DETROIT, May 5, 2017 /PRNewswire/ -- American Axle
& Manufacturing Holdings, Inc. (AAM), (NYSE: AXL) today
reported its financial results for the first quarter of 2017. In
addition, AAM provided an updated 2017 financial outlook and 2017 -
2019 new and incremental business backlog to reflect the inclusion
of recent acquisition activity.
First Quarter 2017 Results
- First quarter sales of $1.05
billion
- Gross profit of $210.7 million,
or 20.1% of sales
- Net income of $78.4 million, or
7.5% of sales
- Diluted earnings per share of $0.99
- Net cash provided by operating activities of $62.3 million
- Adjusted EBITDA of $183.6
million, or 17.5% of sales
- Adjusted earnings per share of $1.03
- Adjusted free cash flow of $60.5
million
AAM's net income in the first quarter of 2017 was $78.4 million, or $0.99 per share, as compared to net income of
$61.1 million, or $0.78 per share, in the first quarter of
2016.
AAM defines Adjusted earnings per share to be diluted earnings
per share excluding the impact of restructuring and
acquisition-related costs and non-recurring items, including the
tax effect thereon. Adjusted earnings per share in the first
quarter of 2017 was $1.03 compared to
$0.78 in the first quarter of
2016.
"AAM's record financial performance in the first quarter of 2017
sets the stage for the next chapter in our future," said
David C. Dauch, AAM's Chairman and
Chief Executive Officer. "As we implement our integration plans to
achieve synergy targets related to the completed acquisition of
MPG, we look forward to driving profitable growth, strong free cash
flow generation and long-term shareholder value as a larger, more
diverse company."
AAM's sales in the first quarter of 2017 were $1.05 billion as compared to $0.97 billion in the first quarter of 2016.
Non-GM sales increased to a record $347.1
million in the first quarter of 2017 as compared to
$323.2 million in the first quarter
of 2016.
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 first quarter of 2017, AAM's
content-per-vehicle was $1,630 as
compared to $1,611 in the first
quarter of 2016.
AAM's gross profit in the first quarter of 2017 increased
$36.7 million to $210.7 million, or 20.1% of sales, as compared to
$174.0 million, or 18.0% of sales, in
the first quarter of 2016.
AAM's SG&A spending in the first quarter of 2017 was
$82.8 million, or 7.9% of sales, as
compared to $75.6 million, or 7.8% of
sales, in the first quarter of 2016. AAM's R&D spending
in the first quarter of 2017 was $41.0
million as compared to $30.9
million in the first quarter of 2016.
AAM defines EBITDA to be earnings before interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA excluding the impact of restructuring and
acquisition-related costs. Excluding the impact of
$16.0 million of restructuring and
acquisition-related costs, Adjusted EBITDA was $183.6 million, or 17.5% of sales, as compared to
$149.8 million, or 15.5% of sales, in
the first quarter of 2016.
AAM defines free cash flow to be net cash provided by operating
activities less capital expenditures net of proceeds from the sale
of property, plant and equipment. Adjusted free cash flow is
defined as free cash flow excluding the impact of cash payments for
restructuring and acquisition-related costs and settlements of
pre-existing accounts payable balances with acquired entities.
Net cash provided by operating activities for the first quarter
of 2017 was $62.3 million.
Capital spending, net of proceeds from the sale of property, plant
and equipment, for the first quarter of 2017 was $34.1 million. Cash payments for
restructuring and acquisition-related costs and the settlement of
pre-existing accounts payable balances with acquired entities were
$32.3 million for the first quarter
of 2017. Reflecting the impact of this activity, AAM's Adjusted
free cash flow for the first quarter of 2017 was $60.5 million.
AAM's Full Year 2017 Updated Financial Outlook
AAM's full year 2017 financial outlook has been updated to
include the impact of the Metaldyne Performance Group Inc. (MPG)
acquisition, reflecting the expected financial performance of the
acquired entity from April 6, 2017 to
December 31, 2017.
- AAM is targeting sales of approximately $6.1 billion in 2017, which excludes MPG sales
for the period between January 1,
2017 and April 5, 2017. This
sales projection is based on the anticipated launch schedule of
programs in AAM's new and incremental business backlog and the
assumption that U.S. Seasonally Adjusted Annual Rate of sales
("SAAR") will be approximately 17.5 million light vehicle units in
2017.
- AAM is targeting an Adjusted EBITDA margin in the range of 17%
to 18% of sales in 2017.
- AAM is targeting Adjusted free cash flow of approximately 5% of
sales in 2017.
- AAM is targeting full year capital spending of approximately 8%
of sales in 2017.
- We expect to incur significant costs and payments related to
restructuring and acquisition-related activities as well as
significant purchase price adjustments and related effects on the
income statement during 2017. The impact of these has been excluded
from our Adjusted EBITDA margin and Adjusted free cash flow
targets.
Pro Forma New and Incremental
Business Backlog
The pro forma new and incremental business backlog for the
period 2017 - 2019 includes MPG's new and incremental business
backlog, including the impact of the full year 2017.
- AAM estimates the pro forma gross new and incremental business
backlog to be approximately $1.5
billion for the three year period of 2017 - 2019.
- AAM assumes US SAAR to be approximately 17.5 million light
vehicle units over each of the three years in the backlog period.
AAM also assumes a moderate recovery in the commercial vehicle and
industrial markets during this time period.
- AAM's expects annual normal business attrition to be between
$100 million and $200 million each
year during the three year period of 2017 - 2019.
- In the first quarter of 2017, MPG completed the exit of the KBI
wheel bearing business. The estimated impact of this exit on pro
forma 2017 sales is a reduction of approximately $105 million.
- As disclosed on January 11, 2017,
AAM estimates the sourcing impact of GM's next generation full-size
truck program to be a reduction of sales of approximately
$175 million in 2018 and an
additional reduction of sales of approximately $275 million in 2019, with the remaining impact
in 2020.
The chart below shows the expected significant changes in sales
from 2016 to 2017, beginning with pro forma 2016 sales of AAM and
MPG through AAM's estimated 2017 consolidated sales.
|
(in
billions)
|
2016 AAM reported
sales
|
$
|
3.9
|
|
2016 MPG reported
sales
|
2.8
|
|
Elimination of 2016
MPG sales to AAM
|
(0.1)
|
|
2016 pro forma
sales
|
6.6
|
|
Impact of exiting KBI
business
|
(0.1)
|
|
2016 pro forma
sales excluding KBI sales
|
6.5
|
|
Estimated gross new
and incremental business backlog
|
0.5
|
|
Estimated business
attrition
|
(0.2)
|
|
Estimated 2017 pro
forma sales
|
6.8
|
|
Pre-acquisition 2017
MPG sales excluded from AAM consolidated sales
|
(0.7)
|
|
Estimated 2017
consolidated AAM sales target
|
$
|
6.1
|
|
First Quarter 2017 Conference Call
A conference call to review AAM's first quarter 2017 results,
updated full year 2017 financial outlook and related matters 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 (855) 681-2072 from the United States or (973) 200-3383 from
outside the United States. A replay will be available from
1:00 p.m. ET on May 5, 2017 until 11:59
p.m. ET May 12, 2017 by
dialing (855) 859-2056 from the United
States or (404) 537-3406 from outside the United
States. When prompted, callers should enter conference
reservation number 87956022.
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 as Adjusted EBITDA,
Adjusted earnings per share and Adjusted free cash flow. Such
information is reconciled to its closest GAAP measure in accordance
with Securities and Exchange Commission rules and is included in
the attached supplemental data.
Certain of the forward-looking financial measures included in
this earnings release are provided on a non-GAAP basis. A
reconciliation of non-GAAP forward-looking financial measures to
the most directly comparable financial measures calculated and
presented in accordance with GAAP is not practical given the
difficulty of projecting event driven transactional and other
non-core operating items, as well as purchase price adjustments and
their related effects in any future period. The magnitude of these
items, however, may be significant.
Management believes that these non-GAAP financial measures are
useful to management, investors, and banking institutions 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.
Company Description
AAM is a premier, global leader in design, engineering,
validation and manufacturing of driveline, metal forming,
powertrain, and casting technologies for automotive, commercial and
industrial markets.
Headquartered in Detroit, AAM
has over 25,000 associates operating at more than 90 facilities in
17 countries to support our customers on global and regional
platforms with a focus on quality, operational excellence and
technology leadership. To learn more, visit www.aam.com.
Forward-Looking Statements
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," "target," and similar words or
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:
reduced purchases of our products by General Motors Company (GM),
FCA US LLC (FCA), or other customers; reduced demand for our
customers' products (particularly light trucks and sport utility
vehicles (SUVs) produced by GM and FCA); 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 respond to changes in technology,
increased competition or pricing pressures; our ability to attract
new customers and programs for new products; 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; potential liabilities or
litigation relating to the MPG merger; risks inherent in our
international operations (including adverse changes in trade
agreements, tariffs, immigration policies, political stability,
taxes and other law changes, potential disruptions of production
and supply, and currency rate fluctuations, including those
resulting from the United States
presidential election and the United
Kingdom's vote to exit the European Union); negative or
unexpected tax consequences; risks related to disruptions to
ongoing business operations as a result of the merger with MPG,
including disruptions to management time; 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; our
ability to achieve the level of cost reductions required to sustain
global cost competitiveness; 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 or our customers' and suppliers' ability to successfully
launch new product programs on a timely basis; our ability to
realize the expected revenues from our new and incremental business
backlog; 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;
global economic conditions; a significant disruption in operations
at one of our key manufacturing facilities; 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; price
volatility in, or reduced availability of, fuel; potential adverse
reactions or changes to business relationships resulting from the
completion of the merger with MPG; our ability to protect our
intellectual property and successfully defend against assertions
made against us; our ability to attract and retain key associates;
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; our customers' and suppliers'
availability of financing for working capital, capital
expenditures, R&D or other general corporate purposes; changes
in liabilities arising from pension and other postretirement
benefit obligations; 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;
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); our
ability or our customers' and suppliers' ability to comply with the
Dodd-Frank Act and other regulatory requirements and the potential
costs of such compliance; and 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:
Investor Contact
Jason P. Parsons
Director, Investor
Relations
(313) 758-2404
jason.parsons@aam.com
Media Contact
Christopher M. Son
Executive Director, Marketing & Communications
(313) 758-4814
chris.son@aam.com
Or visit the AAM website at www.aam.com.
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
(in millions,
except per share data)
|
|
|
|
|
Net sales
|
$
|
1,049.9
|
|
|
$
|
969.2
|
|
|
|
|
|
Cost of goods
sold
|
839.2
|
|
|
795.2
|
|
|
|
|
|
Gross
profit
|
210.7
|
|
|
174.0
|
|
|
|
|
|
Selling, general and
administrative expenses
|
82.8
|
|
|
75.6
|
|
|
|
|
|
Restructuring and
acquisition-related costs
|
16.0
|
|
|
—
|
|
|
|
|
|
Operating
income
|
111.9
|
|
|
98.4
|
|
|
|
|
|
Interest
expense
|
(25.5)
|
|
|
(23.6)
|
|
|
|
|
|
Investment
income
|
0.6
|
|
|
0.6
|
|
|
|
|
|
Other income
(expense), net
|
(1.1)
|
|
|
1.0
|
|
|
|
|
|
Income before income
taxes
|
85.9
|
|
|
76.4
|
|
|
|
|
|
Income tax
expense
|
7.5
|
|
|
15.3
|
|
|
|
|
|
Net income
|
$
|
78.4
|
|
|
$
|
61.1
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.99
|
|
|
$
|
0.78
|
|
|
|
|
|
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(Unaudited)
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
|
|
|
|
Net income
|
$
|
78.4
|
|
|
$
|
61.1
|
|
|
|
|
|
Other comprehensive
income (loss)
|
|
|
|
Defined benefit
plans, net of tax
|
(0.3)
|
|
|
4.2
|
|
Foreign currency
translation adjustments
|
11.9
|
|
|
15.0
|
|
Changes in cash flow
hedges
|
15.5
|
|
|
3.4
|
|
Other comprehensive
income
|
27.1
|
|
|
22.6
|
|
|
|
|
|
Comprehensive
income
|
$
|
105.5
|
|
|
$
|
83.7
|
|
|
|
|
|
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
March
31, 2017
|
|
December 31,
2016
|
|
(in
millions)
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
1,543.4
|
|
|
$
|
481.2
|
|
Accounts receivable,
net
|
702.5
|
|
|
560.0
|
|
Inventories,
net
|
221.6
|
|
|
219.5
|
|
Prepaid expenses and
other
|
106.0
|
|
|
75.8
|
|
Total current
assets
|
2,573.5
|
|
|
1,336.5
|
|
|
|
|
|
Property, plant and
equipment, net
|
1,143.0
|
|
|
1,093.7
|
|
Deferred income
taxes
|
362.0
|
|
|
356.4
|
|
Goodwill
|
233.8
|
|
|
154.0
|
|
GM postretirement
cost sharing asset
|
235.2
|
|
|
236.1
|
|
Other assets and
deferred charges
|
314.5
|
|
|
271.4
|
|
Total
assets
|
$
|
4,862.0
|
|
|
$
|
3,448.1
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current portion of
long-term debt
|
$
|
3.4
|
|
|
$
|
3.3
|
|
Accounts
payable
|
527.9
|
|
|
382.3
|
|
Accrued compensation
and benefits
|
106.3
|
|
|
139.3
|
|
Deferred
revenue
|
24.5
|
|
|
24.6
|
|
Accrued expenses and
other
|
110.6
|
|
|
102.0
|
|
Total current
liabilities
|
772.7
|
|
|
651.5
|
|
|
|
|
|
Long-term debt,
net
|
2,581.5
|
|
|
1,400.9
|
|
Deferred
revenue
|
72.8
|
|
|
70.8
|
|
Postretirement
benefits and other long-term liabilities
|
799.2
|
|
|
794.9
|
|
Total
liabilities
|
4,226.2
|
|
|
2,918.1
|
|
|
|
|
|
Total stockholders'
equity
|
635.8
|
|
|
530.0
|
|
Total liabilities
and stockholders' equity
|
$
|
4,862.0
|
|
|
$
|
3,448.1
|
|
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
|
2017
|
|
2016
|
|
|
(in
millions)
|
Operating
Activities
|
|
|
|
|
Net income
|
|
$
|
78.4
|
|
|
$
|
61.1
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities
|
|
|
|
|
Depreciation and amortization
|
|
56.2
|
|
|
49.8
|
|
Other
|
|
(72.3)
|
|
|
(84.7)
|
|
Net cash provided
by operating activities
|
|
62.3
|
|
|
26.2
|
|
|
|
|
|
|
Investing
Activities
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(34.9)
|
|
|
(50.6)
|
|
Proceeds from sale of
property, plant and equipment
|
|
0.8
|
|
|
0.6
|
|
Acquisition of
business, net
|
|
(144.1)
|
|
|
—
|
|
Other
|
|
3.6
|
|
|
|
—
|
|
Net cash used in
investing activities
|
|
(174.6)
|
|
|
(50.0)
|
|
|
|
|
|
|
Financing
Activities
|
|
|
|
|
Net debt
activity
|
|
1,178.0
|
|
|
|
4.6
|
|
Purchase of treasury
stock
|
|
(5.2)
|
|
|
(3.5)
|
|
Net cash provided
by financing activities
|
|
1,172.8
|
|
|
1.1
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
1.7
|
|
|
2.2
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
1,062.2
|
|
|
(20.5)
|
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
481.2
|
|
|
282.5
|
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
1,543.4
|
|
|
$
|
262.0
|
|
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, depreciation and amortization (EBITDA) and Adjusted
EBITDA(a)
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
|
|
|
|
Net income
|
$
|
78.4
|
|
|
$
|
61.1
|
|
Interest
expense
|
25.5
|
|
|
23.6
|
|
Income tax
expense
|
7.5
|
|
|
15.3
|
|
Depreciation and
amortization
|
56.2
|
|
|
49.8
|
|
EBITDA
|
167.6
|
|
|
149.8
|
|
Restructuring and
acquisition-related costs
|
16.0
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
183.6
|
|
|
$
|
149.8
|
|
Adjusted earnings per
share(b)
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
|
0.99
|
|
$
|
0.78
|
Restructuring and
acquisition-related costs
|
0.20
|
|
—
|
Non-recurring
items:
|
|
|
|
Interest expense for
the debt drawdown period prior to acquisition funding
requirement
|
0.02
|
|
—
|
Discrete first
quarter tax impact of additional interest expense timing
|
(0.11)
|
|
—
|
Tax effect of
adjustments
|
(0.07)
|
|
—
|
Adjusted earnings
per share
|
$
|
1.03
|
|
$
|
0.78
|
Net debt to
capital(c)
|
March 31,
2017
|
|
December 31,
2016
|
|
(in millions,
except percentages)
|
|
|
|
|
Current portion of
long-term debt
|
$
|
3.4
|
|
|
$
|
3.3
|
|
Long-term debt,
net
|
2,581.5
|
|
|
1,400.9
|
|
Total debt,
net
|
2,584.9
|
|
|
1,404.2
|
|
Less: cash and cash
equivalents
|
1,543.4
|
|
|
481.2
|
|
Net debt at end of
period
|
1,041.5
|
|
|
923.0
|
|
Stockholders'
equity
|
635.8
|
|
|
530.0
|
|
Total invested
capital at end of period
|
$
|
1,677.3
|
|
|
$
|
1,453.0
|
|
Net debt to
capital
|
62.1
|
%
|
|
63.5
|
%
|
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.
Free cash flow and Adjusted free cash
flow(d)
|
Three Months
Ended
|
|
March
31,
|
|
2017
|
|
2016
|
|
(in
millions)
|
|
|
|
|
Net cash provided by
operating activities
|
$
|
62.3
|
|
|
$
|
26.2
|
|
Purchases of
property, plant and equipment, net of proceeds from sale of
property, plant and equipment
|
(34.1)
|
|
|
(50.0)
|
|
Free cash
flow
|
28.2
|
|
|
(23.8)
|
|
Cash payments for
restructuring and acquisition-related costs
|
9.5
|
|
|
—
|
|
Acquisition-related
settlement of pre-existing accounts payable balances with acquired
entities
|
22.8
|
|
|
—
|
|
Adjusted free cash
flow
|
$
|
60.5
|
|
|
$
|
(23.8)
|
|
_______________________________________
(a)
|
We define EBITDA to
be earnings before interest expense, income taxes, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA excluding
the impact of restructuring and acquisition-related costs. 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)
|
We define Adjusted
earnings per share to be diluted earnings per share excluding the
impact of restructuring and acquisition-related costs and
non-recurring items, including the tax effect thereon. We
believe Adjusted earnings per share is a meaningful measure as it
is commonly utilized by management and investors in assessing
ongoing financial performance that provides improved comparability
between periods through the exclusion of certain items that
management believes are not indicative of core operating
performance and which may obscure underlying business results and
trends. Other companies may calculate Adjusted earnings per
share differently.
|
|
|
(c)
|
Net debt is equal to
total debt, net less cash and cash equivalents. Net debt to
capital is equal to net debt divided by the sum of stockholders'
equity 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 to be net cash provided by operating activities less capital
expenditures net of proceeds from the sale of property, plant and
equipment. Adjusted free cash flow excludes the impact of
cash payments for restructuring and acquisition-related costs and
settlements of pre-existing accounts payable balances with acquired
entities. We believe free cash flow and Adjusted free cash
flow are meaningful measures as they are 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 and Adjusted free cash flow
are also key metrics used in our calculation of incentive
compensation. Other companies may calculate free cash flow
and Adjusted free cash flow differently.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/aam-reports-first-quarter-2017-financial-results-300452239.html
SOURCE American Axle & Manufacturing Holdings, Inc.