
13.	SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Holdings has no significant assets other than its 100% ownership in AAM, Inc. and no direct subsidiaries other than AAM, Inc. The 7.75% Notes, 6.625% Notes, 6.25% Notes 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 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

2015	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
	(in millions)
Net sales
External	$	—		$	1,149.0		$	210.3		$	2,543.8		$	—		$	3,903.1
Intercompany	—			9.4			258.3			19.0			(286.7		)	—
Total net sales	—			1,158.4			468.6			2,562.8			(286.7		)	3,903.1
Cost of goods sold	—			1,114.5			385.2			2,054.7			(286.7		)	3,267.7
Gross profit	—			43.9			83.4			508.1			—			635.4
Selling, general and administrative expenses	—			210.6			0.1			66.6			—			277.3
Operating income (loss)	—			(166.7		)	83.3			441.5			—			358.1
Non-operating income (expense), net	—			(99.3		)	10.1			3.8			—			(85.4		)
Income (loss) before income taxes	—			(266.0		)	93.4			445.3			—			272.7
Income tax expense	—			21.6			5.5			10.0			—			37.1
Earnings (loss) from equity in subsidiaries	235.6			262.3			(20.8		)	—			(477.1		)	—
Net income (loss) before royalties	235.6			(25.3		)	67.1			435.3			(477.1		)	235.6
Royalties	—			260.9			—			(260.9		)	—			—
Net income after royalties	235.6			235.6			67.1			174.4			(477.1		)	235.6
Other comprehensive loss, net of tax	(59.6		)	(59.6		)	(63.6		)	(68.4		)	191.6			(59.6		)
Comprehensive income	$	176.0		$	176.0		$	3.5		$	106.0		$	(285.5	)	$	176.0



2014	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net sales
External	$	—		$	1,099.5		$	225.1		$	2,371.4		$	—		$	3,696.0
Intercompany	—			13.1			246.9			21.6			(281.6		)	—
Total net sales	—			1,112.6			472.0			2,393.0			(281.6		)	3,696.0
Cost of goods sold	—			1,112.4			396.1			1,946.3			(281.6		)	3,173.2
Gross profit	—			0.2			75.9			446.7			—			522.8
Selling, general and administrative expenses	—			194.0			0.2			61.0			—			255.2
Operating income (loss)	—			(193.8		)	75.7			385.7			—			267.6
Non-operating income (expense), net	—			(103.0		)	9.0			3.1			—			(90.9		)
Income (loss) before income taxes	—			(296.8		)	84.7			388.8			—			176.7
Income tax expense (benefit)	—			(11.8		)	0.9			44.6			—			33.7
Earnings (loss) from equity in subsidiaries	143.0			204.0			(23.3		)	—			(323.7		)	—
Net income (loss) before royalties	143.0			(81.0		)	60.5			344.2			(323.7		)	143.0
Royalties	—			224.0			—			(224.0		)	—			—
Net income after royalties	143.0			143.0			60.5			120.2			(323.7		)	143.0
Other comprehensive loss, net of tax	(80.7		)	(80.7		)	(23.5		)	(34.8		)	139.0			(80.7		)
Comprehensive income	$	62.3		$	62.3		$	37.0		$	85.4		$	(184.7	)	$	62.3

2013	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net sales
External	$	—		$	773.6		$	226.0		$	2,207.7		$	—		$	3,207.3
Intercompany	—			15.3			226.1			14.0			(255.4		)	—
Total net sales	—			788.9			452.1			2,221.7			(255.4		)	3,207.3
Cost of goods sold	—			769.4			389.0			1,825.6			(255.4		)	2,728.6
Gross profit	—			19.5			63.1			396.1			—			478.7
Selling, general and administrative expenses	—			182.4			0.1			55.9			—			238.4
Operating income (loss)	—			(162.9		)	63.0			340.2			—			240.3
Non-operating income (expense), net	—			(155.1		)	10.7			(9.6		)	—			(154.0		)
Income (loss) before income taxes	—			(318.0		)	73.7			330.6			—			86.3
Income tax expense (benefit)	—			(24.9		)	0.9			15.8			—			(8.2		)
Earnings (loss) from equity in subsidiaries	94.5			167.0			(21.7		)	—			(239.8		)	—
Net income (loss) before royalties	94.5			(126.1		)	51.1			314.8			(239.8		)	94.5
Royalties	—			220.6			—			(220.6		)	—			—
Net income after royalties	94.5			94.5			51.1			94.2			(239.8		)	94.5
Other comprehensive income (loss), net of tax	48.4			48.4			(7.2		)	(10.8		)	(30.4		)	48.4
Comprehensive income	$	142.9		$	142.9		$	43.9		$	83.4		$	(270.2	)	$	142.9



Condensed Consolidating Balance Sheets
2015	Holdings		AAM Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elims			Consolidated
Assets	(in millions)
Current assets
Cash and cash equivalents	$	—	$	52.0		$	—	$	230.5	$	—		$	282.5
Accounts receivable, net	—		127.2			19.7		392.2		—			539.1
Intercompany receivables	—		311.8			249.7		9.4		(570.9		)	—
Inventories, net	—		59.8			31.1		139.6		—			230.5
Other current assets	—		30.4			0.5		41.2		—			72.1
Total current assets	—		581.2			301.0		812.9		(570.9		)	1,124.2
Property, plant and equipment, net	—		214.1			91.9		740.2		—			1,046.2
Goodwill	—		—			147.8		6.6		—			154.4
Intercompany notes and accounts receivable	—		393.5			252.2		—		(645.7		)	—
Other assets and deferred charges	—		683.6			41.4		152.9		—			877.9
Investment in subsidiaries	622.3		1,315.9			—		—		(1,938.2		)	—
Total assets	$	622.3	$	3,188.3		$	834.3	$	1,712.6	$	(3,154.8	)	$	3,202.7
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt	$	—				$	—	$	3.3	$	—		$	3.3
Accounts payable	—		103.0			35.8		273.9		—			412.7
Intercompany payables	—		248.7			154.9		167.3		(570.9		)	—
Other current liabilities	—		134.2			4.1		144.9		—			283.2
Total current liabilities	—		485.9			194.8		589.4		(570.9		)	699.2
Intercompany notes and accounts payable	320.8		10.3			—		314.6		(645.7		)	—
Long-term debt, net	—		1,336.5			4.5		34.7		—			1,375.7
Investment in subsidiaries obligation	—		—			111.7				(111.7		)	—
Other long-term liabilities	—		733.3			0.5		92.5		—			826.3
Total liabilities	320.8		2,566.0			311.5		1,031.2		(1,328.3		)	2,901.2
Total stockholders' equity	301.5		622.3			522.8		681.4		(1,826.5		)	301.5
Total liabilities and stockholders' equity	$	622.3	$	3,188.3		$	834.3	$	1,712.6	$	(3,154.8	)	$	3,202.7

2014	Holdings		AAM Inc.			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elims			Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	69.7		$	—	$	179.5	$	—		$	249.2
Accounts receivable, net	—		137.5			23.9		371.3		—			532.7
Intercompany receivables	—		231.0			174.1		10.0		(415.1		)	—
Inventories, net	—		64.9			32.3		151.6		—			248.8
Other current assets	—		53.6			2.6		52.6		—			108.8
Total current assets	—		556.7			232.9		765.0		(415.1		)	1,139.5
Property, plant and equipment, net	—		230.0			87.9		743.2		—			1,061.1
Goodwill	—		—			147.9		7.1		—			155.0
Intercompany notes and accounts receivable	—		509.4			219.1		—		(728.5		)	—
Other assets and deferred charges	—		717.8		(a)	45.7		121.3		—			884.8		(a)
Investment in subsidiaries	433.8		1,134.6			—		—		(1,568.4		)	—
Total assets	$	433.8	$	3,148.5	(a)	$	733.5	$	1,636.6	$	(2,712.0	)	$	3,240.4	(a)
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt	$	—	$	9.4		$	—	$	3.6	$	—		$	13.0
Accounts payable	—		127.3			38.9		278.1		—			444.3
Intercompany payables	—		177.0			105.3		132.8		(415.1		)	—
Other current liabilities	—		121.0			4.4		104.5		—			229.9
Total current liabilities	—		434.7			148.6		519.0		(415.1		)	687.2
Intercompany notes and accounts payable	320.4		6.9			—		401.2		(728.5		)	—
Long-term debt, net	—		1,464.3		(a)	4.9		35.4		—			1,504.6		(a)
Investment in subsidiaries obligation	—		—			53.8		—		(53.8		)	—
Other long-term liabilities	—		808.8			0.6		125.8		—			935.2
Total liabilities	320.4		2,714.7		(a)	207.9		1,081.4		(1,197.4		)	3,127.0		(a)
Total stockholders' equity	113.4		433.8			525.6		555.2		(1,514.6		)	113.4
Total liabilities and stockholders' equity	$	433.8	$	3,148.5	(a)	$	733.5	$	1,636.6	$	(2,712.0	)	$	3,240.4	(a)

(a) These amounts have been adjusted to reflect the impact of retrospectively adopting ASU 2015-03 as described in Item 8. Financial Statements and Supplementary Data - Note 1 - Organization and Summary of Significant Accounting Policies.



Condensed Consolidating Statements of Cash Flows

2015	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
	(in millions)
Net cash provided by operating activities	$	—		$	163.7		$	68.1		$	145.8		$	—		$	377.6
Investing activities
Purchases of property, plant and equipment	—			(36.4		)	(12.8		)	(144.3		)	—			(193.5		)
Proceeds from sale of property, plant and equipment	—			0.1			0.1			0.1			—			0.3
Proceeds from government grants	—			—			—			5.1			—			5.1
Intercompany activity	—			—			(55.0		)	—			55.0			—
Net cash used in investing activities	—			(36.3		)	(67.7		)	(139.1		)	55.0			(188.1		)
Financing activities
Net debt activity	—			(142.8		)	(0.4		)	3.0			—			(140.2		)
Employee stock option exercises	—			0.8			—			—			—			0.8
Purchase of treasury stock	(3.1		)	—			—			—			—			(3.1		)
Purchase of noncontrolling interest	—			—			—			(1.1		)	—			(1.1		)
Intercompany activity	3.1			(3.1		)	—			55.0			(55.0		)	—
Net cash provided by (used in) financing activities	—			(145.1		)	(0.4		)	56.9			(55.0		)	(143.6		)
Effect of exchange rate changes on cash	—			—			—			(12.6		)	—			(12.6		)
Net increase (decrease) in cash and cash equivalents	—			(17.7		)	—			51.0			—			33.3
Cash and cash equivalents at beginning of period	—			69.7			—			179.5			—			249.2
Cash and cash equivalents at end of period	$	—		$	52.0		$	—		$	230.5		$	—		$	282.5

2014	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net cash provided by operating activities	$	—		$	83.4		$	41.9		$	193.1		$	—		$	318.4
Investing activities
Purchases of property, plant and equipment	—			(51.3		)	(18.6		)	(136.6		)	—			(206.5		)
Proceeds from sale of property, plant and equipment	—			7.9			0.4			0.8			—			9.1
Proceeds from government grants	—			—			—			2.1			—			2.1
Intercompany activity	—			—			(23.3		)	—			23.3			—
Net cash used in investing activities	—			(43.4		)	(41.5		)	(133.7		)	23.3			(195.3		)
Financing activities
Net debt activity	—			(7.8		)	(0.4		)	(13.8		)	—			(22.0		)
Debt issuance costs	—			(0.3		)	—			—			—			(0.3		)
Employee stock option exercises	—			1.2			—			—			—			1.2
Purchase of treasury stock	(0.3		)	—			—			—			—			(0.3		)
Intercompany activity	0.3			(0.3		)	—			23.3			(23.3		)	—
Net cash provided by (used in) financing activities	—			(7.2		)	(0.4		)	9.5			(23.3		)	(21.4		)
Effect of exchange rate changes on cash	—			—			—			(6.5		)	—			(6.5		)
Net increase in cash and cash equivalents	—			32.8			—			62.4			—			95.2
Cash and cash equivalents at beginning of period	—			36.9			—			117.1			—			154.0
Cash and cash equivalents at end of period	$	—		$	69.7		$	—		$	179.5		$	—		$	249.2



2013	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated

Net cash provided by (used in) operating activities	$	—		$	(35.9	)	$	64.9		$	194.0		$	—		$	223.0
Investing activities
Purchases of property, plant and equipment	—			(61.2		)	(12.5		)	(178.2		)	—			(251.9		)
Proceeds from sale of property, plant and equipment	—			5.1			0.5			3.5			—			9.1
Proceeds from sale-leaseback of equipment	—			24.1			—			—			—			24.1
Intercompany activity	—			—			(52.6		)	—			52.6			—
Net cash used in investing activities	—			(32.0		)	(64.6		)	(174.7		)	52.6			(218.7		)
Financing activities
Net debt activity	—			110.1			(0.3		)	(5.0		)	—			104.8
Debt issuance costs	—			(16.6		)	—			(0.1		)	—			(16.7		)
Employee stock option exercises	—			1.1			—			—			—			1.1
Purchase of treasury stock	(0.4		)	—			—			—			—			(0.4		)
Intercompany activity	0.4			(0.4		)	—			52.6			(52.6		)	—
Net cash provided by (used in) financing activities	—			94.2			(0.3		)	47.5			(52.6		)	88.8
Effect of exchange rate changes on cash	—			—			—			(1.5		)	—			(1.5		)
Net increase in cash and cash equivalents	—			26.3			—			65.3			—			91.6
Cash and cash equivalents at beginning of period	—			10.6			—			51.8			—			62.4
Cash and cash equivalents at end of period	$	—		$	36.9		$	—		$	117.1		$	—		$	154.0