American Axle & Manufacturing Reports Third Quarter of 2012
Financial Results
DETROIT, Oct. 26, 2012 /PRNewswire/ -- American Axle
& Manufacturing Holdings, Inc. (AAM), which is traded as AXL on
the NYSE, today reported its financial results for the third
quarter of 2012.
Third Quarter 2012 Results
- Third quarter 2012 sales of $702.9
million, up 8.5% from the third quarter of 2011
- Non-GM sales grew approximately 14% on a year-over-year basis
to $198.8 million
- Gross profit of $90.7 million, or
12.9% of sales
- Operating income of $30.1
million, or 4.3% of sales
- Net loss of $8.1 million, or
$0.11 per share
- AAM's quarterly results reflect the impact of $10.1 million (or $0.14 per share) of debt refinancing and
redemption costs and $3.2 million (or
$0.04 per share)
of restructuring costs related to the closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility
AAM's results in the third quarter were a net loss of
$8.1 million or $0.11 per share. This compares to net
earnings of $24.8 million or
$0.33 per share in the third quarter
of 2011.
In the third quarter of 2012, AAM's quarterly results reflect
the impact of $10.1 million (or
$0.14 per share) of debt refinancing
and redemption costs and $3.2 million
(or $0.04 per share)
of restructuring costs related to the closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing
Facility.
"AAM's results in the third quarter of 2012 reflect an increased
level of global launch activity. The complexity of these new
product, process and facility launches, as well as lower capacity
utilization resulting from planned customer downtime on certain
existing programs, adversely impacted our financial performance in
the quarter," said AAM's President and Chief Executive
Officer, David C. Dauch.
"While we are focused on taking the necessary actions to improve
AAM's operating performance, we are very excited about the strong
sales growth and improved business diversification resulting from
our global launch activity."
Dauch also stated, "AAM's results in the third quarter of 2012
also reflect the impact of a number of successful financing actions
we completed in the quarter. These actions included
increasing commitments under our revolving bank credit facility by
approximately $116 million and
issuing $550 million of 6.625% Senior
Unsecured Notes due 2022. The net proceeds were used for
general corporate purposes, including to fund the repurchase and
redemption of all of the 5.25% Senior Notes due in 2014. As a
result of these actions and related initiatives, AAM now has no
significant debt maturities scheduled until
2017."
Net sales in the third quarter of 2012 increased approximately
8.5% to $702.9 million as compared to
$647.6 million in the third quarter
of 2011. Non-GM sales in the third quarter of 2012 increased
approximately 14% on a year-over-year basis to $198.8 million.
AAM's content-per-vehicle is measured by the dollar value of its
product sales supporting our customers' North American light truck
and SUV programs. In the third quarter of 2012, AAM's
content-per-vehicle was $1,466,
approximately the same as in the third quarter of 2011.
AAM's net sales of approximately $2.2
billion in the first three quarters of 2012 increased by
$214.8 million, or 10.9%, as compared
to approximately $2.0 billion in the
first three quarters of 2011. Non-GM sales for the
year-to-date period of $588.5 million
grew by approximately 10.0% on a year-over-year basis as compared
to the first three quarters of 2011.
AAM's gross profit in the third quarter of 2012 was $90.7 million, or 12.9% of sales as compared to
$103.5 million or 16.0% sales in the
third quarter of 2011. In the first three
quarters of 2012, AAM's gross profit was $315.7 million, or 14.4% of sales, as compared to
$349.4 million for the first three
quarters of 2011.
AAM's operating income in the third quarter of 2012 was
$30.1 million or 4.3% of sales as
compared to $44.5 million or 6.9% of
sales in the third quarter of 2011. In the first three
quarters of 2012, AAM's operating income was $137.8 million, or 6.3% of sales, as compared to
$174.9 million for the first three
quarters of 2011.
AAM's SG&A spending in the third quarter of 2012 was
$60.6 million as compared to
$59.0 million in the third quarter of
2011. AAM's R&D spending in the quarter was $31.4 million as compared to $31.8 million in the third quarter of
2011.
In the first three quarters of 2012, AAM's SG&A spending was
$177.9 million as compared to
$174.5 million in the first three
quarters of 2011. AAM's R&D spending for the first three
quarters of 2012 increased by $4.9
million on a year-over-year basis to $90.3 million as compared to $85.4 million in the first three quarters of
2011.
AAM defines Adjusted EBITDA to be earnings before interest,
taxes, depreciation and amortization excluding the impact of
curtailment gains, asset impairments, restructuring costs and
special charges related to the closure of the Detroit Manufacturing
Complex and Cheektowaga Manufacturing Facility, and debt
refinancing and redemption costs, to the extent applicable.
AAM's Adjusted EBITDA in the third quarter of 2012 was $70.1 million, or 10.0% of sales.
In the first three quarters of 2012, AAM's Adjusted EBITDA was
$282.2 million, or 12.9% of
sales.
AAM defines free cash flow to be net cash provided by (or used
in) operating activities less capital expenditures net of proceeds
from the sales of equipment. Net cash used in operating
activities in the first three quarters of 2012 was $196.6 million. Capital spending, net of
proceeds from the sale of equipment for the first three quarters of
2012, was $141.5 million.
Reflecting the impact of this activity, AAM's free cash flow was a
use of $338.1 million in the first
three quarters of 2012.
AAM's free cash flow in the first three quarters of 2012
reflects the impact of $225 million
of contributions to our defined benefit pension plans. On
September 27, 2012 AAM and the
Pension Benefit Guaranty Corporation entered into an agreement in
connection with the closures of the Detroit Manufacturing Facility
and Cheektowaga Manufacturing Facility. As part of this agreement,
in September 2012, we contributed
$114.7 million in excess of our
statutory minimums to our hourly pension plan which is included in
the contributions described above. AAM's free cash flow in
the first three quarters of 2012 also reflects cash used for
restructuring activities of $37.4
million.
A conference call to review AAM's third quarter 2012 results and
new business backlog is scheduled today at 10:00 a.m. ET. Interested participants may
listen to the live conference call by logging onto AAM's investor
web site at http://investor.aam.com or calling (877) 278-1452 from
the United States or (973)
200-3383 from outside the United States. A replay will be
available from Noon ET on
October 26, 2012 until 5:00 p.m. ET November 2,
2012 by dialing (800) 642-1687 from the United States or (706) 645-9291 from
outside the United States. When prompted, callers should
enter conference reservation number 32991103.
Non-GAAP Financial Information
In addition to the results reported in accordance with
accounting principles generally accepted in the United States of America (GAAP) included
within this press release, AAM has provided certain information,
which includes non-GAAP financial measures. Such information
is reconciled to its closest GAAP measure in accordance with the
Securities and Exchange Commission rules and is included in the
attached supplemental data.
Management believes that these non-GAAP financial measures are
useful to both management and its stockholders in their analysis of
the Company's business and operating performance. Management
also uses this information for operational planning and
decision-making purposes.
Non-GAAP financial measures are not and should not be considered
a substitute for any GAAP measure. Additionally, non-GAAP
financial measures as presented by AAM may not be comparable to
similarly titled measures reported by other companies.
AAM is a world leader in the manufacture, engineering, design
and validation of driveline and drivetrain systems and related
components and modules, chassis systems and metal-formed products
for light trucks, sport utility vehicles, passenger cars, crossover
vehicles and commercial vehicles. In addition to locations in
the United States (Michigan, Ohio, Pennsylvania and Indiana), AAM also has offices or facilities
in Brazil, China, Germany, India, Japan,
Luxembourg, Mexico, Poland, Scotland, South
Korea, Sweden and
Thailand.
In this earnings release, we make statements concerning our
expectations, beliefs, plans, objectives, goals, strategies, and
future events or performance. Such statements are "forward-looking"
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and relate to trends and events that may affect
our future financial position and operating results. The terms such
as "will," "may," "could," "would," "plan," "believe," "expect,"
"anticipate," "intend," "project," and similar words of
expressions, as well as statements in future tense, are intended to
identify forward-looking statements. Forward-looking statements
should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of the times at,
or by, which such performance or results will be achieved.
Forward-looking statements are based on information available at
the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are
subject to risks and may differ materially from those expressed in
or suggested by the forward-looking statements. Important factors
that could cause such differences include, but are not limited to:
global economic conditions, including the impact of the current
sovereign debt crisis in the Euro-zone; reduced purchases of our
products by General Motors Company (GM), Chrysler Group LLC
(Chrysler) or other customers; reduced demand for our customers'
products (particularly light trucks and SUVs produced by GM and
Chrysler); liabilities arising from warranty claims, product
recall, product liability and legal proceedings to which we are or
may become a party; our ability to realize the expected revenues
from our new business backlog; our ability or our customers' and
suppliers' ability to successfully launch new product programs on a
timely basis; our ability to achieve the level of cost reductions
required to sustain global cost competitiveness; our ability to
attract new customers and programs for new products; 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; our ability to respond to changes in
technology, increased competition or pricing pressures; price
volatility in, or reduced availability of, fuel; our ability to
develop and produce new products that reflect market demand;
lower-than-anticipated market acceptance of new or existing
products; our ability to maintain satisfactory labor relations and
avoid work stoppages; our suppliers', our customers' and their
suppliers' ability to maintain satisfactory labor relations and
avoid work stoppages; risks inherent in our international
operations (including adverse changes in political stability, taxes
and other law changes, potential disruptions of production and
supply and currency rate fluctuations); availability of financing
for working capital, capital expenditures, R&D or other general
corporate purposes, including our ability to comply with financial
covenants; our customers' and suppliers' availability of financing
for working capital, capital expenditures, R&D or other general
corporate purposes; adverse changes in laws, government regulations
or market conditions affecting our products or our customers'
products (such as the Corporate Average Fuel Economy ("CAFE")
regulations); changes in liabilities arising from pension and other
postretirement benefit obligations; our ability to consummate and
integrate acquisitions and joint ventures; risks of noncompliance
with environmental laws and regulations or risks of environmental
issues that could result in unforeseen costs at our facilities; our
ability to attract and retain key associates; other unanticipated
events and conditions that may hinder our ability to compete. It is
not possible to foresee or identify all such factors and we make no
commitment to update any forward-looking statement or to disclose
any facts, events or circumstances after the date hereof that may
affect the accuracy of any forward-looking statement.
For more information...
Christopher M. Son
Director, Investor
Relations,
Corporate Communications &
Marketing
(313)
758-4814
chris.son@aam.com
David Tworek
Manager, Communications
(313) 758-4883
david.tworek@aam.com
Or visit the AAM website at www.aam.com.
AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(In
millions, except per share
data)
|
|
(In
millions, except per share
data)
|
Net
sales
|
$
702.9
|
|
$
647.6
|
|
$
2,194.2
|
|
$
1,979.4
|
|
|
|
|
|
|
|
|
Cost of
goods sold
|
612.2
|
|
544.1
|
|
1,878.5
|
|
1,630.0
|
|
|
|
|
|
|
|
|
Gross
profit
|
90.7
|
|
103.5
|
|
315.7
|
|
349.4
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expenses
|
60.6
|
|
59.0
|
|
177.9
|
|
174.5
|
|
|
|
|
|
|
|
|
Operating
income
|
30.1
|
|
44.5
|
|
137.8
|
|
174.9
|
|
|
|
|
|
|
|
|
Interest
expense
|
(25.3)
|
|
(19.7)
|
|
(72.7)
|
|
(61.5)
|
Investment
income
|
0.2
|
|
0.3
|
|
0.6
|
|
0.9
|
Other
income (expense), net
|
|
|
|
|
|
|
|
Debt refinancing and redemption
costs
|
(10.1)
|
|
-
|
|
(10.1)
|
|
(3.1)
|
Other, net
|
(2.2)
|
|
(0.2)
|
|
(4.0)
|
|
0.1
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
(7.3)
|
|
24.9
|
|
51.6
|
|
111.3
|
|
|
|
|
|
|
|
|
Income tax
expense
|
0.9
|
|
2.3
|
|
4.8
|
|
4.2
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
(8.2)
|
|
22.6
|
|
46.8
|
|
107.1
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling
interests
|
0.1
|
|
2.2
|
|
1.0
|
|
4.6
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to AAM
|
$
(8.1)
|
|
$
24.8
|
|
$
47.8
|
|
$
111.7
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share
|
$
(0.11)
|
|
$
0.33
|
|
$
0.63
|
|
$
1.48
|
|
|
|
|
|
|
|
|
Diluted
shares outstanding
|
74.9
|
|
75.4
|
|
75.2
|
|
75.4
|
AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(In
millions)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(8.2)
|
|
$
22.6
|
|
$
46.8
|
|
$
107.1
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
Defined benefit
plans
|
(102.7)
|
|
0.4
|
|
(117.2)
|
|
3.9
|
Foreign currency translation
adjustments
|
4.9
|
|
(30.2)
|
|
(7.1)
|
|
(16.7)
|
Change in
derivatives
|
2.2
|
|
(9.0)
|
|
7.6
|
|
(7.9)
|
Other
comprehensive income (loss)
|
(95.6)
|
|
(38.8)
|
|
(116.7)
|
|
(20.7)
|
|
|
|
|
|
|
|
|
Comprehensive income (loss)
|
(103.8)
|
|
(16.2)
|
|
(69.9)
|
|
86.4
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling interests
|
0.1
|
|
2.2
|
|
1.0
|
|
4.6
|
Foreign currency translation adjustments
attributable to noncontrolling
interests
|
-
|
|
0.5
|
|
(0.2)
|
|
(0.3)
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income (loss) attributable to
AAM
|
$
(103.7)
|
|
$
(13.5)
|
|
$
(69.1)
|
|
$
90.7
|
|
|
|
|
|
|
|
|
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC.
|
CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
|
2012
|
|
2011
|
|
|
(In
millions)
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
209.0
|
|
$
169.2
|
Accounts receivable,
net
|
|
465.3
|
|
333.3
|
Inventories, net
|
|
242.3
|
|
177.2
|
Prepaid expenses and other
current assets
|
|
105.5
|
|
83.4
|
Total
current assets
|
|
1,022.1
|
|
763.1
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
1,007.6
|
|
971.2
|
Goodwill
|
|
156.3
|
|
155.9
|
GM
postretirement cost sharing asset
|
|
288.3
|
|
260.2
|
Other
assets and deferred charges
|
|
199.9
|
|
178.3
|
Total
assets
|
|
$
2,674.2
|
|
$
2,328.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable
|
|
$
429.5
|
|
$
337.1
|
Accrued compensation and
benefits
|
|
110.1
|
|
110.6
|
Deferred revenue
|
|
20.6
|
|
32.9
|
Accrued expenses and
other
|
|
89.6
|
|
95.5
|
Total
current liabilities
|
|
649.8
|
|
576.1
|
|
|
|
|
|
Long-term
debt
|
|
1,579.9
|
|
1,180.2
|
Deferred
revenue
|
|
81.2
|
|
88.2
|
Postretirement benefits and other long-term
liabilities
|
|
861.0
|
|
903.8
|
Total
liabilities
|
|
3,171.9
|
|
2,748.3
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
(497.7)
|
|
(419.6)
|
Total
liabilities and stockholders' deficit
|
|
$
2,674.2
|
|
$
2,328.7
|
AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(In
millions)
|
|
(In
millions)
|
Operating activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(8.2)
|
|
$
22.6
|
|
$
46.8
|
|
$
107.1
|
Depreciation and amortization
|
38.7
|
|
35.0
|
|
112.4
|
|
103.8
|
Other
|
(251.7)
|
|
(239.5)
|
|
(355.8)
|
|
(276.3)
|
|
|
|
|
|
|
|
|
Net
cash flow used in operating activities
|
(221.2)
|
|
(181.9)
|
|
(196.6)
|
|
(65.4)
|
|
|
|
|
|
|
|
|
Investing Activities
|
|
|
|
|
|
|
|
Purchases of property, plant & equipment
|
(50.8)
|
|
(39.4)
|
|
(143.7)
|
|
(111.0)
|
Proceeds from sales of property, plant & equipment
|
1.0
|
|
0.1
|
|
2.2
|
|
7.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash flow used in investing activities
|
(49.8)
|
|
(39.3)
|
|
(141.5)
|
|
(103.1)
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
Net
increase in long-term debt
|
404.3
|
|
88.0
|
|
397.0
|
|
40.6
|
Debt issuance costs
|
(10.1)
|
|
(0.4)
|
|
(10.1)
|
|
(5.7)
|
Employee stock option exercises
|
-
|
|
-
|
|
0.1
|
|
4.6
|
Purchase of treasury stock
|
-
|
|
-
|
|
(5.9)
|
|
(0.1)
|
Purchase of noncontrolling interest
|
-
|
|
-
|
|
(4.0)
|
|
-
|
|
|
|
|
|
|
|
|
Net
cash flow provided by financing activities
|
394.2
|
|
87.6
|
|
377.1
|
|
39.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash
|
0.6
|
|
(2.3)
|
|
0.8
|
|
(1.1)
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash and cash
equivalents
|
123.8
|
|
(135.9)
|
|
39.8
|
|
(130.2)
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period
|
85.2
|
|
250.3
|
|
169.2
|
|
244.6
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of period
|
$
209.0
|
|
$
114.4
|
|
$
209.0
|
|
$
114.4
|
AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC.
|
SUPPLEMENTAL DATA
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
supplemental data presented below is a reconciliation of certain
financial measures which is intended
|
to
facilitate analysis of American Axle & Manufacturing Holdings,
Inc. business and operating performance.
|
|
|
|
|
|
|
|
|
Earnings before interest expense, income taxes and
depreciation and amortization (EBITDA) and adjusted
EBITDA(a)
|
|
|
|
|
|
|
|
|
|
Three
months ended
|
|
Nine
months ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(In
millions)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
Net income
(loss) attributable to AAM
|
$
(8.1)
|
|
$
24.8
|
|
$
47.8
|
|
$
111.7
|
Interest
expense
|
25.3
|
|
19.7
|
|
72.7
|
|
61.5
|
Income tax
expense
|
0.9
|
|
2.3
|
|
4.8
|
|
4.2
|
Depreciation and amortization
|
38.7
|
|
35.0
|
|
112.4
|
|
103.8
|
|
|
|
|
|
|
|
|
EBITDA
|
$
56.8
|
|
$
81.8
|
|
$
237.7
|
|
$
281.2
|
|
|
|
|
|
|
|
|
Debt
refinancing and redemption costs
|
10.1
|
|
-
|
|
10.1
|
|
3.1
|
Other
special charges, asset impairments, curtailment gains and
restructuring costs (e)
|
3.2
|
|
11.4
|
|
34.4
|
|
11.4
|
ADJUSTED EBITDA
|
$
70.1
|
|
$
93.2
|
|
$
282.2
|
|
$
295.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
debt(b) to capital
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
|
|
2012
|
|
2011
|
|
|
|
|
|
(In
millions, except
percentages)
|
|
|
|
|
|
|
|
|
Total
debt
|
|
|
|
|
$
1,579.9
|
|
$
1,180.2
|
Less: cash
and cash equivalents
|
|
|
|
|
209.0
|
|
169.2
|
|
|
|
|
|
|
|
|
Net debt
at end of period
|
|
|
|
|
1,370.9
|
|
1,011.0
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
|
|
|
(497.7)
|
|
(419.6)
|
Total
invested capital at end of period
|
|
|
|
|
$
873.2
|
|
$
591.4
|
Net
debt to capital(c)
|
|
|
|
|
157.0%
|
|
171.0%
|
Net
Operating Cash Flow and Free Cash Flow(d)
|
|
Three
months ended
|
|
Nine
months ended
|
|
September 30,
|
|
September 30,
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
(In
millions)
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
Net cash
used in operating activities
|
$(221.2)
|
|
$(181.9)
|
|
$(196.6)
|
|
$
(65.4)
|
Less:
Purchases of property, plant & equipment, net of proceeds
from sale of equipment
|
(49.8)
|
|
(39.3)
|
|
(141.5)
|
|
(103.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
operating cash flow
|
(271.1)
|
|
(221.2)
|
|
(338.1)
|
|
(168.5)
|
|
|
|
|
|
|
|
|
Free
cash flow
|
$(271.0)
|
|
$(221.2)
|
|
$(338.1)
|
|
$(168.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) We define EBITDA to be earnings
before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA excluding the impact of
curtailment gains, asset impairments, restructuring costs, and
special charges related to the closure of the Detroit Manufacturing
Complex and Cheektowaga Manufacturing Facility, and debt
refinancing and redemption costs, to the extent applicable.
We believe that EBITDA and adjusted EBITDA are meaningful measures
of performance as they are commonly utilized by management and
investors to analyze operating performance and entity
valuation. Our management, the investment community and the
banking institutions routinely use EBITDA, together with other
measures, to measure our operating performance relative to other
Tier 1 automotive suppliers. EBITDA and adjusted EBITDA
should not be construed as income from operations, net income or
cash flow from operating activities as determined under GAAP.
Other companies may calculate EBITDA and adjusted EBITDA
differently.
|
|
|
|
|
|
|
|
|
(b) Net debt is equal to total debt
less cash and cash equivalents.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Net debt to capital is equal to
net debt divided by the sum of stockholders' deficit and net
debt. We believe that net debt to capital is a meaningful
measure of financial condition as it is commonly utilized by
management, investors and creditors to assess relative capital
structure risk. Other companies may calculate net debt to
capital differently.
|
|
|
|
|
|
|
|
|
(d) We define free cash flow as net
cash provided by (used in) operating activities less purchases of
property, plant and equipment, net of proceeds from sales of
equipment. For purposes of calculating free cash flow, AAM
excludes the impact of purchase buyouts of leased equipment, if
any. We believe free cash flow is a meaningful measure as it
is commonly utilized by management and investors to assess our
ability to generate cash flow from business operations to repay
debt and return capital to our stockholders. Free cash flow
is also a key metric used in our calculation of incentive
compensation. Other companies may calculate free cash flow
differently.
|
|
|
|
|
|
|
|
|
(e) Special charges and
restructuring costs of $3.2 million for three months ended
September 30, 2012 and $34.4 million for the nine months ended
September 30 , 2012 primarily relate to the closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility.
This special charge activity includes $28.7 million of expense
related to pension and postretirement benefits to be provided to
certain eligible UAW associates as a result of the Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility plant
closures, $27.5 million of expense primarily related to asset
redeployment and other restructuring costs associated with the
closures of Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility and a $21.8 million postretirement benefit
curtailment gain recorded in the first quarter of 2012.
|
SOURCE American Axle & Manufacturing Holdings, Inc.