NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2017
(Unaudited)
|
|
1.
|
ORGANIZATION AND BASIS OF PRESENTATION
|
Organization
American Axle & Manufacturing Holdings, Inc. (Holdings) and its subsidiaries (collectively, we, our, us or AAM) is a global Tier I supplier to the automotive industry. We manufacture, engineer, design and validate driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles (SUVs), crossover vehicles, passenger cars and commercial vehicles. Driveline and drivetrain systems include components that transfer power from the transmission and deliver it to the drive wheels. Our driveline, drivetrain and related products include axles, driveheads, chassis modules, driveshafts, power transfer units, transfer cases, chassis and steering components, transmission parts, electric drive systems and metal formed products.
Merger with Metaldyne Performance Group, Inc.
On April 6, 2017, Alpha SPV I, Inc. (Merger Sub), a wholly-owned subsidiary of Holdings, merged with and into Metaldyne Performance Group, Inc. (MPG), with MPG as the surviving corporation in the merger. Upon completion of the merger, MPG became a wholly-owned subsidiary of Holdings. As a result, we are now a global Tier I supplier to the automotive, commercial and industrial markets. In addition to AAM's aforementioned driveline business, the merger with MPG has expanded our metal forming business and we now manufacture, engineer, design and validate powertrain and casting technologies. We employ over 25,000 associates, operating at more than 90 facilities in 17 countries, to support our customers on global and regional platforms with a continued focus on quality, operational excellence and technology leadership.
Basis of Presentation
We have prepared the accompanying interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934. These condensed consolidated financial statements are unaudited but include all normal recurring adjustments, which we consider necessary for a fair presentation of the information set forth herein. Results of operations for the periods presented are not necessarily indicative of the results for the full fiscal year.
The balance sheet at
December 31, 2016
presented herein has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete consolidated financial statements.
In order to prepare the accompanying interim condensed consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts and disclosures in our interim condensed consolidated financial statements. Actual results could differ from those estimates.
The condensed consolidated financial statements presented in this Form 10-Q as of, and for the three months ended, March 31, 2017 do not include any amounts or balances of MPG as the merger was not completed until April 6, 2017. We will begin to include MPG results in our condensed consolidated financial statements in the second quarter of 2017.
For further information, refer to the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended
December 31, 2016
.
Effect of New Accounting Standards
Accounting Standards Update 2017-07
On March 10, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-07 -
Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
. The amendments in this update require that an employer disaggregate the service cost component from the other components of defined benefit pension cost and postretirement benefit cost (net benefit cost). The amendments also provide explicit guidance on how to present the service cost component and the other components of net benefit cost in the income statement and allow only the service cost component of net benefit cost to be eligible for capitalization. This guidance becomes effective at the beginning of our 2018 fiscal year, however early adoption is permitted. The guidance requires a retrospective transition method for the income statement classification of the net benefit cost components and a prospective transition method for the capitalization of the service cost component in assets. We are currently assessing the impact that this standard will have on our consolidated financial statements.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Accounting Standards Update 2017-04
On January 26, 2017, the FASB issued ASU 2017-04 -
Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment
. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, or what is referred to under existing guidance as "Step 2." Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance becomes effective at the beginning of our 2020 fiscal year, however early adoption is permitted. The guidance requires a prospective transition method. We are currently assessing the impact that this standard will have on our consolidated financial statements.
Accounting Standards Update 2016-16
On October 24, 2016, the FASB issued ASU 2016-16 -
Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
. Existing income tax guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This existing guidance is deemed an exception to the principle of comprehensive recognition of current and deferred income taxes under GAAP. Due to the limited authoritative guidance about this exception, diversity in practice exists. ASU 2016-16 eliminates this exception for intra-entity transfers of assets other than inventory and requires that entities recognize the income tax consequences when the transfers occur. This guidance becomes effective at the beginning of our 2018 fiscal year, however early adoption is permitted. The guidance requires a modified retrospective transition method. We are currently assessing the impact that this standard will have on our consolidated financial statements.
Accounting Standards Update 2016-02
On February 25, 2016, the FASB issued ASU 2016-02 -
Leases (Topic 842)
, which supersedes the existing lease accounting guidance and establishes new criteria for recognizing lease assets and liabilities. The most significant impact of the update, to AAM, is that a lessee will be required to recognize a "right-of-use" asset and lease liability for operating lease agreements that were not previously included on the balance sheet under the existing lease guidance. A lessee will be permitted to make a policy election, excluding recognition of the right-of-use asset and associated liability for lease terms of 12 months or less. Expense recognition in the statement of income along with cash flow statement classification for both financing (capital) and operating leases under the new standard will not be significantly changed from existing lease guidance. This guidance becomes effective for AAM at the beginning of our 2019 fiscal year and requires transition under a modified retrospective method. We are currently assessing the impact that this standard will have on our consolidated financial statements.
Accounting Standards Update 2014-09
In 2014, the FASB issued ASU 2014-09 -
Revenue from Contracts with Customers (Topic 606)
, and has subsequently issued ASUs 2015-14 -
Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
, 2016-08 -
Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)
, 2016-10 -
Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing
, 2016-12 -
Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients
, and 2016-20 -
Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements to Topic 606
(collectively, the Revenue Recognition ASUs).
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Revenue Recognition ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersede most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance is effective for AAM beginning on January 1, 2018 and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. We are evaluating whether we will adopt this guidance using the full retrospective or modified retrospective approach.
We are concluding the assessment phase of implementing this guidance. We have evaluated each of the five steps in the new revenue recognition model, which are as follows: 1) Identify the contract with the customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue when (or as) performance obligations are satisfied. Our preliminary conclusion is that the determination of what constitutes a contract with our customers (step 1), our performance obligations under the contract (step 2), and the determination and allocation of the transaction price (steps 3 and 4) under the new revenue recognition model will not result in significant changes in comparison to the current revenue recognition guidance.
With regard to recognizing revenue when (or as) a performance obligation is satisfied (step 5), we are thoroughly reviewing the language in our contracts with each customer to determine whether the customer obtains control of the goods at a point in time or over time. Under current revenue recognition guidance, we recognize revenue when products are shipped to our customers and title transfers under standard commercial terms or when realizable in accordance with our commercial agreements. Topic 606 provides certain criteria that, if met, require companies to recognize revenue as the product is produced (over time) instead of at a point of time (i.e. upon shipment). We are evaluating our contracts, including MPG contracts, in the context of the criteria for recognizing revenue over time. If we conclude that we meet the criteria for recognizing revenue over time, our timing of revenue recognition would be accelerated. We have initiated the assessment phase of evaluating the impact of Topic 606 on MPG's contracts with customers and are assessing the overall impact that the acquisition of MPG will have on our recognition of revenue.
There are also certain considerations related to internal control over financial reporting that are associated with implementing the new guidance under Topic 606. We are currently evaluating our control framework for revenue recognition and identifying any changes that may need to be made in response to the new guidance. Disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance. Designing and implementing the appropriate controls over gathering and reporting the information required under Topic 606 is currently in process.
Share Repurchase Program
In 2016, AAM's Board of Directors authorized a share repurchase program of up to
$100 million
of AAM's common shares through December 31, 2018 as part of AAM's overall capital allocation strategy. The repurchase of shares may be made in the open market or in privately negotiated transactions and will be funded through available cash balances and cash flow from operations. The timing and amount of any share repurchases will be determined based on market and economic conditions, share price, alternative uses of capital and other factors. Approximately
$1.5 million
of shares have been repurchased under the authorized share repurchase program, leaving approximately
$98.5 million
available for repurchase. There were no repurchases under the program in the first quarter of 2017.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
2.
|
RESTRUCTURING AND ACQUISITION-RELATED COSTS
|
In the fourth quarter of 2016, AAM initiated actions under a global restructuring program focused on creating a more streamlined organization in addition to reducing our cost structure and preparing for upcoming acquisition integration activities. A summary of this activity for the first quarter of 2017 is shown below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance Charges
|
|
Implementation Costs
|
|
Total
|
|
(in millions)
|
Accrual as of December 31, 2016
|
$
|
0.6
|
|
|
$
|
9.2
|
|
|
$
|
9.8
|
|
Charges
|
1.2
|
|
|
5.6
|
|
|
6.8
|
|
Cash utilization
|
(1.1
|
)
|
|
(1.5
|
)
|
|
(2.6
|
)
|
Non-cash utilization
|
—
|
|
|
—
|
|
|
—
|
|
Accrual adjustments
|
—
|
|
|
—
|
|
|
—
|
|
Accrual as of March 31, 2017
|
$
|
0.7
|
|
|
$
|
13.3
|
|
|
$
|
14.0
|
|
As part of our restructuring actions, we incurred severance charges of approximately
$1.2 million
, as well as implementation costs, including professional expenses, of approximately
$5.6 million
during the three months ended March 31, 2017. Since inception of the global restructuring program, we have incurred severance charges totaling
$1.8 million
and implementation costs totaling
$15.8 million
. We expect to incur approximately $15 to
$20 million
of additional charges under our global restructuring program in 2017.
On March 1, 2017, we completed the acquisition of USM Mexico Manufacturing LLC (USM Mexico) and on April 6, 2017, we completed the acquisition of MPG. During the three months ended March 31, 2017, we incurred the following charges related to these acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-Related Costs
|
|
Integration Expenses
|
|
Total
|
|
(in millions)
|
Charges
|
$
|
3.3
|
|
|
$
|
5.9
|
|
|
$
|
9.2
|
|
|
|
|
|
|
|
Total restructuring and acquisition-related charges
|
$
|
16.0
|
|
Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred. Integration expenses reflect consulting fees incurred in preparation for the acquisitions and ongoing integration activities. Total charges associated with our global restructuring program and acquisition-related charges of
$16.0 million
are shown on a separate line item titled "Restructuring and Acquisition-Related Costs" in our Condensed Consolidated Statements of Income.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Acquisition of USM Mexico
On March 1, 2017, AAM completed the acquisition of 100% of USM Mexico, a former subsidiary of U.S. Manufacturing Corporation (USM). The purchase price was funded entirely with available cash and the acquisition was accounted for under the acquisition method with the purchase price allocated to the identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities.
USM Mexico includes USM's operations in Guanajuato, Mexico, which has historically been one of the largest suppliers to AAM's Guanajuato Manufacturing Complex. This acquisition allows AAM to vertically integrate the supply chain and helps ensure continuity of supply for certain parts to our largest manufacturing facility.
The following represents the estimated fair value of the assets acquired and liabilities assumed resulting from the acquisition, as well as the calculation of goodwill:
|
|
|
|
|
(in millions)
|
Contractual purchase price
|
$
|
162.5
|
|
Adjustments 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
|
$
|
144.1
|
|
Accounts receivable
|
1.1
|
|
Inventories
|
4.8
|
|
Prepaid expenses and other
|
2.4
|
|
Property, plant and equipment
|
39.1
|
|
Intangible assets
|
31.7
|
|
Total assets acquired
|
$
|
79.1
|
|
Accounts payable
|
10.8
|
|
Accrued expenses and other
|
2.7
|
|
Deferred income tax liabilities
|
1.2
|
|
Net assets acquired
|
$
|
64.4
|
|
Goodwill
|
$
|
79.7
|
|
The purchase agreement specifies a period of time subsequent to the acquisition date for calculating the final working capital amount of USM Mexico as of the acquisition date. Additionally, we are in the process of reviewing the preliminary estimates of fair value based on independent appraisals and valuations of property, plant and equipment and intangible assets. As a result, the purchase price, working capital, property, plant and equipment, intangible assets and goodwill amounts as included in the table above are considered provisional and are subject to adjustment. We expect these provisional amounts to be finalized in the second quarter of 2017. None of the goodwill is expected to be deductible for tax purposes.
AAM had an existing accounts payable balance of
$22.8 million
with USM Mexico as of the date of acquisition. As a result of the acquisition, this pre-existing accounts payable balance was settled and AAM accounted for this settlement separately from the acquisition. This resulted in a reduction of the purchase price of
$22.8 million
and this portion of the cash paid to acquire USM Mexico has been reflected as an operating cash outflow in our Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2017.
The operating results of USM Mexico from the acquisition date through March 31, 2017 were insignificant to AAM's Condensed Consolidated Statement of Income for the three months ended March 31, 2017. Further, we have not included pro forma revenue and earnings for the three months ended March 31, 2017 and March 31, 2016 as the inclusion of USM Mexico would be insignificant to AAM's consolidated results for these periods.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Acquisition of MPG
On April 6, 2017, AAM completed its acquisition of 100% of the equity interests of MPG for a total purchase price of approximately
$1.5 billion
plus the assumption of approximately
$1.7 billion
in net debt (comprised of approximately
$1.9 billion
in debt less approximately
$0.2 billion
of MPG cash and cash equivalents). The acquisition of MPG will be accounted for under the acquisition method of accounting.
MPG provides highly-engineered components for use in powertrain and safety-critical platforms for the global light, commercial and industrial vehicle markets. MPG produces these components using complex metal-forming manufacturing technologies and processes for a global customer base of OEMs and Tier I suppliers, which help their customers meet fuel economy, performance and safety standards. Our acquisition of MPG contributes significantly to diversifying our global customer base and end markets, while also allowing us to expand our presence as a global Tier I supplier to the commercial and industrial markets, in addition to our existing presence as a global Tier I supplier to the automotive industry.
The aggregate cash consideration for the acquisition of MPG was financed using (i) the net proceeds of the issuance in March 2017 by AAM of
$1.2 billion
of new senior notes consisting of
$700.0 million
aggregate principal amount of
6.25%
senior notes due 2025, and
$500.0 million
aggregate principal amount of
6.50%
senior notes due 2027, and on April 6, 2017: (ii) borrowings by AAM of
$100.0 million
under a term loan that matures five years after completion of the acquisition of MPG, (iii) borrowings by AAM of
$1.55 billion
under a term loan that matures seven years after completion of the acquisition of MPG, and (iv) cash on hand.
We are in the process of valuing MPG's assets acquired and liabilities assumed, as well as identifying and assessing any transactions to be recognized separately from the acquisition. The condensed consolidated financial statements presented in this Form 10-Q as of, and for the three months ended, March 31, 2017 do not include any amounts or balances of MPG as the merger was not completed until April 6, 2017. We will begin to include MPG results in our condensed consolidated financial statements in the second quarter of 2017.
Pro Forma Financial Information
Pro forma net sales for AAM, on a combined basis with MPG for the three months ended March 31, 2017 and March 31, 2016, were
$1.8 billion
and
$1.7 billion
, respectively, excluding MPG sales to AAM during those periods. These pro forma amounts were prepared as if the acquisition of MPG had been completed on January 1, 2016. The disclosure of pro forma net sales is for informational purposes only and does not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date for the periods presented, or which may be realized in the future. It is not practicable for us to provide pro forma earnings amounts for the three months ended March 31, 2017 and March 31, 2016 as the information necessary to calculate these amounts was not readily available as of the date of this filing.
Goodwill
The following table provides a reconciliation of changes in goodwill for the three months ended March 31, 2017:
|
|
|
|
|
|
March 31,
|
|
2017
|
|
(in millions)
|
Beginning balance
|
$
|
154.0
|
|
Acquisition of USM Mexico
|
79.7
|
|
Foreign currency translation
|
0.1
|
|
Ending balance
|
$
|
233.8
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Intangible Assets
As a result of the acquisition of USM Mexico, AAM identified and recognized certain intangible assets that are subject to amortization. The weighted-average amortization period for all intangible assets recognized as a result of the acquisition of USM Mexico is 13 years. The following table provides a breakout of the major intangible assets acquired by class:
|
|
|
|
|
|
March 31,
|
|
2017
|
|
(in millions)
|
Technology
|
$
|
29.5
|
|
Customer platforms
|
2.2
|
|
Total
|
$
|
31.7
|
|
The following table provides a reconciliation of the gross carrying amount and associated accumulated amortization for AAM's total intangible assets, which are all subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
2017
|
|
2016
|
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
|
Gross Carrying Amount
|
Accumulated Amortization
|
Net Carrying Amount
|
|
(in millions)
|
Capitalized computer software
|
$
|
33.1
|
|
$
|
(9.9
|
)
|
$
|
23.2
|
|
|
$
|
31.7
|
|
$
|
(8.5
|
)
|
$
|
23.2
|
|
e-AAM in-process research & development
|
5.4
|
|
—
|
|
5.4
|
|
|
5.3
|
|
—
|
|
5.3
|
|
Technology
|
29.5
|
|
(0.2
|
)
|
29.3
|
|
|
—
|
|
—
|
|
—
|
|
Customer platforms
|
2.2
|
|
—
|
|
2.2
|
|
|
—
|
|
—
|
|
—
|
|
Total
|
$
|
70.2
|
|
$
|
(10.1
|
)
|
$
|
60.1
|
|
|
$
|
37.0
|
|
$
|
(8.5
|
)
|
$
|
28.5
|
|
We state our inventories at the lower of cost or net realizable value. The cost of our inventories is determined using the first-in first-out method. When we determine that our gross inventories exceed usage requirements, or if inventories become obsolete or otherwise not saleable, we record a provision for such loss as a component of our inventory accounts.
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
(in millions)
|
|
|
|
|
|
Raw materials and work-in-progress
|
|
$
|
220.4
|
|
|
$
|
212.7
|
|
Finished goods
|
|
28.9
|
|
|
33.8
|
|
Gross inventories
|
|
249.3
|
|
|
246.5
|
|
Inventory valuation reserves
|
|
(27.7
|
)
|
|
(27.0
|
)
|
Inventories, net
|
|
$
|
221.6
|
|
|
$
|
219.5
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Long-term debt consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
(in millions)
|
|
|
|
|
|
Existing Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
7.75% Notes due 2019
|
|
200.0
|
|
|
200.0
|
|
6.625% Notes due 2022
|
|
550.0
|
|
|
550.0
|
|
6.50% Notes due 2027
|
|
500.0
|
|
|
—
|
|
6.25% Notes due 2025
|
|
700.0
|
|
|
—
|
|
6.25% Notes due 2021
|
|
400.0
|
|
|
400.0
|
|
5.125% Notes due 2019
|
|
200.0
|
|
|
200.0
|
|
Foreign credit facilities
|
|
60.9
|
|
|
60.4
|
|
Capital lease obligations
|
|
5.4
|
|
|
5.5
|
|
Total debt
|
|
2,616.3
|
|
|
1,415.9
|
|
Less: Current portion of long-term debt
|
|
3.4
|
|
|
3.3
|
|
Long-term debt
|
|
2,612.9
|
|
|
1,412.6
|
|
Less: Debt issuance costs
|
|
31.4
|
|
|
11.7
|
|
Long-term debt, net
|
|
$
|
2,581.5
|
|
|
$
|
1,400.9
|
|
Existing Revolving Credit Facility
As of
March 31, 2017
, the existing revolving credit facility under the Amended and Restated Credit Agreement, dated as of January 9, 2004, amended and restated as of September 13, 2013 (Existing Revolving Credit Facility) provided up to
$523.5 million
of revolving bank financing commitments through September 13, 2018. At
March 31, 2017
, we had
$507.3 million
available under the Existing Revolving Credit Facility. This availability reflects a reduction of
$16.2 million
for standby letters of credit issued against the facility. As discussed in New Senior Secured Credit Facilities below, the Existing Revolving Credit Facility was replaced on April 6, 2017.
6.50% Notes due 2027 and 6.25% Notes due 2025
On March 23, 2017, we issued
$700.0 million
in aggregate principal amount of
6.25%
senior notes due 2025 and
$500.0 million
in aggregate principal amount of
6.50%
senior notes due 2027 (the Notes). Proceeds from the Notes were used primarily to fund the cash consideration related to AAM's acquisition of MPG, related fees and expenses, refinancing certain existing indebtedness of MPG and borrowings under the Existing Revolving Credit Facility together with borrowings under the New Senior Secured Credit Facilities. We paid debt issuance costs of
$19.6 million
in the first quarter of 2017 related to the Notes.
New Senior Secured Credit Facilities
In connection with our acquisition of MPG (the Acquisition) on April 6, 2017, Holdings and American Axle & Manufacturing, Inc. (AAM, Inc.) entered into a credit agreement (the Credit Agreement), among AAM, Inc., as borrower, Holdings, each financial institution party thereto as a lender (the Lenders), and JPMorgan Chase Bank, N.A., as administrative agent, pursuant to which Holdings and certain of its restricted subsidiaries (including certain subsidiaries of MPG acquired as part of the Acquisition) are required to guarantee the borrowings of AAM, Inc. thereunder and Holdings, AAM, Inc. and certain of their restricted subsidiaries are required to pledge their assets (including, without limitation, after-acquired assets), subject to certain exceptions and limitations. In connection with the Credit Agreement, Holdings, AAM, Inc. and certain of their restricted subsidiaries entered into a Collateral Agreement with JPMorgan Chase Bank, N.A., as collateral agent, and a Guarantee Agreement with JPMorgan Chase Bank, N.A., as administrative agent.
Pursuant to the Credit Agreement, the Lenders agreed to provide a
$100.0 million
term loan A facility (the Term Loan A Facility), a
$1.55 billion
term loan B facility (the Term Loan B Facility) and a
$900 million
multi-currency revolving credit facility (the Revolving Credit Facility, and together with the Term Loan A Facility and the Term Loan B Facility, the New Senior Secured Credit Facilities). The proceeds of the Term Loan A Facility and the Term Loan B Facility were used to finance a portion of the consideration for the Acquisition, pay transaction costs, redeem in full MPG Holdco I Inc.’s
7.375%
Senior Notes due 2022, and repay the existing indebtedness of AAM, Inc. under its Amended and Restated Credit Agreement, dated as of January 9, 2004, amended and restated as of September 13, 2013 and as further amended, among AAM, Inc., as borrower,
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Holdings, JPMorgan Chase Bank, N.A. as Administrative Agent, and each financial institution party thereto as a lender, as well as repay existing indebtedness of MPG under its Credit Agreement, dated as of October 20, 2014 and as amended as of May 8, 2015, among MPG Holdco I Inc., as guarantor, MPG, the subsidiary guarantors party thereto, and each financial institution party thereto as a lender. The proceeds of the Revolving Credit Facility will be used for general corporate purposes. We paid debt issuance costs of
$1.6 million
in the first quarter of 2017 related to the New Senior Secured Credit Facilities.
The Term Loan A Facility and the Revolving Credit Facility will mature on April 6, 2022, and the Term Loan B Facility will mature on April 6, 2024. Borrowings under the New Senior Secured Credit Facilities bear interest at rates based on the applicable Eurodollar rate or alternate base rate, as AAM may elect, in each case plus an applicable margin determined based on AAM’s total net leverage ratio. The alternate base rate is the greatest of (a) the JPMorgan Chase Bank, N.A. prime rate, (b) the Federal Reserve Bank of New York rate plus 0.50% and (c) the adjusted Eurodollar rate plus 1.00%. The applicable margin for Eurodollar-based loans under the New Senior Secured Credit Facilities will be between 1.25% and 2.25% with respect to any loan under the Term Loan A Facility, 2.25% with respect to any loan under the Term Loan B Facility, and between 2.00% and 3.00% with respect to any loan under the Revolving Credit Facility. The applicable margin for loans subject to alternate base rate will be between 0.25% and 1.25% with respect to any loan under the Term Loan A Facility, 1.25% with respect to any loan under the Term Loan B Facility, and between 1.00% and 2.00% with respect to any loan under the Revolving Credit Facility.
The Credit Agreement requires certain mandatory prepayments of outstanding loans under the Term Loan A Facility and the Term Loan B Facility, subject to certain exceptions, based on the annual excess cash flow of Holdings and its restricted subsidiaries (with step-downs to 0% based upon the total net leverage ratio, and with no prepayment required if annual excess cash flow is under a specified minimum threshold), the net cash proceeds of certain asset sales and casualty and condemnation events, subject to reinvestment rights and certain other exceptions, and the net cash proceeds of any issuance of debt not otherwise permitted under the Credit Agreement.
The Credit Agreement permits AAM, Inc. to incur incremental term loan borrowings and/or increase commitments under the Revolving Credit Facility, subject to certain limitations and the satisfaction of certain conditions, in an aggregate amount not to exceed (i) $600 million, plus (ii) certain voluntary prepayments, plus (iii) additional amounts subject to pro forma compliance with a first lien net leverage ratio for Holdings and its restricted subsidiaries.
The Credit Agreement contains customary affirmative and negative covenants, including, among others, financial covenants based on total net leverage and cash interest expense coverage ratios and limitations on the ability of Holdings, AAM, Inc. or their restricted subsidiaries to make certain investments, declare or pay dividends or distributions on capital stock, redeem or repurchase capital stock and certain debt obligations, incur liens, incur indebtedness, or merge, make certain acquisitions or certain sales of assets. The Credit Agreement includes customary events of default, the occurrence of which would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. Upon such default, the lenders may also seek customary remedies with respect to the collateral under the Collateral Agreement.
The New Senior Secured Credit Facilities provide back-up liquidity for our foreign credit facilities. We intend to use the availability of long-term financing under the New Senior Secured Credit Facilities to refinance any current maturities related to such debt agreements that are not otherwise refinanced on a long-term basis in their local markets, except where otherwise reclassified to current portion of long-term debt on our Condensed Consolidated Balance Sheet.
Foreign credit facilities
We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. At
March 31, 2017
,
$60.9 million
was outstanding under our foreign credit facilities and an additional
$91.2 million
was available.
The weighted-average interest rate of our long-term debt outstanding was
6.7%
at
March 31, 2017
and
6.6%
at
December 31, 2016
.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Accounting Standards Codification 820 - Fair Value Measurement defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:
|
|
•
|
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.
|
Financial instruments
The estimated fair value of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Input
|
|
|
(in millions)
|
|
|
Balance Sheet Classification
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
1,388.9
|
|
|
$
|
1,388.9
|
|
|
$
|
187.2
|
|
|
$
|
187.2
|
|
|
Level 1
|
Currency forward contracts - Prepaid expenses and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
1.0
|
|
|
1.0
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
Nondesignated currency forward contracts
|
|
3.0
|
|
|
3.0
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
Currency forward contracts - Other assets and deferred charges
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
Currency forward contracts - Accrued expenses and other
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
7.0
|
|
|
7.0
|
|
|
12.3
|
|
|
12.3
|
|
|
Level 2
|
Nondesignated currency forward contracts
|
|
—
|
|
|
—
|
|
|
1.4
|
|
|
1.4
|
|
|
Level 2
|
Currency forward contracts - Postretirement benefits and other long-term liabilities
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
2.9
|
|
|
2.9
|
|
|
11.4
|
|
|
11.4
|
|
|
Level 2
|
The carrying values of our cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short-term maturities of these instruments. The carrying values of our borrowings under the foreign credit facilities approximate their fair value due to the frequent resetting of the interest rates. We estimated the fair value of the amounts outstanding on our debt using available market information and other observable data, to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
|
|
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
|
Input
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Existing Revolving Credit Facility
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Level 2
|
7.75% Notes due 2019
|
|
200.0
|
|
|
220.3
|
|
|
200.0
|
|
|
221.0
|
|
|
Level 2
|
6.625% Notes due 2022
|
|
550.0
|
|
|
564.5
|
|
|
550.0
|
|
|
566.1
|
|
|
Level 2
|
6.50% Notes due 2027
|
|
500.0
|
|
|
500.2
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
6.25% Notes due 2025
|
|
700.0
|
|
|
695.2
|
|
|
—
|
|
|
—
|
|
|
Level 2
|
6.25% Notes due 2021
|
|
400.0
|
|
|
410.0
|
|
|
400.0
|
|
|
412.0
|
|
|
Level 2
|
5.125% Notes due 2019
|
|
200.0
|
|
|
202.0
|
|
|
200.0
|
|
|
201.7
|
|
|
Level 2
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Our business and financial results are affected by fluctuations in world financial markets, including interest rates and currency exchange rates. Our hedging policy has been developed to manage these risks to an acceptable level based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We do not hold financial instruments for trading or speculative purposes.
Currency forward contracts
From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates, primarily relating to the Mexican Peso, Euro, Brazilian Real, British Pound Sterling, Thai Baht, Swedish Krona, Chinese Yuan and Polish Zloty. As of
March 31, 2017
, we have currency forward contracts outstanding with a notional amount of
$176.3 million
that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the fourth quarter of 2019 and certain direct and indirect inventory and other working capital items into the third quarter of 2017.
The following table summarizes the reclassification of pre-tax derivative losses into net income from accumulated other comprehensive loss for those derivative instruments designated as cash flow hedges under Accounting Standards Codification 815 - Derivatives and Hedging (ASC 815):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Reclassified During
|
Loss Expected to
|
|
|
Location of Loss
|
|
Three Months Ended
|
|
be Reclassified
|
|
|
Reclassified into
|
|
March 31,
|
|
During the
|
|
|
Net Income
|
|
2017
|
|
2016
|
|
Next 12 Months
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
Currency forward contracts
|
|
Cost of Goods Sold
|
|
$
|
(2.8
|
)
|
|
$
|
(2.0
|
)
|
|
$
|
(6.0
|
)
|
See Note 12 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three months ended March 31, 2017 and March 31, 2016.
The following table summarizes the amount and location of gains (losses) recognized in the Condensed Consolidated Statements of Income for those derivative instruments not designated as hedging instruments under ASC 815:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (Loss) Recognized During
|
|
|
Location of Gain (Loss)
|
|
Three Months Ended
|
|
|
Recognized in
|
|
March 31,
|
|
|
Net Income
|
|
2017
|
|
2016
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Currency forward contracts
|
|
Cost of Goods Sold
|
|
$
|
3.5
|
|
|
$
|
(0.5
|
)
|
Currency forward contracts
|
|
Other Income, Net
|
|
—
|
|
|
(0.7
|
)
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
8.
|
EMPLOYEE BENEFIT PLANS
|
The components of net periodic benefit cost (credit) are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions)
|
|
|
|
|
|
Service cost
|
|
$
|
0.8
|
|
|
$
|
0.7
|
|
Interest cost
|
|
6.8
|
|
|
7.3
|
|
Expected asset return
|
|
(10.5
|
)
|
|
(10.7
|
)
|
Amortized loss
|
|
1.7
|
|
|
1.4
|
|
Net periodic benefit credit
|
|
$
|
(1.2
|
)
|
|
$
|
(1.3
|
)
|
|
|
|
|
|
Other Postretirement Benefits
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions)
|
|
|
|
|
|
|
|
Service cost
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
Interest cost
|
|
3.3
|
|
|
3.5
|
|
Amortized loss
|
|
0.2
|
|
|
0.1
|
|
Amortized prior service credit
|
|
(0.7
|
)
|
|
(0.7
|
)
|
Net periodic benefit cost
|
|
$
|
2.9
|
|
|
$
|
3.0
|
|
The noncurrent liabilities associated with our pension and other postretirement benefit plans are classified as postretirement benefits and other long-term liabilities on our Condensed Consolidated Balance Sheets. As of
March 31, 2017
and
December 31, 2016
, we have a noncurrent pension liability of
$111.0 million
and
$113.5 million
, respectively. As of
March 31, 2017
and
December 31, 2016
, we have a noncurrent other postretirement benefits liability of
$543.6 million
and
$542.6 million
, respectively.
Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions) related to our U.S. pension plans, as well as contributions we made in 2015 for our U.K. pension plan, we are not required to make any cash payments to our pension trusts in 2017. We expect our cash payments for other postretirement benefit obligations in 2017, net of GM cost sharing, to be approximately
$16 million
.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
We record a liability for estimated warranty obligations at the dates our products are sold. These estimates are established using sales volumes and internal and external warranty data where there is no payment history and historical information about the average cost of warranty claims for customers with prior claims. We estimate our costs based on the contractual arrangements with our customers, existing customer warranty terms and internal and external warranty data, which includes a determination of our warranty claims and actions taken to improve product quality and minimize warranty claims. We continuously evaluate these estimates and our customers' administration of their warranty programs. We closely monitor actual warranty claim data and adjust the liability, as necessary, on a quarterly basis.
The following table provides a reconciliation of changes in the product warranty liability:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions)
|
|
|
|
|
|
Beginning balance
|
|
$
|
42.9
|
|
|
$
|
36.6
|
|
Accruals
|
|
5.5
|
|
|
3.9
|
|
Payments
|
|
(0.9
|
)
|
|
(0.5
|
)
|
Adjustment to prior period accruals
|
|
(0.2
|
)
|
|
(3.1
|
)
|
Foreign currency translation
|
|
0.2
|
|
|
0.1
|
|
Ending balance
|
|
$
|
47.5
|
|
|
$
|
37.0
|
|
We are required to adjust our effective tax rate each quarter to estimate our annual effective tax rate. We must also record the tax impact of certain discrete, unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.
Income tax expense was
$7.5 million
in the
three
months ended
March 31, 2017
as compared to
$15.3 million
in the
three
months ended
March 31, 2016
. Our effective income tax rate was
8.7%
in the
first
quarter of
2017
as compared to
20.0%
in the
first
quarter of
2016
. Our income tax expense and effective tax rate for the three months ended
March 31, 2017
are lower than our income tax expense and effective tax rate for the three months ended
March 31, 2016
primarily as a result of favorable foreign tax rates, as well as a benefit in the U.S. for 2017 based on higher forecasted annual interest expense attributable to the first quarter of 2017 resulting from the issuance of our
$700.0 million
aggregate principal amount of
6.25%
senior notes and
$500.0 million
aggregate principal amount of
6.50%
senior notes on March 23, 2017. Our effective tax rate for the three months ended March 31, 2017 was lower than the U.S. federal statutory rate of 35% primarily as a result of the impact of these factors, which was partially offset by our inability to realize a tax benefit for current foreign losses.
Based on the status of audits outside the U.S., and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the timing or impact of changes, if any, to previously recorded uncertain tax positions. As of
March 31, 2017
and December 31, 2016, we have recorded a liability for unrecognized income tax benefits and related interest and penalties of
$38.5 million
and
$30.7 million
, respectively. In January 2016, we completed negotiations with the Mexican tax authorities to settle transfer pricing audits. Including these settlements, we made payments of
$26.1 million
in the first three months of 2016 to the Mexican tax authorities related to transfer pricing matters.
Although it is difficult to estimate with certainty the amount of our tax liabilities for the years that remain subject to audit, we do not expect the settlements will be materially different from what we have recorded in unrecognized tax benefits. We will continue to monitor the progress and conclusions of current and future audits and will adjust our estimated liability as necessary.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
11.
|
EARNINGS PER SHARE (EPS)
|
We present earnings per share using the two-class method. This method allocates undistributed earnings between common shares and non-vested share based payment awards that entitle the holder to non-forfeitable dividend rights. Our participating securities include non-vested restricted stock units.
The following table sets forth the computation of our basic and diluted EPS available to shareholders of common stock (excluding participating securities):
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
2016
|
|
|
(in millions, except per share data)
|
Numerator
|
|
|
|
|
Net income
|
|
$
|
78.4
|
|
|
$
|
61.1
|
|
Less: Net income attributable to participating securities
|
|
(1.9
|
)
|
|
(1.4
|
)
|
Net income attributable to common shareholders - Basic and Dilutive
|
|
$
|
76.5
|
|
|
$
|
59.7
|
|
|
|
|
|
|
Denominators
|
|
|
|
|
|
|
Basic common shares outstanding -
|
|
|
|
|
|
|
Weighted-average shares outstanding
|
|
78.5
|
|
|
77.9
|
|
Less: Participating securities
|
|
(1.9
|
)
|
|
(1.7
|
)
|
Weighted-average common shares outstanding
|
|
76.6
|
|
|
76.2
|
|
|
|
|
|
|
Effect of dilutive securities -
|
|
|
|
|
|
|
Dilutive stock-based compensation
|
|
0.4
|
|
|
0.3
|
|
|
|
|
|
|
|
|
Diluted shares outstanding -
|
|
|
|
|
|
|
Adjusted weighted-average shares after assumed conversions
|
|
77.0
|
|
|
76.5
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
|
1.00
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
Diluted EPS
|
|
$
|
0.99
|
|
|
$
|
0.78
|
|
Certain exercisable stock options were excluded from the computations of diluted EPS because the exercise price of these options was greater than the average period market prices. There were no stock options excluded from the calculation of diluted EPS at March 31, 2017. The number of stock options outstanding, which were not included in the calculation of diluted EPS, was
0.2 million
, with an exercise price of
$26.02
, at
March 31, 2016
.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
12.
|
RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI)
|
Reclassification adjustments and other activity impacting accumulated other comprehensive income (loss) during the three months ended
March 31, 2017
and
March 31, 2016
are as follows
(in millions)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
)
|
|
11.9
|
|
|
12.7
|
|
|
22.9
|
|
|
|
|
|
|
|
|
|
Income tax effect of other comprehensive income (loss) before reclassifications
|
0.6
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
1.2
|
|
(a)
|
—
|
|
|
2.8
|
|
(b)
|
4.0
|
|
|
|
|
|
|
|
|
|
Income tax benefit reclassified into net income
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
|
|
Net current period other comprehensive income (loss)
|
(0.3
|
)
|
|
11.9
|
|
|
15.5
|
|
|
27.1
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2017
|
$
|
(243.8
|
)
|
|
$
|
(110.5
|
)
|
|
$
|
(8.2
|
)
|
|
$
|
(362.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined Benefit Plans
|
|
Foreign Currency Translation Adjustments
|
|
Unrecognized Loss on Cash Flow Hedges
|
|
Total
|
Balance at December 31, 2015
|
$
|
(223.9
|
)
|
|
$
|
(119.2
|
)
|
|
$
|
(13.4
|
)
|
|
$
|
(356.5
|
)
|
|
|
|
|
|
|
|
|
Other comprehensive income before reclassifications
|
5.7
|
|
|
15.0
|
|
|
1.4
|
|
|
22.1
|
|
|
|
|
|
|
|
|
|
Income tax effect of other comprehensive income before reclassifications
|
(2.0
|
)
|
|
—
|
|
|
—
|
|
|
(2.0
|
)
|
|
|
|
|
|
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
0.8
|
|
(a)
|
—
|
|
|
2.0
|
|
(b)
|
2.8
|
|
|
|
|
|
|
|
|
|
Income tax benefit reclassified into net income
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
|
|
|
|
|
|
|
Net current period other comprehensive income
|
4.2
|
|
|
15.0
|
|
|
3.4
|
|
|
22.6
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2016
|
$
|
(219.7
|
)
|
|
$
|
(104.2
|
)
|
|
$
|
(10.0
|
)
|
|
$
|
(333.9
|
)
|
|
|
|
(a)
|
The amount reclassified from AOCI included $1.4 million in cost of goods sold (COGS) and $(0.2) million in selling, general & administrative expenses (SG&A) for the three months ended March 31, 2017 and $1.1 million in COGS and $(0.3) million in SG&A for the three months ended March 31, 2016.
|
|
|
(b)
|
The amounts reclassified from AOCI are included in COGS.
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
13.
|
SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS
|
Holdings, as of March 31, 2017, had no significant assets other than its
100%
ownership in AAM, Inc. and no direct subsidiaries other than AAM, Inc and Alpha SPV I, Inc (Merger Sub), which merged with and into MPG upon closing of the Acquisition. The
7.75%
Notes,
6.625%
Notes,
6.50%
Notes,
6.25%
Notes (due 2025),
6.25%
Notes (due 2021) and
5.125%
Notes are senior unsecured obligations of AAM, Inc.; all of which are fully and unconditionally guaranteed, on a joint and several basis, by Holdings, Merger Sub and substantially all domestic subsidiaries of AAM, Inc, which are
100%
indirectly owned by Holdings.
These Condensed Consolidating Financial Statements are prepared under the equity method of accounting whereby the investments in subsidiaries are recorded at cost and adjusted for the parent’s share of the subsidiaries’ cumulative results of operations, capital contributions and distributions, and other equity changes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Income
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
—
|
|
|
$
|
296.6
|
|
|
$
|
50.1
|
|
|
$
|
703.2
|
|
|
$
|
—
|
|
|
$
|
1,049.9
|
|
Intercompany
|
|
—
|
|
|
0.3
|
|
|
66.7
|
|
|
4.9
|
|
|
(71.9
|
)
|
|
—
|
|
Total net sales
|
|
—
|
|
|
296.9
|
|
|
116.8
|
|
|
708.1
|
|
|
(71.9
|
)
|
|
1,049.9
|
|
Cost of goods sold
|
|
—
|
|
|
277.2
|
|
|
94.9
|
|
|
539.0
|
|
|
(71.9
|
)
|
|
839.2
|
|
Gross profit
|
|
—
|
|
|
19.7
|
|
|
21.9
|
|
|
169.1
|
|
|
—
|
|
|
210.7
|
|
Selling, general and administrative expenses
|
|
—
|
|
|
73.8
|
|
|
—
|
|
|
9.0
|
|
|
—
|
|
|
82.8
|
|
Restructuring and acquisition-related costs
|
|
—
|
|
|
15.3
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
16.0
|
|
Operating income (loss)
|
|
—
|
|
|
(69.4
|
)
|
|
21.9
|
|
|
159.4
|
|
|
—
|
|
|
111.9
|
|
Non-operating income (expense), net
|
|
—
|
|
|
(26.2
|
)
|
|
2.4
|
|
|
(2.2
|
)
|
|
—
|
|
|
(26.0
|
)
|
Income (loss) before income taxes
|
|
—
|
|
|
(95.6
|
)
|
|
24.3
|
|
|
157.2
|
|
|
—
|
|
|
85.9
|
|
Income tax expense (benefit)
|
|
—
|
|
|
(2.8
|
)
|
|
0.1
|
|
|
10.2
|
|
|
—
|
|
|
7.5
|
|
Earnings (loss) from equity in subsidiaries
|
|
78.4
|
|
|
91.6
|
|
|
(0.6
|
)
|
|
—
|
|
|
(169.4
|
)
|
|
—
|
|
Net income (loss) before royalties
|
|
78.4
|
|
|
(1.2
|
)
|
|
23.6
|
|
|
147.0
|
|
|
(169.4
|
)
|
|
78.4
|
|
Royalties
|
|
—
|
|
|
79.6
|
|
|
—
|
|
|
(79.6
|
)
|
|
—
|
|
|
—
|
|
Net income after royalties
|
|
78.4
|
|
|
78.4
|
|
|
23.6
|
|
|
67.4
|
|
|
(169.4
|
)
|
|
78.4
|
|
Other comprehensive income, net of tax
|
|
27.1
|
|
|
27.1
|
|
|
10.5
|
|
|
26.4
|
|
|
(64.0
|
)
|
|
27.1
|
|
Comprehensive income
|
|
$
|
105.5
|
|
|
$
|
105.5
|
|
|
$
|
34.1
|
|
|
$
|
93.8
|
|
|
$
|
(233.4
|
)
|
|
$
|
105.5
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External
|
|
$
|
—
|
|
|
$
|
283.2
|
|
|
$
|
54.8
|
|
|
$
|
631.2
|
|
|
$
|
—
|
|
|
$
|
969.2
|
|
Intercompany
|
|
—
|
|
|
1.6
|
|
|
59.7
|
|
|
3.7
|
|
|
(65.0
|
)
|
|
—
|
|
Total net sales
|
|
—
|
|
|
284.8
|
|
|
114.5
|
|
|
634.9
|
|
|
(65.0
|
)
|
|
969.2
|
|
Cost of goods sold
|
|
—
|
|
|
276.3
|
|
|
92.5
|
|
|
491.4
|
|
|
(65.0
|
)
|
|
795.2
|
|
Gross profit
|
|
—
|
|
|
8.5
|
|
|
22.0
|
|
|
143.5
|
|
|
—
|
|
|
174.0
|
|
Selling, general and administrative expenses
|
|
—
|
|
|
67.5
|
|
|
—
|
|
|
8.1
|
|
|
—
|
|
|
75.6
|
|
Operating income (loss)
|
|
—
|
|
|
(59.0
|
)
|
|
22.0
|
|
|
135.4
|
|
|
—
|
|
|
98.4
|
|
Non-operating income (expense), net
|
|
—
|
|
|
(24.3
|
)
|
|
3.0
|
|
|
(0.7
|
)
|
|
—
|
|
|
(22.0
|
)
|
Income (loss) before income taxes
|
|
—
|
|
|
(83.3
|
)
|
|
25.0
|
|
|
134.7
|
|
|
—
|
|
|
76.4
|
|
Income tax expense
|
|
—
|
|
|
7.8
|
|
|
0.1
|
|
|
7.4
|
|
|
—
|
|
|
15.3
|
|
Earnings (loss) from equity in subsidiaries
|
|
61.1
|
|
|
92.9
|
|
|
(9.6
|
)
|
|
—
|
|
|
(144.4
|
)
|
|
—
|
|
Net income before royalties
|
|
61.1
|
|
|
1.8
|
|
|
15.3
|
|
|
127.3
|
|
|
(144.4
|
)
|
|
61.1
|
|
Royalties
|
|
—
|
|
|
59.3
|
|
|
—
|
|
|
(59.3
|
)
|
|
—
|
|
|
—
|
|
Net income after royalties
|
|
61.1
|
|
|
61.1
|
|
|
15.3
|
|
|
68.0
|
|
|
(144.4
|
)
|
|
61.1
|
|
Other comprehensive income, net of tax
|
|
22.6
|
|
|
22.6
|
|
|
15.7
|
|
|
19.8
|
|
|
(58.1
|
)
|
|
22.6
|
|
Comprehensive income
|
|
$
|
83.7
|
|
|
$
|
83.7
|
|
|
$
|
31.0
|
|
|
$
|
87.8
|
|
|
$
|
(202.5
|
)
|
|
$
|
83.7
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Balance Sheets
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
1,413.3
|
|
|
$
|
—
|
|
|
$
|
130.1
|
|
|
$
|
—
|
|
|
$
|
1,543.4
|
|
Accounts receivable, net
|
|
—
|
|
|
175.3
|
|
|
23.9
|
|
|
503.3
|
|
|
—
|
|
|
702.5
|
|
Intercompany receivables
|
|
—
|
|
|
312.0
|
|
|
350.5
|
|
|
9.0
|
|
|
(671.5
|
)
|
|
—
|
|
Inventories, net
|
|
—
|
|
|
44.0
|
|
|
31.6
|
|
|
146.0
|
|
|
—
|
|
|
221.6
|
|
Prepaid expenses and other
|
|
—
|
|
|
30.7
|
|
|
0.3
|
|
|
75.0
|
|
|
—
|
|
|
106.0
|
|
Total current assets
|
|
—
|
|
|
1,975.3
|
|
|
406.3
|
|
|
863.4
|
|
|
(671.5
|
)
|
|
2,573.5
|
|
Property, plant and equipment, net
|
|
—
|
|
|
209.9
|
|
|
104.8
|
|
|
828.3
|
|
|
—
|
|
|
1,143.0
|
|
Goodwill
|
|
—
|
|
|
—
|
|
|
147.8
|
|
|
86.0
|
|
|
—
|
|
|
233.8
|
|
Intercompany notes and accounts receivable
|
|
—
|
|
|
341.6
|
|
|
243.9
|
|
|
—
|
|
|
(585.5
|
)
|
|
—
|
|
Other assets and deferred charges
|
|
—
|
|
|
666.7
|
|
|
38.4
|
|
|
206.6
|
|
|
—
|
|
|
911.7
|
|
Investment in subsidiaries
|
|
962.9
|
|
|
1,682.1
|
|
|
—
|
|
|
—
|
|
|
(2,645.0
|
)
|
|
—
|
|
Total assets
|
|
$
|
962.9
|
|
|
$
|
4,875.6
|
|
|
$
|
941.2
|
|
|
$
|
1,984.3
|
|
|
$
|
(3,902.0
|
)
|
|
$
|
4,862.0
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
3.4
|
|
Accounts payable
|
|
—
|
|
|
162.6
|
|
|
43.6
|
|
|
321.7
|
|
|
—
|
|
|
527.9
|
|
Intercompany payables
|
|
—
|
|
|
346.2
|
|
|
159.8
|
|
|
165.5
|
|
|
(671.5
|
)
|
|
—
|
|
Accrued expenses and other
|
|
—
|
|
|
113.6
|
|
|
4.5
|
|
|
123.3
|
|
|
—
|
|
|
241.4
|
|
Total current liabilities
|
|
—
|
|
|
622.4
|
|
|
207.9
|
|
|
613.9
|
|
|
(671.5
|
)
|
|
772.7
|
|
Intercompany notes and accounts payable
|
|
327.1
|
|
|
17.3
|
|
|
2.0
|
|
|
239.1
|
|
|
(585.5
|
)
|
|
—
|
|
Long-term debt, net
|
|
—
|
|
|
2,520.1
|
|
|
4.0
|
|
|
57.4
|
|
|
—
|
|
|
2,581.5
|
|
Investment in subsidiaries obligation
|
|
—
|
|
|
—
|
|
|
109.9
|
|
|
—
|
|
|
(109.9
|
)
|
|
—
|
|
Other long-term liabilities
|
|
—
|
|
|
752.9
|
|
|
0.7
|
|
|
118.4
|
|
|
—
|
|
|
872.0
|
|
Total liabilities
|
|
327.1
|
|
|
3,912.7
|
|
|
324.5
|
|
|
1,028.8
|
|
|
(1,366.9
|
)
|
|
4,226.2
|
|
Total stockholders’ equity
|
|
635.8
|
|
|
962.9
|
|
|
616.7
|
|
|
955.5
|
|
|
(2,535.1
|
)
|
|
635.8
|
|
Total liabilities and stockholders’ equity
|
|
$
|
962.9
|
|
|
$
|
4,875.6
|
|
|
$
|
941.2
|
|
|
$
|
1,984.3
|
|
|
$
|
(3,902.0
|
)
|
|
$
|
4,862.0
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
84.3
|
|
|
$
|
1.6
|
|
|
$
|
395.3
|
|
|
$
|
—
|
|
|
$
|
481.2
|
|
Accounts receivable, net
|
|
—
|
|
|
126.7
|
|
|
21.9
|
|
|
411.4
|
|
|
—
|
|
|
560.0
|
|
Intercompany receivables
|
|
—
|
|
|
442.6
|
|
|
326.0
|
|
|
9.1
|
|
|
(777.7
|
)
|
|
—
|
|
Inventories, net
|
|
—
|
|
|
46.0
|
|
|
29.1
|
|
|
144.4
|
|
|
—
|
|
|
219.5
|
|
Prepaid expenses and other
|
|
—
|
|
|
29.4
|
|
|
0.5
|
|
|
45.9
|
|
|
—
|
|
|
75.8
|
|
Total current assets
|
|
—
|
|
|
729.0
|
|
|
379.1
|
|
|
1,006.1
|
|
|
(777.7
|
)
|
|
1,336.5
|
|
Property, plant and equipment, net
|
|
—
|
|
|
213.7
|
|
|
102.9
|
|
|
777.1
|
|
|
—
|
|
|
1,093.7
|
|
Goodwill
|
|
—
|
|
|
—
|
|
|
147.8
|
|
|
6.2
|
|
|
—
|
|
|
154.0
|
|
Intercompany notes and accounts receivable
|
|
—
|
|
|
343.9
|
|
|
242.2
|
|
|
—
|
|
|
(586.1
|
)
|
|
—
|
|
Other assets and deferred charges
|
|
—
|
|
|
662.6
|
|
|
37.1
|
|
|
164.2
|
|
|
—
|
|
|
863.9
|
|
Investment in subsidiaries
|
|
851.8
|
|
|
1,559.0
|
|
|
—
|
|
|
—
|
|
|
(2,410.8
|
)
|
|
—
|
|
Total assets
|
|
$
|
851.8
|
|
|
$
|
3,508.2
|
|
|
$
|
909.1
|
|
|
$
|
1,953.6
|
|
|
$
|
(3,774.6
|
)
|
|
$
|
3,448.1
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
Accounts payable
|
|
—
|
|
|
80.6
|
|
|
35.8
|
|
|
265.9
|
|
|
—
|
|
|
382.3
|
|
Intercompany payables
|
|
—
|
|
|
324.8
|
|
|
153.4
|
|
|
299.5
|
|
|
(777.7
|
)
|
|
—
|
|
Accrued expenses and other
|
|
—
|
|
|
142.2
|
|
|
4.3
|
|
|
119.4
|
|
|
—
|
|
|
265.9
|
|
Total current liabilities
|
|
—
|
|
|
547.6
|
|
|
193.5
|
|
|
688.1
|
|
|
(777.7
|
)
|
|
651.5
|
|
Intercompany notes and accounts payable
|
|
321.8
|
|
|
14.6
|
|
|
7.5
|
|
|
242.2
|
|
|
(586.1
|
)
|
|
—
|
|
Long-term debt, net
|
|
—
|
|
|
1,339.7
|
|
|
4.1
|
|
|
57.1
|
|
|
—
|
|
|
1,400.9
|
|
Investment in subsidiaries obligation
|
|
—
|
|
|
—
|
|
|
124.7
|
|
|
—
|
|
|
(124.7
|
)
|
|
—
|
|
Other long-term liabilities
|
|
—
|
|
|
754.5
|
|
|
0.6
|
|
|
110.6
|
|
|
—
|
|
|
865.7
|
|
Total liabilities
|
|
321.8
|
|
|
2,656.4
|
|
|
330.4
|
|
|
1,098.0
|
|
|
(1,488.5
|
)
|
|
2,918.1
|
|
Total stockholders’ equity
|
|
530.0
|
|
|
851.8
|
|
|
578.7
|
|
|
855.6
|
|
|
(2,286.1
|
)
|
|
530.0
|
|
Total liabilities and stockholders’ equity
|
|
$
|
851.8
|
|
|
$
|
3,508.2
|
|
|
$
|
909.1
|
|
|
$
|
1,953.6
|
|
|
$
|
(3,774.6
|
)
|
|
$
|
3,448.1
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Cash Flows
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
—
|
|
|
$
|
161.8
|
|
|
$
|
5.3
|
|
|
$
|
(104.8
|
)
|
|
$
|
—
|
|
|
$
|
62.3
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
—
|
|
|
(11.6
|
)
|
|
(5.2
|
)
|
|
(18.1
|
)
|
|
—
|
|
|
(34.9
|
)
|
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
0.8
|
|
Purchase buyouts of leased equipment
|
|
—
|
|
|
(2.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.3
|
)
|
Proceeds from sale of business, net
|
|
—
|
|
|
7.5
|
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
5.9
|
|
Acquisition of business, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(144.1
|
)
|
|
—
|
|
|
(144.1
|
)
|
Net cash used in investing activities
|
|
—
|
|
|
(6.2
|
)
|
|
(6.8
|
)
|
|
(161.6
|
)
|
|
—
|
|
|
(174.6
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt activity
|
|
—
|
|
|
1,199.8
|
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
1,199.2
|
|
Debt issuance costs
|
|
—
|
|
|
(21.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21.2
|
)
|
Purchase of treasury stock
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.2
|
)
|
Intercompany activity
|
|
5.2
|
|
|
(5.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
|
—
|
|
|
1,173.4
|
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
1,172.8
|
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
1.7
|
|
Net increase (decrease) in cash and cash equivalents
|
|
—
|
|
|
1,329.0
|
|
|
(1.6
|
)
|
|
(265.2
|
)
|
|
—
|
|
|
1,062.2
|
|
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
84.3
|
|
|
1.6
|
|
|
395.3
|
|
|
—
|
|
|
481.2
|
|
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
1,413.3
|
|
|
$
|
—
|
|
|
$
|
130.1
|
|
|
$
|
—
|
|
|
$
|
1,543.4
|
|
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Holdings
|
|
AAM Inc.
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Elims
|
|
Consolidated
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities
|
|
$
|
—
|
|
|
$
|
66.8
|
|
|
$
|
5.1
|
|
|
$
|
(45.7
|
)
|
|
$
|
—
|
|
|
$
|
26.2
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
—
|
|
|
(7.9
|
)
|
|
(5.2
|
)
|
|
(37.5
|
)
|
|
—
|
|
|
(50.6
|
)
|
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.4
|
|
|
—
|
|
|
0.6
|
|
Net cash used in investing activities
|
|
—
|
|
|
(7.9
|
)
|
|
(5.0
|
)
|
|
(37.1
|
)
|
|
—
|
|
|
(50.0
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt activity
|
|
—
|
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
4.9
|
|
|
—
|
|
|
4.6
|
|
Purchase of treasury stock
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.5
|
)
|
Intercompany activity
|
|
3.5
|
|
|
(3.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
|
—
|
|
|
(3.7
|
)
|
|
(0.1
|
)
|
|
4.9
|
|
|
—
|
|
|
1.1
|
|
Effect of exchange rate changes on cash
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
—
|
|
|
2.2
|
|
Net increase (decrease) in cash and cash equivalents
|
|
—
|
|
|
55.2
|
|
|
—
|
|
|
(75.7
|
)
|
|
—
|
|
|
(20.5
|
)
|
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
52.0
|
|
|
—
|
|
|
230.5
|
|
|
—
|
|
|
282.5
|
|
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
107.2
|
|
|
$
|
—
|
|
|
$
|
154.8
|
|
|
$
|
—
|
|
|
$
|
262.0
|
|