inventory, and foreign currency resulting in previously reported net income (loss) available to common stockholders and loss per common share being reduced to $(105,047) and $3.51, respectively.

30.	Condensed Consolidating Financial Information

The following tables present condensed consolidating financial information for: (a) Wolverine Tube, Inc. (the Parent) on a stand-alone basis; (b) on a combined basis, the guarantors of the 10.5% Senior Notes (Subsidiary Guarantors), which include TF Investor, Inc.; Tube Forming, L.P.; Wolverine Finance, LLC; Small Tube Manufacturing, LLC; Wolverine Joining Technologies, LLC; WT Holding Company, Inc.; and Tube Forming Holdings, Inc.; and (c) on a combined basis, the Non-Guarantor Subsidiaries, which include Wolverine Tube (Canada) Inc.; 3072452 Nova Scotia Company; 3072453 Nova Scotia Company; 3072996 Nova Scotia Company; 3226522 Nova Scotia Ltd.; Wolverine Tube Canada Limited Partnership; Wolverine Tube (Shanghai) Co., Limited, Wolverine Metal Shanghai Company Ltd.; Wolverine European Holdings BV; Wolverine Tube Europe BV; Wolverine Tube, BV; Wolverine Tubagem (Portugal), Lda; Wolverine Joining Technologies Canada, Inc.; WLVN de Latinoamerica, S. de R.L. de C.V.; WLV Mexico, S. de R.L. de C.V.; and DEJ 98 Finance LLC. Each of the Subsidiary Guarantors is 100% owned by the Parent with the exception of Wolverine Tube (Shanghai) Co., Limited, which is 50% owned with Wieland. The guarantees issued by each of the Subsidiary Guarantors are full, unconditional, joint, and several. Accordingly, separate financial statements of the 100% owned Subsidiary Guarantors are not presented because the Subsidiary Guarantors are jointly, severally and unconditionally liable under the guarantees, and we believe separate financial statements and other disclosures regarding the Subsidiary Guarantors are not material to investors. Furthermore, there are no significant legal restrictions on the Parent’s ability to obtain funds from its subsidiaries by dividend or loan.

The Parent is comprised of manufacturing operations and certain corporate management, sales and marketing, information services, and finance and administrative functions located in Alabama, Oklahoma, and Tennessee.

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Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Year Ended December 31, 2008


(In thousands)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	574,490		$	135,014		$	120,685		$	(14,388	)	$	815,801
Cost of goods sold		561,537			132,162			109,619			(14,388	)		788,930

Gross profit		12,953			2,852			11,066			—			26,871
Selling, general and administrative expenses		22,369			2,345			2,002			—			26,716
Net gain on divestitures		(23,588	)		—			(2,760	)		—			(26,348	)
Advisory fees and expenses		984			—			—			—			984
Goodwill impairment		—			44,747			1,813			—			46,560
Restructuring and impairment charges		4,374			—			1,446			—			5,820

Operating income (loss)		8,814			(44,240	)		8,565			—			(26,861	)
Other expenses (income):
Interest expense, net		17,815			(427	)		(32	)		—			17,356
Amortization expense		2,698			—			356			—			3,054
Loss on sale of receivables		—			—			484			—			484
Embedded derivative mark to fair value		—			—			(3	)		—			(3	)
Other (income) expense, net		425			484			(305	)		—			604
Equity in earnings (loss) of subsidiaries		(38,944	)		—			—			38,944			—

Income (loss) from continuing operations before minority interest		(51,068	)		(44,297	)		8,065			38,944			(48,356	)
Minority interest		541			—			—			—			541
Equity income from unconsolidated subsidiary		(332	)		—			—			—			(332	)
Income tax expense (benefit)		(2,035	)		469			2,243			—			677

Income (loss) from continuing operations		(49,242	)		(44,766	)		5,822			38,944			(49,242	)
Income from discontinued operations		769			—			—			—			769

Net income (loss)		(48,473	)		(44,766	)		5,822			38,944			(48,473	)

Less: Accretion of convertible preferred stock and beneficial conversion feature		5,021			—			—			—			5,021
Preferred stock dividends		6,810			—			—			—			6,810

Net income (loss) applicable to common shares	$	(60,304	)	$	(44,766	)	$	5,822		$	38,944		$	(60,304	)

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Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Year Ended December 31, 2007


(In thousands)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	876,229		$	135,829		$	120,895		$	(121,934	)	$	1,011,019
Cost of goods sold		849,732			122,841			110,178			(121,934	)		960,817


Gross profit		26,497			12,988			10,717			—			50,202
Selling, general and administrative expenses		26,027			2,774			1,627			—			30,428
Advisory fees and expenses		6,014			—			—			—			6,014
Restructuring and other charges		72,594			—			2,503			—			75,097


Operating income (loss)		(78,138	)		10,214			6,587			—			(61,337	)
Other expenses (income):
Interest expense, net		13,149			(2,994	)		11,170			—			21,325
Amortization expense		1,588			—			903			—			2,491
Loss on sale of receivables		—			—			2,531			—			2,531
Embedded derivative mark to fair value		(15,755	)		—			—			—			(15,755	)
Other (income) expense, net		2,381			761			(1,903	)		—			1,239
Equity in earnings (loss) of subsidiaries		(774	)		—			—			774			—


Income (loss) from continuing operations before income taxes		(80,275	)		12,447			(6,114	)		774			(73,168	)
Income tax expense (benefit)		(3,631	)		5,586			1,521			—			3,476


Net income (loss) from continuing operations		(76,644	)		6,861			(7,635	)		774			(76,644	)
Loss from discontinued operations		(21,583	)		—			—			—			(21,583	)


Net income (loss)		(98,227	)		6,861			(7,635	)		774			(98,227	)


Less: Accretion of convertible preferred stock and beneficial conversion feature		4,618			—			—			—			4,618
Preferred stock dividends		13,284			—			—			—			13,284

Net income (loss) applicable to common shares	$	(116,129	)	$	6,861		$	(7,635	)	$	774		$	(116,129	)

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Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

December 31, 2008


(In thousands)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	18,778		$	—		$	14,759		$	—		$	33,537
Restricted cash		37,173			1			564			—			37,738
Accounts receivable, net		4,362			8,338			25,926			—			38,626
Inventories		18,605			23,366			11,313			—			53,284
Assets held for sale		3,680			—			—			—			3,680
Derivative assets		291			—			—			—			291
Prepaid expenses and other assets		1,514			3,575			291			—			5,380

Total current assets		84,403			35,280			52,853			—			172,536
Property, plant and equipment, net		23,033			14,644			14,327			—			52,004
Intangible assets and deferred charges, net		2,588			5			41			—			2,634
Notes receivable		—			—			585			—			585
Investment in unconsolidated subsidiary		9,373			—			—			—			9,373
Investments in subsidiaries		357,759			325			—			(358,084	)		—

Total assets	$	477,156		$	50,254		$	67,806		$	(358,084	)	$	237,132


Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	16,190		$	12,315		$	6,208		$	—		$	34,713
Accrued liabilities		14,352			2,684			1,999			—			19,035
Derivative liabilities		5,415			—			—			—			5,415
Short-term borrowings		19,745			—			14			—			19,759
Deferred income taxes		1,561			(211	)		251			—			1,601
Intercompany balances, net		261,022			(239,316	)		(21,706	)		—			—


Total current liabilities		318,285			(224,528	)		(13,234	)		—			80,523
Deferred income taxes, non-current		3,549			(3,549	)		—			—			—
Long-term debt		117,911			—			—			—			117,911
Pension liabilities		45,552			—			—			—			45,552
Postretirement benefit obligation		3,375			—			1,287			—			4,662
Accrued environmental remediation		9,628			—			—			—			9,628
Other liabilities		2,981			—			—			—			2,981


Total liabilities		501,281			(228,077	)		(11,947	)		—			261,257

Preferred stock		23,608			—			—			—			23,608
Stockholders’ equity (deficit)		(47,733	)		278,331			79,753			(358,084	)		(47,733	)

Total liabilities, convertible preferred stock and stockholders’ equity	$	477,156		$	50,254		$	67,806		$	(358,084	)	$	237,132

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Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

December 31, 2007


(In thousands)	Parent		Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	37,981	$	—		$	25,322		$	—		$	63,303
Restricted cash		1,446		1			679			—			2,126
Accounts receivable, net		56,380		17,860			34,158			—			108,398
Inventories		38,278		39,511			26,953			—			104,742
Assets held for sale		10,622		25,447			6,932			—			43,001
Derivative assets		975		—			—			—			975
Prepaid expenses and other assets		6,092		3,990			1,479			—			11,561


Total current assets		151,774		86,809			95,523			—			334,106
Property, plant and equipment, net		25,641		15,001			28,436			—			69,078
Goodwill		—		44,747			1,956			—			46,703
Intangible assets and deferred charges, net		3,774		5			505			—			4,284
Deferred income taxes, non-current		6,493		(6,493	)		—			—			—
Notes receivable		—		—			815			—			815
Investments in subsidiaries		445,001		325			—			(445,326	)		—


Total assets	$	632,683	$	140,394		$	127,235		$	(445,326	)	$	454,986


Liabilities and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	19,575	$	19,042		$	17,244		$	—		$	55,861
Accrued liabilities		17,485		2,411			6,176			—			26,072
Derivative liabilities		925		—			—			—			925
Liabilities of discontinued operations		—		1,853			—			—			1,853
Short-term borrowings		89,898		—			1,041			—			90,939
Deferred income taxes		1,000		(525	)		202			—			677
Intercompany balances, net		251,703		(202,677	)		(49,026	)		—			—


Total current liabilities		380,586		(179,896	)		(24,363	)		—			176,327
Deferred income taxes, non-current		2,375		—			689			—			3,064
Long-term debt		146,021		—			—			—			146,021
Pension liabilities		17,616		—			—			—			17,616
Postretirement benefits obligation		5,176		—			13,600			—			18,776
Accrued environmental remediation		9,185		—			12,273			—			21,458
Other liabilities		112		—			—			—			112


Total liabilities		561,071		(179,896	)		2,199			—			383,374
Preferred stock		4,393		—			—			—			4,393
Stockholders’ equity (deficit)		67,219		320,290			125,036			(445,326	)		67,219


Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	632,683	$	140,394		$	127,235		$	(445,326	)	$	454,986

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 31, 2008


(In thousands)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating Activities:
Net income (loss) from continuing operations	$	(49,242	)	$	(44,766	)	$	5,822		$	38,944		$	(49,242	)
Net income (loss) from discontinued operations		769			—			—			—			769


Net income (loss)	$	(48,473	)	$	(44,766	)	$	5,822		$	38,944		$	(48,473	)
Depreciation		3,602			1,995			1,458			—			7,055
Amortization		2,708			—			471			—			3,179
Deferred income taxes		8,737			(10,127	)		(559	)		—			(1,949	)
Stock compensation expense		847			—			—			—			847
Impairment of assets held for sale and Goodwill		390			44,747			1,813			—			46,950
Net gain on divestitures		(33,409	)		—			7,061			—			(26,348	)
Non-cash environmental and other restructuring charges		1,985			—			(2,544	)		—			(559	)
Gain on early extinguishment of debt		(858	)		—			—			—			(858	)
Minority interest		541			—			—			—			541
Equity in earnings of unconsolidated subsidiary		(332	)		—			—			—			(332	)
Equity in earnings of subsidiaries		38,944			—			—			(38,944	)		—
Changes in operating assets and liabilities		73,357			1,550			(36,447	)		—			38,460

Net cash provided by (used in) continuing operating activities		47,270			(6,601	)		(22,925	)		—			17,744
Net cash used in discontinued operating activities		(9,754	)		—			—			—			(9,754	)

Net cash provided by (used in) operating activities		37,516			(6,601	)		(22,925	)		—			7,990

Investing Activities:
Additions to property, plant, and equipment		(1,516	)		(1,599	)		(706	)		—			(3,821	)
Proceeds from sale of assets		7,012			—			(572	)		—			6,440
Purchase of patents		(368	)		—			—			—			(368	)
Proceeds from sale of interest in Chinese subsidiary		19,419			—			—			—			19,419
Change in restricted cash		(35,727	)		—			115			—			(35,612	)

Net cash used in continuing investing activities		(11,180	)		(1,599	)		(1,163	)		—			(13,942	)
Net cash provided by discontinued investing activities		64,796			—			—			—			64,796

Net cash provided by (used in) investing activities		53,616			(1,599	)		(1,163	)		—			50,854

Financing Activities:
Issuance of preferred stock		14,194			—			—			—			14,194
Financing fees and expenses paid		(1,734	)		—			(161	)		—			(1,895	)
Payment of dividends		(2,042	)		—			—			—			(2,042	)
Payments under revolving credit facilities and other debt		—			—			(968	)		—			(968	)
Purchase of senior notes		(97,661	)		—			—			—			(97,661	)
Intercompany borrowings (payments)		974			8,200			(9,174	)		—			—

Net cash provided by (used in) continuing financing activities		(86,269	)		8,200			(10,303	)		—			(88,372	)
Net cash provided by discontinued financing activities		1			—			—			—			1

Net cash provided by (used in) financing activities		(86,268	)		8,200			(10,303	)		—			(88,371	)
Effect of exchange rate on cash and cash equivalents		(24,067	)		—			23,828			—			(239	)

Net decrease in cash and cash equivalents		(19,203	)		—			(10,563	)		—			(29,766	)
Cash and cash equivalents at beginning of period		37,981			—			25,322			—			63,303

Cash and cash equivalents at end of period	$	18,778		$	—		$	14,759		$	—		$	33,537

Table of Contents

Index to Financial Statements

Wolverine Tube, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Year Ended December 31, 2007


(In thousands)	Parent			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating Activities
Income (loss) from continuing operations	$	(76,644	)	$	6,861		$	(7,635	)	$	774		$	(76,644	)
Loss from discontinued operations		(21,583	)		—			—			—			(21,583	)

Net income (loss)	$	(98,227	)	$	6,861		$	(7,635	)	$	774		$	(98,227	)
Depreciation		6,172			2,148			1,208			—			9,528
Amortization		1,665			—			921			—			2,586
Deferred income taxes		5,953			(3,113	)		(73	)		—			2,767
Impairment of assets held for sale		48,983			—			—			—			48,983
Loss on disposal of fixed assets		(1	)		40			7			—			46
Non-cash environmental, restructuring and other charges		8,482			—			2,095			—			10,577
Change in fair value of embedded derivative		(15,755	)		—			—			—			(15,755	)
Stock compensation expense		2,629			—			—			—			2,629
Purchase of accounts receivable		—			—			(43,882	)		—			(43,882	)
Equity in earnings of subsidiaries		774			—			—			(774	)		—
Changes in operating assets and liabilities		(42,589	)		(5,214	)		72,166			—			24,363


Net cash provided by (used in) continuing operating activities		(60,331	)		722			24,807			—			(34,802	)
Net cash provided by discontinued operating activities		11,588			—			—			—			11,588


Net cash provided by (used in) operating activities		(48,743	)		722			24,807			—			(23,214	)

Investing Activities
Additions to property, plant and equipment		(323	)		(641	)		(1,744	)		—			(2,708	)
Proceeds from sale of assets		375			—			—			—			375
Purchase of patents		(176	)		—			—			—			(176	)
Change in restricted cash		2,514			—			989			—			3,503
Investment purchases		(1,618	)		—			—			—			(1,618	)


Net cash used in continuing investing activities		772			(641	)		(755	)		—			(624	)
Net cash used in discontinued investing activities		(1,309	)		—			—			—			(1,309	)


Net cash used in investing activities		(537	)		(641	)		(755	)		—			(1,933	)

Financing Activities
Issuance of preferred stock		45,179			—			—			—			45,179
Proceeds from common stock rights offering		27,510			—			—			—			27,510
Financing fees and expenses paid		(213	)		—			103			—			(110	)
Payment of dividends		(2,958	)		—			—			—			(2,958	)
Payments under revolving credit facilities and other debt		(1,971	)		(86	)		(1,606	)		—			(3,663	)
Borrowings from revolving credit facilities and other debt		—			—			230			—			230
Other financing activities		77			—			—			—			77
Intercompany borrowings (payments)		21,213			5			(21,218	)		—			—

Net cash provided by (used in) continuing financing activities		88,837			(81	)		(22,491	)		—			66,265
Net cash used in discontinued financing activities		(24	)		—			—			—			(24	)


Net cash provided by (used in) financing activities		88,813			(81	)		(22,491	)		—			66,241
Effect of exchange rate on cash and equivalents		(4,311	)		—			9,166			—			4,855


Net increase in cash and equivalents		35,222			—			10,727			—			45,949
Cash and cash equivalents at beginning of period		2,759			—			14,595			—			17,354


Cash and equivalents at end of period	$	37,981		$	—		$	25,322		$	—		$	63,303

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Index to Financial Statements

31.	Preferred Stock and Embedded Derivatives

We completed a private placement of 50,000 shares of Series A Convertible Preferred Stock (the “Preferred Stock”) pursuant to a Preferred Stock Purchase Agreement among the Company, The Alpine Group, Inc. and a fund managed by Plainfield Asset Management LLC, for $50 million on February 16, 2007. In accordance with the provisions of APB Opinion No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, the net proceeds from the issuance of the Preferred Stock were allocated to a freestanding written option available to the holders to increase their number of shares of Preferred Stock based upon the results of a subsequent stockholder rights offering, with the residual value allocated to the Preferred Stock. For the year ended December 31, 2007, we recorded pre-tax non-cash income of $15.8 million to mark to fair value the embedded derivative associated with the Preferred Stock written option, which brought the embedded derivative value to zero. Therefore, there is no subsequent mark to fair value adjustments recorded for this derivative in future periods.

Separately, in accordance with Emerging Issues Task Force (“EITF”) Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingency Adjustable Conversion Ratios and EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, the beneficial conversion feature (“BCF”) present in the convertible Preferred Stock has been valued and measured by allocating a portion of the proceeds equal to the intrinsic value of that feature to additional paid-in capital. The BCF is a function of the conversion price of the Preferred Stock, the fair value attributed to the written option and the fair value of the underlying common stock on the commitment date of the Preferred Stock private placement transaction (February 16, 2007). This BCF is recorded to additional paid-in capital and will be recorded as a deemed dividend to preferred stockholders over the stated life of the Preferred Stock, which is ten years.

We did not have a sufficient number of authorized shares of common stock available to fully settle the conversion options embedded in the Preferred Stock upon issuance on February 16, 2007. Accordingly, as a result of not meeting the criteria of EITF Issue No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock and therefore not being eligible for the 11A scope exception in SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), the fair value of this option was determined and the related derivative liability bifurcated from the underlying Preferred Stock balance and included as a component of current liabilities at the time of the issuance. In addition, subsequent issuance of stock options by us (see Note 23, Stock-Based Compensation Plans) further reduced the available shares, necessitating a subsequent valuation of the conversion feature related to the additional shares of Preferred Stock not convertible of this additional embedded derivative as of March 29, 2007. Additionally, this transaction resulted in recording a deemed dividend of $9.6 million in the first quarter of 2007 for the difference in the proceeds allocated to the Preferred Stock and the fair value of the conversion option that required liability classification.

On May 24, 2007, at the Annual Meeting of Stockholders, the stockholders voted to increase the authorized shares of common stock to 180 million. As a result, after recording $5.6 million in pre-tax income from February 16, 2007 to the date of the Annual Meeting of Stockholders to mark to market the conversion option, this liability was reclassified to equity in accordance with EITF Issue No. 06-7 Issuer’s Accounting for a Previously Bifurcated Conversion Option in a Convertible Debt Instrument When the Conversion Option No Longer Meets the Bifurcation Criteria in SFAS 133.

In addition, the discount of the Preferred Stock resulting from the allocations discussed above was accreted during 2008 and 2007 on a straight-line basis over the period from the date of issuance and will continue to be accreted to the earliest redemption date as a deemed dividend. The balance remaining as of December 31, 2008 and 2007 was $40.6 million and $45.6 million, respectively.

32.	Related-Party Transactions

On February 16, 2007, the Company closed the Preferred Stock Purchase Agreement with Alpine and Plainfield providing for the issuance and sale of 50,000 shares of Series A Convertible Preferred Stock of the Company, at a price of $1,000 per share, for a total purchase price of $50,000,000. Following the completion of our common stock rights offering, Alpine purchased an additional 4,494 shares of Series A Convertible Preferred Stock on January 25, 2008 for $4.5 million in order to maintain the fully diluted ownership by Alpine and Plainfield in Wolverine at 55.0%. On March 20, 2008 Alpine purchased 10,000 shares of Series B Convertible Preferred Stock, which have substantially the same terms and conditions as the Series A Convertible Preferred Stock except that the initial rate of interest on the Series B Convertible Preferred Stock is 8.5% and could increase to 10.5% if the underlying shares of common stock into which the Series B Convertible Preferred Stock can be converted are not successfully registered for resale. The 10,000 shares were issued at the $1.10 conversion price and are convertible into 9.1 million shares of stock.

The Company and Alpine entered into a management agreement at closing of the initial transaction for a two-year period pursuant to which Alpine will provide the Company with certain services in exchange for an annual fee of $1,250,000 and reimbursement of reasonable and customary expenses incurred by Alpine. For the year ended December 31, 2008, the Company paid Alpine management fees in the amount of $1,250,000 and reimbursed customary and reasonable expenses in the amount of $31,195. For the year ended December 31, 2007, the Company paid Alpine management fees in the amount of $1,041,667 and reimbursed customary and reasonable expenses in the amount of $118,918. The Company has renewed the management agreement on a month to month basis.

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Index to Financial Statements

On April 30, 2007, the Company entered into a consulting agreement with Keith Weil, the Company’s former Senior Vice President, International and Strategic Development, which was effective as of February 19, 2007, whereby Mr. Weil agreed to provide consulting and advisory services to the Company. Under the terms of the consulting agreement, for the year ended December 31, 2008 we paid Mr. Weil $279,867 in consulting fees and reimbursed his expenses incurred in connection with his assigned duties in the amount of $3,183. The consulting agreement terminated in January, 2009.

On February 29, 2008, the Company entered into a Consultant Agreement with Mr. James E. Deason, the former Senior Vice President, Chief Financial Officer and Secretary of Wolverine, effective as of January 1, 2008. Mr. Deason provided consulting and advisory services to Wolverine in 2008. Under the terms of the consulting agreement, for 2008 we paid Mr. Deason $165,084 in consulting fees and reimbursed his expenses incurred in connection with his assigned duties in the amount of $4,219 as well as provided certain medical insurance coverage. The consulting agreement terminated on December 31, 2008.

Effective as of January 1, 2008, we entered into a sole source purchasing agreement with Exeon, Inc. (“Exeon”), a wholly owned subsidiary of Alpine, whereby we have agreed to purchase all of our scrap and cathode copper requirements for our Shawnee, Oklahoma and London, Ontario facilities. Under the agreement, we will purchase copper scrap and cathode at substantially the same prices paid prior to entering into the agreement, but with enhanced terms thus improving our working capital usage. However, we believe consolidating our purchases in this manner is more efficient and provides more opportunities to purchase materials from secondary markets since Exeon has been in the scrap reclamation business for a number of years. During 2008, we purchased 75.8 million pounds of copper cathode and scrap from Exeon at the COMEX current month average price. This represented 73.5% of our North America copper purchases for the year. Fees charged by Exeon to purchase copper cathode and scrap on our behalf totaled $0.5 million for the year. These fees approximate our cost to perform the same services in-house. As of December 31, 2008, the amount payable to Exeon was $1.7 million and we had $10.8 million of restricted cash related to margin deposits with Exeon.

33.	Subsequent Events

On February 26, 2009, the Company announced the commencement of an Exchange Offer to each of the holders of its 10.5% Senior Notes and its 10.5% Senior Exchange Notes due 2009 for Senior Secured Notes due 2012. The Exchange Offer was extended and amended on March 23, 2009, April, 2, 2009, April 15, 2009, and April 21, 2009. On April 21, 2009, the Company announced that it had received tenders with respect to $83.3 million in aggregate principal amount of the 10.5% Senior Notes, representing 84% of the outstanding 10.5% Senior Notes of $99.4 million. Including the $38.3 million in principal amount of the 10.5% Senior Exchange Notes, holders of $121.6 million, or 88%, of the Company’s $137.7 million 10.5% Senior Notes and 10.5% Senior Exchange Notes agreed to exchange their notes for the 15% Senior Secured Notes due 2012. The Company closed the Exchange offer on April 28, 2009. The Company redeemed $16.1 million of the 10.5% Senior Notes and paid a 3% exchange fee to holders of the 10.5% Senior Notes and 10.5% Senior Exchange Notes that exchanged their notes for the 15% Senior Secured Notes.

The terms of the Exchange Offer and new 15% Senior Secured Notes are as follows:

The Senior Secured Notes will mature on March 31, 2012. We will pay interest on the Senior Secured Notes at 15% per annum until maturity, of which 10% is payable in cash and 5% is payable by issuing additional Senior Secured Notes (“PIK Notes”); provided however, that (a) if the outstanding principal amount of Senior Secured Notes at the close of business on March 31, 2010 exceeds $90 million, the interest rate will increase to 16%, of which 10% will be payable in cash and 6% will be payable in PIK Notes, and (b) if the outstanding principal amount of Senior Secured Notes at the close of business on March 31, 2011 exceeds $60 million, the interest rate will increase to 17%, of which 10% will be payable in cash and 7% will be payable in PIK Notes. We will pay interest semiannually on March 31 and September 30 of each year, commencing September 30, 2009. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

The Senior Secured Notes are secured on a first-priority basis by substantially all of our assets and those of the subsidiary guarantors and will rank pari passu in right of payment with all of our existing and future senior indebtedness and senior in right of payment to all of our future subordinated indebtedness, if any. The Guarantee and Collateral Agreement provides for the unconditional guarantee by the subsidiary guarantors of the payment of the principal and interest on the Senior Secured Notes and the performance by us of all other obligations under the indenture.

At any time and from time to time, we may redeem all or a part of the Senior Secured Notes upon not less than 30 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, on the Senior Secured Notes redeemed to the applicable redemption date, subject to the rights of holders on the relevant record date to receive interest on the relevant interest payment date. Unless we default in the payment of the redemption price, interest will cease to accrue on the Senior Secured Notes or portions thereof called for redemption on the applicable redemption date. Under the indenture, we are not required to make mandatory redemption or sinking fund payments with respect to the Senior Secured Notes; provided however, that if the Company grants any liens to lenders under a credit agreement, we will issue a notice of redemption to redeem an amount of Senior Secured Notes equal to 55% of “eligible NAFTA inventory” and “eligible NAFTA accounts receivable” (in each case as such terms are defined in such credit agreement). A notice of redemption will be delivered immediately prior to or concurrently with the closing of such credit agreement.

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Index to Financial Statements

The indenture related to the Senior Secured Notes contains covenants that limit the ability of the Company and our subsidiaries to incur additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock; make investments; issue or sell capital stock of subsidiaries; engage in transactions with affiliates; create liens on assets; transfer or sell assets; guarantee indebtedness; restrict dividends or other payments of subsidiaries; consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries; and engage in sale/leaseback transactions. These covenants are subject to important exceptions and qualifications.

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Index to Financial Statements

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Wolverine Tube, Inc.:

We have audited the accompanying consolidated balance sheets of Wolverine Tube, Inc. and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of operations, stockholders’ equity (deficit) and comprehensive income (loss), and cash flows for the years then ended. In connection with our audits of the consolidated financial statements, we also have audited the accompanying financial statement schedule II. These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Wolverine Tube, Inc. and subsidiaries as of December 31, 2008 and 2007, and the results of their operations and their cash flows for the years then ended in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects the information set forth therein.

The accompanying consolidated financial statements and schedule have been prepared assuming that the Company will continue as a going concern. As discussed in note 1 to the consolidated financial statements, the Company does not currently have additional borrowing capacity, and future funding requirements with respect to its liquidity requirements could vary materially from the Company’s current estimates. Those matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 1. The consolidated financial statements and schedule do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KPMG LLP

Birmingham, Alabama

June 11, 2009

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Index to Financial Statements

WOLVERINE TUBE , INC. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS


Description	Balance Beginning of Period		Charged to Cost and Expenses			Charged to Other Accounts			Deductions			Balance End of Period
(In thousands)
YEAR ENDED DECEMBER 31, 2008:

Reserve for sales returns and allowances	$	386	$	(252	)	$	—		$	(11	)	$	123

Allowances for doubtful accounts	$	613	$	(172	)	$	—		$	1		$	442

Deferred tax valuation allowance	$	44,681	$	(12,158	)	$	(3,025	)	$	—		$	29,498
Maintenance, Repair and Operations reserve	$	8,436	$	1,220		$	(2,128	)	$	—		$	7,528

YEAR ENDED DECEMBER 31, 2007:

Reserve for sales returns and allowances	$	205	$	173		$	—		$	8		$	386

Allowances for doubtful accounts	$	460	$	91		$	—		$	62		$	613

Deferred tax valuation allowance	$	56,339	$	32,342		$	(44,000	)	$	—		$	44,681
Maintenance, Repair, and Operations reserve	$	5,753	$	7,236		$	(4,553	)	$	—		$	8,436

(1)	Reduction of reserve, net of translation adjustments, for actual sales returns and allowances.

(2)	Uncollectible accounts written off from both continuing and discontinued operations, net of translation adjustments and recoveries.

100

Signatures

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

	WOLVERINE TUBE, INC.


December 29, 2009	By:	/s/ David A. Owen
		David A. Owen
		Senior Vice President, Chief Financial Officer and Secretary

101

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Index to Financial Statements

EXHIBIT INDEX


Exhibit Number		Description

23.1		Consent of KPMG LLP, Independent Registered Public Accounting Firm

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Management contract or compensatory plan or arrangement

102

WOLVERINE TUBE INC - FORM 10-K/A - December 29, 2009

Attached files