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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2018
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _____________ to _____________
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Delaware
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38-3161171
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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One Dauch Drive, Detroit, Michigan
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48211-1198
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(Address of Principal Executive Offices)
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(Zip Code)
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Page Number
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•
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reduced purchases of our products by General Motors Company (GM), FCA US LLC (FCA), or other customers;
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reduced demand for our customers' products (particularly light trucks, sport utility vehicles (SUVs) and crossover vehicles produced by GM and FCA);
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our ability to respond to changes in technology, increased competition or pricing pressures;
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our ability to develop and produce new products that reflect market demand;
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lower-than-anticipated market acceptance of new or existing products;
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our ability to attract new customers and programs for new products;
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•
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risks inherent in our global operations (including tariffs and the potential consequences thereof to us, our suppliers, and our customers and their suppliers, adverse changes in trade agreements, such as NAFTA, immigration policies, political stability, taxes and other law changes, potential disruptions of production and supply, and currency rate fluctuations);
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a significant disruption in operations at one or more of our key manufacturing facilities;
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global economic conditions;
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our ability to successfully integrate the business and information systems of Metaldyne Performance Group, Inc. (MPG) and to realize the anticipated benefits of the merger;
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risks related to a failure of our information technology systems and networks, and risks associated with current and emerging technology threats and damage from computer viruses, unauthorized access, cyber attack and other similar disruptions;
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negative or unexpected tax consequences;
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liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers;
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our ability to achieve the level of cost reductions required to sustain global cost competitiveness;
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supply shortages or price increases in raw materials, utilities or other operating supplies for us or our customers as a result of natural disasters or otherwise;
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our ability or our customers' and suppliers' ability to successfully launch new product programs on a timely basis;
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our ability to realize the expected revenues from our new and incremental business backlog;
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our ability to maintain satisfactory labor relations and avoid work stoppages;
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our suppliers', our customers' and their suppliers' ability to maintain satisfactory labor relations and avoid work stoppages;
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price volatility in, or reduced availability of, fuel;
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potential liabilities or litigation relating to, or assumed in, the MPG merger;
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potential adverse reactions or changes to business relationships resulting from the completion of the merger with MPG;
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our ability to protect our intellectual property and successfully defend against assertions made against us;
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our ability to attract and retain key associates;
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availability of financing for working capital, capital expenditures, research and development (R&D) or other general corporate purposes including acquisitions, as well as our ability to comply with financial covenants;
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our customers' and suppliers' availability of financing for working capital, capital expenditures, R&D or other general corporate purposes;
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changes in liabilities arising from pension and other postretirement benefit obligations;
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risks of noncompliance with environmental laws and regulations or risks of environmental issues that could result in unforeseen costs at our facilities or reputational damage;
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adverse changes in laws, government regulations or market conditions affecting our products or our customers' products;
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our ability or our customers' and suppliers' ability to comply with regulatory requirements and the potential costs of such compliance; and
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other unanticipated events and conditions that may hinder our ability to compete.
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2018
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2017
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2018
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2017
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(in millions, except per share data)
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Net sales
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$
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1,900.9
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$
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1,757.8
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$
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3,759.3
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$
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2,807.7
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Cost of goods sold
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1,569.5
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1,441.4
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3,111.6
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2,280.6
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Gross profit
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331.4
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316.4
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647.7
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527.1
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Selling, general and administrative expenses
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95.0
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105.6
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192.3
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186.8
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Amortization of intangible assets
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24.8
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24.8
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49.7
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26.4
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Restructuring and acquisition-related costs
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36.8
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51.7
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55.1
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67.7
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Gain on sale of business
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(15.5
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)
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—
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(15.5
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—
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Operating income
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190.3
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134.3
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366.1
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246.2
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Interest expense
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(54.4
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(56.9
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)
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(107.6
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)
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(82.4
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)
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Investment income
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0.5
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0.8
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1.0
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1.4
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Other income (expense)
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Debt refinancing and redemption costs
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(4.3
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(2.7
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(14.6
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(2.7
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Gain on settlement of capital lease
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15.6
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—
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15.6
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—
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Other income (expense), net
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5.6
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(6.8
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0.2
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(7.9
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Income before income taxes
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153.3
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68.7
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260.7
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154.6
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Income tax expense
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2.0
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2.4
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19.9
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9.9
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Net income
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$
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151.3
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$
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66.3
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$
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240.8
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$
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144.7
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Net income attributable to noncontrolling interests
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(0.2
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)
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(0.1
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)
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(0.3
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)
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(0.1
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)
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Net income attributable to AAM
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$
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151.1
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$
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66.2
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$
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240.5
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$
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144.6
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Basic earnings per share
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$
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1.31
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$
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0.59
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$
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2.09
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$
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1.52
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Diluted earnings per share
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$
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1.30
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$
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0.59
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$
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2.08
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$
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1.51
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Three Months Ended
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Six Months Ended
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||||||||||||
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June 30,
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June 30,
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||||||||||||
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2018
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2017
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2018
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2017
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(in millions)
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Net income
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$
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151.3
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$
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66.3
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$
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240.8
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$
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144.7
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Other comprehensive income (loss)
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Defined benefit plans, net of tax
(a)
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12.2
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0.9
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13.5
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0.6
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Foreign currency translation adjustments
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(81.0
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)
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24.6
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(43.1
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)
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|
36.5
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Changes in cash flow hedges, net of tax
(b)
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(7.9
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)
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4.9
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7.2
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|
20.4
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Other comprehensive income (loss)
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(76.7
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)
|
|
30.4
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(22.4
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)
|
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57.5
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|
||||
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Comprehensive income
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$
|
74.6
|
|
|
$
|
96.7
|
|
|
$
|
218.4
|
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|
$
|
202.2
|
|
|
|
|
|
|
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||||||||
Net income attributable to noncontrolling interests
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(0.2
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)
|
|
(0.1
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)
|
|
(0.3
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)
|
|
(0.1
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)
|
||||
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||||||||
Comprehensive income attributable to AAM
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$
|
74.4
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|
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$
|
96.6
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$
|
218.1
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|
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$
|
202.1
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|
(a)
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Amounts are net of tax of $(4.1) million and $(4.5) million for the three and six months ended June 30, 2018, and $(0.4) million and $(0.2) million for the three and six months ended June 30, 2017, respectively.
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(b)
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Amounts are net of tax of $(0.1) million and $(1.2) million for the three and six months ended June 30, 2018, and $0.7 million for the three and six months ended June 30, 2017.
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|
June 30, 2018
|
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December 31, 2017
|
||||
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(Unaudited)
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|
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Assets
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(in millions)
|
||||||
Current assets
|
|
|
||||||
Cash and cash equivalents
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|
$
|
353.2
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$
|
376.8
|
|
Accounts receivable, net
|
|
1,253.6
|
|
|
1,035.9
|
|
||
Inventories, net
|
|
426.4
|
|
|
392.0
|
|
||
Prepaid expenses and other
|
|
121.8
|
|
|
140.3
|
|
||
Total current assets
|
|
2,155.0
|
|
|
1,945.0
|
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||
|
|
|
|
|
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Property, plant and equipment, net
|
|
2,459.3
|
|
|
2,402.9
|
|
||
Deferred income taxes
|
|
30.6
|
|
|
37.1
|
|
||
Goodwill
|
|
1,631.7
|
|
|
1,654.3
|
|
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Intangible assets, net
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|
1,159.8
|
|
|
1,212.5
|
|
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GM postretirement cost sharing asset
|
|
248.3
|
|
|
252.2
|
|
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Other assets and deferred charges
|
|
405.7
|
|
|
378.8
|
|
||
Total assets
|
|
$
|
8,090.4
|
|
|
$
|
7,882.8
|
|
|
|
|
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Liabilities and Stockholders’ Equity
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|
|
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Current liabilities
|
|
|
|
|
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|
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Current portion of long-term debt
|
|
$
|
33.2
|
|
|
$
|
5.9
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Accounts payable
|
|
930.9
|
|
|
799.0
|
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Accrued compensation and benefits
|
|
161.5
|
|
|
200.0
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|
||
Deferred revenue
|
|
38.1
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|
|
34.1
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|
||
Accrued expenses and other
|
|
168.0
|
|
|
177.4
|
|
||
Total current liabilities
|
|
1,331.7
|
|
|
1,216.4
|
|
||
|
|
|
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Long-term debt, net
|
|
3,873.0
|
|
|
3,969.3
|
|
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Deferred revenue
|
|
81.6
|
|
|
78.8
|
|
||
Deferred income taxes
|
|
143.0
|
|
|
101.7
|
|
||
Postretirement benefits and other long-term liabilities
|
|
894.9
|
|
|
976.6
|
|
||
Total liabilities
|
|
6,324.2
|
|
|
6,342.8
|
|
||
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Stockholders' equity
|
|
|
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Common stock, par value $0.01 per share; 150.0 million shares authorized;
|
|
|
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|
||||
118.8 million shares issued as of June 30, 2018 and 118.2 million shares issued as of December 31, 2017
|
|
1.2
|
|
|
1.2
|
|
||
Paid-in capital
|
|
1,278.3
|
|
|
1,264.6
|
|
||
Retained earnings
|
|
1,001.5
|
|
|
761.0
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|
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Treasury stock at cost, 7.1 million shares as of June 30, 2018 and 6.9 million shares as of December 31, 2017
|
|
(201.7
|
)
|
|
(198.1
|
)
|
||
Accumulated other comprehensive income (loss)
|
|
|
|
|
||||
Defined benefit plans, net of tax
|
|
(238.5
|
)
|
|
(252.0
|
)
|
||
Foreign currency translation adjustments
|
|
(77.2
|
)
|
|
(34.1
|
)
|
||
Unrecognized income (loss) on cash flow hedges, net of tax
|
|
0.6
|
|
|
(6.6
|
)
|
||
Total AAM stockholders' equity
|
|
1,764.2
|
|
|
1,536.0
|
|
||
Noncontrolling interests in subsidiaries
|
|
2.0
|
|
|
4.0
|
|
||
Total stockholders' equity
|
|
1,766.2
|
|
|
1,540.0
|
|
||
Total liabilities and stockholders' equity
|
|
$
|
8,090.4
|
|
|
$
|
7,882.8
|
|
|
|
Six Months Ended
|
||||||
|
|
June 30,
|
||||||
|
|
2018
|
|
2017
|
||||
|
|
(in millions)
|
||||||
Operating activities
|
|
|
|
|
||||
Net income
|
|
$
|
240.8
|
|
|
$
|
144.7
|
|
Adjustments to reconcile net income to net cash provided by operating activities
|
|
|
|
|
||||
Depreciation and amortization
|
|
258.0
|
|
|
180.8
|
|
||
Impairment of long-lived assets
|
|
23.9
|
|
|
—
|
|
||
Deferred income taxes
|
|
38.0
|
|
|
(24.6
|
)
|
||
Stock-based compensation
|
|
13.7
|
|
|
30.9
|
|
||
Pensions and other postretirement benefits, net of contributions
|
|
(0.6
|
)
|
|
(0.5
|
)
|
||
Gain on sale of business
|
|
(15.5
|
)
|
|
—
|
|
||
Loss (Gain) on disposal of property, plant and equipment, net
|
|
(4.9
|
)
|
|
1.1
|
|
||
Debt refinancing and redemption costs and (gain) on settlement of capital lease
|
|
(0.8
|
)
|
|
2.7
|
|
||
Changes in operating assets and liabilities, net of amounts acquired or disposed
|
|
|
|
|
||||
Accounts receivable
|
|
(225.7
|
)
|
|
(139.8
|
)
|
||
Inventories
|
|
(47.4
|
)
|
|
6.2
|
|
||
Accounts payable and accrued expenses
|
|
83.7
|
|
|
45.0
|
|
||
Deferred revenue
|
|
8.1
|
|
|
8.4
|
|
||
Other assets and liabilities
|
|
(81.9
|
)
|
|
(41.7
|
)
|
||
Net cash provided by operating activities
|
|
289.4
|
|
|
213.2
|
|
||
|
|
|
|
|
|
|
||
Investing activities
|
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
|
(273.0
|
)
|
|
(138.6
|
)
|
||
Proceeds from sale of property, plant and equipment
|
|
0.9
|
|
|
1.5
|
|
||
Purchase buyouts of leased equipment
|
|
(0.5
|
)
|
|
(8.4
|
)
|
||
Proceeds from sale of business, net
|
|
47.1
|
|
|
5.9
|
|
||
Acquisition of business, net of cash acquired
|
|
(1.3
|
)
|
|
(895.5
|
)
|
||
Net cash used in investing activities
|
|
(226.8
|
)
|
|
(1,035.1
|
)
|
||
|
|
|
|
|
|
|
||
Financing activities
|
|
|
|
|
|
|
||
Payments of long-term debt and capital lease obligations
|
|
(528.7
|
)
|
|
(1,937.5
|
)
|
||
Proceeds from issuance of long-term debt
|
|
461.9
|
|
|
2,857.9
|
|
||
Debt issuance costs
|
|
(6.8
|
)
|
|
(90.5
|
)
|
||
Purchase of noncontrolling interest
|
|
(2.2
|
)
|
|
—
|
|
||
Purchase of treasury stock
|
|
(3.6
|
)
|
|
(6.9
|
)
|
||
Employee stock option exercises
|
|
—
|
|
|
0.9
|
|
||
Net cash provided by (used in) financing activities
|
|
(79.4
|
)
|
|
823.9
|
|
||
|
|
|
|
|
|
|
||
Effect of exchange rate changes on cash
|
|
(4.3
|
)
|
|
7.4
|
|
||
|
|
|
|
|
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
(21.1
|
)
|
|
9.4
|
|
||
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
|
376.8
|
|
|
481.2
|
|
||
|
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
355.7
|
|
|
$
|
490.6
|
|
|
|
|
|
|
|
|
||
Supplemental cash flow information
|
|
|
|
|
|
|
||
Interest paid
|
|
$
|
104.4
|
|
|
$
|
79.8
|
|
Income taxes paid, net of refunds
|
|
$
|
19.6
|
|
|
$
|
16.7
|
|
Non-cash investing activities: AAM common shares issued for acquisition of MPG
|
|
$
|
—
|
|
|
$
|
576.7
|
|
1.
|
ORGANIZATION AND BASIS OF PRESENTATION
|
2.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS
|
•
|
Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles;
|
•
|
Metal Forming products consist primarily of axle and transmission shafts, ring and pinion gears, differential gears, transmission gears, and suspension components for Original Equipment Manufacturers and Tier 1 automotive suppliers;
|
•
|
The Powertrain segment products consist primarily of transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for Original Equipment Manufacturers and Tier I automotive suppliers; and
|
•
|
The Casting segment produces both thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the global light vehicle, commercial and industrial markets.
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
North America
|
|
$
|
899.0
|
|
|
$
|
216.3
|
|
|
$
|
197.2
|
|
|
$
|
209.6
|
|
|
$
|
1,522.1
|
|
Asia
|
|
159.3
|
|
|
1.2
|
|
|
29.9
|
|
|
—
|
|
|
190.4
|
|
|||||
Europe
|
|
30.7
|
|
|
70.3
|
|
|
54.9
|
|
|
—
|
|
|
155.9
|
|
|||||
South America
|
|
31.0
|
|
|
—
|
|
|
1.5
|
|
|
—
|
|
|
32.5
|
|
|||||
Total
|
|
$
|
1,120.0
|
|
|
$
|
287.8
|
|
|
$
|
283.5
|
|
|
$
|
209.6
|
|
|
$
|
1,900.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
North America
|
|
$
|
862.0
|
|
|
$
|
201.6
|
|
|
$
|
204.2
|
|
|
$
|
195.4
|
|
|
$
|
1,463.2
|
|
Asia
|
|
103.9
|
|
|
0.7
|
|
|
32.5
|
|
|
—
|
|
|
137.1
|
|
|||||
Europe
|
|
21.2
|
|
|
57.6
|
|
|
44.6
|
|
|
—
|
|
|
123.4
|
|
|||||
South America
|
|
34.0
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
34.1
|
|
|||||
Total
|
|
$
|
1,021.1
|
|
|
$
|
259.9
|
|
|
$
|
281.4
|
|
|
$
|
195.4
|
|
|
$
|
1,757.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
North America
|
|
$
|
1,784.3
|
|
|
$
|
432.6
|
|
|
$
|
396.4
|
|
|
$
|
419.4
|
|
|
$
|
3,032.7
|
|
Asia
|
|
282.1
|
|
|
2.6
|
|
|
61.0
|
|
|
—
|
|
|
345.7
|
|
|||||
Europe
|
|
59.7
|
|
|
143.7
|
|
|
110.8
|
|
|
—
|
|
|
314.2
|
|
|||||
South America
|
|
64.3
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
66.7
|
|
|||||
Total
|
|
$
|
2,190.4
|
|
|
$
|
578.9
|
|
|
$
|
570.6
|
|
|
$
|
419.4
|
|
|
$
|
3,759.3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
North America
|
|
$
|
1,727.2
|
|
|
$
|
252.7
|
|
|
$
|
204.2
|
|
|
$
|
195.4
|
|
|
$
|
2,379.5
|
|
Asia
|
|
189.4
|
|
|
0.7
|
|
|
32.5
|
|
|
—
|
|
|
222.6
|
|
|||||
Europe
|
|
41.9
|
|
|
57.6
|
|
|
44.6
|
|
|
—
|
|
|
144.1
|
|
|||||
South America
|
|
61.4
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
61.5
|
|
|||||
Total
|
|
$
|
2,019.9
|
|
|
$
|
311.0
|
|
|
$
|
281.4
|
|
|
$
|
195.4
|
|
|
$
|
2,807.7
|
|
|
|
|
|
||||||
|
Accounts Receivable, Net
|
Contract Liabilities (Current)
|
Contract Liabilities (Long-term)
|
||||||
December 31, 2017
|
$
|
1,035.9
|
|
$
|
34.1
|
|
$
|
78.8
|
|
June 30, 2018
|
1,253.6
|
|
38.1
|
|
81.6
|
|
|||
Increase/(decrease)
|
$
|
217.7
|
|
$
|
4.0
|
|
$
|
2.8
|
|
3.
|
RESTRUCTURING AND ACQUISITION-RELATED COSTS
|
|
Severance Charges
|
|
Implementation Costs
|
|
Asset Impairment Charges
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Accrual as of December 31, 2016
|
$
|
0.6
|
|
|
$
|
9.2
|
|
|
$
|
—
|
|
|
$
|
9.8
|
|
Charges
|
1.5
|
|
|
7.0
|
|
|
—
|
|
|
8.5
|
|
||||
Cash utilization
|
(2.0
|
)
|
|
(11.8
|
)
|
|
—
|
|
|
(13.8
|
)
|
||||
Accrual as of June 30, 2017
|
$
|
0.1
|
|
|
$
|
4.4
|
|
|
$
|
—
|
|
|
$
|
4.5
|
|
|
|
|
|
|
|
|
|
||||||||
Accrual as of December 31, 2017
|
$
|
0.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
Charges
|
2.0
|
|
|
5.5
|
|
|
23.9
|
|
|
31.4
|
|
||||
Cash utilization
|
(0.4
|
)
|
|
(5.1
|
)
|
|
—
|
|
|
(5.5
|
)
|
||||
Non-cash utilization
|
—
|
|
|
—
|
|
|
(23.9
|
)
|
|
(23.9
|
)
|
||||
Accrual as of June 30, 2018
|
$
|
1.9
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
2.3
|
|
|
Acquisition-Related Costs
|
|
Integration Expenses
|
|
Total
|
||||||
|
(in millions)
|
||||||||||
Charges
|
$
|
1.1
|
|
|
$
|
22.6
|
|
|
$
|
23.7
|
|
|
|
|
|
|
|
||||||
Total restructuring and acquisition-related charges
|
$
|
55.1
|
|
4.
|
BUSINESS COMBINATIONS
|
(in millions)
|
April 6, 2017
|
||
Cash consideration
|
$
|
953.5
|
|
Share consideration
|
576.7
|
|
|
Total consideration transferred
|
$
|
1,530.2
|
|
Fair value of MPG noncontrolling interests
|
3.6
|
|
|
Total fair value of MPG
|
$
|
1,533.8
|
|
|
|
||
Cash and cash equivalents
|
$
|
202.1
|
|
Accounts receivable
|
403.1
|
|
|
Inventories
|
199.0
|
|
|
Prepaid expenses and other long-term assets
|
119.9
|
|
|
Property, plant and equipment
|
971.8
|
|
|
Intangible assets
|
1,223.1
|
|
|
Total assets acquired
|
$
|
3,119.0
|
|
Accounts payable
|
287.8
|
|
|
Accrued expenses and other
|
137.7
|
|
|
Deferred income tax liabilities
|
580.2
|
|
|
Debt
|
1,918.7
|
|
|
Postretirement benefits and other long-term liabilities
|
54.1
|
|
|
Net assets acquired
|
$
|
140.5
|
|
Goodwill
|
$
|
1,393.3
|
|
(in millions)
|
March 1, 2017
|
||
Contractual purchase price
|
$
|
162.5
|
|
Adjustment to contractual purchase price for working capital settlement
|
2.5
|
|
|
Adjustment to contractual purchase price for capital equipment
|
4.9
|
|
|
Adjustment to contractual purchase price for settlement of existing accounts payable balance
|
(22.8
|
)
|
|
Cash acquired
|
(0.5
|
)
|
|
Adjusted purchase price, net of cash acquired
|
$
|
146.6
|
|
Accounts receivable
|
1.1
|
|
|
Inventories
|
4.8
|
|
|
Prepaid expenses and other
|
3.6
|
|
|
Property, plant and equipment
|
38.4
|
|
|
Intangible assets
|
31.7
|
|
|
Total assets acquired
|
$
|
79.6
|
|
Accounts payable
|
10.8
|
|
|
Accrued expenses and other
|
2.7
|
|
|
Deferred income tax liabilities
|
1.2
|
|
|
Net assets acquired
|
$
|
64.9
|
|
Goodwill
|
$
|
81.7
|
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Consolidated
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance as of December 31, 2017
|
$
|
211.1
|
|
|
$
|
558.9
|
|
|
$
|
478.8
|
|
|
$
|
405.5
|
|
|
$
|
1,654.3
|
|
Acquisition of MPG
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Acquisition of USM Mexico
|
1.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.3
|
|
|||||
Sale of business
|
—
|
|
|
—
|
|
|
(15.1
|
)
|
|
—
|
|
|
(15.1
|
)
|
|||||
Foreign currency translation
|
(0.5
|
)
|
|
(4.8
|
)
|
|
(4.4
|
)
|
|
—
|
|
|
(9.7
|
)
|
|||||
Balance as of June 30, 2018
|
$
|
211.9
|
|
|
$
|
555.0
|
|
|
$
|
459.3
|
|
|
$
|
405.5
|
|
|
$
|
1,631.7
|
|
|
June 30,
|
|
December 31,
|
||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net Carrying Amount
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Capitalized computer software
|
$
|
37.4
|
|
|
$
|
(17.2
|
)
|
|
$
|
20.2
|
|
|
$
|
35.6
|
|
|
$
|
(14.3
|
)
|
|
$
|
21.3
|
|
e-AAM in-process research and development
|
5.4
|
|
|
(0.4
|
)
|
|
5.0
|
|
|
5.9
|
|
|
—
|
|
|
5.9
|
|
||||||
Customer platforms
|
952.2
|
|
|
(88.1
|
)
|
|
864.1
|
|
|
952.2
|
|
|
(52.9
|
)
|
|
899.3
|
|
||||||
Customer relationships
|
147.0
|
|
|
(12.0
|
)
|
|
135.0
|
|
|
151.8
|
|
|
(7.3
|
)
|
|
144.5
|
|
||||||
Technology and other
|
150.8
|
|
|
(15.3
|
)
|
|
135.5
|
|
|
150.8
|
|
|
(9.3
|
)
|
|
141.5
|
|
||||||
Total
|
$
|
1,292.8
|
|
|
$
|
(133.0
|
)
|
|
$
|
1,159.8
|
|
|
$
|
1,296.3
|
|
|
$
|
(83.8
|
)
|
|
$
|
1,212.5
|
|
6.
|
INVENTORIES
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
(in millions)
|
||||||
|
|
|
|
|
||||
Raw materials and work-in-progress
|
|
$
|
366.1
|
|
|
$
|
319.7
|
|
Finished goods
|
|
78.6
|
|
|
89.6
|
|
||
Gross inventories
|
|
444.7
|
|
|
409.3
|
|
||
Inventory valuation reserves
|
|
(18.3
|
)
|
|
(17.3
|
)
|
||
Inventories, net
|
|
$
|
426.4
|
|
|
$
|
392.0
|
|
7.
|
LONG-TERM DEBT
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
(in millions)
|
||||||
|
|
|
|
|
||||
Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan A Facility
|
|
92.5
|
|
|
92.5
|
|
||
Term Loan B Facility
|
|
1,526.8
|
|
|
1,526.8
|
|
||
7.75% Notes due 2019
|
|
200.0
|
|
|
200.0
|
|
||
6.625% Notes due 2022
|
|
450.0
|
|
|
550.0
|
|
||
6.50% Notes due 2027
|
|
500.0
|
|
|
500.0
|
|
||
6.25% Notes due 2026
|
|
400.0
|
|
|
—
|
|
||
6.25% Notes due 2025
|
|
700.0
|
|
|
700.0
|
|
||
6.25% Notes due 2021
|
|
—
|
|
|
400.0
|
|
||
Foreign credit facilities
|
|
94.8
|
|
|
53.2
|
|
||
Capital lease obligations
|
|
15.4
|
|
|
28.3
|
|
||
Total debt
|
|
3,979.5
|
|
|
4,050.8
|
|
||
Less: Current portion of long-term debt
|
|
33.2
|
|
|
5.9
|
|
||
Long-term debt
|
|
3,946.3
|
|
|
4,044.9
|
|
||
Less: Debt issuance costs
|
|
73.3
|
|
|
75.6
|
|
||
Long-term debt, net
|
|
$
|
3,873.0
|
|
|
$
|
3,969.3
|
|
8.
|
FAIR VALUE
|
•
|
Level 1: Observable inputs such as quoted prices in active markets;
|
•
|
Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
|
•
|
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
||||||||||||
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Input
|
||||||||
|
|
(in millions)
|
|
|
||||||||||||||
Balance Sheet Classification
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
108.4
|
|
|
$
|
108.4
|
|
|
$
|
72.8
|
|
|
$
|
72.8
|
|
|
Level 1
|
Prepaid expenses and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges - currency forward contracts
|
|
0.5
|
|
|
0.5
|
|
|
0.1
|
|
|
0.1
|
|
|
Level 2
|
||||
Cash flow hedges - variable-to-fixed interest rate swap
|
|
0.4
|
|
|
0.4
|
|
|
1.3
|
|
|
1.3
|
|
|
Level 2
|
||||
Nondesignated - currency forward contracts
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
Other assets and deferred charges
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges - currency forward contracts
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
Level 2
|
||||
Cash flow hedges - variable-to-fixed interest rate swap
|
|
1.8
|
|
|
1.8
|
|
|
0.9
|
|
|
0.9
|
|
|
Level 2
|
||||
Accrued expenses and other
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges - currency forward contracts
|
|
3.3
|
|
|
3.3
|
|
|
6.0
|
|
|
6.0
|
|
|
Level 2
|
||||
Nondesignated - currency forward contracts
|
|
1.5
|
|
|
1.5
|
|
|
2.8
|
|
|
2.8
|
|
|
Level 2
|
||||
Postretirement benefits and other long-term liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash flow hedges - currency forward contracts
|
|
2.0
|
|
|
2.0
|
|
|
2.6
|
|
|
2.6
|
|
|
Level 2
|
||||
Cash flow hedges - variable-to-fixed interest rate swap
|
|
1.0
|
|
|
1.0
|
|
|
0.3
|
|
|
0.3
|
|
|
Level 2
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
||||||||||||
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Input
|
||||||||
|
|
(in millions)
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 2
|
Term Loan A Facility
|
|
92.5
|
|
|
91.9
|
|
|
92.5
|
|
|
92.5
|
|
|
Level 2
|
||||
Term Loan B Facility
|
|
1,526.8
|
|
|
1,517.2
|
|
|
1,526.8
|
|
|
1,528.7
|
|
|
Level 2
|
||||
7.75% Notes due 2019
|
|
200.0
|
|
|
209.5
|
|
|
200.0
|
|
|
217.5
|
|
|
Level 2
|
||||
6.625% Notes due 2022
|
|
450.0
|
|
|
460.7
|
|
|
550.0
|
|
|
570.2
|
|
|
Level 2
|
||||
6.50% Notes due 2027
|
|
500.0
|
|
|
494.4
|
|
|
500.0
|
|
|
527.5
|
|
|
Level 2
|
||||
6.25% Notes due 2026
|
|
400.0
|
|
|
389.0
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
||||
6.25% Notes due 2025
|
|
700.0
|
|
|
683.9
|
|
|
700.0
|
|
|
736.8
|
|
|
Level 2
|
||||
6.25% Notes due 2021
|
|
—
|
|
|
—
|
|
|
400.0
|
|
|
410.0
|
|
|
Level 2
|
|
|
|
|
|
||||
Balance Sheet Classification
|
|
Fair Value at
June 30, 2018
|
|
Asset Impairment for the Six Months Ended June 30, 2018
|
||||
|
|
(in millions)
|
||||||
|
|
|
|
|
||||
Property, plant and equipment, net
|
|
$
|
—
|
|
|
$
|
23.6
|
|
Other assets and deferred charges
|
|
—
|
|
|
0.3
|
|
9.
|
DERIVATIVES
|
|
|
Location
|
|
Gain (Loss) Reclassified During
|
|
Total of Financial
|
|
Gain (Loss) Expected
|
||||||||||||||||||
|
|
of Gain (Loss)
|
|
Three Months Ended
|
|
Six Months Ended
|
|
Statement
|
|
to be Reclassified
|
||||||||||||||||
|
|
Reclassified into
|
|
June 30,
|
|
June 30,
|
|
Line Item
|
|
During the
|
||||||||||||||||
|
|
Net Income
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
Next 12 Months
|
||||||||||||
|
|
|
|
(in millions)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Currency forward contracts
|
|
Cost of Goods Sold
|
|
$
|
(0.8
|
)
|
|
$
|
(1.1
|
)
|
|
$
|
(2.8
|
)
|
|
$
|
(3.9
|
)
|
|
$
|
3,111.6
|
|
|
$
|
(2.8
|
)
|
Variable-to-fixed interest rate swap
|
|
Interest Expense
|
|
0.9
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
107.6
|
|
|
2.5
|
|
|
|
|
|
Gain (Loss) Recognized During
|
Total of Financial
|
||||||||||||||||
|
|
Location of Gain (Loss)
|
|
Three Months Ended
|
|
Six Months Ended
|
Statement Line
|
||||||||||||||
|
|
Recognized in
|
|
June 30,
|
|
June 30,
|
Item
|
||||||||||||||
|
|
Net Income
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
2018
|
||||||||||
|
|
|
|
(in millions)
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency forward contracts
|
|
Cost of Goods Sold
|
|
$
|
(3.5
|
)
|
|
$
|
2.2
|
|
|
$
|
0.5
|
|
|
$
|
5.7
|
|
$
|
3,111.6
|
|
Currency forward contracts
|
|
Other Income (Expense), net
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
0.2
|
|
|||||
Currency option contracts
|
|
Cost of Goods Sold
|
|
—
|
|
|
1.1
|
|
|
—
|
|
|
1.1
|
|
3,111.6
|
|
10.
|
EMPLOYEE BENEFIT PLANS
|
|
|
Pension Benefits
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Service cost
|
|
$
|
1.0
|
|
|
$
|
1.1
|
|
|
$
|
2.1
|
|
|
$
|
1.9
|
|
Interest cost
|
|
6.8
|
|
|
7.4
|
|
|
13.7
|
|
|
14.2
|
|
||||
Expected asset return
|
|
(11.5
|
)
|
|
(11.1
|
)
|
|
(23.0
|
)
|
|
(21.6
|
)
|
||||
Amortized loss
|
|
2.2
|
|
|
1.8
|
|
|
4.4
|
|
|
3.5
|
|
||||
Amortized prior service cost
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
||||
Curtailment
|
|
—
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
||||
Net periodic benefit cost (credit)
|
|
$
|
(1.4
|
)
|
|
$
|
(0.8
|
)
|
|
$
|
0.5
|
|
|
$
|
(2.0
|
)
|
|
|
|
|
|
|
|
||||||||||
|
|
Other Postretirement Benefits
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.2
|
|
|
$
|
0.2
|
|
Interest cost
|
|
3.1
|
|
|
3.3
|
|
|
6.2
|
|
|
6.6
|
|
||||
Amortized loss
|
|
0.2
|
|
|
0.1
|
|
|
0.4
|
|
|
0.3
|
|
||||
Amortized prior service credit
|
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||||
Net periodic benefit cost
|
|
$
|
2.8
|
|
|
$
|
2.9
|
|
|
$
|
5.5
|
|
|
$
|
5.8
|
|
11.
|
PRODUCT WARRANTIES
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(in millions)
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Beginning balance
|
|
$
|
53.6
|
|
|
$
|
47.5
|
|
|
$
|
49.5
|
|
|
$
|
42.9
|
|
Accruals
|
|
6.2
|
|
|
4.1
|
|
|
10.5
|
|
|
9.6
|
|
||||
Payments
|
|
(0.6
|
)
|
|
(1.5
|
)
|
|
(1.1
|
)
|
|
(2.4
|
)
|
||||
Adjustment to prior period accruals
|
|
(0.2
|
)
|
|
(2.4
|
)
|
|
(0.2
|
)
|
|
(2.6
|
)
|
||||
Foreign currency translation
|
|
(0.6
|
)
|
|
0.2
|
|
|
(0.3
|
)
|
|
0.4
|
|
||||
Ending balance
|
|
$
|
58.4
|
|
|
$
|
47.9
|
|
|
$
|
58.4
|
|
|
$
|
47.9
|
|
12.
|
INCOME TAXES
|
•
|
Requires companies to pay a one-time transition tax (Transition Tax) on certain foreign earnings for which U.S. income tax was previously deferred
|
•
|
Generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries
|
•
|
Requires a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations (GILTI)
|
•
|
Eliminates the corporate alternative minimum tax (AMT) and changes how existing AMT credits can be realized
|
•
|
Creates a new limitation on deductible net interest expense incurred by U.S. corporations
|
•
|
Allows for immediate expensing of certain capital investments in the U.S. for the period September 27, 2017 through December 31, 2022
|
•
|
Creates a new base erosion anti-abuse minimum tax (BEAT)
|
•
|
Allows for a current deduction for a portion of foreign derived intangible income (FDII)
|
13.
|
EARNINGS PER SHARE (EPS)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
June 30,
|
|
June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
(in millions, except per share data)
|
||||||||||||||
Numerator
|
|
|
|
|
|
|
|
|
|
|||||||
Net income attributable to AAM
|
|
$
|
151.1
|
|
|
$
|
66.2
|
|
|
$
|
240.5
|
|
|
$
|
144.6
|
|
Less: Net income attributable to participating securities
|
|
(4.9
|
)
|
|
(1.4
|
)
|
|
(6.8
|
)
|
|
(3.3
|
)
|
||||
Net income attributable to common shareholders - Basic and Dilutive
|
|
$
|
146.2
|
|
|
$
|
64.8
|
|
|
$
|
233.7
|
|
|
$
|
141.3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Denominators
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic common shares outstanding -
|
|
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares outstanding
|
|
115.4
|
|
|
111.6
|
|
|
114.8
|
|
|
95.2
|
|
||||
Less: Participating securities
|
|
(3.7
|
)
|
|
(2.3
|
)
|
|
(3.3
|
)
|
|
(2.2
|
)
|
||||
Weighted-average common shares outstanding
|
|
111.7
|
|
|
109.3
|
|
|
111.5
|
|
|
93.0
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Effect of dilutive securities -
|
|
|
|
|
|
|
|
|
|
|
||||||
Dilutive stock-based compensation
|
|
0.6
|
|
|
0.4
|
|
|
0.6
|
|
|
0.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted shares outstanding -
|
|
|
|
|
|
|
|
|
|
|
||||||
Adjusted weighted-average shares after assumed conversions
|
|
112.3
|
|
|
109.7
|
|
|
112.1
|
|
|
93.4
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Basic EPS
|
|
$
|
1.31
|
|
|
$
|
0.59
|
|
|
$
|
2.09
|
|
|
$
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Diluted EPS
|
|
$
|
1.30
|
|
|
$
|
0.59
|
|
|
$
|
2.08
|
|
|
$
|
1.51
|
|
14.
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI)
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation Adjustments
|
|
Unrecognized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||
Balance at March 31, 2018
|
$
|
(250.7
|
)
|
|
$
|
3.8
|
|
|
$
|
8.5
|
|
|
$
|
(238.4
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
14.7
|
|
|
(81.2
|
)
|
|
(7.7
|
)
|
|
(74.2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax effect of other comprehensive income (loss) before reclassifications
|
(3.6
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(4.0
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
1.6
|
|
(a)
|
0.2
|
|
|
(0.1
|
)
|
(b)
|
1.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income taxes reclassified into net income
|
(0.5
|
)
|
|
—
|
|
|
0.3
|
|
|
(0.2
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current period other comprehensive income (loss)
|
12.2
|
|
|
(81.0
|
)
|
|
(7.9
|
)
|
|
(76.7
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2018
|
$
|
(238.5
|
)
|
|
$
|
(77.2
|
)
|
|
$
|
0.6
|
|
|
$
|
(315.1
|
)
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation Adjustments
|
|
Unrecognized Gain (Loss) on Cash Flow Hedges
|
|
Total
|
||||||||
Balance at March 31, 2017
|
$
|
(243.8
|
)
|
|
$
|
(110.5
|
)
|
|
$
|
(8.2
|
)
|
|
$
|
(362.5
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income before reclassifications
|
—
|
|
|
24.6
|
|
|
3.1
|
|
|
27.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax effect of other comprehensive income before reclassifications
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
1.3
|
|
(a)
|
—
|
|
|
1.1
|
|
(b)
|
2.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income taxes reclassified into net income
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current period other comprehensive income
|
0.9
|
|
|
24.6
|
|
|
4.9
|
|
|
30.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2017
|
$
|
(242.9
|
)
|
|
$
|
(85.9
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(332.1
|
)
|
(a)
|
The amount reclassified from AOCI included $1.6 million in cost of goods sold (COGS) for the three months ended June 30, 2018 and $1.4 million in COGS and $(0.1) million in SG&A for the three months ended June 30, 2017.
|
|
|
(b)
|
The amounts reclassified from AOCI included $0.8 million in COGS and $(0.9) million in interest expense for the three months ended June 30, 2018 and $1.1 million in COGS for the three months ended June 30, 2017.
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation Adjustments
|
|
Unrecognized Loss on Cash Flow Hedges
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
(252.0
|
)
|
|
$
|
(34.1
|
)
|
|
$
|
(6.6
|
)
|
|
$
|
(292.7
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
14.7
|
|
|
(43.3
|
)
|
|
6.9
|
|
|
(21.7
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax effect of other comprehensive income (loss) before reclassifications
|
(3.6
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
(5.1
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
3.3
|
|
(a)
|
0.2
|
|
|
1.5
|
|
(b)
|
5.0
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income taxes reclassified into net income
|
(0.9
|
)
|
|
—
|
|
|
0.3
|
|
|
(0.6
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current period other comprehensive income (loss)
|
13.5
|
|
|
(43.1
|
)
|
|
7.2
|
|
|
(22.4
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2018
|
$
|
(238.5
|
)
|
|
$
|
(77.2
|
)
|
|
$
|
0.6
|
|
|
$
|
(315.1
|
)
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation Adjustments
|
|
Unrecognized Loss on Cash Flow Hedges
|
|
Total
|
||||||||
Balance at December 31, 2016
|
$
|
(243.5
|
)
|
|
$
|
(122.4
|
)
|
|
$
|
(23.7
|
)
|
|
$
|
(389.6
|
)
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
(1.7
|
)
|
|
36.5
|
|
|
15.8
|
|
|
50.6
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income tax effect of other comprehensive income before reclassifications
|
0.6
|
|
|
—
|
|
|
0.7
|
|
|
1.3
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss
|
2.5
|
|
(a)
|
—
|
|
|
3.9
|
|
(b)
|
6.4
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income taxes reclassified into net income
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net current period other comprehensive income
|
0.6
|
|
|
36.5
|
|
|
20.4
|
|
|
57.5
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balance at June 30, 2017
|
$
|
(242.9
|
)
|
|
$
|
(85.9
|
)
|
|
$
|
(3.3
|
)
|
|
$
|
(332.1
|
)
|
(a)
|
The amount reclassified from AOCI included $3.0 million in cost of goods sold (COGS) and $0.3 million in selling, general & administrative expenses (SG&A) for the six months ended June 30, 2018 and $2.8 million in COGS and $(0.3) million in SG&A for the six months ended June 30, 2017.
|
|
|
(b)
|
The amounts reclassified from AOCI included $2.8 million in COGS and $(1.3) million in interest expense for the six months ended June 30, 2018 and $3.9 million in COGS for the six months ended June 30, 2017.
|
15.
|
SEGMENT REPORTING
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
Sales
|
|
$
|
1,120.2
|
|
|
$
|
397.1
|
|
|
$
|
288.3
|
|
|
$
|
243.2
|
|
|
$
|
2,048.8
|
|
Less: intersegment sales
|
|
0.2
|
|
|
109.3
|
|
|
4.8
|
|
|
33.6
|
|
|
147.9
|
|
|||||
Net external sales
|
|
$
|
1,120.0
|
|
|
$
|
287.8
|
|
|
$
|
283.5
|
|
|
$
|
209.6
|
|
|
$
|
1,900.9
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Adjusted EBITDA
|
|
$
|
184.9
|
|
|
$
|
89.1
|
|
|
$
|
47.0
|
|
|
$
|
26.9
|
|
|
$
|
347.9
|
|
|
|
Three Months Ended June 30, 2017
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
Sales
|
|
$
|
1,021.5
|
|
|
$
|
369.3
|
|
|
$
|
283.6
|
|
|
$
|
225.6
|
|
|
$
|
1,900.0
|
|
Less: intersegment sales
|
|
0.4
|
|
|
109.4
|
|
|
2.2
|
|
|
30.2
|
|
|
142.2
|
|
|||||
Net external sales
|
|
$
|
1,021.1
|
|
|
$
|
259.9
|
|
|
$
|
281.4
|
|
|
$
|
195.4
|
|
|
$
|
1,757.8
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Adjusted EBITDA
|
|
$
|
179.0
|
|
|
$
|
69.4
|
|
|
$
|
51.9
|
|
|
$
|
25.5
|
|
|
$
|
325.8
|
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
Sales
|
|
$
|
2,190.8
|
|
|
$
|
794.1
|
|
|
$
|
580.2
|
|
|
$
|
482.2
|
|
|
$
|
4,047.3
|
|
Less: intersegment sales
|
|
0.4
|
|
|
215.2
|
|
|
9.6
|
|
|
62.8
|
|
|
288.0
|
|
|||||
Net external sales
|
|
$
|
2,190.4
|
|
|
$
|
578.9
|
|
|
$
|
570.6
|
|
|
$
|
419.4
|
|
|
$
|
3,759.3
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Adjusted EBITDA
|
|
$
|
354.9
|
|
|
$
|
164.4
|
|
|
$
|
97.1
|
|
|
$
|
48.5
|
|
|
$
|
664.9
|
|
|
|
Six Months Ended June 30, 2017
|
||||||||||||||||||
|
|
Driveline
|
|
Metal Forming
|
|
Powertrain
|
|
Casting
|
|
Total
|
||||||||||
Sales
|
|
$
|
2,020.8
|
|
|
$
|
519.3
|
|
|
$
|
283.6
|
|
|
$
|
225.6
|
|
|
$
|
3,049.3
|
|
Less: intersegment sales
|
|
0.9
|
|
|
208.3
|
|
|
2.2
|
|
|
30.2
|
|
|
241.6
|
|
|||||
Net external sales
|
|
$
|
2,019.9
|
|
|
$
|
311.0
|
|
|
$
|
281.4
|
|
|
$
|
195.4
|
|
|
$
|
2,807.7
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment Adjusted EBITDA
|
|
$
|
332.2
|
|
|
$
|
99.8
|
|
|
$
|
51.9
|
|
|
$
|
25.5
|
|
|
$
|
509.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Total Segment Adjusted EBITDA
|
$
|
347.9
|
|
|
$
|
325.8
|
|
|
$
|
664.9
|
|
|
$
|
509.4
|
|
Interest expense
|
(54.4
|
)
|
|
(56.9
|
)
|
|
(107.6
|
)
|
|
(82.4
|
)
|
||||
Depreciation and amortization
|
(130.2
|
)
|
|
(124.6
|
)
|
|
(258.0
|
)
|
|
(180.8
|
)
|
||||
Restructuring and acquisition-related costs
|
(36.8
|
)
|
|
(51.7
|
)
|
|
(55.1
|
)
|
|
(67.7
|
)
|
||||
Gain on sale of business
|
15.5
|
|
|
—
|
|
|
15.5
|
|
|
—
|
|
||||
Gain on settlement of capital lease
|
15.6
|
|
|
—
|
|
|
15.6
|
|
|
—
|
|
||||
Acquisition-related fair value inventory adjustment
|
—
|
|
|
(24.9
|
)
|
|
—
|
|
|
(24.9
|
)
|
||||
Impact of change in accounting principle
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
||||
Debt refinancing and redemption costs
|
(4.3
|
)
|
|
(2.7
|
)
|
|
(14.6
|
)
|
|
(2.7
|
)
|
||||
Income before income taxes
|
$
|
153.3
|
|
|
$
|
68.7
|
|
|
$
|
260.7
|
|
|
$
|
154.6
|
|
16.
|
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
$
|
—
|
|
|
$
|
260.3
|
|
|
$
|
560.6
|
|
|
$
|
936.9
|
|
|
$
|
—
|
|
|
$
|
1,757.8
|
|
Intercompany
|
|
—
|
|
|
1.9
|
|
|
101.9
|
|
|
7.9
|
|
|
(111.7
|
)
|
|
—
|
|
||||||
Total net sales
|
|
—
|
|
|
262.2
|
|
|
662.5
|
|
|
944.8
|
|
|
(111.7
|
)
|
|
1,757.8
|
|
||||||
Cost of goods sold
|
|
—
|
|
|
245.4
|
|
|
580.6
|
|
|
727.1
|
|
|
(111.7
|
)
|
|
1,441.4
|
|
||||||
Gross profit
|
|
—
|
|
|
16.8
|
|
|
81.9
|
|
|
217.7
|
|
|
—
|
|
|
316.4
|
|
||||||
Selling, general and administrative expenses
|
|
—
|
|
|
65.8
|
|
|
21.0
|
|
|
18.8
|
|
|
—
|
|
|
105.6
|
|
||||||
Amortization of intangible assets
|
|
—
|
|
|
1.5
|
|
|
22.7
|
|
|
0.6
|
|
|
—
|
|
|
24.8
|
|
||||||
Restructuring and acquisition-related costs
|
|
—
|
|
|
50.1
|
|
|
—
|
|
|
1.6
|
|
|
—
|
|
|
51.7
|
|
||||||
Operating income (loss)
|
|
—
|
|
|
(100.6
|
)
|
|
38.2
|
|
|
196.7
|
|
|
—
|
|
|
134.3
|
|
||||||
Non-operating income (expense), net
|
|
—
|
|
|
(61.6
|
)
|
|
7.0
|
|
|
(11.0
|
)
|
|
—
|
|
|
(65.6
|
)
|
||||||
Income (loss) before income taxes
|
|
—
|
|
|
(162.2
|
)
|
|
45.2
|
|
|
185.7
|
|
|
—
|
|
|
68.7
|
|
||||||
Income tax expense (benefit)
|
|
—
|
|
|
(30.4
|
)
|
|
15.8
|
|
|
17.0
|
|
|
—
|
|
|
2.4
|
|
||||||
Earnings from equity in subsidiaries
|
|
66.2
|
|
|
81.3
|
|
|
8.2
|
|
|
—
|
|
|
(155.7
|
)
|
|
—
|
|
||||||
Net income (loss) before royalties
|
|
66.2
|
|
|
(50.5
|
)
|
|
37.6
|
|
|
168.7
|
|
|
(155.7
|
)
|
|
66.3
|
|
||||||
Royalties
|
|
—
|
|
|
89.2
|
|
|
1.3
|
|
|
(90.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Net income after royalties
|
|
66.2
|
|
|
38.7
|
|
|
38.9
|
|
|
78.2
|
|
|
(155.7
|
)
|
|
66.3
|
|
||||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||
Net income attributable to AAM
|
|
$
|
66.2
|
|
|
$
|
38.7
|
|
|
$
|
38.9
|
|
|
$
|
78.1
|
|
|
$
|
(155.7
|
)
|
|
$
|
66.2
|
|
Other comprehensive income, net of tax
|
|
30.4
|
|
|
11.3
|
|
|
21.6
|
|
|
17.1
|
|
|
(50.0
|
)
|
|
30.4
|
|
||||||
Comprehensive income attributable to AAM
|
|
$
|
96.6
|
|
|
$
|
50.0
|
|
|
$
|
60.5
|
|
|
$
|
95.2
|
|
|
$
|
(205.7
|
)
|
|
$
|
96.6
|
|
Condensed Consolidating Statements of Income
|
|
|
|
|
|
|
|
|
||||||||||||||||
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
External
|
|
$
|
—
|
|
|
$
|
604.3
|
|
|
$
|
1,154.9
|
|
|
$
|
2,000.1
|
|
|
$
|
—
|
|
|
$
|
3,759.3
|
|
Intercompany
|
|
—
|
|
|
3.3
|
|
|
156.0
|
|
|
20.3
|
|
|
(179.6
|
)
|
|
—
|
|
||||||
Total net sales
|
|
—
|
|
|
607.6
|
|
|
1,310.9
|
|
|
2,020.4
|
|
|
(179.6
|
)
|
|
3,759.3
|
|
||||||
Cost of goods sold
|
|
—
|
|
|
583.9
|
|
|
1,119.1
|
|
|
1,588.2
|
|
|
(179.6
|
)
|
|
3,111.6
|
|
||||||
Gross profit
|
|
—
|
|
|
23.7
|
|
|
191.8
|
|
|
432.2
|
|
|
—
|
|
|
647.7
|
|
||||||
Selling, general and administrative expenses
|
|
—
|
|
|
120.0
|
|
|
41.8
|
|
|
30.5
|
|
|
—
|
|
|
192.3
|
|
||||||
Amortization of intangible assets
|
|
—
|
|
|
2.9
|
|
|
45.1
|
|
|
1.7
|
|
|
—
|
|
|
49.7
|
|
||||||
Restructuring and acquisition-related costs
|
|
—
|
|
|
26.1
|
|
|
27.9
|
|
|
1.1
|
|
|
—
|
|
|
55.1
|
|
||||||
Gain on sale of business
|
|
—
|
|
|
—
|
|
|
(15.5
|
)
|
|
—
|
|
|
—
|
|
|
(15.5
|
)
|
||||||
Operating income (loss)
|
|
—
|
|
|
(125.3
|
)
|
|
92.5
|
|
|
398.9
|
|
|
—
|
|
|
366.1
|
|
||||||
Non-operating income (expense), net
|
|
—
|
|
|
(133.8
|
)
|
|
8.2
|
|
|
20.2
|
|
|
—
|
|
|
(105.4
|
)
|
||||||
Income (loss) before income taxes
|
|
—
|
|
|
(259.1
|
)
|
|
100.7
|
|
|
419.1
|
|
|
—
|
|
|
260.7
|
|
||||||
Income tax expense
|
|
—
|
|
|
9.1
|
|
|
0.5
|
|
|
10.3
|
|
|
—
|
|
|
19.9
|
|
||||||
Earnings from equity in subsidiaries
|
|
240.5
|
|
|
173.5
|
|
|
107.8
|
|
|
—
|
|
|
(521.8
|
)
|
|
—
|
|
||||||
Net income (loss) before royalties
|
|
240.5
|
|
|
(94.7
|
)
|
|
208.0
|
|
|
408.8
|
|
|
(521.8
|
)
|
|
240.8
|
|
||||||
Royalties
|
|
—
|
|
|
169.2
|
|
|
1.9
|
|
|
(171.1
|
)
|
|
—
|
|
|
—
|
|
||||||
Net income after royalties
|
|
240.5
|
|
|
74.5
|
|
|
209.9
|
|
|
237.7
|
|
|
(521.8
|
)
|
|
240.8
|
|
||||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||
Net income attributable to AAM
|
|
$
|
240.5
|
|
|
$
|
74.5
|
|
|
$
|
209.9
|
|
|
$
|
237.4
|
|
|
$
|
(521.8
|
)
|
|
$
|
240.5
|
|
Other comprehensive loss, net of tax
|
|
(22.4
|
)
|
|
(3.6
|
)
|
|
(40.2
|
)
|
|
(37.3
|
)
|
|
81.1
|
|
|
(22.4
|
)
|
||||||
Comprehensive income attributable to AAM
|
|
$
|
218.1
|
|
|
$
|
70.9
|
|
|
$
|
169.7
|
|
|
$
|
200.1
|
|
|
$
|
(440.7
|
)
|
|
$
|
218.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
External
|
|
$
|
—
|
|
|
$
|
556.9
|
|
|
$
|
610.8
|
|
|
$
|
1,640.0
|
|
|
$
|
—
|
|
|
$
|
2,807.7
|
|
Intercompany
|
|
—
|
|
|
2.2
|
|
|
134.7
|
|
|
12.9
|
|
|
(149.8
|
)
|
|
—
|
|
||||||
Total net sales
|
|
—
|
|
|
559.1
|
|
|
745.5
|
|
|
1,652.9
|
|
|
(149.8
|
)
|
|
2,807.7
|
|
||||||
Cost of goods sold
|
|
—
|
|
|
522.6
|
|
|
641.7
|
|
|
1,266.1
|
|
|
(149.8
|
)
|
|
2,280.6
|
|
||||||
Gross profit
|
|
—
|
|
|
36.5
|
|
|
103.8
|
|
|
386.8
|
|
|
—
|
|
|
527.1
|
|
||||||
Selling, general and administrative expenses
|
|
—
|
|
|
138.2
|
|
|
21.0
|
|
|
27.6
|
|
|
—
|
|
|
186.8
|
|
||||||
Amortization of intangible assets
|
|
—
|
|
|
2.8
|
|
|
22.7
|
|
|
0.9
|
|
|
—
|
|
|
26.4
|
|
||||||
Restructuring and acquisition-related costs
|
|
—
|
|
|
65.4
|
|
|
—
|
|
|
2.3
|
|
|
—
|
|
|
67.7
|
|
||||||
Operating income (loss)
|
|
—
|
|
|
(169.9
|
)
|
|
60.1
|
|
|
356.0
|
|
|
—
|
|
|
246.2
|
|
||||||
Non-operating income (expense), net
|
|
—
|
|
|
(87.9
|
)
|
|
9.4
|
|
|
(13.1
|
)
|
|
—
|
|
|
(91.6
|
)
|
||||||
Income (loss) before income taxes
|
|
—
|
|
|
(257.8
|
)
|
|
69.5
|
|
|
342.9
|
|
|
—
|
|
|
154.6
|
|
||||||
Income tax expense (benefit)
|
|
—
|
|
|
(33.2
|
)
|
|
24.2
|
|
|
18.9
|
|
|
—
|
|
|
9.9
|
|
||||||
Earnings from equity in subsidiaries
|
|
144.6
|
|
|
173.0
|
|
|
15.9
|
|
|
—
|
|
|
(333.5
|
)
|
|
—
|
|
||||||
Net income (loss) before royalties
|
|
144.6
|
|
|
(51.6
|
)
|
|
61.2
|
|
|
324.0
|
|
|
(333.5
|
)
|
|
144.7
|
|
||||||
Royalties
|
|
—
|
|
|
168.7
|
|
|
1.3
|
|
|
(170.0
|
)
|
|
—
|
|
|
—
|
|
||||||
Net income after royalties
|
|
144.6
|
|
|
117.1
|
|
|
62.5
|
|
|
154.0
|
|
|
(333.5
|
)
|
|
144.7
|
|
||||||
Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
||||||
Net income attributable to AAM
|
|
$
|
144.6
|
|
|
$
|
117.1
|
|
|
$
|
62.5
|
|
|
$
|
153.9
|
|
|
$
|
(333.5
|
)
|
|
$
|
144.6
|
|
Other comprehensive income, net of tax
|
|
57.5
|
|
|
38.6
|
|
|
32.1
|
|
|
43.5
|
|
|
(114.2
|
)
|
|
57.5
|
|
||||||
Comprehensive income attributable to AAM
|
|
$
|
202.1
|
|
|
$
|
155.7
|
|
|
$
|
94.6
|
|
|
$
|
197.4
|
|
|
$
|
(447.7
|
)
|
|
$
|
202.1
|
|
Condensed Consolidating Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
82.3
|
|
|
$
|
0.3
|
|
|
$
|
270.6
|
|
|
$
|
—
|
|
|
$
|
353.2
|
|
Accounts receivable, net
|
|
—
|
|
|
182.7
|
|
|
339.3
|
|
|
731.6
|
|
|
—
|
|
|
1,253.6
|
|
||||||
Intercompany receivables
|
|
—
|
|
|
2,748.4
|
|
|
1,446.6
|
|
|
91.1
|
|
|
(4,286.1
|
)
|
|
—
|
|
||||||
Inventories, net
|
|
—
|
|
|
34.4
|
|
|
153.8
|
|
|
238.2
|
|
|
—
|
|
|
426.4
|
|
||||||
Prepaid expenses and other
|
|
—
|
|
|
37.3
|
|
|
4.9
|
|
|
79.6
|
|
|
—
|
|
|
121.8
|
|
||||||
Total current assets
|
|
—
|
|
|
3,085.1
|
|
|
1,944.9
|
|
|
1,411.1
|
|
|
(4,286.1
|
)
|
|
2,155.0
|
|
||||||
Property, plant and equipment, net
|
|
—
|
|
|
259.6
|
|
|
770.3
|
|
|
1,429.4
|
|
|
—
|
|
|
2,459.3
|
|
||||||
Goodwill
|
|
—
|
|
|
—
|
|
|
1,204.5
|
|
|
427.2
|
|
|
—
|
|
|
1,631.7
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
19.9
|
|
|
1,106.2
|
|
|
33.7
|
|
|
—
|
|
|
1,159.8
|
|
||||||
Intercompany notes and accounts receivable
|
|
11.7
|
|
|
1,319.7
|
|
|
133.7
|
|
|
—
|
|
|
(1,465.1
|
)
|
|
—
|
|
||||||
Other assets and deferred charges
|
|
—
|
|
|
341.9
|
|
|
115.3
|
|
|
227.4
|
|
|
—
|
|
|
684.6
|
|
||||||
Investment in subsidiaries
|
|
3,071.1
|
|
|
2,146.6
|
|
|
1,690.1
|
|
|
—
|
|
|
(6,907.8
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
3,082.8
|
|
|
$
|
7,172.8
|
|
|
$
|
6,965.0
|
|
|
$
|
3,528.8
|
|
|
$
|
(12,659.0
|
)
|
|
$
|
8,090.4
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
11.5
|
|
|
$
|
—
|
|
|
$
|
21.7
|
|
|
$
|
—
|
|
|
$
|
33.2
|
|
Accounts payable
|
|
—
|
|
|
156.8
|
|
|
245.6
|
|
|
528.5
|
|
|
—
|
|
|
930.9
|
|
||||||
Intercompany payables
|
|
—
|
|
|
1,404.5
|
|
|
2,747.6
|
|
|
134.0
|
|
|
(4,286.1
|
)
|
|
—
|
|
||||||
Accrued expenses and other
|
|
—
|
|
|
141.1
|
|
|
40.9
|
|
|
185.6
|
|
|
—
|
|
|
367.6
|
|
||||||
Total current liabilities
|
|
—
|
|
|
1,713.9
|
|
|
3,034.1
|
|
|
869.8
|
|
|
(4,286.1
|
)
|
|
1,331.7
|
|
||||||
Intercompany notes and accounts payable
|
|
1,316.6
|
|
|
15.2
|
|
|
—
|
|
|
133.3
|
|
|
(1,465.1
|
)
|
|
—
|
|
||||||
Long-term debt, net
|
|
—
|
|
|
3,785.0
|
|
|
3.5
|
|
|
84.5
|
|
|
—
|
|
|
3,873.0
|
|
||||||
Other long-term liabilities
|
|
—
|
|
|
598.8
|
|
|
332.0
|
|
|
188.7
|
|
|
—
|
|
|
1,119.5
|
|
||||||
Total liabilities
|
|
1,316.6
|
|
|
6,112.9
|
|
|
3,369.6
|
|
|
1,276.3
|
|
|
(5,751.2
|
)
|
|
6,324.2
|
|
||||||
Total AAM Stockholders’ equity
|
|
1,764.2
|
|
|
1,059.9
|
|
|
3,595.4
|
|
|
2,250.5
|
|
|
(6,905.8
|
)
|
|
1,764.2
|
|
||||||
Noncontrolling interests in subsidiaries
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(2.0
|
)
|
|
2.0
|
|
||||||
Total stockholders’ equity
|
|
1,766.2
|
|
|
1,059.9
|
|
|
3,595.4
|
|
|
2,252.5
|
|
|
(6,907.8
|
)
|
|
1,766.2
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
3,082.8
|
|
|
$
|
7,172.8
|
|
|
$
|
6,965.0
|
|
|
$
|
3,528.8
|
|
|
$
|
(12,659.0
|
)
|
|
$
|
8,090.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
91.9
|
|
|
$
|
0.1
|
|
|
$
|
284.8
|
|
|
$
|
—
|
|
|
$
|
376.8
|
|
Accounts receivable, net
|
|
—
|
|
|
138.9
|
|
|
287.9
|
|
|
609.1
|
|
|
—
|
|
|
1,035.9
|
|
||||||
Intercompany receivables
|
|
—
|
|
|
3,475.2
|
|
|
479.9
|
|
|
7.5
|
|
|
(3,962.6
|
)
|
|
—
|
|
||||||
Inventories, net
|
|
—
|
|
|
37.2
|
|
|
147.4
|
|
|
207.4
|
|
|
—
|
|
|
392.0
|
|
||||||
Prepaid expenses and other
|
|
—
|
|
|
40.4
|
|
|
9.9
|
|
|
90.0
|
|
|
—
|
|
|
140.3
|
|
||||||
Total current assets
|
|
—
|
|
|
3,783.6
|
|
|
925.2
|
|
|
1,198.8
|
|
|
(3,962.6
|
)
|
|
1,945.0
|
|
||||||
Property, plant and equipment, net
|
|
—
|
|
|
250.9
|
|
|
786.8
|
|
|
1,365.2
|
|
|
—
|
|
|
2,402.9
|
|
||||||
Goodwill
|
|
—
|
|
|
—
|
|
|
1,218.4
|
|
|
435.9
|
|
|
—
|
|
|
1,654.3
|
|
||||||
Intangible assets, net
|
|
—
|
|
|
21.0
|
|
|
1,155.6
|
|
|
35.9
|
|
|
—
|
|
|
1,212.5
|
|
||||||
Intercompany notes and accounts receivable
|
|
11.7
|
|
|
—
|
|
|
243.5
|
|
|
—
|
|
|
(255.2
|
)
|
|
—
|
|
||||||
Other assets and deferred charges
|
|
—
|
|
|
349.1
|
|
|
122.8
|
|
|
196.2
|
|
|
—
|
|
|
668.1
|
|
||||||
Investment in subsidiaries
|
|
2,841.3
|
|
|
1,955.2
|
|
|
1,280.1
|
|
|
—
|
|
|
(6,076.6
|
)
|
|
—
|
|
||||||
Total assets
|
|
$
|
2,853.0
|
|
|
$
|
6,359.8
|
|
|
$
|
5,732.4
|
|
|
$
|
3,232.0
|
|
|
$
|
(10,294.4
|
)
|
|
$
|
7,882.8
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
|
$
|
—
|
|
|
$
|
5.9
|
|
Accounts payable
|
|
—
|
|
|
139.0
|
|
|
204.6
|
|
|
455.4
|
|
|
—
|
|
|
799.0
|
|
||||||
Intercompany payables
|
|
1,313.0
|
|
|
563.7
|
|
|
2,017.7
|
|
|
68.2
|
|
|
(3,962.6
|
)
|
|
—
|
|
||||||
Accrued expenses and other
|
|
—
|
|
|
181.6
|
|
|
52.4
|
|
|
177.5
|
|
|
—
|
|
|
411.5
|
|
||||||
Total current liabilities
|
|
1,313.0
|
|
|
884.3
|
|
|
2,274.7
|
|
|
707.0
|
|
|
(3,962.6
|
)
|
|
1,216.4
|
|
||||||
Intercompany notes and accounts payable
|
|
—
|
|
|
11.7
|
|
|
—
|
|
|
243.5
|
|
|
(255.2
|
)
|
|
—
|
|
||||||
Long-term debt, net
|
|
—
|
|
|
3,894.6
|
|
|
4.4
|
|
|
70.3
|
|
|
—
|
|
|
3,969.3
|
|
||||||
Other long-term liabilities
|
|
—
|
|
|
639.1
|
|
|
333.2
|
|
|
184.8
|
|
|
—
|
|
|
1,157.1
|
|
||||||
Total liabilities
|
|
1,313.0
|
|
|
5,429.7
|
|
|
2,612.3
|
|
|
1,205.6
|
|
|
(4,217.8
|
)
|
|
6,342.8
|
|
||||||
Total AAM Stockholders’ equity
|
|
1,536.0
|
|
|
930.1
|
|
|
3,120.1
|
|
|
2,022.4
|
|
|
(6,072.6
|
)
|
|
1,536.0
|
|
||||||
Noncontrolling interests in subsidiaries
|
|
4.0
|
|
|
—
|
|
|
—
|
|
|
4.0
|
|
|
(4.0
|
)
|
|
4.0
|
|
||||||
Total stockholders’ equity
|
|
1,540.0
|
|
|
930.1
|
|
|
3,120.1
|
|
|
2,026.4
|
|
|
(6,076.6
|
)
|
|
1,540.0
|
|
||||||
Total liabilities and stockholders’ equity
|
|
$
|
2,853.0
|
|
|
$
|
6,359.8
|
|
|
$
|
5,732.4
|
|
|
$
|
3,232.0
|
|
|
$
|
(10,294.4
|
)
|
|
$
|
7,882.8
|
|
Condensed Consolidating Statements of Cash Flows
|
|
|
|
|
|
|
|
|
||||||||||||||||
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by operating activities
|
|
$
|
—
|
|
|
$
|
152.3
|
|
|
$
|
8.6
|
|
|
$
|
128.5
|
|
|
$
|
—
|
|
|
$
|
289.4
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment
|
|
—
|
|
|
(40.3
|
)
|
|
(74.5
|
)
|
|
(158.2
|
)
|
|
—
|
|
|
(273.0
|
)
|
||||||
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
0.4
|
|
|
—
|
|
|
0.9
|
|
||||||
Purchase buyouts of leased equipment
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
||||||
Proceeds from sale of business, net
|
|
—
|
|
|
—
|
|
|
42.7
|
|
|
4.4
|
|
|
—
|
|
|
47.1
|
|
||||||
Acquisition of business, net of cash acquired
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
||||||
Net cash used in investing activities
|
|
—
|
|
|
(40.3
|
)
|
|
(31.8
|
)
|
|
(154.7
|
)
|
|
—
|
|
|
(226.8
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net debt activity
|
|
—
|
|
|
(111.2
|
)
|
|
(0.4
|
)
|
|
44.8
|
|
|
—
|
|
|
(66.8
|
)
|
||||||
Debt issuance costs
|
|
—
|
|
|
(6.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.8
|
)
|
||||||
Purchase of treasury stock
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.6
|
)
|
||||||
Purchase of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
||||||
Intercompany activity
|
|
3.6
|
|
|
(3.6
|
)
|
|
28.5
|
|
|
(28.5
|
)
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
—
|
|
|
(121.6
|
)
|
|
25.9
|
|
|
16.3
|
|
|
—
|
|
|
(79.4
|
)
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
—
|
|
|
(9.6
|
)
|
|
2.7
|
|
|
(14.2
|
)
|
|
—
|
|
|
(21.1
|
)
|
||||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
—
|
|
|
91.9
|
|
|
0.1
|
|
|
284.8
|
|
|
—
|
|
|
376.8
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
—
|
|
|
$
|
82.3
|
|
|
$
|
2.8
|
|
|
$
|
270.6
|
|
|
$
|
—
|
|
|
$
|
355.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
—
|
|
|
$
|
222.8
|
|
|
$
|
(25.2
|
)
|
|
$
|
15.6
|
|
|
$
|
—
|
|
|
$
|
213.2
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property, plant and equipment
|
|
—
|
|
|
(28.4
|
)
|
|
(39.2
|
)
|
|
(71.0
|
)
|
|
—
|
|
|
(138.6
|
)
|
||||||
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
1.1
|
|
|
—
|
|
|
1.5
|
|
||||||
Purchase buyouts of leased equipment
|
|
—
|
|
|
(8.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4
|
)
|
||||||
Proceeds from sale of business, net
|
|
—
|
|
|
7.5
|
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
5.9
|
|
||||||
Acquisition of business, net of cash acquired
|
|
—
|
|
|
(953.5
|
)
|
|
64.6
|
|
|
(6.6
|
)
|
|
—
|
|
|
(895.5
|
)
|
||||||
Net cash used in investing activities
|
|
—
|
|
|
(982.5
|
)
|
|
23.9
|
|
|
(76.5
|
)
|
|
—
|
|
|
(1,035.1
|
)
|
||||||
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net debt activity
|
|
—
|
|
|
931.4
|
|
|
(0.2
|
)
|
|
(10.8
|
)
|
|
—
|
|
|
920.4
|
|
||||||
Debt issuance costs
|
|
—
|
|
|
(90.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(90.5
|
)
|
||||||
Employee stock option exercises
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
||||||
Purchase of treasury stock
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6.9
|
)
|
||||||
Intercompany activity
|
|
6.9
|
|
|
(6.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
|
—
|
|
|
834.9
|
|
|
(0.2
|
)
|
|
(10.8
|
)
|
|
—
|
|
|
823.9
|
|
||||||
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7.4
|
|
|
—
|
|
|
7.4
|
|
||||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
—
|
|
|
75.2
|
|
|
(1.5
|
)
|
|
(64.3
|
)
|
|
—
|
|
|
9.4
|
|
||||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
—
|
|
|
84.3
|
|
|
1.6
|
|
|
395.3
|
|
|
—
|
|
|
481.2
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
—
|
|
|
$
|
159.5
|
|
|
$
|
0.1
|
|
|
$
|
331.0
|
|
|
$
|
—
|
|
|
$
|
490.6
|
|
•
|
Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, transfer cases, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles;
|
•
|
Metal Forming products consist primarily of axle and transmission shafts, ring and pinion gears, differential gears, transmission gears, and suspension components for Original Equipment Manufacturers and Tier 1 automotive suppliers;
|
•
|
The Powertrain segment products consist primarily of transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for Original Equipment Manufacturers and Tier I automotive suppliers; and
|
•
|
The Casting segment produces both thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the global light vehicle, commercial and industrial markets.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Driveline
|
$
|
1,120.2
|
|
|
$
|
1,021.5
|
|
|
$
|
2,190.8
|
|
|
$
|
2,020.8
|
|
Metal Forming
|
397.1
|
|
|
369.3
|
|
|
794.1
|
|
|
519.3
|
|
||||
Powertrain
|
288.3
|
|
|
283.6
|
|
|
580.2
|
|
|
283.6
|
|
||||
Casting
|
243.2
|
|
|
225.6
|
|
|
482.2
|
|
|
225.6
|
|
||||
Eliminations
|
(147.9
|
)
|
|
(142.2
|
)
|
|
(288.0
|
)
|
|
(241.6
|
)
|
||||
Net Sales
|
$
|
1,900.9
|
|
|
$
|
1,757.8
|
|
|
$
|
3,759.3
|
|
|
$
|
2,807.7
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Driveline
|
$
|
184.9
|
|
|
$
|
179.0
|
|
|
$
|
354.9
|
|
|
$
|
332.2
|
|
Metal Forming
|
89.1
|
|
|
69.4
|
|
|
164.4
|
|
|
99.8
|
|
||||
Powertrain
|
47.0
|
|
|
51.9
|
|
|
97.1
|
|
|
51.9
|
|
||||
Casting
|
26.9
|
|
|
25.5
|
|
|
48.5
|
|
|
25.5
|
|
||||
Total Segment adjusted EBITDA
|
$
|
347.9
|
|
|
$
|
325.8
|
|
|
$
|
664.9
|
|
|
$
|
509.4
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income
|
$
|
151.3
|
|
|
$
|
66.3
|
|
|
$
|
240.8
|
|
|
$
|
144.7
|
|
Interest expense
|
54.4
|
|
|
56.9
|
|
|
107.6
|
|
|
82.4
|
|
||||
Income tax expense
|
2.0
|
|
|
2.4
|
|
|
19.9
|
|
|
9.9
|
|
||||
Depreciation and amortization
|
130.2
|
|
|
124.6
|
|
|
258.0
|
|
|
180.8
|
|
||||
EBITDA
|
$
|
337.9
|
|
|
$
|
250.2
|
|
|
$
|
626.3
|
|
|
$
|
417.8
|
|
Restructuring and acquisition-related costs
|
36.8
|
|
|
51.7
|
|
|
55.1
|
|
|
67.7
|
|
||||
Debt refinancing and redemption costs
|
4.3
|
|
|
2.7
|
|
|
14.6
|
|
|
2.7
|
|
||||
Gain on sale of business
|
(15.5
|
)
|
|
—
|
|
|
(15.5
|
)
|
|
—
|
|
||||
Non-recurring items:
|
|
|
|
|
|
|
|
||||||||
Gain on settlement of capital lease
|
(15.6
|
)
|
|
—
|
|
|
(15.6
|
)
|
|
—
|
|
||||
Acquisition-related fair value inventory adjustment
|
—
|
|
|
24.9
|
|
|
—
|
|
|
24.9
|
|
||||
Impact of change in accounting principle
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
(3.7
|
)
|
||||
Total Segment Adjusted EBITDA
|
$
|
347.9
|
|
|
$
|
325.8
|
|
|
$
|
664.9
|
|
|
$
|
509.4
|
|
Period
|
|
Total Number of Shares (or Units) Purchased
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
|
||||||
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|||||
April 1 - April 30, 2018
|
|
115
|
|
|
$
|
15.89
|
|
|
—
|
|
|
$
|
—
|
|
|
May 1 - May 31, 2018
|
|
152
|
|
|
15.00
|
|
|
—
|
|
|
—
|
|
|
||
June 1 - June 30, 2018
|
|
26
|
|
|
15.53
|
|
|
—
|
|
|
—
|
|
|
||
Total
|
|
293
|
|
|
$
|
15.40
|
|
|
—
|
|
|
$
|
—
|
|
|
Number
|
|
Description of Exhibit
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
**101.INS
|
|
XBRL Instance Document
|
|
|
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
**101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
*
|
Filed herewith
|
|
|
|
**
|
Submitted electronically with this Report.
|
|
|
|
1.
|
Purpose
. The purpose of the American Axle & Manufacturing Holdings, Inc. Change in Control Plan (the
“
Plan
”
) is to provide select employees with the title of Vice President and above and certain other associates as determined by the Administrator in its sole discretion from time to time of the Company or any of its Subsidiaries with the opportunity to receive severance protections in connection with a Change in Control of the Company (each as defined below). The purpose of the Plan is to attract and retain talent and to assure the present and future continuity, objectivity and dedication of management in the event of any Change in Control to maximize the value of the Company on a Change in Control.
|
2.
|
Definitions
. For purposes of this Plan, the following words and phrases have the meanings specified below:
|
1.
|
“
Accountants
” has the meaning set forth in Section 8.2.
|
2.
|
“
Administrator
” has the meaning set forth in Section 3.
|
3.
|
“
Benefit Continuation
” has the meaning set forth in Section 6.2.
|
4.
|
“
Base Salary
” means the greater of the highest rate of annual base salary paid to the Participant by the Company or any of its Subsidiaries during either (a) the twelve (12)-month period preceding the Participant’s date of termination or (b) the twelve (12)-month period preceding the Change in Control Date.
|
5.
|
“
Board
” means the Board of Directors of the Company.
|
6.
|
“
Cause
” means any one or more of the following:
|
(a)
|
the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her as an employee of the Company or any of its Subsidiaries;
|
(b)
|
the Participant’s conviction of, or plea of nolo contendere to (i) any felony or (ii) another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or its Subsidiaries or affiliates or otherwise impairs or impedes its operations;
|
(c)
|
the Participant’s engaging in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company or its Subsidiaries or affiliates;
|
(d)
|
the Participant’s material breach of any applicable employment agreement, any restrictive covenant or any material written policy of the Company or its Subsidiaries or affiliates;
|
(e)
|
the Participant’s material failure to comply with any material applicable laws and regulations or professional standards relating to the business of the Company or its Subsidiaries or affiliates; or
|
(f)
|
any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company or its Subsidiaries or affiliates;
|
7.
|
“
Change in Control
” means any one of the following:
|
(a)
|
any person or entity, including a “group” as defined in Section 13(d)(3) of the Exchange Act other than the Company or a wholly-owned Subsidiary thereof or any employee benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the Company’s securities having 30% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business);
|
(b)
|
as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of the Company or any successor corporation or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction;
|
(c)
|
during any period of two consecutive years, individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each director of the Company first elected during such period was approved by a vote of at least two-thirds of the directors of the Company then still in office who were directors of the Company at the beginning of any such period; or
|
(d)
|
the stockholders of the Company approve a plan of complete liquidation of the Company or the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a liquidation of the Company into a wholly owned subsidiary.
|
8.
|
“
Change in Control Date
” means the date on which a Change in Control is consummated.
|
9.
|
“
Code
” means the U.S. Internal Revenue Code of 1986, as amended, and any successor thereto.
|
10.
|
“
Committee
” means the Compensation Committee of the Board.
|
11.
|
“
Company
” means American Axle & Manufacturing Holdings, Inc., and any successor.
|
12.
|
“
Covered Payments
” has the meaning set forth in Section 8.1.
|
13.
|
“
Date of Separation
” means, with respect to a Participant, the date on which a Participant incurs a termination of employment.
|
14.
|
“
Effective Date
” has the meaning set forth in Section 16.
|
15.
|
“
Exchange Act
” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto.
|
16.
|
“
Excise Tax
” has the meaning set forth in Section 8.1.
|
17.
|
“
Good Reason
” means any one or more of the following actions or omissions:
|
(a)
|
any material reduction in a Participant’s position, authority, duties or responsibilities following the Change in Control as compared to such level immediately prior to the Change in Control;
|
(b)
|
any material reduction in a Participant’s annual base salary or bonus opportunity as in effect immediately prior to the Change in Control; or
|
(c)
|
the relocation (other than by mutual agreement) of the office at which the Participant is to perform the majority of his or her duties following the Change in Control to a location more than 50 miles from the location at which the Participant performed such duties prior to the Change in Control;
|
18.
|
“
Participant
” has the meaning set forth in Section 4.
|
19.
|
“
Payment Date
” has the meaning set forth in Section 6.1.
|
20.
|
“
Person
” has the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
|
21.
|
“
Plan
” means this American Axle & Manufacturing Holdings, Inc. Change in Control Plan, as described in this document and as amended from time to time.
|
22.
|
“
Qualifying Event
” means the termination of a Participant’s employment with the Company or any Subsidiary occurring within the two (2)-year period commencing on the Change in Control Date by reason of either (i) a termination of the Participant’s employment by the Company or a Subsidiary without Cause or (ii) a resignation by the Participant for Good Reason.
|
23.
|
“
Reference Bonus
” means the greater of (a) the target annual bonus amount for the year in which the Change in Control occurs; or (b) the target annual bonus amount for the year in which the Participant’s termination of employment occurs.
|
24.
|
“
Release
” has the meaning set forth in Section 7.
|
25.
|
“
Severance Multiple
” means the number applicable to a Participant’s position as set forth on Exhibit A, as amended from time to time.
|
26.
|
“
Subsidiary
” means any Person (other than the Company) of which 50% or more of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company.
|
3.
|
Administration
. The Plan shall be administered by the Committee (the
“
Administrator
”
). Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan, to establish, amend and rescind appropriate rules and regulations relating to the Plan, to delegate some or all of its authority under the Plan to the extent permitted by law, and to take all such steps and make all such determinations in connection with the Plan and the benefits granted pursuant to the Plan as it may deem necessary or advisable. Any decision of the Administrator in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned.
|
4.
|
Eligibility
. The participants under the Plan shall be limited to (i) employees of the Company or any Subsidiary of the Company having the title of Vice President and above, other than those employees who have an employment agreement or other separate arrangement providing for severance on or following a change in control event (the
“
Automatic Participants
”
) and (ii) certain other associates of the Company, or any Subsidiary of the Company, as determined by the Administrator in its sole discretion from time to time (the
“
Associate Participants
”
and, together with the Automatic Participants, the
“
Participants
”
). Individuals who qualify under the definition of Automatic Participant under this Section 4 shall automatically, without any independent action by the Administrator, become eligible to and shall participate in the Plan as Participants as of such date. Prior to a Change in Control, in the event that an individual no longer meets the definition of Automatic Participant, he or she shall automatically, without any independent action by the Administrator, no longer be eligible to participate in the Plan and such individual’s participation shall automatically, without any independent action by the Administrator, be terminated as of such
|
5.
|
No Effect on Equity Awards
. This Plan does not alter or amend any vesting or other terms and conditions of any equity-based compensation awards under the Company’s equity incentive compensation plans (including, but not limited to, the American Axle & Manufacturing Holdings, Inc. 2018 Omnibus Incentive Plan or any successor plan), which shall be governed by the terms and conditions set forth in the equity incentive compensation plans and separate written grant agreements.
|
6.
|
Change in Control Severance Benefits
.
|
1.
|
Upon a Qualifying Event, subject to the provisions of the Plan, the Participant shall receive the following benefits:
|
(a)
|
A cash amount equal to the participant’s Base Salary multiplied by the applicable Severance Multiple;
|
(b)
|
A cash amount equal to the Participant’s Reference Bonus multiplied by the applicable Severance Multiple;
|
(c)
|
Any unpaid annual bonus for any completed performance year immediately preceding the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document; and
|
(d)
|
|
(i)
|
A prorated target annual bonus (as in effect as of the Change in Control Date) for the year of termination if the termination of employment occurs during the calendar year in which the Change in Control occurs; or
|
(ii)
|
The greater of (x) the prorated target annual bonus for the year of termination or (y) the prorated target annual bonus for the year in which the Change in Control occurred, if the termination of employment occurs in a calendar year following the calendar year in which the Change in Control occurs.
|
2.
|
Benefits Payment
. In addition, upon a Qualifying Event, the Participant (and his or her eligible dependents) shall be entitled to continued participation in the Company’s medical, dental and vision plans, as in effect from time to time, at then-existing participation and coverage levels, for the twenty four-month (24) period immediately following the Participant’s termination of employment (the
“
Benefit Continuation
”
). In the event that such Benefit Continuation is not permitted or advisable or the Company, in its sole discretion, elects, in lieu of Benefit Continuation, the Company shall pay to the Participant an amount (in the Company’s determination) equal to the value of the Benefit Continuation in three separate semi-annual installments, with the first payment being made on the Payment Date. Any obligation to provide Benefit Continuation or payment in lieu of such Benefit Continuation, shall cease upon the Participant becoming eligible to receive group health benefits under a program of a subsequent employer or in the event that the Release does not become effective and irrevocable prior to the 60
th
day following the Date of Separation or the Participant breaches the Restrictive Covenant, except as otherwise provided by law. For the avoidance of doubt, the Participant (and his or her eligible dependents) shall be responsible for paying all employee contributions, deductibles and other cost sharing items under such plans. Nothing in this Section 6.2 shall be construed to impair or reduce a Participant’s rights under COBRA or other applicable law.
|
3.
|
Outplacement Services
. In addition, upon a Qualifying Event, the Participant shall be entitled to reimbursement for outplacement service costs incurred (which shall include appropriate itemization and substantiation of expenses incurred) within the twenty four-month (24) period immediately following the Participant’s termination of employment, subject to a maximum amount of $30,000; provided that such claims for reimbursement are submitted to the Company within 90 days following the date of invoice. Any obligation to provide such reimbursement shall cease in the event that the Release does not become effective and irrevocable prior to the 60
th
day following the Date of Separation or the Participant breaches the Restrictive Covenant, except as otherwise provided by law.
|
4.
|
General
. Nothing in this Section 6 shall be construed to impair or reduce a Participant’s right to any other accrued but unpaid compensation or benefits nor create a right or entitlement to any additional senior executive retirement benefit.
|
5.
|
Legal Fees
. The Company shall pay all legal fees on a current basis as incurred by a Participant in connection with the Participant’s enforcement of his or her rights under the Plan; provided that such claims for reimbursement are submitted to the Company within 90 days following the date of invoice;
provided
,
however
, that in the event a court of competent jurisdiction holds in a final, non-appealable decision that all of the Participant’s claims were entirely without merit or frivolous, the Participant shall repay all legal fees paid by the Company on the Participant’s behalf.
|
7.
|
Release and Restrictive Covenant
.
|
1.
|
Release
. A Participant shall only be entitled to receive the payments and benefits pursuant to Section 6 if he or she shall have executed and delivered (and not revoked) a release of
|
2.
|
Restrictive Covenant
. For a period of two (2) years commencing upon a termination of a Participant’s employment either by (i) the Company without Cause or (ii) a resignation by the Participant for Good Reason, during the two (2)-year period commencing on the Change in Control Date (the “
Restricted Period
”), the Participant shall not, without the prior written consent of the Company, directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on a business competitive with the Company in any geographic area in which the Company or any of its Subsidiaries or affiliates (collectively, the “
Company Group
”) has engaged in business, or is reasonably expected to engage in business during such Restricted Period (including, without limitation, any area in which any customer of the Company Group may be located);
provided
,
however
, that nothing herein shall limit the Participant’s right to own not more than 1% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Sections 13 or 15(d) of the Exchange Act (the
“
Restrictive
Covenant
”
). (For the avoidance of doubt, amounts payable pursuant to Section 6.1 are partial consideration for the Participant’s compliance with this Restrictive Covenant).
|
3.
|
Breach
. If a Participant breaches any provision of the Release or the Restrictive Covenant, the Administrator may determine that the Participant (i) will forfeit any unpaid portion of the payments provided pursuant to this Plan and (ii) will repay to the Company any amounts previously paid to him or her pursuant to this Plan.
|
8.
|
Section 280G
.
|
1.
|
Notwithstanding any other provision of this Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or any of its Subsidiaries or affiliates to a Participant or for the Participant’s benefit pursuant to the terms of this Plan or otherwise (
“
Covered Payments
”
) constitute parachute payments within the meaning of Section 280G of the Code and would, but for this Section 8 be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the
“
Excise Tax
”
), then the Covered Payments shall be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Participant’s receipt on an after-tax basis of the greatest amount of payments and benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). Any such reduction shall be made by the Company in its sole discretion consistent with the requirements of Section 409A of the Code.
|
2.
|
Any determination required under this Section 8 shall be made in writing in good faith by the accounting firm that was the Company’s independent auditor immediately before the Change in Control (the
“
Accountants
”
). The Company and the Participant shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 8. The Company shall be responsible for all fees and expenses of the Accountants.
|
9.
|
Section 409A
. Notwithstanding anything to the contrary contained in this Plan, the payments and benefits provided under this Plan are intended to comply with or be exempt from Section 409A of the Code, and the provisions of this Plan shall be interpreted or construed consistently with that intent. The Administrator may modify the payments and benefits under this Plan at any time solely as necessary to avoid adverse tax consequences under Section 409A;
provided
,
however
, that this Section 9 shall not create any obligation on the part of the Administrator to make such modifications or take any other action.
|
1.
|
It is intended that the terms “termination” and “termination of employment” as used herein shall constitute a “separation from service” within the meaning of Section 409A.
|
2.
|
Anything in the Plan to the contrary notwithstanding, each payment of compensation made to a Participant shall be treated as a separate and distinct payment from all other such payments for purposes of Section 409A.
|
3.
|
In no event may a Participant be permitted to control the year in which any payment occurs.
|
4.
|
Anything in the Plan to the contrary notwithstanding, if a Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Participant’s termination of employment, then any payment or benefit which would be considered “nonqualified deferred compensation” within the meaning of Section 409A that the Participant is entitled to receive upon the Participant’s termination of employment and which otherwise would be payable during the six-month period immediately following the Participant’s termination of employment will instead be paid or made available on the first day of the seventh month following the Participant’s termination of employment (or, if earlier, the date of the Participant’s death).
|
5.
|
With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.
|
10.
|
Clawback
. Any amounts payable under the Plan are subject to any policy providing for clawback, recoupment or recovery of amounts that were paid to the Participant as established from time to time by the Committee and adopted prior to a Change in Control. The Company shall make any determination for clawback, recoupment or recovery in its sole discretion and in accordance with any such policy and applicable law or regulation.
|
11.
|
Withholding
. The Company and its Subsidiaries shall be entitled to withhold from payments to or on behalf of the Participant taxes and other authorized deductions.
|
12.
|
Governing Law
. This Plan shall be construed, interpreted and governed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflicts of law.
|
13.
|
Effect on Other Plans
. This Plan supersedes in all respects any severance or change in control benefit plans, arrangements or policies of the Company and its Subsidiaries that apply to Participants upon a Change in Control. Notwithstanding the foregoing, the Company and the Board reserve the right to adhere to other policies and practices that may be in effect for other groups of employees.
|
14.
|
Amendment, Modification and Termination
. Prior to a Change in Control, this Plan (including Exhibit A) may be modified, amended or terminated at any time by the Administrator without notice to Participants. Notwithstanding any provision in this Plan to the contrary, for a period of two (2) years following a Change in Control, (i) the Plan (including Exhibit A) may not be discontinued, terminated or amended in such a manner that decreases the benefits payable to any Participant or that makes any provision less favorable for any Participant without the consent of the Participant and (ii) the individuals who are Participants in the Plan as of the date of the Change in Control shall remain Participants and their eligibility and participation under this Plan may not be amended or terminated in any way.
|
15.
|
No Employment Rights
. Neither this Plan nor the benefits hereunder shall be a term of the employment of any employee, and the Company or any of its Subsidiaries or affiliates shall not be obligated in any way to continue the Plan. The terms of this Plan shall not give any employee the right to be retained in the employment of the Company or any of its Subsidiaries or affiliates.
|
16.
|
Effective Date and Term
. This Plan originally became effective on February 19, 2015. The Effective Date of this Plan as now amended and restated is [___] (the
“
Effective Date
”
)
|
Participants
|
Applicable Severance Multiple
|
All Automatic Participants
|
2
|
All Associate Participants
|
1.5
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Axle & Manufacturing Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of American Axle & Manufacturing Holdings, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ David C. Dauch
|
|
|
/s/ Christopher J. May
|
|
David C. Dauch
|
|
|
Christopher J. May
|
|
Chairman of the Board &
|
|
|
Vice President &
|
|
Chief Executive Officer
|
|
|
Chief Financial Officer
|
|
August 3, 2018
|
|
|
August 3, 2018
|
|