0001062231-19-000066.txt : 20191101 0001062231-19-000066.hdr.sgml : 20191101 20191101140841 ACCESSION NUMBER: 0001062231-19-000066 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 98 CONFORMED PERIOD OF REPORT: 20190930 FILED AS OF DATE: 20191101 DATE AS OF CHANGE: 20191101 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN AXLE & MANUFACTURING HOLDINGS INC CENTRAL INDEX KEY: 0001062231 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 383161171 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14303 FILM NUMBER: 191186420 BUSINESS ADDRESS: STREET 1: ONE DAUCH DRIVE CITY: DETROIT STATE: MI ZIP: 48211-1198 BUSINESS PHONE: 3137583600 MAIL ADDRESS: STREET 1: ONE DAUCH DRIVE CITY: DETROIT STATE: MI ZIP: 48211-1198 10-Q 1 axl-q32019x10q.htm SEPTEMBER 30, 2019 FORM 10-Q Document
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the quarterly period ended
September 30, 2019
 
 
or
 
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
For the transition period from  _____________ to _____________
 
 
Commission File Number:  1-14303
_______________________________________________________________________________

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(Exact Name of Registrant as Specified in Its Charter)
 
Delaware
 
38-3161171
 
(State or Other Jurisdiction of Incorporation or Organization)
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
 
 
 
 
 
One Dauch Drive,
Detroit
,
Michigan
 
 
48211-1198
 
(Address of Principal Executive Offices)
 
(Zip Code)

(313) 758-2000
(Registrant's Telephone Number, Including Area Code)
_______________________________________________________________________________
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes No
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer            Accelerated filer           Non-accelerated filer            Smaller reporting company            Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, par value $0.01 per share
AXL
New York Stock Exchange

As of October 29, 2019, the latest practicable date, the number of shares of the registrant's Common Stock, par value $0.01 per share, outstanding was 112,475,824 shares.
 
Internet Website Access to Reports

The website for American Axle & Manufacturing Holdings, Inc. is www.aam.com.  Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission (SEC).  The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.




AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2019
TABLE OF CONTENTS 
 
 
 
 
Page Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




FORWARD-LOOKING STATEMENTS

In this Quarterly Report on Form 10-Q (Quarterly Report), 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;
our ability to respond to changes in technology, increased competition or pricing pressures;
our ability to develop and produce new products that reflect market demand;
our ability or our customers' and suppliers' ability to successfully launch new product programs on a timely and cost efficient basis;
lower-than-anticipated market acceptance of new or existing products;
our ability to attract new customers and programs for new products;
an impairment of our goodwill, other intangible assets, or long-lived assets if our business or market conditions indicate that the carrying values of those assets exceed their fair values;
reduced demand for our customers' products (particularly light trucks and sport utility vehicles (SUVs) produced by GM and FCA);
risks inherent in our global operations (including tariffs and the potential consequences thereof to us, our suppliers, and our customers and their suppliers, adverse changes in trade agreements, such as NAFTA, or proposed trade agreements, such as the USMCA, immigration policies, political stability, taxes and other law changes, potential disruptions of production and supply, and currency rate fluctuations);
a significant disruption in operations at one or more of our key manufacturing facilities;
our suppliers', our customers' and their suppliers' ability to maintain satisfactory labor relations and avoid work stoppages;
global economic conditions;
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;
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;
supply shortages or price increases in raw material and/or freight, utilities or other operating supplies for us or our customers as a result of natural disasters or otherwise;
our ability to successfully integrate the business and information systems of MPG and to realize the anticipated benefits of the merger;
negative or unexpected tax consequences;
our ability to achieve the level of cost reductions required to sustain global cost competitiveness;
our ability to realize the expected revenues from our new and incremental business backlog;
our ability to maintain satisfactory labor relations and avoid work stoppages;
price volatility in, or reduced availability of, fuel;
potential liabilities or litigation relating to, or assumed in, the MPG merger;
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 current and former facilities, or reputational damage;
adverse changes in laws, government regulations or market conditions affecting our products or our customers' products;
our ability or our customers' and suppliers' ability to comply with 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.


1



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
(in millions, except per share data)
 
 
 
 
 
 
 
 
Net sales
$
1,677.4

 
$
1,817.0

 
$
5,100.9

 
$
5,576.3

 
 
 
 
 
 
 
 
Cost of goods sold
1,428.7

 
1,549.6

 
4,381.7

 
4,661.2

 
 
 
 
 
 
 
 
Gross profit
248.7

 
267.4

 
719.2

 
915.1

 
 
 
 
 
 
 
 
Selling, general and administrative expenses
92.7

 
96.3

 
274.7

 
288.6

 
 
 
 
 
 
 
 
Amortization of intangible assets
23.7

 
24.8

 
73.6

 
74.5

 
 
 
 
 
 
 
 
Impairment charge (Note 2)
225.0

 

 
225.0

 

 

 
 
 
 
 
 
Restructuring and acquisition-related costs
11.7

 
11.7

 
36.0

 
66.8

 
 
 
 
 
 
 
 
Gain on sale of business

 

 

 
(15.5
)
 
 
 
 
 
 
 
 
Operating income (loss)
(104.4
)
 
134.6

 
109.9

 
500.7

 
 
 
 
 
 
 
 
Interest expense
(54.3
)
 
(54.9
)
 
(163.9
)
 
(162.5
)
 
 
 
 
 
 
 
 
Investment income
2.2

 
0.6

 
3.4

 
1.6

 
 
 
 
 
 
 
 
Other income (expense)
 
 
 
 
 
 
 
Debt refinancing and redemption costs
(5.1
)
 

 
(7.5
)
 
(14.6
)
Gain on settlement of capital lease

 

 

 
15.6

     Other expense, net
(2.9
)
 
(4.8
)
 
(9.0
)
 
(4.6
)
 
 
 
 
 
 
 
 
Income (loss) before income taxes
(164.5
)
 
75.5

 
(67.1
)
 
336.2

 
 
 
 
 
 
 
 
Income tax expense (benefit)
(40.4
)
 
11.5

 
(37.4
)
 
31.4

 
 
 
 
 
 
 
 
Net income (loss)
$
(124.1
)
 
$
64.0

 
$
(29.7
)
 
$
304.8

 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
(0.1
)
 
(0.2
)
 
(0.4
)
 
(0.5
)
 
 
 
 
 
 
 
 
Net income (loss) attributable to AAM
$
(124.2
)
 
$
63.8

 
$
(30.1
)
 
$
304.3

 

 

 

 

Basic earnings (loss) per share
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.65

 

 

 

 

Diluted earnings (loss) per share
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.63

 
See accompanying notes to condensed consolidated financial statements.

2



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2019
 
2018
 
2019
 
2018
 
(in millions)
Net income (loss)
$
(124.1
)
 
$
64.0

 
$
(29.7
)
 
$
304.8

 
 
 
 
 
 
 
 
Other comprehensive income (loss)

 

 

 

Defined benefit plans, net of tax (a)
(1.3
)
 
1.0

 
0.5

 
14.5

     Foreign currency translation adjustments
(37.1
)
 
(11.9
)
 
(34.7
)
 
(55.0
)
     Changes in cash flow hedges, net of tax (b)
(6.4
)
 
12.4

 
(24.7
)
 
19.6

Other comprehensive income (loss)
(44.8
)
 
1.5

 
(58.9
)
 
(20.9
)
 
 
 
 
 
 
 
 
Comprehensive income (loss)
$
(168.9
)
 
$
65.5

 
$
(88.6
)
 
$
283.9

 
 
 
 
 
 
 
 
     Net income attributable to noncontrolling interests
(0.1
)
 
(0.2
)
 
(0.4
)
 
(0.5
)
 
 
 
 
 
 
 
 
Comprehensive income (loss) attributable to AAM
$
(169.0
)
 
$
65.3

 
$
(89.0
)
 
$
283.4

(a)
Amounts are net of tax of $0.3 million and $(0.2) million for the three and nine months ended September 30, 2019, and $(0.3) million and $(4.8) million for the three and nine months ended September 30, 2018, respectively.
(b)
Amounts are net of tax of $1.1 million and $7.3 million for the three and nine months ended September 30, 2019, and $(0.5) million and $(1.7) million for the three and nine months ended September 30, 2018, respectively.

See accompanying notes to condensed consolidated financial statements.                   

3



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

 
 
September 30, 2019
 
December 31, 2018
 
 
(Unaudited)
 
 
Assets
 
(in millions)
Current assets
 
 
Cash and cash equivalents
 
$
375.1

 
$
476.4

Accounts receivable, net
 
976.9

 
966.5

Inventories, net
 
403.1

 
459.7

Prepaid expenses and other
 
130.9

 
127.2

Current assets held-for-sale
 
312.2

 

Total current assets
 
2,198.2

 
2,029.8

 
 
 

 
 

Property, plant and equipment, net
 
2,326.4

 
2,514.4

Deferred income taxes
 
61.9

 
45.5

Goodwill
 
1,127.5

 
1,141.8

Other intangible assets, net
 
881.5

 
1,111.1

GM postretirement cost sharing asset
 
223.1

 
219.4

Other assets and deferred charges
 
497.7

 
448.7

Total assets
 
$
7,316.3

 
$
7,510.7

 
 
 

 
 

Liabilities and Stockholders’ Equity
 
 

 
 

Current liabilities
 
 

 
 

Current portion of long-term debt
 
$
23.8

 
$
121.6

Accounts payable
 
703.7

 
840.2

Accrued compensation and benefits
 
165.1

 
179.0

Deferred revenue
 
22.6

 
44.3

Accrued expenses and other
 
220.2

 
171.7

Current liabilities held-for-sale
 
101.7

 

Total current liabilities
 
1,237.1

 
1,356.8

 
 
 

 
 

Long-term debt, net
 
3,673.3

 
3,686.8

Deferred revenue
 
83.1

 
77.6

Deferred income taxes
 
21.6

 
92.6

Postretirement benefits and other long-term liabilities
 
891.6

 
810.6

Total liabilities
 
5,906.7

 
6,024.4

 
 
 

 
 

Stockholders' equity
 
 

 
 

Common stock, par value $0.01 per share; 150.0 million shares authorized;
 
 
 
 
120.1 million shares issued as of September 30, 2019 and 118.9 million shares issued as of December 31, 2018
 
1.2

 
1.2

Paid-in capital
 
1,310.1

 
1,292.6

Retained earnings
 
703.0

 
703.5

Treasury stock at cost, 7.6 million shares as of September 30, 2019 and 7.2 million shares as of December 31, 2018
 
(209.3
)
 
(201.8
)
Accumulated other comprehensive loss
 
 
 
 
Defined benefit plans, net of tax
 
(241.1
)
 
(213.9
)
Foreign currency translation adjustments
 
(131.3
)
 
(96.6
)
Unrecognized loss on cash flow hedges, net of tax
 
(25.8
)
 
(1.1
)
Total AAM stockholders' equity
 
1,406.8

 
1,483.9

Noncontrolling interests in subsidiaries
 
2.8

 
2.4

Total stockholders' equity
 
1,409.6

 
1,486.3

Total liabilities and stockholders' equity
 
$
7,316.3

 
$
7,510.7

 See accompanying notes to condensed consolidated financial statements. 

4



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
Nine Months Ended
 
 
September 30,
 
 
2019
 
2018
 
 
(in millions)
Operating activities
 
 
 
 
Net income (loss)
 
$
(29.7
)
 
$
304.8

Adjustments to reconcile net income (loss) to net cash provided by operating activities
 
 
 
 
Depreciation and amortization
 
411.5

 
390.9

Impairment charges (Note 2 and Note 4)
 
225.0

 
26.6

Deferred income taxes
 
(87.6
)
 
51.7

Stock-based compensation
 
17.5

 
20.7

Pensions and other postretirement benefits, net of contributions
 
(10.4
)
 
(3.1
)
Gain on sale of business
 

 
(15.5
)
Loss (gain) on disposal of property, plant and equipment, net
 
1.3

 
(3.3
)
Debt refinancing and redemption costs and (gain) on settlement of capital lease
 
7.5

 
(0.8
)
Changes in operating assets and liabilities
 
 
 
 
Accounts receivable
 
(108.4
)
 
(248.0
)
Inventories
 
18.8

 
(67.2
)
Accounts payable and accrued expenses
 
8.6

 
188.7

Deferred revenue
 
(12.9
)
 
13.3

Other assets and liabilities
 
(62.6
)
 
(145.6
)
Net cash provided by operating activities
 
378.6

 
513.2

 
 
 

 
 

Investing activities
 
 

 
 

Purchases of property, plant and equipment
 
(335.3
)
 
(391.8
)
Proceeds from sale of property, plant and equipment
 
2.0

 
3.2

Investment in joint venture
 
(2.2
)
 

Purchase buyouts of leased equipment
 

 
(0.5
)
Proceeds from sale of business, net
 

 
47.1

Acquisition of business
 

 
(1.3
)
Net cash used in investing activities
 
(335.5
)
 
(343.3
)
 
 
 

 
 

Financing activities
 
 

 
 

Payments of long-term debt and finance lease obligations
 
(477.7
)

(568.0
)
Proceeds from issuance of long-term debt
 
348.4


481.3

Debt issuance costs
 
(3.3
)

(6.9
)
Purchase of noncontrolling interest
 

 
(2.2
)
Purchase of treasury stock
 
(7.5
)

(3.7
)
Net cash used in financing activities
 
(140.1
)

(99.5
)
 
 
 

 
 

Effect of exchange rate changes on cash
 
(4.3
)

(5.3
)
 
 
 

 
 

Net increase (decrease) in cash, cash equivalents and restricted cash
 
(101.3
)

65.1

 
 
 

 
 

Cash, cash equivalents and restricted cash at beginning of period
 
478.9


376.8

 
 
 

 
 

Cash, cash equivalents and restricted cash at end of period
 
$
377.6


$
441.9

 
 
 

 
 

Supplemental cash flow information
 
 

 
 

     Interest paid
 
$
136.3

 
$
127.8

     Income taxes paid, net of refunds
 
$
45.7

 
$
33.6


See accompanying notes to condensed consolidated financial statements.

5



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)

 
Common Stock
 
 
 
Accumulated
Noncontrolling
 
Shares
Par
Paid-in
Retained
Treasury
Other Comprehensive
Interest
 
Outstanding
Value
Capital
Earnings
Stock
Income (Loss)
in Subsidiaries
Balance at January 1, 2018
111.3

$
1.2

$
1,264.6

$
761.0

$
(198.1
)
$
(292.7
)
$
4.0

Net income



89.4



0.1

Exercise of stock options and vesting of restricted stock units and performance shares
0.6







Stock-based compensation


6.6





Purchase of treasury stock
(0.2
)



(3.5
)


Changes in cash flow hedges





15.1


Foreign currency translation adjustments





37.9


Defined benefit plans, net





1.3


Purchase of noncontrolling interest






(0.9
)
Balance at March 31, 2018
111.7

$
1.2

$
1,271.2

$
850.4

$
(201.6
)
$
(238.4
)
$
3.2

Net income



151.1



0.2

Stock-based compensation


7.1





Purchase of treasury stock




(0.1
)


Changes in cash flow hedges





(7.9
)

Foreign currency translation adjustments





(81.0
)

Defined benefit plans, net





12.2


Purchase of noncontrolling interest






(1.4
)
Balance at June 30, 2018
111.7

$
1.2

$
1,278.3

$
1,001.5

$
(201.7
)
$
(315.1
)
$
2.0

Net income



63.8



0.2

Exercise of stock options


0.1





Stock-based compensation


7.1





Purchase of treasury stock
(0.1
)



(0.1
)


Changes in cash flow hedges





12.4


Foreign currency translation adjustments





(11.9
)

Defined benefit plans, net





1.0


Purchase of noncontrolling interest






(0.1
)
Balance at September 30, 2018
111.6

$
1.2

$
1,285.5

$
1,065.3

$
(201.8
)
$
(313.6
)
$
2.1


6



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (CONTINUED)
(Unaudited)

 
Common Stock
 
 
 
Accumulated
Noncontrolling
 
Shares
Par
Paid-in
Retained
Treasury
Other Comprehensive
Interest
 
Outstanding
Value
Capital
Earnings
Stock
Income (Loss)
in Subsidiaries
Balance at January 1, 2019
111.7

$
1.2

$
1,292.6

$
703.5

$
(201.8
)
$
(311.6
)
$
2.4

Net income



41.6



0.1

Vesting of restricted stock units and performance shares
1.2







Stock-based compensation


5.5





Modified-retrospective application of ASU 2016-02



1.9




Adoption of ASU 2018-02



27.7


(27.7
)

Purchase of treasury stock
(0.4
)



(7.3
)


Changes in cash flow hedges





(2.5
)

Foreign currency translation adjustments





(2.5
)

Defined benefit plans, net





0.7


Balance at March 31, 2019
112.5

$
1.2

$
1,298.1

$
774.7

$
(209.1
)
$
(343.6
)
$
2.5

Net income



52.5



0.2

Stock-based compensation


5.7





Purchase of treasury stock




(0.2
)


Changes in cash flow hedges





(15.8
)

Foreign currency translation adjustments





4.9


Defined benefit plans, net





1.1


Balance at June 30, 2019
112.5

$
1.2

$
1,303.8

$
827.2

$
(209.3
)
$
(353.4
)
$
2.7

Net loss



(124.2
)


0.1

Stock-based compensation


6.3





Changes in cash flow hedges





(6.4
)

Foreign currency translation adjustments





(37.1
)

Defined benefit plans, net





(1.3
)

Balance at September 30, 2019
112.5

$
1.2

$
1,310.1

$
703.0

$
(209.3
)
$
(398.2
)
$
2.8


See accompanying notes to condensed consolidated financial statements.


7



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2019
(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization We are a global Tier 1 supplier to the automotive industry. We design, engineer and manufacture driveline, metal forming and casting products that are making the next generation of vehicles smarter, lighter, safer and more efficient. We employ over 25,000 associates, operating at nearly 90 facilities in 17 countries, to support our customers on global and regional platforms with a focus on quality, operational excellence and technology leadership.

In the third quarter of 2019, we entered into a definitive agreement to sell the U.S. operations of our Casting segment to entities affiliated with Gamut Capital Management, L.P. As a result, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. See Note 2 - Assets Held-for-Sale for further detail.

In the first quarter of 2019, we initiated a new global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing segments into three segments. This activity occurred through the disaggregation of our Powertrain segment, with a portion moving into our Driveline segment and a portion moving into our Metal Forming segment. See Note 4 - Restructuring and Acquisition-Related Costs for more detail on this reorganization.

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, 2018 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.

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, 2018.

Effect of New Accounting Standards

Accounting Standard Update 2018-15

On August 15, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-15 - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (Topic 350-40). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing or hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance becomes effective at the beginning of our 2020 fiscal year and may be applied either retrospectively or prospectively. We expect to adopt this guidance prospectively on January 1, 2020 and we are currently assessing the impact that this standard will have on our consolidated financial statements.


8

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Accounting Standards Update 2018-02

On February 14, 2018, the FASB issued ASU 2018-02 - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). ASU 2018-02 allows companies the option to reclassify disproportionate tax effects in accumulated other comprehensive income (AOCI) caused by the 2017 Tax Cuts and Jobs Act, also known as stranded tax effects, to retained earnings. ASU 2018-02 also requires expanded disclosures related to disproportionate income tax effects from AOCI, some of which are applicable to all companies regardless of whether the option to reclassify the stranded tax effects is exercised. This guidance became effective on January 1, 2019, and we elected to reclassify the stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, resulting in a decrease in Accumulated other comprehensive income (loss) and an increase in Retained earnings of $27.7 million at January 1, 2019.

Accounting Standards Update 2016-02

On February 25, 2016, the FASB issued ASU 2016-02 - Leases (Topic 842), and has subsequently issued ASU 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842) (collectively the Lease ASUs) which supersede the existing lease accounting guidance and establish new criteria for recognizing lease assets and liabilities. The most significant impact of these updates, to AAM, is that a lessee is 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 previous lease guidance. Expense recognition in the statement of income, along with cash flow statement classification for both financing (capital) and operating leases under the new standard are not significantly changed from previous lease guidance. This guidance became effective for AAM on January 1, 2019. See Note 3 - Leasing for additional detail regarding the adoption of ASU 2016-02.




9

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2. ASSETS HELD-FOR-SALE

In the third quarter of 2019, we entered into a definitive agreement to sell the U.S. operations of our Casting segment to entities affiliated with Gamut Capital Management, L.P. for a sales price of $245.0 million, subject to certain customary adjustments. The sales price consists of $185.0 million in cash and a $60.0 million deferred payment obligation, which will accrue interest at an annual rate of 6% beginning on January 1, 2020 for a period of twelve years. The sale is expected to close in the fourth quarter of 2019.

As a result, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. Upon reclassification to held-for-sale in the third quarter of 2019, we recorded a pre-tax impairment charge of $225.0 million to reduce the carrying value of this business to fair value less cost to sell. The sale of the U.S. operations of our Casting segment did not qualify for classification as discontinued operations as the sale does not represent a strategic shift in our business that has had, or will have, a major effect on our operations and financial results.

The assets and liabilities classified as held-for-sale are as follows (in millions):
 
September 30, 2019
 
 
Accounts receivable, net
$
89.1

Inventories
32.8

Prepaid expenses and other
1.5

Property, plant and equipment, net
184.6

Intangible assets, net
158.2

Other assets and deferred charges
71.0

Impairment of carrying value
(225.0
)
   Total assets held-for-sale*
$
312.2

 
 
Accounts payable
$
71.3

Accrued compensation and benefits
6.8

Accrued expenses and other
3.4

Postretirement benefits and other long-term liabilities
20.2

   Total liabilities held-for-sale*
$
101.7

 

* The assets and liabilities classified as held-for-sale are classified entirely as current in the September 30, 2019 Condensed Consolidated Balance Sheet as we expect to complete the sale in the fourth quarter of 2019. As this transaction does not qualify for classification as discontinued operations, no reclassification of the assets and liabilities in the December 31, 2018 Condensed Consolidated Balance Sheet was required.



10

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

3. LEASING

On January 1, 2019, we adopted new accounting guidance under Accounting Standards Codification Topic 842 (ASC 842) Leases. ASC 842 superseded prior lease accounting guidance and established new criteria for recognizing right-of-use assets and lease liabilities for operating lease arrangements on our Condensed Consolidated Balance Sheet. We elected to adopt this guidance utilizing the optional transition method that allowed us to not retrospectively revise prior period balance sheets to include operating leases, and to only include the disclosures required under ASC 842 for the periods subsequent to adoption.

We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and furniture under finance leases, and we also lease certain commercial office and production facilities, manufacturing machinery and equipment, vehicles and other assets under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.

The lease consideration for some of our facilities and machinery and equipment is variable, as it is based on various indices or usage of the underlying assets, respectively. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheet, while variable lease payments based on usage of the underlying asset have been excluded as they do not represent present rights or obligations.

Lease cost consists of the following:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2019
 
 
(in millions)
 
 
 
 
 
Finance lease cost
 
 
 
 
     Amortization of right-of-use assets
 
$
0.2

 
$
0.6

Interest on lease liabilities
 
0.1

 
0.2

Total finance lease cost
 
0.3

 
0.8

 
 
 
 
 
Operating lease cost
 
6.5

 
19.9

Short-term lease cost
 
1.4

 
4.8

Variable lease cost
 
2.5

 
6.7

 
 
 
 
 
Total lease cost
 
$
10.7

 
$
32.2



For the three months ended September 30, 2019, $8.0 million and $2.4 million were recorded to Cost of goods sold (COGS) and Selling, general and administrative expenses (SG&A), respectively, on our Condensed Consolidated Statement of Operations, as compared to $7.1 million and $2.4 million, respectively, for the three months ended September 30, 2018. For the nine months ended September 30, 2019, $24.0 million and $7.4 million were recorded to COGS and SG&A, respectively, on our Condensed Consolidated Statement of Operations, as compared to $21.4 million and $7.4 million, respectively for the nine months ended September 30, 2018.

11

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following table summarizes additional information related to our lease agreements.
 
 
Nine Months Ended
 
 
September 30,
 
 
2019
 
 
(in millions, except lease term and rate)
 
 
 
Cash paid for amounts included in measurement of lease liabilities
 
 
     Operating cash flows from finance leases
 
$
0.2

Operating cash flows from operating leases
 
18.2

Financing cash flows from finance leases
 
0.6

 
 
 
Weighted-average remaining lease term - finance leases
 
3.1 years

Weighted-average remaining lease term - operating leases
 
7.5 years

 
 


Weighted-average discount rate - finance leases
 
8.1
%
Weighted-average discount rate - operating leases
 
5.6
%


As the rate implicit in the lease is typically unknown, the discount rate used to determine the lease liability for the majority of our leases is the collateralized incremental borrowing rate in the applicable geographic area for a similar term and amount as the lease agreement.

Future undiscounted minimum payments under non-cancelable leases are as follows:
 
 
Finance Leases
 
Operating Leases
 
 
(in millions)
2019 (excluding the nine months ended September 30, 2019)
 
$
0.3

 
$
6.9

2020
 
1.1

 
25.6

2021
 
1.0

 
18.1

2022
 
0.9

 
14.5

2023
 
0.9

 
9.7

Thereafter
 

 
38.9

Total future undiscounted minimum lease payments
 
4.2

 
113.7

Less: Impact of discounting
 
(1.4
)
 
(20.0
)
Total
 
$
2.8

 
$
93.7



For the full year 2019, we expect payments for short-term leases to be approximately $5.0 million.

The right-of-use assets and lease liabilities recorded on our Condensed Consolidated Balance Sheet as of September 30, 2019 are as follows:
 
 
Finance Leases
 
Operating Leases
 
 
(in millions)
Property, plant and equipment, net
 
$
2.8

 
$

Other assets and deferred charges
 

 
93.7

Total
 
$
2.8

 
$
93.7

 
 
 
 
 
Accrued expenses and other
 
$
0.9

 
$
21.4

Postretirement benefits and other long-term liabilities
 
1.9

 
72.3

Total
 
$
2.8

 
$
93.7





12

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

ASC 842 Adoption of Practical Expedients

We have elected to adopt, for all classes of underlying assets, a package of practical expedients provided under ASC 842 that allow us to 1) not reassess whether existing or expired contracts contain or contained a lease; 2) not reassess the lease classification (operating or financing) of our existing leases at adoption; and 3) not reassess initial direct costs for existing leases.

ASC 842 also provides a practical expedient that allows companies to exclude balance sheet recognition of right-of-use assets and associated liabilities for lease terms of 12 months or less, which we have elected as part of our adoption of ASC 842 for all classes of underlying assets. We do not include right-of-use assets and operating lease liabilities on our Condensed Consolidated Balance Sheet for leases with a term of 12 months or less.

We have also elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts that contain both. These lease agreements are accounted for as a single lease component for all classes of underlying assets.

Leases Not Yet Commenced

As of September 30, 2019, we have entered into additional operating leases that have not yet commenced of approximately $1.4 million, which primarily reflects the lease of machinery and equipment with a term of 5 years that is expected to commence in 2019.




13

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

4. RESTRUCTURING AND ACQUISITION-RELATED COSTS

In 2016, AAM initiated actions under a global restructuring program (the 2016 Program) focused on creating a more streamlined organization in addition to reducing our cost structure and preparing for acquisition and integration activities. We incurred severance charges totaling $2.8 million and implementation costs totaling $29.6 million under the 2016 Program. There were no charges incurred under the 2016 Program during the first nine months of 2019 and we do not expect to incur any additional restructuring charges under the 2016 Program in future periods.
In the first quarter of 2019, we initiated a new global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing segments into three segments. This activity occurred through the disaggregation of our Powertrain segment, with a portion moving into our Driveline segment and a portion moving into our Metal Forming segment. The primary objectives of this consolidation are to further the integration of Metaldyne Performance Group, Inc. (MPG), align AAM's product and process technologies, and to achieve efficiencies within our corporate and business unit support teams to reduce cost in our business.
A summary of our restructuring activity for the first nine months of 2019 and 2018 is shown below:
 
Severance Charges
 
Implementation Costs
 
Asset Impairment Charges
 
Total
 
(in millions)
Accrual at December 31, 2017
$
0.3

 
$

 
$

 
$
0.3

Charges
2.3

 
8.8

 
26.6

 
37.7

Cash utilization
(0.4
)
 
(6.6
)
 

 
(7.0
)
Non-cash utilization

 

 
(26.6
)
 
(26.6
)
Accrual at September 30, 2018
$
2.2

 
$
2.2

 
$

 
$
4.4

 
 
 
 
 
 
 
 
Accrual at December 31, 2018
$
2.4

 
$
1.6

 
$

 
$
4.0

Charges
10.4

 
13.1

 

 
23.5

Cash utilization
(11.7
)
 
(9.9
)
 

 
(21.6
)
Accrual at September 30, 2019
$
1.1

 
$
4.8

 
$

 
$
5.9


As part of our restructuring actions, we incurred total severance charges of approximately $10.4 million and $2.3 million, as well as total implementation costs of approximately $13.1 million and $8.8 million, during the nine months ended September 30, 2019 and 2018, respectively. We expect to incur approximately $30 million to $35 million of total restructuring charges in 2019, including costs incurred under the ongoing 2019 Program.
In the first nine months of 2018, we initiated actions to exit operations at manufacturing facilities in our Driveline, Metal Forming and former Powertrain segment. As a result of these actions, we were required to assess the associated long-lived assets for impairment. Based on our analysis, assets that were not to be redeployed to other AAM facilities were determined to be fully impaired resulting in a charge of $26.6 million for the nine months ended September 30, 2018. See Note 8 - Fair Value for further detail.
In 2017, we completed the acquisitions of MPG and USM Mexico Manufacturing LLC (USM Mexico). During the nine months ended September 30, 2019, we incurred the following integration charges related to these acquisitions:
 
Integration Expenses
 
(in millions)
Charges for the nine months ended September 30, 2019
$
12.5


These integration expenses primarily reflect costs incurred for information technology systems and ongoing operational activities incurred in conjunction with the acquisition of MPG. Total restructuring charges and acquisition-related charges are presented on a separate line item titled Restructuring and acquisition-related costs in our Condensed Consolidated Statements of Operations. Restructuring and acquisition-related costs totaled $36.0 million for the nine months ended September 30, 2019, of which $23.5 million were restructuring charges and $12.5 million were acquisition-related charges, and $66.8 million for the nine months ended September 30, 2018, of which $37.7 million were restructuring charges and $29.1 million were acquisition-related charges.

14

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

5. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill The following table provides a reconciliation of changes in goodwill for the nine months ended September 30, 2019:
 
Driveline
 
Metal Forming
 
Powertrain
 
Casting
 
Consolidated
 
(in millions)
Balance at December 31, 2018
$
212.1

 
$
552.4

 
$
377.3

 
$

 
$
1,141.8

Reorganization
187.2

 
190.1

 
(377.3
)
 

 

Foreign currency translation
(5.4
)
 
(8.9
)
 

 

 
(14.3
)
Balance at September 30, 2019
$
393.9

 
$
733.6

 
$

 
$

 
$
1,127.5



In the first quarter of 2019, we initiated a global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing segments into three segments. See Note 4 - Restructuring and Acquisition-Related Costs for further detail on this reorganization of our segments. Prior to this reorganization, our Powertrain segment was also a reporting unit for purposes of measuring and reporting goodwill. The goodwill that was previously attributable to the Powertrain reporting unit was reallocated to the Driveline and Metal Forming reporting units based on the relative fair value of the respective portions that became attributable to those reporting units.

The initiation of the 2019 Program and the reorganization of our business represented a triggering event in the first quarter of 2019 to test goodwill for impairment prior to reallocating the Powertrain goodwill to Driveline and Metal Forming. No impairment was identified as a result of completing this goodwill impairment test.

Other Intangible Assets The following table provides a reconciliation of the gross carrying amount and associated accumulated amortization for AAM's other intangible assets, which are all subject to amortization:
 
September 30,
 
December 31,
 
2019
 
2018
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net Carrying Amount
 
(in millions)
Capitalized computer software
$
41.4

 
$
(26.0
)
 
$
15.4

 
$
38.0

 
$
(20.1
)
 
$
17.9

Customer platforms
856.2

 
(158.6
)
 
697.6

 
952.2

 
(123.5
)
 
828.7

Customer relationships
53.0

 
(8.5
)
 
44.5

 
147.0

 
(16.5
)
 
130.5

Technology and other
155.7

 
(31.7
)
 
124.0

 
156.2

 
(22.2
)
 
134.0

Total
$
1,106.3

 
$
(224.8
)
 
$
881.5

 
$
1,293.4

 
$
(182.3
)
 
$
1,111.1


Amortization expense for our intangible assets was $23.7 million and $73.6 million for the three and nine months ended September 30, 2019, respectively, and $24.8 million and $74.5 million for the three and nine months ended September 30, 2018, respectively. Estimated amortization expense for the full year 2019 is approximately $95 million and estimated amortization expense for each of the full years 2020 through 2023 is approximately $87 million.

15

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

6. INVENTORIES

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: 
 
 
September 30, 2019
 
December 31, 2018
 
 
(in millions)
 
 
 
 
 
Raw materials and work-in-progress
 
$
337.3

 
$
375.1

Finished goods
 
88.0

 
99.0

Gross inventories
 
425.3

 
474.1

Inventory valuation reserves
 
(22.2
)
 
(14.4
)
Inventories, net
 
$
403.1

 
$
459.7






16

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

7. LONG-TERM DEBT

Long-term debt consists of the following:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
(in millions)
 
 
 
 
 
Revolving Credit Facility
 
$

 
$

Term Loan A Facility
 
340.0

 
83.8

Term Loan B Facility
 
1,248.6

 
1,511.2

7.75% Notes due 2019
 

 
100.0

6.625% Notes due 2022
 
450.0

 
450.0

6.50% Notes due 2027
 
500.0

 
500.0

6.25% Notes due 2026
 
400.0

 
400.0

6.25% Notes due 2025
 
700.0

 
700.0

Foreign credit facilities and other
 
113.2

 
127.1

Capital lease obligations
 

 
3.4

Total debt
 
3,751.8

 
3,875.5

    Less: Current portion of long-term debt
 
23.8

 
121.6

Long-term debt
 
3,728.0

 
3,753.9

    Less: Debt issuance costs
 
54.7

 
67.1

Long-term debt, net
 
$
3,673.3

 
$
3,686.8



Senior Secured Credit Facilities In 2017, American Axle & Manufacturing Holdings, Inc. (Holdings) and American Axle & Manufacturing, Inc. (AAM, Inc.) entered into a credit agreement (the Credit Agreement). In connection with the Credit Agreement, Holdings, AAM, Inc. and certain of their restricted subsidiaries entered into a Collateral Agreement and Guarantee Agreement with the financial institutions party thereto. The Credit Agreement included 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 $932 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 Senior Secured Credit Facilities).

In July 2019, Holdings, AAM, Inc., and certain subsidiaries of Holdings entered into the First Amendment (First Amendment) to the Credit Agreement (as amended by the First Amendment, the Amended Credit Agreement). The First Amendment, among other things, established $340 million in incremental term loan A commitments under the Amended Credit Agreement with a maturity date of July 29, 2024 (Term Loan A Facility due 2024), extended the maturity date of the Revolving Credit Facility from April 6, 2022 to July 29, 2024 and modified the applicable margin with respect to interest rates under the Term Loan A Facility due 2024 and interest rates and commitment fees under the Revolving Credit Facility. The applicable margin and the maturity date for the Term Loan B Facility remain unchanged. The proceeds of $340 million were used to repay all of the outstanding loans under the existing Term Loan A Facility and a portion of the outstanding Term Loan B Facility, resulting in no additional indebtedness. In the third quarter of 2019, we expensed $5.1 million for the write-off of the unamortized debt issuance costs related to the existing Term Loan A Facility and a portion of the unamortized debt issuance costs related to our Term Loan B Facility that we had been amortizing over the expected life of the borrowings.

At September 30, 2019, we had $890.8 million available under the Revolving Credit Facility. This availability reflects a reduction of $34.2 million for standby letters of credit issued against the facility. The proceeds of the Revolving Credit Facility are used for general corporate purposes.

The 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 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.




17

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Foreign credit facilities We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. At September 30, 2019, $107.8 million was outstanding under our foreign credit facilities, as compared to $127.1 million at December 31, 2018. At September 30, 2019, an additional $93.7 million was available under our foreign credit facilities.

Weighted-Average Interest Rate The weighted-average interest rate of our long-term debt outstanding was 5.8% at September 30, 2019 and 5.9% at December 31, 2018.  

Capital lease obligations Upon our adoption of ASC 842 Leases, our capital (finance) lease obligations are now presented in Accrued expenses and other, and Postretirement benefits and other long-term liabilities on our Condensed Consolidated Balance Sheet. See Note 3 - Leasing for additional detail regarding our adoption of ASC 842.

Redemption of 7.75% Notes due 2019 In the second quarter of 2019, we voluntarily redeemed the remaining balance outstanding under our 7.75% Notes due 2019. This resulted in a principal payment of $100 million and $0.3 million in accrued interest. We also expensed approximately $0.1 million for the write-off of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing, and approximately $2.2 million for an early redemption premium.



18

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

8. FAIR VALUE

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:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
 
Input
 
 
(in millions)
 
 
Balance Sheet Classification
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
$
160.7

 
$
160.7

 
$
44.0

 
$
44.0

 
Level 1
Prepaid expenses and other
 
 

 
 

 
 

 
 

 
 
Cash flow hedges - currency forward contracts
 
2.3

 
2.3

 
1.3

 
1.3

 
Level 2
Cash flow hedges - variable-to-fixed interest rate swap
 
1.6

 
1.6

 
0.9

 
0.9

 
Level 2
Nondesignated - currency forward contracts
 
0.2

 
0.2

 
0.6

 
0.6

 
Level 2
Other assets and deferred charges
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.9

 
0.9

 
0.4

 
0.4

 
Level 2
     Cash flow hedges - fixed-to-fixed cross-currency swap
 
7.0

 
7.0

 

 

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
4.0

 
4.0

 
1.6

 
1.6

 
Level 2
Accrued expenses and other
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.3

 
0.3

 
0.8

 
0.8

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
10.0

 
10.0

 
0.7

 
0.7

 
Level 2
     Nondesignated - currency forward contracts
 
0.4

 
0.4

 
0.4

 
0.4

 
Level 2
Postretirement benefits and other long-term liabilities
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.1

 
0.1

 
0.9

 
0.9

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
24.2

 
24.2

 
6.9

 
6.9

 
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.  

19

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

We estimated the fair value of the amounts outstanding on our debt using available market information and other observable data, to be as follows:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Carrying  Amount
 
Fair Value
 
Carrying  Amount
 
Fair Value
 
 
Input
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility
 
$

 
$

 
$

 
$

 
Level 2
Term Loan A Facility
 
340.0

 
334.9

 
83.8

 
79.5

 
Level 2
Term Loan B Facility
 
1,248.6

 
1,217.4

 
1,511.2

 
1,420.6

 
Level 2
7.75% Notes due 2019
 

 

 
100.0

 
102.1

 
Level 2
6.625% Notes due 2022
 
450.0

 
454.5

 
450.0

 
444.4

 
Level 2
6.50% Notes due 2027
 
500.0

 
474.4

 
500.0

 
446.3

 
Level 2
6.25% Notes due 2026
 
400.0

 
380.0

 
400.0

 
358.0

 
Level 2
6.25% Notes due 2025
 
700.0

 
665.0

 
700.0

 
636.7

 
Level 2


Long-Lived Assets   During the second quarter of 2018, we recorded asset impairment charges as a result of restructuring actions initiated during the quarter. See Note 4 - Restructuring and Acquisition-Related Costs for further detail. There were no such impairment charges incurred during the nine months ended September 30, 2019.

The following table summarizes the impairments of long-lived assets measured at fair value on a nonrecurring basis subsequent to initial recognition:
 
 
 
 
 
Balance Sheet Classification
 
Fair Value at September 30, 2018
 
Asset Impairment for the Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
$

 
$
25.7

Other assets and deferred charges
 

 
0.9





20

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

9. DERIVATIVES

Our business and financial results are affected by fluctuations in global 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 derivative contracts  From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies.  As of September 30, 2019, we have currency forward contracts outstanding with a total notional amount of $191.5 million that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the third quarter of 2022 and other items into the second quarter of 2020. 

Fixed-to-fixed cross-currency swap In the third quarter of 2019, we entered into a fixed-to-fixed cross-currency swap to reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. As of September 30, 2019, the notional amount of the fixed-to-fixed cross-currency swap was $217.9 million, and hedges our exposure to changes in exchange rates on the intercompany loans into the second quarter of 2024.

Variable-to-fixed interest rate swap In 2018, we entered into a variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. In the second quarter of 2019, we discontinued this variable-to-fixed interest rate swap, which was a liability of $9.7 million on the date that it was discontinued.

Also in the second quarter of 2019, we entered into a new variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. We have the following notional amounts hedged in relation to our variable-to-fixed interest rate swap: $1.0 billion through May 2020, $900.0 million through May 2021, $750.0 million through May 2022, $600.0 million through May 2023 and $500.0 million through May 2024.

The following table summarizes the reclassification of derivative gains and losses into net income from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow hedges under ASC 815 - Derivatives and Hedging:
 
 
Location
 
Gain (Loss) Reclassified During
 
Total of Financial
 
Gain (Loss) Expected
 
 
of Gain (Loss)
 
Three Months Ended
 
Nine Months Ended
 
Statement
 
to be Reclassified
 
 
  Reclassified into
 
September 30,
 
September 30,
 
Line Item
 
During the
 
 
  Net Income
 
2019
 
2018
 
2019
 
2018
 
2019
 
Next 12 Months
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currency forward contracts
 
Cost of Goods Sold
 
$
0.9

 
$
(0.9
)
 
$
1.8

 
$
(3.7
)
 
$
4,381.7

 
$
2.0

Fixed-to-fixed cross-currency swap
 
Other Income (Expense), net
 
7.6

 

 
7.6

 

 
(9.0
)
 

Variable-to-fixed interest rate swap
 
Interest Expense
 
(1.7
)
 
0.8

 
0.2

 
2.1

 
(163.9
)
 
(9.1
)
 

See Note 14 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three and nine months ended September 30, 2019 and 2018.

21

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


The following table summarizes the amount and location of gains and losses recognized in the Condensed Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:

 
 
 
 
Gain (Loss) Recognized During
Total of Financial
 
 
Location of Gain (Loss)
 
Three Months Ended
 
Nine Months Ended
Statement Line
 
 
 Recognized in
 
September 30,
 
September 30,
Item
 
 
  Net Income
 
2019

2018
 
2019
 
2018
2019
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
Currency forward contracts
 
Cost of Goods Sold
 
$
(0.5
)
 
$
2.3

 
$
1.3

 
$
2.8

$
4,381.7

Currency forward contracts
 
Other Income (Expense), net
 
0.1

 
(0.5
)
 
(0.5
)
 
1.3

(9.0
)



22

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

10. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost (credit) are as follows:
 
 
Pension Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Service cost
 
$
0.4

 
$
1.1

 
$
1.1

 
$
3.2

Interest cost
 
7.1

 
6.9

 
21.3

 
20.6

Expected asset return
 
(10.3
)
 
(11.4
)
 
(30.9
)
 
(34.4
)
Amortized loss
 
1.5

 
2.2

 
4.7

 
6.6

Amortized prior service cost
 

 

 

 
0.1

Curtailment
 

 

 

 
3.2

Settlement
 
0.4

 

 
0.4

 

Net periodic benefit credit
 
$
(0.9
)
 
$
(1.2
)
 
$
(3.4
)
 
$
(0.7
)
 
 
 
 
 
 
 
 
 
Other Postretirement Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 

 
 

 
 
 
 
Service cost
 
$

 
$
0.1

 
$
0.2

 
$
0.3

Interest cost
 
3.3

 
3.1

 
9.7

 
9.3

Amortized loss
 

 
0.2

 
0.1

 
0.6

Amortized prior service credit
 
(0.4
)
 
(0.7
)
 
(1.2
)
 
(2.0
)
Net periodic benefit cost
 
$
2.9

 
$
2.7

 
$
8.8

 
$
8.2



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 September 30, 2019 and December 31, 2018, we have a noncurrent pension liability of $113.0 million and $128.6 million, respectively. As of September 30, 2019 and December 31, 2018, we have a noncurrent other postretirement benefits liability of $506.4 million and $506.5 million, respectively.

Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions) related to certain of our U.S. pension plans, we expect our regulatory pension funding requirements in 2019 to be approximately $2.2 million. We expect our cash payments for other postretirement benefit obligations in 2019, net of GM cost sharing, to be approximately $17.7 million.


23

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

11. PRODUCT WARRANTIES

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
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
55.7

 
$
58.4

 
$
57.7

 
$
49.5

     Accruals
 
5.3

 
4.4

 
14.7

 
14.9

Payments
 
(0.9
)
 
(2.2
)
 
(8.2
)
 
(3.3
)
     Adjustment to prior period accruals
 
0.7

 
5.1

 
(3.6
)
 
4.9

     Foreign currency translation
 
(0.5
)
 
(0.2
)
 
(0.3
)
 
(0.5
)
Ending balance
 
$
60.3

 
$
65.5

 
$
60.3

 
$
65.5





24

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

12. INCOME TAXES

We adjust our effective tax rate each quarter based on our estimated annual effective tax rate. We 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 was a benefit of $40.4 million for the three months ended September 30, 2019, an effective income tax rate of 24.6%, as compared to expense of $11.5 million for the three months ended September 30, 2018, an effective income tax rate of 15.2%. Income tax was a benefit of $37.4 million for the nine months ended September 30, 2019, an effective income tax rate of 55.7%, as compared to expense of $31.4 million for the nine months ended September 30, 2018, an effective income tax rate of 9.3%.

Our effective income tax rate for the three months ended September 30, 2019 varies from our effective income tax rate for the three months ended September 30, 2018 primarily due to an income tax benefit of $47.2 million recognized during the third quarter of 2019 as a result of the impairment charge recorded upon reclassifying the assets and liabilities of the U.S. Casting business to held-for-sale.

Our effective income tax rate for the nine months ended September 30, 2019 varies from our effective income tax rate for the nine months ended September 30, 2018, primarily as a result of the tax benefit associated with the impairment charge as discussed above. In addition, as part of the Tax Cuts and Jobs Act in 2017, a one-time transition tax (Transition Tax) was imposed on certain foreign earnings for which U.S. income tax was previously deferred. The Department of Treasury and Internal Revenue Service issued final regulations on February 5, 2019 regarding the Transition Tax, which changed the manner in which we are required to compute the Transition Tax when it is recognized over a two-year period. The application of the final regulations resulted in a $9.3 million income tax benefit, which has been recorded in the nine months ended September 30, 2019, the period in which the final regulations were issued.

Our effective income tax rate for the nine months ended September 30, 2018 was impacted by certain discrete income tax items recognized during this period. During the first nine months of 2018, we recognized a discrete tax benefit as a result of finalizing an advance pricing agreement in a foreign jurisdiction, which resulted in a reduction of our liability for unrecognized income tax benefits and related interest and penalties of $20.0 million. Also in the first nine months of 2018, we recognized a discrete tax expense related to the sale of the aftermarket business associated with our former Powertrain segment.

For the three and nine months ended September 30, 2019 and 2018, our effective income tax rates vary from the U.S. federal statutory rate of 21% primarily due to favorable foreign tax rates, as well as the impact of tax credits and the effect of the discrete items described above.

We operate in multiple jurisdictions throughout the world and the income tax returns of several subsidiaries in various tax jurisdictions are currently under examination. We are currently under a U.S. federal income tax examination for the years 2015 through 2017. We continue to have years subject to income tax examination in certain significant tax jurisdictions from 2013 to present. Based on the status of ongoing tax audits, and the protocol of finalizing audits by the relevant tax authorities, it is not possible to estimate the impact of changes, if any, to previously recorded uncertain tax positions. As of September 30, 2019 and December 31, 2018, we have recorded a liability for unrecognized income tax benefits and related interest and penalties of $51.9 million and $45.6 million, respectively.

During the next 12 months, we may finalize an advance pricing agreement in a foreign jurisdiction, which could result in a cash payment to the relevant tax authorities and a reduction of our liability for unrecognized tax benefits and related interest and penalties. Although it is difficult to estimate with certainty the amount of any audit settlement, we do not expect any potential settlement to be materially different from what we have recorded in unrecognized tax benefits. We will continue to monitor the progress and conclusions of all ongoing audits and other communications with tax authorities, and will adjust our estimated liability as necessary.



25

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

13. EARNINGS (LOSS) PER SHARE (EPS)

We present EPS 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
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions, except per share data)
Numerator
 
 

 
 
 
 
 
 
Net income (loss) attributable to AAM
 
$
(124.2
)
 
$
63.8

 
$
(30.1
)
 
$
304.3

    Less: Net income attributable to participating securities
 

 
(2.0
)
 

 
(8.9
)
Net income (loss) attributable to common shareholders - Basic and Dilutive
 
$
(124.2
)
 
$
61.8

 
$
(30.1
)
 
$
295.4

 
 
 
 
 
 
 
 
 
Denominators
 
 

 
 

 
 
 
 
Basic common shares outstanding -
 
 

 
 

 
 
 
 
   Weighted-average shares outstanding
 
115.8

 
115.3

 
115.6

 
115.0

        Less: Participating securities
 
(3.3
)
 
(3.6
)
 
(3.3
)
 
(3.4
)
    Weighted-average common shares outstanding
 
112.5

 
111.7

 
112.3

 
111.6

 
 
 
 
 
 
 
 
 
Effect of dilutive securities -
 
 

 
 

 
 
 
 
   Dilutive stock-based compensation
 

 
1.0

 

 
0.7

 
 


 


 
 
 
 
Diluted shares outstanding -
 
 

 
 

 
 
 
 
   Adjusted weighted-average shares after assumed conversions
 
112.5

 
112.7

 
112.3

 
112.3

 
 
 

 
 

 
 
 
 
Basic EPS
 
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.65

 
 
 

 
 

 
 
 
 
Diluted EPS
 
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.63



Basic and diluted loss per share are the same for the three and nine months ended September 30, 2019 because the effect of dilutive performance shares of 0.3 million and 0.4 million, respectively, would have been antidilutive.


26

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

14. 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 September 30, 2019 and September 30, 2018 are as follows (in millions):

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at June 30, 2019
$
(239.8
)
 
$
(94.2
)
 
$
(19.4
)
 
$
(353.4
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
(2.9
)
 
(37.1
)
 
(0.7
)
 
(40.7
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
0.6

 

 
(0.1
)
 
0.5

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss
1.3

(a)

 
(6.8
)
(b)
(5.5
)
 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.3
)
 

 
1.2

 
0.9

 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive loss
(1.3
)
 
(37.1
)
 
(6.4
)
 
(44.8
)
 
 
 
 
 
 
 
 
Balance at September 30, 2019
$
(241.1
)
 
$
(131.3
)
 
$
(25.8
)
 
$
(398.2
)

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at June 30, 2018
$
(238.5
)
 
$
(77.2
)
 
$
0.6

 
$
(315.1
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications

 
(11.9
)
 
12.8

 
0.9

 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications

 

 
(0.7
)
 
(0.7
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
1.3

(a)

 
0.1

(b)
1.4

 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.3
)
 

 
0.2

 
(0.1
)
 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive income (loss)
1.0

 
(11.9
)
 
12.4

 
1.5

 
 
 
 
 
 
 
 
Balance at September 30, 2018
$
(237.5
)
 
$
(89.1
)
 
$
13.0

 
$
(313.6
)
(a)
The amount reclassified from AOCI included $1.2 million in COGS and $0.1 million in SG&A for the three months ended September 30, 2019 and $1.5 million in COGS and $(0.1) million in SG&A for the three months ended September 30, 2018.
 
 
(b)
The amounts reclassified from AOCI included $(0.9) million in COGS, $1.7 million in interest expense and $(7.6) million in other income for the three months ended September 30, 2019 and $0.9 million in COGS and $(0.8) million in interest expense for the three months ended September 30, 2018.


27

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Reclassification adjustments and other activity impacting accumulated other comprehensive income (loss) during the nine months ended September 30, 2019 and September 30, 2018 are as follows (in millions):
 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at December 31, 2018
$
(213.9
)
 
$
(96.6
)
 
$
(1.1
)
 
$
(311.6
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
(30.8
)
(a)
(34.7
)
 
(22.4
)
 
(87.9
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
0.6

 

 
5.7

 
6.3

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss
3.8

(b)

 
(9.6
)
(c)
(5.8
)
 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.8
)
 

 
1.6

 
0.8

 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive loss
(27.2
)
 
(34.7
)
 
(24.7
)
 
(86.6
)
 
 
 
 
 
 
 
 
Balance at September 30, 2019
$
(241.1
)
 
$
(131.3
)
 
$
(25.8
)
 
$
(398.2
)

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at December 31, 2017
$
(252.0
)
 
$
(34.1
)
 
$
(6.6
)
 
$
(292.7
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
14.7

 
(55.2
)
 
19.7

 
(20.8
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
(3.6
)
 

 
(2.2
)
 
(5.8
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
4.6

(b)
0.2

 
1.6

(c)
6.4

 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(1.2
)
 

 
0.5

 
(0.7
)
 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive income (loss)
14.5

 
(55.0
)
 
19.6

 
(20.9
)
 
 
 
 
 
 
 
 
Balance at September 30, 2018
$
(237.5
)
 
$
(89.1
)
 
$
13.0

 
$
(313.6
)
(a)
ASU 2018-02 became effective on January 1, 2019, and we elected to reclassify the stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, resulting in a decrease in Accumulated other comprehensive income (loss) of $27.7 million at January 1, 2019. See Note 1 - Organization and Basis of Presentation for further detail.
 
 
(b)
The amount reclassified from AOCI included $3.6 million in COGS and $0.2 million in SG&A for the nine months ended September 30, 2019 and $4.5 million in COGS and $0.1 million in SG&A for the nine months ended September 30, 2018.
 
 
(c)
The amounts reclassified from AOCI included $(1.8) million in COGS, $(0.2) million in interest expense and $(7.6) million in other income for the nine months ended September 30, 2019 and $3.7 million in COGS and $(2.1) million in interest expense for the nine months ended September 30, 2018.


28

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

15. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Net Sales

Net sales recognized from contracts with customers, disaggregated by segment and geographical location, are presented in the following table for the three and nine months ended September 30, 2019 and 2018. Net sales are attributed to regions based on the location of production. Intersegment sales have been excluded from the table.

In the first quarter of 2019, we reorganized our business to disaggregate our former Powertrain business unit, with a portion moving to our Driveline business unit and a portion moving to our Metal Forming business unit. As a result, the Powertrain amounts previously reported for the three and nine months ended September 30, 2018 have been reclassified to Driveline and Metal Forming.
 
 
Three Months Ended September 30, 2019
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
902.7

 
$
296.9

 
$
169.7

 
$
1,369.3

Asia
 
131.0

 
10.3

 

 
141.3

Europe
 
77.9

 
61.1

 

 
139.0

South America
 
26.5

 
1.3

 

 
27.8

Total
 
$
1,138.1

 
$
369.6

 
$
169.7

 
$
1,677.4

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
946.0

 
$
316.8

 
$
193.8

 
$
1,456.6

Asia
 
160.7

 
8.9

 

 
169.6

Europe
 
85.1

 
69.8

 

 
154.9

South America
 
34.6

 
1.3

 

 
35.9

Total
 
$
1,226.4

 
$
396.8

 
$
193.8

 
$
1,817.0

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2019
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
2,644.1

 
$
903.7

 
$
553.9

 
$
4,101.7

Asia
 
419.3

 
25.7

 

 
445.0

Europe
 
270.3

 
201.0

 

 
471.3

South America
 
78.2

 
4.7

 

 
82.9

Total
 
$
3,411.9

 
$
1,135.1

 
$
553.9

 
$
5,100.9

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2018
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
2,892.5

 
$
983.6

 
$
613.2

 
$
4,489.3

Asia
 
481.6

 
33.7

 

 
515.3

Europe
 
240.3

 
228.8

 

 
469.1

South America
 
98.9

 
3.7

 

 
102.6

Total
 
$
3,713.3

 
$
1,249.8

 
$
613.2

 
$
5,576.3







29

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Contract Assets and Liabilities

The following table summarizes our beginning and ending balances for accounts receivable and contract liabilities associated with our contracts with customers:

 
 
 
 
 
Accounts Receivable, Net
Contract Liabilities (Current)
Contract Liabilities (Long-term)
December 31, 2018
$
966.5

$
44.3

$
77.6

September 30, 2019
976.9

22.6

83.1

Increase/(decrease)
$
10.4

$
(21.7
)
$
5.5



Contract liabilities relate to deferred revenue associated with various settlements and commercial agreements for which we have a future performance obligation to the customer. We recognize this deferred revenue into revenue over the life of the associated program as we satisfy our performance obligations to the customer. We do not have contract assets as defined in ASC 606.

During the three and nine months ended September 30, 2019, we amortized $12.5 million and $40.3 million, respectively, of previously recorded contract liabilities into revenue as we satisfied performance obligations with our customers.


30

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

16. SEGMENT REPORTING

Subsequent to the acquisition of MPG in 2017, our business was organized into four segments: Driveline, Metal Forming, Powertrain and Casting. In the first quarter of 2019, we reorganized our business to disaggregate our former Powertrain segment, with a portion moving to our Driveline segment and a portion moving to our Metal Forming segment. As a result, our business is now organized into Driveline, Metal Forming and Casting segments, with each representing a reportable segment under ASC 280 Segment Reporting. The Powertrain Sales and Segment Adjusted EBITDA amounts previously reported for the three and nine months ended September 30, 2018, as well as the Total Assets previously reported for Powertrain as of December 31, 2018, have been reclassified to Driveline and Metal Forming in the tables below.

The results of each segment are regularly reviewed by the chief operating decision maker to assess the performance of the segment and make decisions regarding the allocation of resources to the segments.

Our product offerings by segment are as follows:

Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles;
Metal Forming products consist primarily of axle and transmission shafts, ring and pinion gears, differential gears and assemblies, connecting rods and variable valve timing products for Original Equipment Manufacturers and Tier 1 automotive suppliers; and
Casting products consist primarily of both thin wall castings and high strength ductile iron castings, as well as transmission pump bodies, steering knuckles, control arms, brake anchors and calipers, and ball joint housings for the global light vehicle, commercial and industrial markets.

We use Segment Adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gain on the sale of a business, impairment charges and non-recurring items.

The following tables represent information by reportable segment for the three months ended September 30, 2019 and 2018 (in millions):


Three Months Ended September 30, 2019


Driveline

Metal Forming

Casting

Total
Sales

$
1,146.7


$
476.6


$
209.0


$
1,832.3

Less: intersegment sales

8.6


107.0


39.3


154.9

Net external sales
 
$
1,138.1


$
369.6


$
169.7

 
$
1,677.4

 
 
 
 
 
 
 
 
 
Segment Adjusted EBITDA
 
$
171.6

 
$
80.4

 
$
13.8

 
$
265.8

 
 
 
 
 
 
 
 
 


Three Months Ended September 30, 2018


Driveline

Metal Forming

Casting

Total
Sales

$
1,228.2


$
509.0


$
219.1


$
1,956.3

Less: intersegment sales

1.8


112.2


25.3


139.3

Net external sales
 
$
1,226.4


$
396.8


$
193.8


$
1,817.0

 
 
 
 
 
 
 
 
 
Segment Adjusted EBITDA
 
$
176.9

 
$
83.6

 
$
14.5

 
$
275.0









31

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

The following tables represent information by reportable segment for the nine months ended September 30, 2019 and 2018 (in millions):
 
 
Nine Months Ended September 30, 2019
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
Sales
 
$
3,422.5

 
$
1,444.1

 
$
655.0

 
$
5,521.6

Less: intersegment sales
 
10.6

 
309.0

 
101.1

 
420.7

Net external sales
 
$
3,411.9

 
$
1,135.1

 
$
553.9

 
$
5,100.9

 
 
 
 
 
 
 
 
 
Segment Adjusted EBITDA
 
$
461.7

 
$
253.7

 
$
61.4

 
$
776.8

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2018
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
Sales
 
$
3,718.6

 
$
1,581.7

 
$
701.3

 
$
6,001.6

Less: intersegment sales
 
5.3

 
331.9

 
88.1

 
425.3

Net external sales
 
$
3,713.3

 
$
1,249.8

 
$
613.2

 
$
5,576.3

 
 
 
 
 
 
 
 
 
Segment Adjusted EBITDA
 
$
570.9

 
$
306.0

 
$
63.0

 
$
939.9


The following table represents total assets by segment as of September 30, 2019 and December 31, 2018 (in millions):
 
 
Driveline
 
Metal Forming
 
Casting
 
Corporate and Elims
 
Total
Total Assets at September 30, 2019
 
$
3,649.4

 
$
2,579.9

 
$
454.7

 
$
632.3

 
$
7,316.3

 
 
 
 
 
 
 
 
 
 
 
Total Assets at December 31, 2018
 
3,529.2

 
2,723.0

 
664.7

 
593.8

 
7,510.7


The following table represents a reconciliation of Total Segment Adjusted EBITDA to consolidated income before income taxes for the three months and nine months ended September 30, 2019 and 2018 (in millions):

Three Months Ended September 30,

Nine Months Ended September 30,

2019

2018

2019

2018
Total segment adjusted EBITDA
$
265.8

 
$
275.0

 
$
776.8

 
$
939.9

Interest expense
(54.3
)
 
(54.9
)
 
(163.9
)
 
(162.5
)
Depreciation and amortization
(134.2
)
 
(132.9
)
 
(411.5
)
 
(390.9
)
Restructuring and acquisition-related costs
(11.7
)
 
(11.7
)
 
(36.0
)
 
(66.8
)
Gain on sale of business

 

 

 
15.5

Gain on settlement of capital lease

 

 

 
15.6

Debt refinancing and redemption costs
(5.1
)
 

 
(7.5
)
 
(14.6
)
Impairment charge
(225.0
)
 

 
(225.0
)
 

Income (loss) before income taxes
$
(164.5
)
 
$
75.5

 
$
(67.1
)
 
$
336.2




32

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Holdings has no significant assets other than its 100% ownership in AAM, Inc. and Metaldyne Performance Group, Inc. (MPG Inc.), and no direct subsidiaries other than AAM, Inc. and MPG Inc. The 6.625% Notes, 6.50% Notes, 6.25% Notes (due 2026), and 6.25% Notes (due 2025) 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. and MPG Inc.

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 Operations
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
 
 
 
External
 
$

 
$
205.7

 
$
506.5

 
$
965.2

 
$

 
$
1,677.4

Intercompany
 

 
0.5

 
77.0

 
16.5

 
(94.0
)
 

Total net sales
 

 
206.2

 
583.5

 
981.7

 
(94.0
)
 
1,677.4

Cost of goods sold
 

 
221.2

 
529.6

 
771.9

 
(94.0
)
 
1,428.7

Gross profit (loss)
 

 
(15.0
)
 
53.9

 
209.8

 

 
248.7

Selling, general and administrative expenses
 

 
68.9

 
6.8

 
17.0

 

 
92.7

Amortization of intangible assets
 

 
1.4

 
21.4

 
0.9

 

 
23.7

Impairment charges
 

 

 
225.0

 

 

 
225.0

Restructuring and acquisition-related costs
 

 
6.2

 
4.1

 
1.4

 

 
11.7

Operating income (loss)
 

 
(91.5
)
 
(203.4
)
 
190.5

 

 
(104.4
)
Non-operating income (expense), net
 

 
(62.7
)
 
2.3

 
0.3

 

 
(60.1
)
Income (loss) before income taxes
 

 
(154.2
)
 
(201.1
)
 
190.8

 

 
(164.5
)
Income tax expense (benefit)
 

 
(8.5
)
 
(46.8
)
 
14.9

 

 
(40.4
)
Earnings (loss) from equity in subsidiaries
 
(124.2
)
 
50.5

 
38.2

 

 
35.5

 

Net income (loss) before royalties
 
(124.2
)
 
(95.2
)
 
(116.1
)
 
175.9

 
35.5

 
(124.1
)
Royalties
 

 
86.6

 
0.7

 
(87.3
)
 

 

Net income (loss) after royalties
 
(124.2
)
 
(8.6
)
 
(115.4
)
 
88.6

 
35.5

 
(124.1
)
Net income attributable to noncontrolling interests
 

 

 

 
(0.1
)
 

 
(0.1
)
Net income (loss) attributable to AAM
 
$
(124.2
)
 
$
(8.6
)
 
$
(115.4
)
 
$
88.5

 
$
35.5

 
$
(124.2
)
Other comprehensive income (loss), net of tax
 
(44.8
)
 
(26.4
)
 
(35.4
)
 
(36.4
)
 
98.2

 
(44.8
)
Comprehensive income (loss) attributable to AAM
 
$
(169.0
)
 
$
(35.0
)
 
$
(150.8
)
 
$
52.1

 
$
133.7

 
$
(169.0
)


33

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 

 
 

 
 

 
 

 
 

 
 

Net sales
 
 

 
 

 
 

 
 

 
 

 
 

External
 
$

 
$
247.1

 
$
544.3

 
$
1,025.6

 
$

 
$
1,817.0

Intercompany
 

 
0.7

 
75.6

 
10.8

 
(87.1
)
 

Total net sales
 

 
247.8

 
619.9

 
1,036.4

 
(87.1
)
 
1,817.0

Cost of goods sold
 

 
220.6

 
594.2

 
821.9

 
(87.1
)
 
1,549.6

Gross profit
 

 
27.2

 
25.7

 
214.5

 

 
267.4

Selling, general and administrative expenses
 

 
63.4

 
19.6

 
13.3

 

 
96.3

Amortization of intangible assets
 

 
1.0

 
22.9

 
0.9

 

 
24.8

Restructuring and acquisition-related costs
 

 
5.0

 
3.9

 
2.8

 

 
11.7

Operating income (loss)
 

 
(42.2
)
 
(20.7
)
 
197.5

 

 
134.6

Non-operating income (expense), net
 

 
(60.0
)
 
2.8

 
(1.9
)
 

 
(59.1
)
Income (loss) before income taxes
 

 
(102.2
)
 
(17.9
)
 
195.6

 

 
75.5

Income tax expense (benefit)
 

 
(1.0
)
 
0.1

 
12.4

 

 
11.5

Earnings from equity in subsidiaries
 
63.8

 
68.1

 
33.8

 

 
(165.7
)
 

Net income (loss) before royalties
 
63.8

 
(33.1
)
 
15.8

 
183.2

 
(165.7
)
 
64.0

Royalties
 

 
87.6

 
0.7

 
(88.3
)
 

 

Net income after royalties
 
63.8

 
54.5

 
16.5

 
94.9

 
(165.7
)
 
64.0

Net income attributable to noncontrolling interests
 

 

 

 
(0.2
)
 

 
(0.2
)
Net income attributable to AAM
 
$
63.8

 
$
54.5

 
$
16.5

 
$
94.7

 
$
(165.7
)
 
$
63.8

Other comprehensive income (loss), net of tax
 
1.5

 
1.0

 
(10.3
)
 

 
9.3

 
1.5

Comprehensive income attributable to AAM
 
$
65.3

 
$
55.5

 
$
6.2

 
$
94.7

 
$
(156.4
)
 
$
65.3








34

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Condensed Consolidating Statements of Operations
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
 
 
 
External
 
$

 
$
711.8

 
$
1,561.8

 
$
2,827.3

 
$

 
$
5,100.9

Intercompany
 

 
1.5

 
219.8

 
37.2

 
(258.5
)
 

Total net sales
 

 
713.3

 
1,781.6

 
2,864.5

 
(258.5
)
 
5,100.9

Cost of goods sold
 

 
721.1

 
1,612.2

 
2,306.9

 
(258.5
)
 
4,381.7

Gross profit (loss)
 

 
(7.8
)
 
169.4

 
557.6

 

 
719.2

Selling, general and administrative expenses
 

 
208.9

 
22.4

 
43.4

 

 
274.7

Amortization of intangible assets
 

 
4.3

 
66.6

 
2.7

 

 
73.6

Impairment charges
 

 

 
225.0

 

 

 
225.0

Restructuring and acquisition-related costs
 

 
17.1

 
12.3

 
6.6

 

 
36.0

Operating income (loss)
 

 
(238.1
)
 
(156.9
)
 
504.9

 

 
109.9

Non-operating income (expense), net
 

 
(184.0
)
 
7.0

 

 

 
(177.0
)
Income (loss) before income taxes
 

 
(422.1
)
 
(149.9
)
 
504.9

 

 
(67.1
)
Income tax expense (benefit)
 

 
(23.2
)
 
(46.7
)
 
32.5

 

 
(37.4
)
Earnings (loss) from equity in subsidiaries
 
(30.1
)
 
131.9

 
105.3

 

 
(207.1
)
 

Net income (loss) before royalties
 
(30.1
)
 
(267.0
)
 
2.1

 
472.4

 
(207.1
)
 
(29.7
)
Royalties
 

 
241.2

 
2.2

 
(243.4
)
 

 

Net income (loss) after royalties
 
(30.1
)
 
(25.8
)
 
4.3

 
229.0

 
(207.1
)
 
(29.7
)
Net income attributable to noncontrolling interests
 

 

 

 
(0.4
)
 

 
(0.4
)
Net income (loss) attributable to AAM
 
$
(30.1
)
 
$
(25.8
)
 
$
4.3

 
$
228.6

 
$
(207.1
)
 
$
(30.1
)
Other comprehensive income (loss), net of tax
 
(58.9
)
 
(40.2
)
 
(32.1
)
 
(29.5
)
 
101.8

 
(58.9
)
Comprehensive income (loss) attributable to AAM
 
$
(89.0
)
 
$
(66.0
)
 
$
(27.8
)
 
$
199.1

 
$
(105.3
)
 
$
(89.0
)


35

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 

 
 

 
 

 
 

 
 

 
 

Net sales
 
 

 
 

 
 

 
 

 
 

 
 

External
 
$

 
$
851.4

 
$
1,699.2

 
$
3,025.7

 
$

 
$
5,576.3

Intercompany
 

 
4.0

 
231.6

 
31.1

 
(266.7
)
 

Total net sales
 

 
855.4

 
1,930.8

 
3,056.8

 
(266.7
)
 
5,576.3

Cost of goods sold
 

 
804.5

 
1,713.3

 
2,410.1

 
(266.7
)
 
4,661.2

Gross profit
 

 
50.9

 
217.5

 
646.7

 

 
915.1

Selling, general and administrative expenses
 

 
183.4

 
61.4

 
43.8

 

 
288.6

Amortization of intangible assets
 

 
3.9

 
68.0

 
2.6

 

 
74.5

Restructuring and acquisition-related costs
 

 
31.1

 
31.8

 
3.9

 

 
66.8

Gain on sale of business
 

 

 
(15.5
)
 

 

 
(15.5
)
Operating income (loss)
 

 
(167.5
)
 
71.8

 
596.4

 

 
500.7

Non-operating income (expense), net
 

 
(193.8
)
 
11.0

 
18.3

 

 
(164.5
)
Income (loss) before income taxes
 

 
(361.3
)
 
82.8

 
614.7

 

 
336.2

Income tax expense
 

 
8.1

 
0.6

 
22.7

 

 
31.4

Earnings from equity in subsidiaries
 
304.3

 
241.6

 
141.6

 

 
(687.5
)
 

Net income (loss) before royalties
 
304.3

 
(127.8
)
 
223.8

 
592.0

 
(687.5
)
 
304.8

Royalties
 

 
256.8

 
2.6

 
(259.4
)
 

 

Net income after royalties
 
304.3

 
129.0

 
226.4

 
332.6

 
(687.5
)
 
304.8

Net income attributable to noncontrolling interests
 

 

 

 
(0.5
)
 

 
(0.5
)
Net income attributable to AAM
 
$
304.3

 
$
129.0

 
$
226.4

 
$
332.1

 
$
(687.5
)
 
$
304.3

Other comprehensive loss, net of tax
 
(20.9
)
 
(2.6
)
 
(50.5
)
 
(37.3
)
 
90.4

 
(20.9
)
Comprehensive income attributable to AAM
 
$
283.4

 
$
126.4

 
$
175.9

 
$
294.8

 
$
(597.1
)
 
$
283.4



36

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
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
 
    Cash and cash equivalents
 
$

 
$
79.4

 
$
0.1

 
$
295.6

 
$

 
$
375.1

    Accounts receivable, net
 

 
95.2

 
230.8

 
650.9

 

 
976.9

    Intercompany receivables
 

 
4,864.1

 
4,722.1

 
183.0

 
(9,769.2
)
 

    Inventories, net
 

 
62.8

 
116.9

 
223.4

 

 
403.1

    Prepaid expenses and other
 

 
34.3

 
3.7

 
92.9

 

 
130.9

    Current assets held-for-sale
 

 

 
312.2

 

 

 
312.2

Total current assets
 

 
5,135.8

 
5,385.8

 
1,445.8

 
(9,769.2
)
 
2,198.2

Property, plant and equipment, net
 

 
294.1

 
554.5

 
1,477.8

 

 
2,326.4

Goodwill
 

 

 
719.0

 
408.5

 

 
1,127.5

Intangible assets, net
 

 
15.4

 
836.9

 
29.2

 

 
881.5

Intercompany notes and accounts receivable
 

 
1,542.1

 
186.7

 

 
(1,728.8
)
 

Other assets and deferred charges
 

 
339.7

 
118.1

 
324.9

 

 
782.7

Investment in subsidiaries
 
2,721.4

 
2,155.9

 
1,504.1

 

 
(6,381.4
)
 

Total assets
 
$
2,721.4

 
$
9,483.0

 
$
9,305.1

 
$
3,686.2

 
$
(17,879.4
)
 
$
7,316.3

Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

 
 

Current liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$

 
$
2.1

 
$
5.3

 
$
16.4

 
$

 
$
23.8

Accounts payable
 

 
101.3

 
169.1

 
433.3

 

 
703.7

Intercompany payables
 

 
3,931.7

 
5,835.5

 
2.0

 
(9,769.2
)
 

Accrued expenses and other
 

 
165.2

 
34.9

 
207.8

 

 
407.9

    Current liabilities held-for-sale
 

 

 
101.7

 

 

 
101.7

Total current liabilities
 

 
4,200.3

 
6,146.5

 
659.5

 
(9,769.2
)
 
1,237.1

Intercompany notes and accounts payable
 
1,311.8

 
36.0

 

 
381.0

 
(1,728.8
)
 

Long-term debt, net
 

 
3,581.8

 

 
91.5

 

 
3,673.3

Other long-term liabilities
 

 
503.0

 
243.1

 
250.2

 

 
996.3

Total liabilities
 
1,311.8

 
8,321.1

 
6,389.6

 
1,382.2

 
(11,498.0
)
 
5,906.7

Total AAM Stockholders’ equity
 
1,406.8

 
1,161.9

 
2,915.5

 
2,301.2

 
(6,378.6
)
 
1,406.8

Noncontrolling interests in subsidiaries
 
2.8

 

 

 
2.8

 
(2.8
)
 
2.8

Total stockholders’ equity
 
1,409.6

 
1,161.9

 
2,915.5

 
2,304.0

 
(6,381.4
)
 
1,409.6

Total liabilities and stockholders’ equity
 
$
2,721.4

 
$
9,483.0

 
$
9,305.1

 
$
3,686.2

 
$
(17,879.4
)
 
$
7,316.3



37

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
 
    Cash and cash equivalents
 
$

 
$
36.7

 
$
0.2

 
$
439.5

 
$

 
$
476.4

    Accounts receivable, net
 

 
122.7

 
287.7

 
556.1

 

 
966.5

    Intercompany receivables
 

 
3,337.2

 
2,356.3

 
93.5

 
(5,787.0
)
 

    Inventories, net
 

 
42.5

 
157.7

 
259.5

 

 
459.7

    Prepaid expenses and other
 

 
34.4

 
6.0

 
86.8

 

 
127.2

Total current assets
 

 
3,573.5

 
2,807.9

 
1,435.4

 
(5,787.0
)
 
2,029.8

Property, plant and equipment, net
 

 
275.8

 
758.6

 
1,480.0

 

 
2,514.4

Goodwill
 

 

 
719.0

 
422.8

 

 
1,141.8

Intangible assets, net
 

 
18.6

 
1,059.6

 
32.9

 

 
1,111.1

Intercompany notes and accounts receivable
 

 
1,316.8

 
144.5

 

 
(1,461.3
)
 

Other assets and deferred charges
 

 
319.8

 
126.4

 
267.4

 

 
713.6

Investment in subsidiaries
 
2,790.5

 
2,241.5

 
1,748.7

 

 
(6,780.7
)
 

Total assets
 
$
2,790.5

 
$
7,746.0

 
$
7,364.7

 
$
3,638.5

 
$
(14,029.0
)
 
$
7,510.7

Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

 
 

Current liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$

 
$
100.0

 
$

 
$
21.6

 
$

 
$
121.6

Accounts payable
 

 
94.2

 
246.5

 
499.5

 

 
840.2

Intercompany payables
 

 
2,050.0

 
3,615.7

 
121.3

 
(5,787.0
)
 

Accrued expenses and other
 

 
169.0

 
35.8

 
190.2

 

 
395.0

Total current liabilities
 

 
2,413.2

 
3,898.0

 
832.6

 
(5,787.0
)
 
1,356.8

Intercompany notes and accounts payable
 
1,304.2

 
12.5

 

 
144.6

 
(1,461.3
)
 

Long-term debt, net
 

 
3,578.3

 
3.0

 
105.5

 

 
3,686.8

Other long-term liabilities
 

 
508.9

 
271.7

 
200.2

 

 
980.8

Total liabilities
 
1,304.2

 
6,512.9

 
4,172.7

 
1,282.9

 
(7,248.3
)
 
6,024.4

Total AAM Stockholders’ equity
 
1,483.9

 
1,233.1

 
3,192.0

 
2,353.2

 
(6,778.3
)
 
1,483.9

Noncontrolling interests in subsidiaries
 
2.4

 

 

 
2.4

 
(2.4
)
 
2.4

Total stockholders’ equity
 
1,486.3

 
1,233.1

 
3,192.0

 
2,355.6

 
(6,780.7
)
 
1,486.3

Total liabilities and stockholders’ equity
 
$
2,790.5

 
$
7,746.0

 
$
7,364.7

 
$
3,638.5

 
$
(14,029.0
)
 
$
7,510.7



38

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Condensed Consolidating Statements of Cash Flows
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$

 
$
214.1

 
$
20.4

 
$
144.1

 
$

 
$
378.6

Investing activities
 
 

 
 

 
 

 
 

 
 

 
 

Purchases of property, plant and equipment
 

 
(46.8
)
 
(91.0
)
 
(197.5
)
 

 
(335.3
)
Proceeds from sale of property, plant and equipment
 

 

 
1.7

 
0.3

 

 
2.0

Investment in joint ventures
 

 

 

 
(2.2
)
 

 
(2.2
)
Intercompany activity
 

 

 
(12.0
)
 
12.0

 

 

Net cash used in investing activities
 

 
(46.8
)
 
(101.3
)
 
(187.4
)
 

 
(335.5
)
Financing activities
 
 

 
 

 
 

 
 

 
 

 
 

Net debt activity
 

 
(113.8
)
 
(0.2
)
 
(15.3
)
 

 
(129.3
)
Debt issuance costs
 

 
(3.3
)
 

 

 

 
(3.3
)
Purchase of treasury stock
 
(7.5
)
 

 

 

 

 
(7.5
)
Intercompany activity
 
7.5


(7.5
)
 
81.0

 
(81.0
)
 

 

Net cash used in financing activities
 

 
(124.6
)
 
80.8

 
(96.3
)
 

 
(140.1
)
Effect of exchange rate changes on cash
 

 

 

 
(4.3
)
 

 
(4.3
)
Net increase (decrease) in cash, cash equivalents and restricted cash
 

 
42.7

 
(0.1
)
 
(143.9
)
 

 
(101.3
)
Cash, cash equivalents and restricted cash at beginning of period
 

 
36.7

 
2.7

 
439.5

 

 
478.9

Cash, cash equivalents and restricted cash at end of period
 
$

 
$
79.4

 
$
2.6

 
$
295.6

 
$

 
$
377.6



39

AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$

 
$
240.0

 
$
103.0

 
$
170.2

 
$

 
$
513.2

Investing activities
 
 
 
 
 
 
 
 
 
 

 
 

Purchases of property, plant and equipment
 

 
(51.8
)
 
(121.2
)
 
(218.8
)
 

 
(391.8
)
Proceeds from sale of property, plant and equipment
 

 

 
2.7

 
0.5

 

 
3.2

Purchase buyouts of leased equipment
 

 

 
(0.5
)
 

 

 
(0.5
)
Proceeds from sale of business, net
 

 

 
42.7

 
4.4

 

 
47.1

Acquisition of business, net of cash acquired
 

 

 

 
(1.3
)
 

 
(1.3
)
Intercompany activity
 

 

 
(43.8
)
 
43.8

 

 

Net cash used in investing activities
 

 
(51.8
)
 
(120.1
)
 
(171.4
)
 

 
(343.3
)
Financing activities
 
 

 
 

 
 

 
 

 
 

 
 

Net debt activity
 

 
(140.3
)
 
(0.6
)
 
54.2

 

 
(86.7
)
Debt issuance costs
 

 
(6.9
)
 

 

 

 
(6.9
)
Purchase of treasury stock
 
(3.7
)
 

 

 

 

 
(3.7
)
Purchase of noncontrolling interest
 

 

 
(2.2
)
 

 

 
(2.2
)
Intercompany activity
 
3.7

 
(3.7
)
 
22.5

 
(22.5
)
 

 

Net cash provided by (used in) financing activities
 

 
(150.9
)
 
19.7

 
31.7

 

 
(99.5
)
Effect of exchange rate changes on cash
 

 

 

 
(5.3
)
 

 
(5.3
)
Net increase in cash, cash equivalents and restricted cash
 

 
37.3

 
2.6

 
25.2

 

 
65.1

Cash, cash equivalents and restricted cash at beginning of period
 

 
91.9

 
0.1

 
284.8

 

 
376.8

Cash, cash equivalents and restricted cash at end of period
 
$

 
$
129.2

 
$
2.7

 
$
310.0

 
$

 
$
441.9




40



Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis (MD&A) should be read in conjunction with the unaudited condensed consolidated financial statements and notes appearing elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the year ended December 31, 2018.

Unless the context otherwise requires, references to "we," "our," "us" or "AAM" shall mean collectively (i) American Axle & Manufacturing Holdings, Inc. (Holdings), a Delaware corporation, (ii) American Axle & Manufacturing, Inc. (AAM, Inc.), a Delaware corporation, and its direct and indirect subsidiaries, and, (iii) Metaldyne Performance Group, Inc. (MPG) and its direct and indirect subsidiaries. AAM Inc. and MPG are wholly-owned subsidiaries of Holdings.

COMPANY OVERVIEW

We are a global Tier 1 supplier to the automotive industry. We design, engineer and manufacture driveline, metal forming and casting products that are making the next generation of vehicles smarter, lighter, safer and more efficient. We employ over 25,000 associates, operating at nearly 90 facilities in 17 countries, to support our customers on global and regional platforms with a focus on quality, operational excellence and technology leadership.

We are a primary supplier of driveline components to General Motors Company (GM) for its full-size rear-wheel drive (RWD) light trucks and SUVs manufactured in North America, supplying a significant portion of GM’s rear axle and four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms.  We also supply GM with various products from our Metal Forming and Casting segments. Sales to GM were approximately 38% of our consolidated net sales in the first nine months of 2019, and 41% of our consolidated net sales in both the first nine months of 2018 and for the full year 2018.

We also supply driveline system products to FCA US LLC (FCA) for heavy-duty Ram full-size pickup trucks and its derivatives, the AWD Jeep Cherokee, and a passenger car driveshaft program. In addition, we sell various products to FCA from our Metal Forming and Casting segments. Sales to FCA were approximately 16% of our consolidated net sales in the first nine months of 2019, and 13% of our consolidated net sales in both the first nine months of 2018 and for the full year 2018.

In the third quarter of 2019, we entered into a definitive agreement to sell the U.S. operations of our Casting segment to entities affiliated with Gamut Capital Management, L.P (the Casting Sale Agreement). As a result, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. The sale of the U.S. operations of our Casting segment did not qualify for classification as discontinued operations as the sale does not represent a strategic shift in our business that has had, or will have, a major effect on our operations and financial results.

In 2019, we initiated a new global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing segments into three segments. This activity occurred through the disaggregation of our former Powertrain segment, with a portion moving into our Driveline segment and a portion moving into our Metal Forming segment. The primary objectives of this consolidation are to further the integration of MPG, align AAM's product and process technologies, and to achieve efficiencies within our corporate and business unit support teams to reduce cost in our business. Throughout this MD&A, amounts previously reported for the Powertrain segment have been reclassified to the Driveline and Metal Forming segments accordingly.


41



RESULTS OF OPERATIONS –– THREE MONTHS ENDED SEPTEMBER 30, 2019 AS COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2018

Net Sales  Net sales were $1,677.4 million in the third quarter of 2019 as compared to $1,817.0 million in the third quarter of 2018. Our change in sales in the third quarter of 2019, as compared to the third quarter of 2018, primarily reflects a reduction of approximately $57 million associated with the impact of the GM work stoppage that began during the third quarter of 2019, and the impact of lower global automotive production volumes. Net sales in the third quarter of 2019, as compared to the third quarter of 2018, also decreased by approximately $50 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. These factors were partially offset by the impact of program launches associated with our new business backlog.

Cost of Goods Sold Cost of goods sold was $1,428.7 million in the third quarter of 2019, as compared to $1,549.6 million in the third quarter of 2018. The change in cost of goods sold principally reflects a reduction of approximately $39 million associated with the impact of the GM work stoppage, and the impact of lower global automotive production volumes. Cost of goods sold was also impacted by a decrease of approximately $50 million related to metal market pass-through costs and the impact of foreign exchange.

For the three months ended September 30, 2019, material costs were approximately 55% of total costs of goods sold, as compared to approximately 58% for the three months ended September 30, 2018.

Gross Profit   Gross profit was $248.7 million in the third quarter of 2019 as compared to $267.4 million in the third quarter of 2018.  Gross margin increased to 14.8% in the third quarter of 2019 as compared to 14.7% in the third quarter of 2018.  Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.

Selling, General and Administrative Expenses (SG&A)  SG&A (including research and development (R&D)) was $92.7 million or 5.5% of net sales in the third quarter of 2019 as compared to $96.3 million or 5.3% of net sales in the third quarter of 2018.  R&D spending was approximately $37.4 million in the third quarter of 2019 as compared to $37.7 million in the third quarter of 2018. The change in SG&A in the three months ended September 30, 2019, as compared to the three months ended September 30, 2018, is primarily attributable to lower compensation-related expense.

Amortization of Intangible Assets Amortization expense related to intangible assets was $23.7 million for the three months ended September 30, 2019 and $24.8 million for the three months ended September 30, 2018.

Impairment Charge In conjunction with the Casting Sale Agreement, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. Upon reclassification to held-for-sale in the third quarter of 2019, we recorded a pre-tax impairment charge of $225.0 million to reduce the carrying value of this business to fair value less cost to sell.

Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $11.7 million in the third quarter of both 2019 and 2018. As part of our restructuring actions, we incurred severance charges of approximately $2.2 million, as well as implementation costs of approximately $4.2 million during the three months ended September 30, 2019. This compares to severance charges of $0.3 million and implementation charges of $3.3 million for the three months ended September 30, 2018.

During the three months ended September 30, 2019, we incurred $5.3 million of integration expenses primarily associated with the ongoing integration of MPG. This compares to $0.1 million of acquisition-related costs and $5.3 million of integration expenses incurred during the three months ended September 30, 2018. Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional fees incurred. Integration expenses reflect costs incurred for information technology systems, ongoing operational activities, and consulting fees incurred in conjunction with acquisitions.

In the three months ended September 30, 2018, we initiated actions to exit operations at a manufacturing facility in our Driveline segment. As a result of these actions, we were required to assess the associated long-lived assets for impairment. Based on our analysis, assets that were not to be redeployed to other AAM facilities were determined to be fully impaired resulting in a charge of $2.7 million for the three months ended September 30, 2018.

Operating Income (Loss)  Operating loss was $104.4 million in the third quarter of 2019, as compared to operating income of $134.6 million in the third quarter of 2018.  Operating margin was (6.2)% in the third quarter of 2019, as compared to 7.4% in the third quarter of 2018.  The changes in operating income (loss) and operating margin were primarily due to factors discussed in Net Sales, Cost of Goods Sold, SG&A, and Impairment Charge above.

42




Interest Expense and Investment Income  Interest expense was $54.3 million in the third quarter of 2019, as compared to $54.9 million in the third quarter of 2018.  Investment income was $2.2 million in the third quarter of 2019 as compared to $0.6 million in the third quarter of 2018

The weighted-average interest rate of our long-term debt outstanding was 5.8% in the third quarter of 2019 and 5.9% in the third quarter of 2018.

Debt Refinancing and Redemption Costs In July 2019, Holdings, AAM, Inc., and certain subsidiaries of Holdings entered into the First Amendment (First Amendment) to the Credit Agreement (as amended by the First Amendment, the Amended Credit Agreement). The First Amendment, among other things, established $340 million in incremental term loan A commitments under the Amended Credit Agreement with a maturity date of July 29, 2024 (Term Loan A Facility due 2024), extended the maturity date of the Revolving Credit Facility from April 6, 2022 to July 29, 2024 and modified the applicable margin with respect to interest rates under the Term Loan A Facility due 2024 and interest rates and commitment fees under the Revolving Credit Facility. The applicable margin and the maturity date for the Term Loan B Facility remain unchanged. The proceeds of $340 million were used to repay all of the outstanding loans under the existing Term Loan A Facility and a portion of the outstanding Term Loan B Facility, resulting in no additional indebtedness.

In the third quarter of 2019, we expensed $5.1 million for the write-off of the unamortized debt issuance costs related to the existing Term Loan A Facility and a portion of the unamortized debt issuance costs related to our Term Loan B Facility that we had been amortizing over the expected life of the borrowings.

Other Expense, Net Other expense, net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost. Other expense, net was $2.9 million in the third quarter of 2019, as compared to $4.8 million in the third quarter of 2018.

Income Tax Expense  Income tax was a benefit of $40.4 million for the three months ended September 30, 2019, as compared to expense of $11.5 million for the three months ended September 30, 2018.  Our effective income tax rate was 24.6% in the third quarter of 2019, as compared to 15.2% in the third quarter of 2018.

Our effective income tax rate for the three months ended September 30, 2019 varies from our effective income tax rate for the three months ended September 30, 2018 primarily due to an income tax benefit of $47.2 million recognized during the third quarter of 2019 as a result of the impairment charge recorded upon reclassifying the assets and liabilities of the U.S. Casting business to held-for-sale.

For the three months ended September 30, 2019 and 2018, our effective income tax rates vary from the U.S. federal statutory rate of 21% primarily due to favorable foreign tax rates, as well as the impact of tax credits and the effect of the discrete item described above.

Net Income (Loss) Attributable to AAM and Earnings (Loss) Per Share (EPS) Net income (loss) attributable to AAM was a loss of $124.2 million in the third quarter of 2019, as compared to income of $63.8 million in the third quarter of 2018. Diluted loss per share was $1.10 in the third quarter of 2019, as compared to diluted earnings per share of $0.55 in the third quarter of 2018. Net income (loss) attributable to AAM and EPS for the third quarters of 2019 and 2018 were primarily impacted by the factors discussed above.


43



RESULTS OF OPERATIONS –– NINE MONTHS ENDED SEPTEMBER 30, 2019 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2018

Net Sales  Net sales were $5,100.9 million in the first nine months of 2019 as compared to $5,576.3 million in the first nine months of 2018.  Our change in sales in the first nine months of 2019, as compared to the first nine months of 2018, primarily reflects the impact of lower full-size truck sales resulting from the in-sourcing by our largest customer of a portion of a replacement program that launched in the second half of 2018, as well as the impact of customer downtime as a result of program changeovers in the first quarter of 2019 and lower volumes on certain crossover vehicle programs that we support.

Net sales for the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018, also decreased by approximately $57 million associated with the impact of the GM work stoppage, and $96 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. These factors were partially offset by the impact of program launches associated with our new business backlog.

The GM work stoppage continued into the fourth quarter of 2019 and we estimate the full year impact of the GM work stoppage on sales to be approximately $250 million.

Cost of Goods Sold Cost of goods sold was $4,381.7 million in the first nine months of 2019 as compared to $4,661.2 million in the first nine months of 2018. The change in cost of goods sold principally reflects the impact of lower global automotive production volumes, a decrease of approximately $39 million associated with the impact of the GM work stoppage, and a decrease of approximately $96 million related to metal market pass-through costs and the impact of foreign exchange. This was partially offset by the impact of costs associated with program launches from our new business backlog, and an increase in depreciation expense of approximately $21 million as a result of significant program launch activity in 2018.

For the nine months ended September 30, 2019, material costs were approximately 56% of total costs of goods sold as compared to approximately 59% for the nine months ended September 30, 2018.

Gross Profit  Gross profit was $719.2 million in the first nine months of 2019 as compared to $915.1 million in the first nine months of 2018. Gross margin was 14.1% in the first nine months of 2019 as compared to 16.4% in the first nine months of 2018. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.

SG&A  SG&A (including R&D) was $274.7 million or 5.4% of net sales in the first nine months of 2019 as compared to $288.6 million or 5.2% of net sales in the first nine months of 2018.  R&D spending was approximately $104.9 million in the first nine months of 2019 as compared to $110.3 million in the first nine months of 2018. The change in SG&A in the first nine months of 2019, as compared to the first nine months of 2018, was primarily attributable to a decrease in R&D spending and lower compensation-related expense.

Amortization of Intangible Assets Amortization expense related to intangible assets for the nine months ended September 30, 2019 was $73.6 million as compared to $74.5 million for the nine months ended September 30, 2018.

Impairment Charge In conjunction with the Casting Sale Agreement, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. Upon reclassification to held-for-sale in the third quarter of 2019, we recorded a pre-tax impairment charge of $225.0 million to reduce the carrying value of this business to fair value less cost to sell.

Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $36.0 million for the nine months ended September 30, 2019, as compared to $66.8 million for the nine months ended September 30, 2018. As part of our restructuring actions, we incurred severance charges of approximately $10.4 million and $2.3 million, as well as implementation costs, including professional expenses, of approximately $13.1 million and $8.8 million, during the nine months ended September 30, 2019 and 2018, respectively. We expect to incur approximately $30 million to $35 million of total restructuring charges in 2019, including costs incurred under the 2019 Program.

During the nine months ended September 30, 2019, we incurred $12.5 million of integration expenses primarily associated with the ongoing integration of MPG. This compares to $1.2 million of acquisition-related costs and $27.9 million of integration expenses incurred during the nine months ended September 30, 2018. We expect to incur total integration charges of approximately $15 million to $20 million in 2019 as we further the integration of MPG.


44



Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional fees incurred. Integration expenses reflect costs incurred for information technology systems, ongoing operational activities, and consulting fees incurred in conjunction with acquisitions.

In the first nine months of 2018, we initiated actions to exit operations at manufacturing facilities in our Driveline, Metal Forming and former Powertrain segments. As a result of these actions, we were required to assess the associated long-lived assets for impairment. Based on our analysis, assets that were not to be redeployed to other AAM facilities were determined to be fully impaired resulting in a charge of $26.6 million for the nine months ended September 30, 2018.

Gain on Sale of Business In April 2018, we completed the sale of the aftermarket business associated with our former Powertrain segment for approximately $50 million. As a result, we recorded a $15.5 million pre-tax gain, which is presented in the Gain on sale of business line item of our Condensed Consolidated Statement of Income for the nine months ended September 30, 2018.

Operating Income  Operating income was $109.9 million in the first nine months of 2019 as compared to $500.7 million in the first nine months of 2018.  Operating margin was 2.2% in the first nine months of 2019 as compared to 9.0% in the first nine months of 2018.  The changes in operating income and operating margin were due to factors discussed in Net Sales, Cost of Goods Sold, SG&A, Impairment Charge, Restructuring and Acquisition-Related Costs and Gain on Sale of Business above.

Interest Expense and Investment Income  Interest expense was $163.9 million in the first nine months of 2019 as compared to $162.5 million in the first nine months of 2018.   Investment income was $3.4 million in the first nine months of 2019 as compared to $1.6 million in the first nine months of 2018.

The weighted-average interest rate of our long-term debt outstanding was 5.9% for the nine months ended September 30, 2019 and 5.8% for the nine months ended September 30, 2018. We expect our interest expense for the full year 2019 to be approximately $215 million to $225 million.

Debt Refinancing and Redemption Costs In July 2019, Holdings, AAM, Inc., and certain subsidiaries of Holdings entered into the First Amendment to the Credit Agreement. The First Amendment, among other things, established $340 million in incremental term loan A commitments under the Amended Credit Agreement with a maturity date of July 29, 2024, extended the maturity date of the Revolving Credit Facility from April 6, 2022 to July 29, 2024 and modified the applicable margin with respect to interest rates under the Term Loan A Facility due 2024 and interest rates and commitment fees under the Revolving Credit Facility. The applicable margin and the maturity date for the Term Loan B Facility remain unchanged. The proceeds of $340 million were used to repay all of the outstanding loans under the existing Term Loan A Facility and a portion of the outstanding Term Loan B Facility, resulting in no additional indebtedness.

In the third quarter of 2019, we expensed $5.1 million for the write-off of the unamortized debt issuance costs related to the existing Term Loan A Facility and a portion of the unamortized debt issuance costs related to our Term Loan B Facility that we had been amortizing over the expected life of the borrowings.

In May 2019, we voluntarily redeemed the remaining balance outstanding under our 7.75% Notes due 2019. This resulted in a principal payment of $100 million and $0.3 million in accrued interest. We also expensed approximately $0.1 million for the write-off of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing, and approximately $2.2 million for an early redemption premium.

In March 2018, we made a tender offer for our 6.25% Notes due 2021. Under this tender offer, we retired $383.1 million of the 6.25% Notes due 2021. We redeemed the remaining $16.9 million of the 6.25% Notes due 2021 during the second quarter of 2018. During the nine months ended September 30, 2018, we expensed $2.5 million for the write-off of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing and $8.0 million in tender premiums.
 
In May 2018, we voluntarily redeemed a portion of our 6.625% Notes due 2022. This resulted in a principal payment of $100.0 million, and a payment of $0.8 million in accrued interest. During the nine months ended September 30, 2018, we expensed $0.8 million for the write-off of a portion of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing and $3.3 million for an early redemption premium.

Gain on Settlement of Capital Lease In the second quarter of 2018, we reached a settlement agreement related to a capital lease obligation that we had recognized as a result of the acquisition of MPG. This settlement resulted in a gain of $15.6 million, including accrued interest.

45




Other Expense, Net Other expense, net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost. Other expense, net was $9.0 million in the first nine months of 2019 as compared to $4.6 million in the first nine months of 2018. The change in other expense, net was primarily attributable to increased net expense associated with the components of net periodic pension and postretirement benefit costs other than service cost.

Income Tax Expense  Income tax was a benefit of $37.4 million for the nine months ended September 30, 2019 as compared to expense of $31.4 million for the nine months ended September 30, 2018.  Our effective income tax rate was 55.7% in the first nine months of 2019 as compared to 9.3% in the first nine months of 2018.

Our effective income tax rate for the nine months ended September 30, 2019 varies from our effective income tax rate for the nine months ended September 30, 2018, primarily due to an income tax benefit of $47.2 million recognized during the nine months ended September 30, 2019 as a result of the impairment charge recorded upon reclassifying the assets and liabilities of the U.S. Casting business to held-for-sale. In addition, as part of the Tax Cuts and Jobs Act in 2017, a one-time transition tax (Transition Tax) was imposed on certain foreign earnings for which U.S. income tax was previously deferred. The Department of Treasury and Internal Revenue Service issued final regulations on February 5, 2019 regarding the Transition Tax, which changed the manner in which we are required to compute the Transition Tax when it is recognized over a two-year period. The application of the final regulations resulted in a $9.3 million income tax benefit, which has been recorded in the nine months ended September 30, 2019, the period in which the final regulations were issued.

Our effective income tax rate for the nine months ended September 30, 2018 was impacted by certain discrete income tax items recognized during this period. During the first nine months of 2018, we recognized a discrete tax benefit as a result of finalizing an advance pricing agreement in a foreign jurisdiction, which resulted in a reduction of our liability for unrecognized income tax benefits and related interest and penalties of $20.0 million. Also in the first nine months of 2018, we recognized a discrete tax expense related to the sale of the aftermarket business associated with our former Powertrain segment.

For the nine months ended September 30, 2019 and 2018, our effective income tax rates vary from the U.S. federal statutory rate of 21% primarily due to favorable foreign tax rates, as well as the impact of tax credits and the effect of the discrete items described above.

Net Income (Loss) Attributable to AAM and Earnings (Loss) Per Share (EPS) Net income (loss) attributable to AAM was a loss of $30.1 million in the first nine months of 2019 as compared to income of $304.3 million in the first nine months of 2018. Diluted EPS was a loss of $0.27 per share in the first nine months of 2019 as compared to earnings of $2.63 per share in the first nine months of 2018.

Net income (loss) attributable to AAM and EPS for the first nine months of 2019 and 2018 were primarily impacted by the factors discussed above.


46



SEGMENT REPORTING

In the first quarter of 2019, we reorganized our business to disaggregate our former Powertrain segment, with a portion moving to our Driveline segment and a portion moving to our Metal Forming segment. As a result, our business is now organized into Driveline, Metal Forming and Casting segments, with each representing a reportable segment under ASC 280 Segment Reporting. The Powertrain amounts previously reported for the three and nine months ended September 30, 2018 have been reclassified to Driveline and Metal Forming.

The results of each segment are regularly reviewed by the chief operating decision maker to assess the performance of the segment and make decisions regarding the allocation of resources to the segments.

Our product offerings by segment are as follows:

Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles;
Metal Forming products consist primarily of axle and transmission shafts, ring and pinion gears, differential gears and assemblies, connecting rods and variable valve timing products for Original Equipment Manufacturers and Tier 1 automotive suppliers; and
Casting products consist of both thin wall castings and high strength ductile iron castings, as well as transmission pump bodies, steering knuckles, control arms, brake anchors and calipers, and ball joint housings for the global light vehicle, commercial and industrial markets.

The following table represents sales by reportable segment for the three and nine months ended September 30, 2019 and 2018 (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Driveline
$
1,146.7

 
$
1,228.2

 
$
3,422.5

 
$
3,718.6

Metal Forming
476.6

 
509.0

 
1,444.1

 
1,581.7

Casting
209.0

 
219.1

 
655.0

 
701.3

Eliminations
(154.9
)
 
(139.3
)
 
(420.7
)
 
(425.3
)
Net Sales
$
1,677.4

 
$
1,817.0

 
$
5,100.9

 
$
5,576.3


The change in Driveline sales for the three months ended September 30, 2019, as compared to the three months ended September 30, 2018, primarily reflects the impact of the GM work stoppage, and a reduction of approximately $27 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.

The change in Driveline sales for the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018, primarily reflects the impact of lower full-size truck sales resulting from the in-sourcing by our largest customer of a portion of a replacement program that launched in the second half of 2018, as well as lower volumes on certain crossover vehicle programs that we support. Driveline sales for the nine months ended September 30, 2019 were also negatively impacted by the GM work stoppage, and by approximately $70 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. This was partially offset by the impact of program launches associated with our new business backlog.

The change in net sales in our Metal Forming segment in the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018, reflect lower global automotive production volumes, as well as a reduction in intersegment sales to our Driveline segment due to the factors discussed for Driveline above. Also for the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018, Metal Forming sales were negatively impacted by approximately $17 million and $26 million, respectively, associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.

The change in net sales in our Casting segment in the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018, reflect lower production volumes, partially offset by price increases to customers of approximately $6 million for the three months and $9 million for the nine months ended September 30, 2019.

47




We use Segment Adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gain on the sale of a business, impairment charges and non-recurring items.

The amounts for Segment Adjusted EBITDA for the three and nine months ended September 30, 2019 and 2018 are as follows (in millions):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Driveline
$
171.6

 
$
176.9

 
$
461.7

 
$
570.9

Metal Forming
80.4

 
83.6

 
253.7

 
306.0

Casting
13.8

 
14.5

 
61.4

 
63.0

Total segment adjusted EBITDA
$
265.8

 
$
275.0

 
$
776.8

 
$
939.9


For the three months ended September 30, 2019, as compared to the three months ended September 30, 2018, the change in Segment Adjusted EBITDA for the Driveline segment was primarily attributable to lower global automotive production volumes, as well as a decrease associated with the GM work stoppage. This was partially offset by approximately $8 million associated with lower net manufacturing costs.

For the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018, the change in Segment Adjusted EBITDA for the Driveline segment was primarily attributable to lower global automotive production volumes, as well as the impact of a change in product mix due to customer downtime as a result of program changeovers in the first quarter of 2019, and the impact of the GM work stoppage.

The change in Metal Forming Segment Adjusted EBITDA for the three months ended September 30, 2019, as compared to the three months ended September 30, 2018, was primarily attributable to lower global automotive production volumes, partially offset by approximately $5 million associated with lower net manufacturing costs. For the nine months ended September 30, 2019, as compared to the nine months ended September 30, 2018, the change in Segment Adjusted EBITDA for the Metal Forming segment was primarily attributable to lower global automotive production volumes, as well as an increase in net manufacturing costs, including higher material, freight and tariff costs, of approximately $10 million.

The change in Casting Segment Adjusted EBITDA for the three and nine months ended September 30, 2019, as compared to the three and nine months ended September 30, 2018 was primarily attributable to lower production volumes, offset by the impact of price increases to customers.


48



Reconciliation of Non-GAAP and GAAP Information

In addition to results reported in accordance with accounting principles generally accepted in the United States of America (GAAP) in this MD&A, we have provided certain non-GAAP financial measures such as EBITDA and Total Segment Adjusted EBITDA. Such information is reconciled to its closest GAAP measure in accordance with Securities and Exchange Commission rules below.

We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Total Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gain on the sale of a business, impairment charges and non-recurring items. We believe that EBITDA and Total Segment 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 and Total Segment Adjusted EBITDA, together with other measures, to measure our operating performance relative to other Tier 1 automotive suppliers and to assess the relative mix of Adjusted EBITDA by segment. We also believe that Total Segment Adjusted EBITDA is a meaningful measure as it is used for operational planning and decision-making purposes. These 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.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Net income (loss)
$
(124.1
)
 
$
64.0

 
$
(29.7
)
 
$
304.8

Interest expense
54.3

 
54.9

 
163.9

 
162.5

Income tax expense (benefit)
(40.4
)
 
11.5

 
(37.4
)
 
31.4

Depreciation and amortization
134.2

 
132.9

 
411.5

 
390.9

EBITDA
$
24.0

 
$
263.3


$
508.3


$
889.6

Restructuring and acquisition-related costs
11.7

 
11.7

 
36.0

 
66.8

Debt refinancing and redemption costs
5.1

 

 
7.5

 
14.6

Impairment charge
225.0

 

 
225.0

 

Gain on sale of business

 

 

 
(15.5
)
Non-recurring items:
 
 
 
 
 
 
 
Gain on settlement of capital lease

 

 

 
(15.6
)
Total segment adjusted EBITDA
$
265.8

 
$
275.0


$
776.8


$
939.9



49



LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs are to fund debt service obligations, capital expenditures and working capital requirements, in addition to advancing our strategic initiatives.  We believe that operating cash flow, available cash and cash equivalent balances and available borrowing capacity under our credit facilities will be sufficient to meet these needs. 

Operating Activities  In the first nine months of 2019, net cash provided by operating activities was $378.6 million as compared to $513.2 million in the first nine months of 2018.  The following factors impacted cash from operating activities in the first nine months of 2019 as compared to the first nine months of 2018:

Accounts receivable For the nine months ended September 30, 2019, we experienced an increase in cash flow from operating activities of approximately $140 million related to the change in our accounts receivable balance from December 31, 2018 to September 30, 2019, as compared to the change in our accounts receivable balance from December 31, 2017 to September 30, 2018. This change was primarily attributable to lower sales, as well as the timing of payments related to customer receivables.

Inventories For the nine months ended September 30, 2019, we experienced an increase in cash flow from operating activities of approximately $86 million related to the change in our inventories balance from December 31, 2018 to September 30, 2019, as compared to the change in our inventories balance from December 31, 2017 to September 30, 2018. This change was primarily the result of increased levels of inventories as of September 30, 2018 in preparation for program changeovers and new launch activity that occurred in the second half of 2018. As of September 30, 2019, inventories have decreased as the program changeovers and new launch activity have transitioned into production, and as a result of inventory reduction initiatives in 2019.

Accounts payable and accrued expenses For the nine months ended September 30, 2019, we experienced a decrease in cash flow from operating activities of approximately $180 million related to the change in our accounts payable and accrued expenses balances from December 31, 2018 to September 30, 2019, as compared to the change in our accounts payable and accrued expenses balances from December 31, 2017 to September 30, 2018. This change was attributable primarily to accounts payable and was the result of increased levels of accounts payable as of September 30, 2018 in preparation for program changeovers and new launch activity that occurred in the second half of 2018. As of September 30, 2019, there has been a decrease in accounts payable primarily associated with the decrease in inventories as discussed above.

Interest paid Interest paid in the first nine months of 2019 was $136.3 million, as compared to $127.8 million in the first nine months of 2018.

Restructuring and acquisition-related costs For the full year 2019, we expect restructuring and acquisition-related payments in cash flows from operating activities to be between $55 million and $65 million, and we expect the timing of cash payments to approximate the timing of charges incurred.

Pension and other postretirement benefits Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions) related to certain of our U.S. pension plans, we expect our regulatory pension funding requirements in 2019 to be approximately $2.2 million. We expect our cash payments for other postretirement benefit obligations in 2019, net of GM cost sharing, to be approximately $17.7 million.

Investing Activities  In the first nine months of 2019, net cash used in investing activities was $335.5 million as compared to $343.3 million for the nine months ended September 30, 2018. Capital expenditures were $335.3 million in the first nine months of 2019 as compared to $391.8 million in the first nine months of 2018. We expect our capital spending in 2019 to be approximately 7% of sales, which includes support for our global program launches in 2019 and 2020 within our new and incremental business backlog, as well as program capacity increases and future launches of replacement programs.

In the second quarter of 2019, we made a payment of $2.2 million as part of our investment in the Liuzhou Wuling joint venture that was formed in 2018. We expect to make additional payments totaling approximately $8 million as part of this investment during the fourth quarter of 2019.

In the first nine months of 2018, we completed the sale of the aftermarket business associated with our Powertrain segment. As a result of this sale, we received net proceeds of approximately $47 million.


50



Financing Activities  In the first nine months of 2019, net cash used in financing activities was $140.1 million, as compared to net cash used in financing activities of $99.5 million in the first nine months of 2018. The following factors impacted cash from financing activities in the first nine months of 2019 as compared to the first nine months of 2018:

Senior Secured Credit Facilities In 2017, Holdings and American Axle & Manufacturing, Inc. (AAM, Inc.) entered into a credit agreement (the Credit Agreement). In connection with the Credit Agreement, Holdings, AAM, Inc. and certain of their restricted subsidiaries entered into a Collateral Agreement and Guarantee Agreement with the financial institutions party thereto. The Credit Agreement included 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 $932 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 Senior Secured Credit Facilities).

In July 2019, Holdings, AAM, Inc., and certain subsidiaries of Holdings entered into the First Amendment (First Amendment) to the Credit Agreement (as amended by the First Amendment, the Amended Credit Agreement). The First Amendment, among other things, established $340 million in incremental term loan A commitments under the Amended Credit Agreement with a maturity date of July 29, 2024 (Term Loan A Facility due 2024), extended the maturity date of the Revolving Credit Facility from April 6, 2022 to July 29, 2024 and modified the applicable margin with respect to interest rates under the Term Loan A Facility due 2024 and interest rates and commitment fees under the Revolving Credit Facility. The applicable margin and the maturity date for the Term Loan B Facility remain unchanged. The proceeds of $340 million were used to repay all of the outstanding loans under the existing Term Loan A Facility and a portion of the outstanding Term Loan B Facility, resulting in no additional indebtedness. In the third quarter of 2019, we paid $3.3 million of debt issuance costs related to this First Amendment.

At September 30, 2019, we had $890.8 million available under the Revolving Credit Facility. This availability reflects a reduction of $34.2 million for standby letters of credit issued against the facility. The borrowings under the Revolving Credit Facility are used for general corporate purposes.

The 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 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.

Redemption of 7.75% Notes due 2019 In May 2019, we voluntarily redeemed the remaining balance outstanding under our 7.75% Notes due 2019. This resulted in a principal payment of $100 million and $0.3 million in accrued interest. We also expensed approximately $0.1 million for the write-off of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing, and approximately $2.2 million for an early redemption premium.

6.25% Notes due 2026 In March 2018, we issued $400.0 million in aggregate principal amount of 6.25% senior notes due 2026 (the 6.25% Notes due 2026). Proceeds from the 6.25% Notes due 2026 were used primarily to fund the tender offer for the 6.25% senior notes due 2021 (the 6.25% Notes due 2021) described below. We paid debt issuance costs of $6.6 million in the first nine months of 2018 related to the 6.25% Notes due 2026.

Tender Offer of 6.25% Notes due 2021 Also in March 2018, we made a tender offer for our 6.25% Notes due 2021. Under this tender offer, we retired $383.1 million of the 6.25% Notes due 2021 in the first quarter of 2018. We redeemed the remaining $16.9 million of the 6.25% Notes due 2021 during the second quarter of 2018. During the nine months ended September 30, 2018, we expensed $2.5 million for the write-off of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing and $8.0 million in tender premiums.

Redemption of 6.625% Notes due 2022 In May 2018, we voluntarily redeemed a portion of our 6.625% Notes due 2022. This resulted in a principal payment of $100.0 million, and a payment of $0.8 million in accrued interest. During the nine months ended September 30, 2018, we expensed $0.8 million for the write-off of a portion of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing and $3.3 million for an early redemption premium.

Settlement of Capital Lease Obligation In the third quarter of 2018, we paid $6.6 million related to the settlement of a capital lease obligation that we had recognized as a result of the acquisition of MPG.

Foreign credit facilities We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. At September 30, 2019, $107.8 million was outstanding under our foreign credit facilities, as compared to $127.1 million at December 31, 2018. At September 30, 2019, an additional $93.7 million was available under our foreign credit facilities.

51




Treasury stock Treasury stock increased by $7.5 million in the first nine months of 2019 to $209.3 million as compared to $201.8 million at year-end 2018, due to the withholding and repurchase of shares of AAM stock to satisfy employee tax withholding obligations due upon the vesting of performance shares and restricted stock units.

CRITICAL ACCOUNTING ESTIMATES

Subsequent to the disaggregation of our Powertrain reporting unit into the Driveline and Metal Forming reporting units in the first quarter of 2019, the fair value of our Metal Forming reporting unit exceeded its carrying value by approximately 11%. Fair value of the reporting unit is estimated based on a combination of discounted cash flows and the use of pricing multiples derived from an analysis of comparable public companies multiplied against historical and/or anticipated financial metrics of the reporting unit. These calculations contain uncertainties as they require management to make assumptions including, but not limited to, market comparables, future cash flows of the reporting unit, and appropriate discount and long-term growth rates.

A decline in the actual cash flows of Metal Forming in future periods, as compared to the projected cash flows used in the valuation, could result in the carrying value of the reporting unit exceeding its fair value. Further, a change in the discount rate or long-term growth rate as a result of a change in economic conditions could result in the carrying value of the reporting unit exceeding its fair value.

AAM's critical accounting estimates are included in our Annual Report on Form 10-K for the year ended December 31, 2018 and did not materially change during the nine months ended September 30, 2019.

CYCLICALITY AND SEASONALITY

Our operations are cyclical because they are directly related to worldwide automotive production, which is itself cyclical and dependent on general economic conditions and other factors.  Our business is also moderately seasonal as our major OEM customers historically have an extended shutdown of operations (typically 1-2 weeks) in conjunction with their model year changeover and an approximate one-week shutdown in December.  Our major OEM customers also occasionally have longer shutdowns of operations (up to six weeks) for program changeovers. Accordingly, our quarterly results may reflect these trends.

LITIGATION AND ENVIRONMENTAL MATTERS

We are involved in various legal proceedings incidental to our business.  Although the outcome of these matters cannot be predicted with certainty, we do not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.

We are subject to various federal, state, local and foreign environmental and occupational safety and health laws, regulations and ordinances, including those regulating air emissions, water discharge, waste management and environmental cleanup. We closely monitor our environmental conditions to ensure that we are in compliance with applicable laws, regulations and ordinances.  We have made, and anticipate continuing to make, capital and other expenditures, including recurring administrative costs, to comply with environmental requirements.  Such expenditures were not significant in the third quarter of 2019.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

MARKET RISK

Our business and financial results are affected by fluctuations in global financial markets, including currency exchange rates and interest 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 Exchange Risk  From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies.  At September 30, 2019, we had currency forward contracts with a notional amount of $191.5 million outstanding.  The potential decrease in fair value of foreign exchange contracts, assuming a 10% adverse change in the foreign currency exchange rates, would be approximately $17.5 million at September 30, 2019 and was approximately $17.1 million at December 31, 2018.


52



In the third quarter of 2019, we entered into a fixed-to-fixed cross-currency swap to reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At September 30, 2019, the notional amount of the fixed-to-fixed cross-currency swap was $217.9 million. The potential decrease in fair value of the fixed-to-fixed cross-currency swap, assuming a 10% adverse change in the foreign currency exchange rates, would be approximately $21.8 million at September 30, 2019.

Future business operations and opportunities, including the expansion of our business outside North America, may further increase the risk that cash flows resulting from these global operations may be adversely affected by changes in currency exchange rates.  If and when appropriate, we intend to manage these risks by creating natural hedges in the structure of our global operations, utilizing local currency funding of these expansions and various types of foreign exchange contracts.

Interest Rate Risk  We are exposed to variable interest rates on certain credit facilities. From time to time, we have used interest rate hedging to reduce the effects of fluctuations in market interest rates. In 2018, we entered into a variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. In the second quarter of 2019, we discontinued this variable-to-fixed interest rate swap, which was a liability of $9.7 million on the date that it was discontinued.

Also in the second quarter of 2019, we entered into a new variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. We have the following notional amounts hedged in relation to our variable-to-fixed interest rate swap: $1.0 billion through May 2020, $900.0 million through May 2021, $750.0 million through May 2022, $600.0 million through May 2023 and $500.0 million through May 2024.

The pre-tax earnings and cash flow impact of a one-percentage-point increase in interest rates (approximately 17% of our weighted-average interest rate at September 30, 2019) on our long-term debt outstanding, would be approximately $6.9 million at September 30, 2019 and was approximately $8.2 million at December 31, 2018, on an annualized basis.

Item 4.  Controls and Procedures

Disclosure Controls and Procedures

Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) were effective as of September 30, 2019.

Changes in Internal Control over Financial Reporting

On January 1, 2019, we began the implementation of our global enterprise resource planning (ERP) systems at certain of the locations that were acquired as part of the MPG acquisition. As part of these implementations, we have modified the design and documentation of our internal controls processes and procedures, where appropriate. We will continue to implement these ERP systems at certain locations throughout the remainder of 2019 and early 2020.

Also on January 1, 2019, we adopted new accounting guidance under Accounting Standards Codification Topic 842 (ASC 842) Leases. As part of the adoption of ASC 842, we implemented changes to our internal controls including the implementation of a new software system for lease accounting and reporting. Other changes to internal controls related to ASC 842 included updating our company policy associated with leases, determining the term of lease agreements, including whether options to extend or terminate a lease are reasonably certain to be exercised, and establishing the appropriate discount rates to calculate our lease liabilities.

Except as described above, there were no changes in our internal control over financial reporting during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II.  OTHER  INFORMATION

Item 1A. Risk Factors

There were no material changes from the risk factors previously disclosed in our December 31, 2018 Form 10-K.

53




Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information about our equity security purchases during the quarter ended September 30, 2019:

ISSUER PURCHASES OF EQUITY SECURITIES
Period
 
Total Number of Shares (or Units) Purchased
 
Average Price Paid per Share (or Unit)
 
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
 
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
 
 
 
 
 
 
 
 
(in millions)

July 1 - July 31, 2019
 

 
$

 

 
$

August 1 - August 31, 2019
 

 

 

 

September 1 - September 30, 2019
 

 

 

 

Total
 

 
$

 

 
$




54



Item 6.  Exhibits


Number
 
Description of Exhibit
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101.INS
 
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
 
 
 
**101.SCH
 
XBRL Taxonomy Extension Schema Document
 
 
 
**101.CAL
 
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
**101.LAB
 
XBRL Taxonomy Extension Label Linkbase Document
 
 
 
**101.PRE
 
XBRL Taxonomy Extension Presentation Linkbase Document
 
 
 
**101.DEF
 
XBRL Taxonomy Extension Definition Linkbase Document
 
*
Filed herewith
 
 
 
**
Submitted electronically with this Report.
 
 
 




    
    

55



SIGNATURES
 
 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
 AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
(Registrant)

 
 
 
 
 
/s/ James G. Zaliwski
James G. Zaliwski
Chief Accounting Officer
November 1, 2019


56
EX-31.1 2 exhibit311-q32019.htm SECTION 302 CERTIFICATION OF THE CEO Exhibit


EXHIBIT 31.1 - CERTIFICATION PURSUANT TO RULE 13a-14(a)
OF THE SECURITIES EXCHANGE ACT

 
I, David C. Dauch, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of American Axle & Manufacturing Holdings, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


 
Date: November 1, 2019

/s/ David C. Dauch
David C. Dauch
Chairman of the Board & Chief Executive Officer
(Principal Executive Officer)


EX-31.2 3 exhibit312-q32019.htm SECTION 302 CERTIFICATION OF THE CFO Exhibit


EXHIBIT 31.2 - CERTIFICATION PURSUANT TO RULE 13a-14(a)
OF THE SECURITIES EXCHANGE ACT
 
 
I, Christopher J. May, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of American Axle & Manufacturing Holdings, Inc.;

2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


 
Date: November 1, 2019

/s/ Christopher J. May
Christopher J. May
Vice President & Chief Financial Officer
(Principal Financial Officer)



EX-32 4 exhibit32-q32019.htm SECTION 906 CERTIFICATION OF THE CEO AND CFO Exhibit


EXHIBIT 32 - CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 
 
 
In connection with the Quarterly Report of American Axle & Manufacturing Holdings, Inc. (Issuer) on Form 10-Q for the period ending September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (Report), I, David C. Dauch, Chairman of the Board & Chief Executive Officer of the Issuer, and I, Christopher J. May, Vice President & Chief Financial Officer of the Issuer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.

 

 

/s/ David C. Dauch
 
 
/s/ Christopher J. May
 
David C. Dauch
 
 
Christopher J. May
 
Chairman of the Board &
 
 
Vice President &
 
Chief Executive Officer   
 
 
Chief Financial Officer
 
November 1, 2019
 
 
November 1, 2019
 

                                                        
                                                                                                                                   
                                                                       
 







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Other assets and deferred charges Other Assets, Noncurrent Liabilities and Stockholders’ Equity Accrued compensation and benefits Employee-related Liabilities, Current Deferred revenue Deferred Revenue, Current Accrued expenses and other Other Liabilities, Current Deferred revenue Deferred Revenue, Noncurrent Deferred income taxes Deferred Tax Liabilities, Net, Noncurrent Postretirement benefits and other long-term liabilities Postretirement benefits and other longterm liabilities This represents the noncurrent liability for underfunded plans recognized in the balance sheet that is associated with the defined benefit pension plans and other postretirement defined benefit plans, as well as, the aggregate carrying amount, as of the balance sheet date, of noncurrent obligations not separately disclosed in the balance sheet due to materiality considerations. Noncurrent liabilities are expected to be paid after one year (or the normal operating cycle, if longer). Stockholders' equity Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest [Abstract] Common stock, par value $0.01 per share; 150.0 million shares authorized; 120.1 million shares issued as of September 30, 2019 and 118.9 million shares issued as of December 31, 2018 Common Stock, Value, Outstanding Paid-in capital Additional Paid in Capital, Common Stock Retained earnings Retained Earnings (Accumulated Deficit) Treasury stock at cost, 7.6 million shares as of September 30, 2019 and 7.2 million shares as of December 31, 2018 Treasury Stock, Value Accumulated other comprehensive loss Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] Defined benefit plans, net of tax Accumulated Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax Foreign currency translation adjustments Accumulated Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Net of Tax Unrecognized loss on cash flow hedges, net of tax Accumulated Other Comprehensive Income (Loss), Cumulative Changes in Net Gain (Loss) from Cash Flow Hedges, Effect Net of Tax Total AAM stockholders' equity Leases [Abstract] Supplemental lease information [Table] Supplemental lease information [Table] Supplemental lease information [Table] Scenario [Axis] Supplemental lease information [Line Items] Additional lease information [Line Items] [Line Items] for Additional lease information [Table] Operating cash flows from finance leases Finance Lease, Interest Payment on Liability Operating cash flows from operating leases Operating Lease, Payments Financing cash flows from finance leases Finance Lease, Principal Payments Weighted-average remaining lease term - finance leases Finance Lease, Weighted Average Remaining Lease Term Weighted-average remaining lease term - operating leases Operating Lease, Weighted Average Remaining Lease Term Weighted-average discount rate - finance leases Finance Lease, Weighted Average Discount Rate, Percent Weighted-average discount rate - operating leases Operating Lease, Weighted Average Discount Rate, Percent Debt Disclosure [Abstract] Schedule of Long-term Debt Instruments [Table] Schedule of Long-term Debt Instruments [Table] Long-term Debt, Type [Axis] Long-term Debt, Type [Axis] Long-term Debt, Type [Domain] Long-term Debt, Type [Domain] Revolving Credit Facility [Member] Revolving Credit Facility [Member] Secured Debt [Member] Secured Debt [Member] Unsecured Debt [Member] Unsecured Debt [Member] Foreign Credit Facilities [Member] Foreign Line of Credit [Member] Capital Lease Obligations [Member] Capital Lease Obligations [Member] Debt Instrument [Axis] Debt Instrument [Axis] Debt Instrument, Name [Domain] Debt Instrument, Name [Domain] Term Loan A Due 2024 [Member] Term Loan A Due 2024 [Member] Term Loan A Due 2024 [Member] Term Loan A [Member] Term Loan A [Member] Term Loan A [Member] Term Loan B [Member] Term Loan B [Member] Term Loan B [Member] 7.75% Notes [Member] 7.75% Notes [Member] 7.75% Notes [Member] 6.625% Notes [Member] 6.625% Notes [Member] 6.625% Notes [Member] 6.50% Notes [Member] 6.50% Notes [Member] 6.50% Notes 6.25% Notes Due 2026 [Member] 6.25% Notes Due 2026 [Member] 6.25% Notes Due 2026 [Member] 6.25% Notes due 2025 [Member] 6.25% Notes due 2025 [Member] 6.25% Notes due 2025 Total Debt Instruments excluding Revolving Credit Facility [Member] Total Debt Instruments excluding Revolving Credit Facility [Member] Total Debt Instruments excluding Revolving Credit Facility [Member] Debt Instrument [Line Items] Debt Instrument [Line Items] Line of Credit Facility, Amount Outstanding Long-term Line of Credit Long-term Debt Long-term Debt Foreign credit facilities and other debt Foreign credit facilities and other debt Foreign credit facilities and other debt Capital lease obligations Capital Lease Obligations Debt, Long-term and Short-term, Combined Amount Debt, Long-term and Short-term, Combined Amount Long-term debt Long-term Debt and Lease Obligation Unamortized Debt Issuance Expense Unamortized Debt Issuance Expense Right of use assets and lease liabilities [Table] Right of use assets and lease liabilities [Table] Right of use assets and lease liabilities [Table] Accrued expenses and other [Member] Accrued expenses and other [Member] Accrued expenses and other [Member] Postretirement benefits and other long-term liabilities [Member] Postretirement benefits and other long-term liabilities [Member] Postretirement benefits and other long-term liabilities [Member] Right of use assets and lease liabilities [Line Items] Right of use assets and lease liabilities [Line Items] [Line Items] for Right of use assets and lease liabilities [Table] Finance Lease, Right-of-Use Asset Finance Lease, Right-of-Use Asset Operating Lease, Right-of-Use Asset Operating Lease, Right-of-Use Asset Finance Lease, Liability Finance Lease, Liability Operating Lease, Liability Operating Lease, Liability Cover page. Document Type Document Type Document Quarterly Report Document Quarterly Report Document Period End Date Document Period End Date Document Transition Report Document Transition Report Entity File Number Entity File Number Entity Registrant Name Entity Registrant Name Entity Incorporation, State or Country Code Entity Incorporation, State or Country Code Entity Tax Identification Number Entity Tax Identification Number Entity Address, Address Line One Entity Address, Address Line One Entity Address, City or Town Entity Address, City or Town Entity Address, State or Province Entity Address, State or Province Entity Address, Postal Zip Code Entity Address, Postal Zip Code City Area Code City Area Code Local Phone Number Local Phone Number Entity Current Reporting Status Entity Current Reporting Status Entity Interactive Data Current Entity Interactive Data Current Entity Filer Category Entity Filer Category Entity Small Business Entity Small Business Entity Emerging Growth Company Entity Emerging Growth Company Entity Shell Company Entity Shell Company Title of 12(b) Security Title of 12(b) Security Trading Symbol Trading Symbol Security Exchange Name Security Exchange Name Entity Common Stock, Shares Outstanding (in shares) Entity Common Stock, Shares Outstanding Entity Central Index Key Entity Central Index Key Current Fiscal Year End Date Current Fiscal Year End Date Document Fiscal Year Focus Document Fiscal Year Focus Document Fiscal Period Focus Document Fiscal Period Focus Amendment Flag Amendment Flag Revenue from Contract with Customer [Abstract] Revenue from Contract with Customer [Text Block] Revenue from Contract with Customer [Text Block] Discontinued Operations and Disposal Groups [Abstract] Disposal Groups, Including Discontinued Operations [Table] Disposal Groups, Including Discontinued Operations [Table] Disposal Group Name [Axis] Disposal Group Name [Axis] Disposal Group Name [Domain] Disposal Group Name [Domain] Disposal Group Classification [Axis] Disposal Group Classification [Axis] Disposal Group Classification [Domain] Disposal Group Classification [Domain] Income Statement Location [Axis] Income Statement Location [Axis] Income Statement Location [Domain] Income Statement Location [Domain] Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] Disposal Groups, Including Discontinued Operations [Table Text Block] Disposal Groups, Including Discontinued Operations [Table Text Block] Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] Supplemental Guarantor Consolidating Statement of Operations [Table Text Block] Supplemental Guarantor Consolidating Income Statement [Table Text Block] Tabular disclosure of the Condensed Consolidating Statement of Operations 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 changes in equity. [Table Text Block] Supplemental Guarantor Consolidating Balance Sheet [Table Text Block] Supplemental Guarantor Consolidating Balance Sheet [Table Text Block] Tabular disclosure of the Condensed Consolidating Statement of Financial Position 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 changes in equity. [Table Text Block] Supplemental Guarantor Consolidating Statement of Cash Flows [Table Text Block] Supplemental Guarantor Consolidating Statement of Cash Flows [Table Text Block] Tabular disclosure of the Condensed Consolidating Statement of Cash Flows 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 changes in equity. [Table Text Block] Leasing [Abstract] Leasing [Abstract] Components of lease cost [Table Text Block] Components of lease cost [Table Text Block] [Table Text Block] for Components of lease cost [Table] Supplemental lease information [Table Text Block] Supplemental lease information [Table Text Block] [Table Text Block] for Supplemental lease information [Table] Future minimum lease payments [Table Text Block] Future minimum lease payments [Table Text Block] [Table Text Block] for Future minimum lease payments [Table] Right of use assets and lease liabilities [Table Text Block] Right of use assets and lease liabilities [Table Text Block] [Table Text Block] for Right of use assets and lease liabilities [Table] Restructuring and Related Activities [Abstract] Restructuring Charges Restructuring Charges Integration expenses Business Combination, Integration Related Costs Restructuring and acquisition-related costs Product Warranties Disclosures [Abstract] Schedule of Product Warranty Liability [Table Text Block] Schedule of Product Warranty Liability [Table Text Block] Supplemental Guarantor Condensed Consolidated Financial Statements [Abstract] Supplemental Guarantor Condensed Consolidated Financial Statements [Abstract] Ownership in Subsidiary, Percentage Ownership in Subsidiary, Percentage Represents the percentage ownership in subsidiary by the parent company. Debt Instrument, Interest Rate, Stated Percentage Debt Instrument, Interest Rate, Stated Percentage Leases not yet commenced [Table] Leases not yet commenced [Table] Leases not yet commenced [Table] Leases not yet commenced [Line Items] Leases not yet commenced [Line Items] [Line Items] for Leases not yet commenced [Table] Lessee, Operating Lease, Lease Not yet Commenced Lessee, Operating Lease, Lease Not yet Commenced Future lease payments for an operating lease expected to commence in the future Schedule of Restructuring and Related Costs [Table] Schedule of Restructuring and Related Costs [Table] Restructuring Type [Axis] Restructuring Type [Axis] Type of Restructuring [Domain] Type of Restructuring [Domain] Employee Severance [Member] Employee Severance [Member] Other Restructuring [Member] Other Restructuring [Member] Facility Closing [Member] Facility Closing [Member] Statistical Measurement [Axis] Statistical Measurement [Axis] Statistical Measurement [Domain] Statistical Measurement [Domain] Minimum [Member] Minimum [Member] Maximum [Member] Maximum [Member] Restructuring Cost and Reserve [Line Items] Restructuring Cost and Reserve [Line Items] Restructuring Reserve [Roll Forward] Restructuring Reserve [Roll Forward] Restructuring reserve Restructuring Reserve Charges Cash utilization Payments for Restructuring Non-cash utilization Restructuring Reserve, Settled without Cash Restructuring reserve Restructuring and Related Cost, Expected Cost Restructuring and Related Cost, Expected Cost Business Acquisition [Axis] Business Acquisition [Axis] Business Acquisition, Acquiree [Domain] Business Acquisition, Acquiree [Domain] AAM Inc. [Member] AAM Inc. [Member] The registrant that controls, directly or indirectly, another entity (or entities). The usual condition for control is ownership of a majority (over 50%) of the outstanding voting stock. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders or by court decree. [Member] Multi-Currency Credit Facility [Member] Multi-Currency Credit Facility [Member] Multi-Currency Credit Facility [Member] Term Loan A & Term Loan B [Member] Term Loan A & Term Loan B [Member] Term Loan A & Term Loan B [Member] Proceeds from Issuance of Long-term Debt Proceeds from Issuance of Long-term Debt Long-term Line of Credit Write off of Deferred Debt Issuance Cost Write off of Deferred Debt Issuance Cost Line of Credit Facility, Remaining Borrowing Capacity Line of Credit Facility, Remaining Borrowing Capacity Line of Credit Facility, Standby Letters of Credit Issued Against the Facility Line of Credit Facility, Standby Letters of Credit Issued Against the Facility The amount of total standby letters of credit issued against the revolving credit facility at the reporting date, which represents a reduction of the available borrowing capacity. Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Table] Measurement Basis [Axis] Measurement Basis [Axis] Fair Value Measurement [Domain] Fair Value Measurement [Domain] Portion at Fair Value Measurement [Member] Portion at Fair Value Measurement [Member] Carrying (Reported) Amount, Fair Value Disclosure [Member] Reported Value Measurement [Member] Estimate of Fair Value, Fair Value Disclosure [Member] Estimate of Fair Value Measurement [Member] Fair Value, Measurements, Fair Value Hierarchy [Domain] Fair Value, Inputs, Level 2 [Member] Fair Value, Inputs, Level 2 [Member] Restructuring and Related Costs [Table Text Block] Restructuring and Related Costs [Table Text Block] Business Combination, Separately Recognized Transactions [Table Text Block] Business Combination, Separately Recognized Transactions [Table Text Block] Income Statement [Abstract] Net sales Revenue from Contract with Customer, Excluding Assessed Tax Cost of goods sold Cost of Goods and Services Sold Gross profit Gross Profit Selling, general and administrative expenses Selling, General and Administrative Expense Amortization of intangible assets Amortization of Intangible Assets Impairment charge Gain on sale of business Operating income (loss) Operating Income (Loss) Interest expense Investment income Investment Income, Interest Other expense, net Other Nonoperating Income (Expense) Income tax expense (benefit) Income Tax Expense (Benefit) Net income (loss) Net Income (Loss), Including Portion Attributable to Noncontrolling Interest Net income attributable to noncontrolling interests Net Income (Loss) Attributable to Noncontrolling Interest Net income (loss) attributable to AAM Net Income (Loss) Attributable to Parent Basic earnings (loss) per share Earnings Per Share, Basic Diluted earnings (loss) per share Earnings Per Share, Diluted Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] Schedule of Defined Benefit Plans Disclosures [Table] Schedule of Defined Benefit Plans Disclosures [Table] Retirement Plan Type [Axis] Retirement Plan Type [Axis] Retirement Plan Type [Domain] Retirement Plan Type [Domain] Pension Plan [Member] Pension Plan [Member] Other Postretirement Benefits Plan [Member] Other Postretirement Benefits Plan [Member] Defined Benefit Plan Disclosure [Line Items] Defined Benefit Plan Disclosure [Line Items] Liability, Defined Benefit Pension Plan, Noncurrent Liability, Defined Benefit Pension Plan, Noncurrent Liability, Other Postretirement Defined Benefit Plan, Noncurrent Liability, Other Postretirement Defined Benefit Plan, Noncurrent Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year Defined Benefit Plan, Expected Future Employer Contributions, Remainder of Fiscal Year Organization, Consolidation and Presentation of Financial Statements [Abstract] Basis of Accounting, Policy [Policy Text Block] Basis of Accounting, Policy [Policy Text Block] New Accounting Pronouncements, Policy [Policy Text Block] New Accounting Pronouncements, Policy [Policy Text Block] Reclassifications out of Accumulated Other Comprehensive Income (Loss) [Abstract] Reclassifications out of Accumulated Other Comprehensive Income (Loss) [Abstract] Disclosure of Reclassification Amount [Text Block] Disclosure of Reclassification Amount [Text Block] Goodwill and Intangible Assets Disclosure [Abstract] Schedule of Goodwill [Table Text Block] Schedule of Goodwill [Table Text Block] Schedule of Finite-Lived Intangible Assets [Table Text Block] Schedule of Finite-Lived Intangible Assets [Table Text Block] Derivative Instrument [Axis] Derivative Instrument [Axis] Derivative Contract [Domain] Derivative Contract [Domain] Foreign Exchange Forward [Member] Foreign Exchange Forward [Member] Currency Swap [Member] Currency Swap [Member] Interest Rate Swap [Member] Interest Rate Swap [Member] Hedging Designation [Axis] Hedging Designation [Axis] Hedging Designation [Domain] Hedging Designation [Domain] Designated as Hedging Instrument [Member] Designated as Hedging Instrument [Member] Not Designated as Hedging Instrument [Member] Not Designated as Hedging Instrument [Member] Derivatives, Fair Value, by Balance Sheet Location [Axis] Prepaid expenses and other [Member] Prepaid Expenses and Other Current Assets [Member] Other Noncurrent Assets [Member] Other Noncurrent Assets [Member] Accrued expenses and other [Member] Accrued Liabilities [Member] Postretirement benefits and other long-term liabilities [Member] Other Noncurrent Liabilities [Member] Fair Value, Inputs, Level 1 [Member] Fair Value, Inputs, Level 1 [Member] Cash Equivalents, at Carrying Value Other Cash Equivalents, at Carrying Value Cash Equivalents, at Fair Value Cash and Cash Equivalents, Fair Value Disclosure Foreign Currency Contract, Asset, Fair Value Disclosure Foreign Currency Contract, Asset, Fair Value Disclosure Interest Rate Derivative Assets, at Fair Value Interest Rate Derivative Assets, at Fair Value Foreign Currency Contract, Liabilities, Fair Value Disclosure Foreign Currency Contracts, Liability, Fair Value Disclosure Interest Rate Derivative Liabilities, at Fair Value Interest Rate Derivative Liabilities, at Fair Value Debt Instrument, Unused Borrowing Capacity, Amount Debt Instrument, Unused Borrowing Capacity, Amount Long-term Debt, Weighted Average Interest Rate, at Point in Time Long-term Debt, Weighted Average Interest Rate, at Point in Time Debt Instrument, Repurchase Amount Debt Instrument, Repurchase Amount Interest Paid, Including Capitalized Interest, Operating and Investing Activities Interest Paid, Including Capitalized Interest, Operating and Investing Activities Write off of Deferred Debt Issuance Cost Redemption Premium Redemption Premium Derivative Instruments and Hedging Activities Disclosure [Abstract] Derivative Instruments and Hedging Activities Disclosure [Text Block] Derivative Instruments and Hedging Activities Disclosure [Text Block] Reclassification out of Accumulated Other Comprehensive Income [Table] Reclassification out of Accumulated Other Comprehensive Income [Table] Adjustments for New Accounting Pronouncements [Axis] Adjustments for New Accounting Pronouncements [Axis] Type of Adoption [Domain] Type of Adoption [Domain] Accounting Standard Update 2018-02 [Member] Accounting Standard Update 2018-02 [Member] Accounting Standards Update 2018-02 [Member] Cost of Sales [Member] Cost of Sales [Member] Selling, General and Administrative Expenses [Member] Selling, General and Administrative Expenses [Member] Interest Expense [Member] Interest Expense [Member] Other Income [Member] Other Income [Member] Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] Defined benefit plans, amounts reclassified from accumulated other comprehensive income (loss) Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, after Tax Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Table] Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Table] Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] Service cost Defined Benefit Plan, Service Cost Interest cost Defined Benefit Plan, Interest Cost Expected asset return Defined Benefit Plan, Expected Return (Loss) on Plan Assets Amortized loss Defined Benefit Plan, Amortization of Gain (Loss) Amortized prior service cost (credit) Defined Benefit Plan, Amortization of Prior Service Cost (Credit) Curtailment Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement and Curtailment Settlement Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement Net periodic benefit credit Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Net periodic benefit cost Other Postretirement Benefits Cost (Reversal of Cost) Schedule of Long-term Debt Instruments [Table Text Block] Schedule of Long-term Debt Instruments [Table Text Block] Schedule of Finite-Lived Intangible Assets [Table] Schedule of Finite-Lived Intangible Assets [Table] Finite-Lived Intangible Assets by Major Class [Axis] Finite-Lived Intangible Assets by Major Class [Axis] Finite-Lived Intangible Assets, Major Class Name [Domain] Finite-Lived Intangible Assets, Major Class Name [Domain] Computer Software, Intangible Asset [Member] Computer Software, Intangible Asset [Member] Customer Platforms - Intangible Assets [Member] Customer Platforms - Intangible Assets [Member] Customer Platforms - Intangible Assets [Member] Customer Relationships - Intangible Assets [Member] Customer Relationships - Intangible Assets [Member] Customer Relationships - Intangible Assets [Member] Technology-Based Intangible Assets [Member] Technology-Based Intangible Assets [Member] Finite-Lived Intangible Assets [Line Items] Finite-Lived Intangible Assets [Line Items] Gross Carrying Amount Finite-Lived Intangible Assets, Gross Accumulated Amortization Finite-Lived Intangible Assets, Accumulated Amortization Net Carrying Amount Finite-Lived Intangible Assets, Net Amortization of Intangible Assets Finite-Lived Intangible Assets, Amortization Expense, Current Fiscal Year Finite-Lived Intangible Assets, Amortization Expense, Current Fiscal Year Finite-Lived Intangible Assets, Amortization Expense, Current Fiscal Year Finite-Lived Intangible Assets, Amortization Expense, Year Two Finite-Lived Intangible Assets, Amortization Expense, Year Two Finite-Lived Intangible Assets, Amortization Expense, Year Three Finite-Lived Intangible Assets, Amortization Expense, Year Three Finite-Lived Intangible Assets, Amortization Expense, Year Four Finite-Lived Intangible Assets, Amortization Expense, Year Four Finite-Lived Intangible Assets, Amortization Expense, Year Five Finite-Lived Intangible Assets, Amortization Expense, Year Five Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract] Other comprehensive income (loss), pension and other postretirement benefit plans, tax Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax Other comprehensive income (loss), derivatives qualifying as hedges, tax Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Tax Inventory Disclosure [Abstract] Inventory Disclosure [Text Block] Inventory Disclosure [Text Block] Pension and Other Postretirement Benefits Disclosure [Text Block] Pension and Other Postretirement Benefits Disclosure [Text Block] Leases of Lessee Disclosure [Text Block] Leases of Lessee Disclosure [Text Block] Statement of Cash Flows [Abstract] Net income (loss) Operating activities Net Cash Provided by (Used in) Operating Activities, Continuing Operations [Abstract] Adjustments to reconcile net income (loss) to net cash provided by operating activities Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] Depreciation and amortization Impairment charges Impairment of held-for-sale and long-lived assets Impairment of held-for-sale and long-lived assets Deferred income taxes Increase (Decrease) in Deferred Income Taxes Stock-based compensation Share-based Payment Arrangement, Noncash Expense Pensions and other postretirement benefits, net of contributions Pensions and other postretirement benefits, net of contributions The amount of pension and other (such as medical, dental and life insurance) postretirement benefit costs recognized during the period for defined benefit plans (periodic benefit costs include the following components: service cost, interest cost, expected return on plan assets, gain (loss) on assets, prior service cost or credit, transition asset or obligation, and gain (loss) due to settlements or curtailments), net of contributions made to defined benefit plans during the period. Loss (gain) on disposal of property, plant and equipment, net Gain (Loss) on Disposition of Property Plant Equipment Debt refinancing and redemption costs and (gain) on settlement of capital lease (Gain) Loss on Extinguishment of Debt and Capital Lease Obligation (Gain) Loss on Extinguishment of Debt and Capital Lease Obligation Changes in operating assets and liabilities Increase (Decrease) in Operating Capital [Abstract] Accounts receivable Increase (Decrease) in Accounts Receivable Inventories Increase (Decrease) in Inventories Accounts payable and accrued expenses Increase (Decrease) in Accounts Payable and Accrued Liabilities Deferred revenue Increase (Decrease) in Deferred Revenue Other assets and liabilities Increase (Decrease) in Other Operating Assets and Liabilities, Net Net cash provided by operating activities Net Cash Provided by (Used in) Operating Activities Investing activities Net Cash Provided by (Used in) Investing Activities [Abstract] Purchases of property, plant and equipment Payments to Acquire Property, Plant, and Equipment Proceeds from sale of property, plant and equipment Proceeds from Sale of Property, Plant, and Equipment Investment in joint venture Payments to Acquire Interest in Joint Venture Purchase buyouts of leased equipment Payments to Acquire Equipment on Lease Proceeds from sale of business, net Proceeds from Divestiture of Businesses, Net of Cash Divested Acquisition of business Payments to Acquire Businesses, Net of Cash Acquired Net cash used in investing activities Net Cash Provided by (Used in) Investing Activities Financing activities Net Cash Provided by (Used in) Financing Activities [Abstract] Payments of long-term debt and finance lease obligations Repayments of Long-term Debt Proceeds from issuance of long-term debt Debt issuance costs Payments of Debt Issuance Costs Purchase of noncontrolling interest Payments to Noncontrolling Interests Purchase of treasury stock Payments for Repurchase of Common Stock Net cash used in financing activities Net Cash Provided by (Used in) Financing Activities Effect of exchange rate changes on cash Effect of Exchange Rate on Cash and Cash Equivalents Net increase (decrease) in cash, cash equivalents and restricted cash Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect Cash, cash equivalents and restricted cash at beginning of period Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents Cash, cash equivalents and restricted cash at end of period Supplemental cash flow information Supplemental Cash Flow Information [Abstract] Interest paid Interest Paid, Excluding Capitalized Interest, Operating Activities Income taxes paid, net of refunds Income Taxes Paid, Net Driveline [Member] Driveline [Member] Driveline [Member] Metal Forming [Member] Metal Forming [Member] Metal Forming [Member] Casting [Member] Casting [Member] Casting [Member] Corporate and Eliminations [Member] Corporate and Eliminations [Member] Corporate and Eliminations [Member] Assets Supplemental Guarantor Condensed Consolidating Statements of Cash Flows [Abstract] Supplemental Guarantor Condensed Consolidating Statements of Cash Flows [Abstract] Legal Entity [Axis] Legal Entity [Axis] Entity [Domain] Entity [Domain] Net cash provided by operating activities Purchases of property, plant and equipment Acquisition of business, net of cash acquired Intercompany Activity - Investing Intercompany Activity - Investing The net cash inflow or outflow related to capital contributions or loans made to intercompany partners. Net debt activity Proceeds from (Repayments of) Debt Intercompany Activity - Financing Intercompany Activity - Financing Intercompany Activity - Financing Net increase (decrease) in cash, cash equivalents and restricted cash Cash and Cash Equivalents, Period Increase (Decrease) Cash, cash equivalents and restricted cash Supplemental Guarantor Condensed Consolidating Statements of Operations [Abstract] Supplemental Guarantor Condensed Consolidating Statements of Operations [Abstract] Net sales Revenues [Abstract] External Revenue from External Customers, Supplemental Guarantor Disclosure Amount of revenue from external customers during the period, disclosed as part of the Supplemental Guarantor disclosure. Intercompany Revenue from Related Parties Net sales Non-operating income (expense), net Nonoperating Income (Expense) Income (loss) before income taxes Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest Income tax expense (benefit) Earnings (loss) from equity in subsidiaries Income (Loss) from Equity Method Investments Net income (loss) before royalties Net Income (Loss) Before Royalties and Dividends This element represents the income or loss from continuing operations attributable to the economic entity after income or loss from equity method investments and income taxes, but before royalties and dividends, extraordinary items and noncontrolling interest. Royalties Royalties and Dividends Represents income (expense) from royalties and dividends during the period. Net income (loss) after royalties Net Income (loss) After Royalties and Dividends This element represents the income or loss from continuing operations attributable to the economic entity after income or loss from equity method investments, income taxes and royalties and dividends, but before extraordinary items and noncontrolling interest. Net income attributable to noncontrolling interests Other comprehensive income (loss), net of tax Other Comprehensive Income (Loss), Net of Tax Comprehensive income (loss) attributable to AAM Comprehensive Income (Loss), Net of Tax, Attributable to Parent Statement of Stockholders' Equity [Abstract] ASU 2016-02 [Member] ASU 2016-02 [Member] ASU 2016-02 [Member] ASU 2018-02 [Member] ASU 2018-02 [Member] ASU 2018-02 [Member] Equity Components [Axis] Equity Components [Axis] Equity Component [Domain] Equity Component [Domain] Common Stock Common Stock [Member] Additional Paid-in Capital Additional Paid-in Capital [Member] Retained Earnings Retained Earnings [Member] Treasury Stock Treasury Stock [Member] AOCI Attributable to Parent AOCI Attributable to Parent [Member] Noncontrolling Interest Noncontrolling Interest [Member] Increase (Decrease) in Stockholders' Equity [Roll Forward] Increase (Decrease) in Stockholders' Equity [Roll Forward] Common stock, shares, outstanding Common Stock, Shares, Outstanding Total AAM stockholders' equity Net income (loss) attributable to AAM Net income (loss) attributable to noncontrolling interest Exercise of stock options Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture Stock issued during period, shares, share-based compensation, net of forfeitures Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture Stock-based compensation APIC, Share-based Payment Arrangement, Increase for Cost Recognition New accounting pronouncement or change in accounting principle, effect of adoption, quantification Treasury stock, shares, acquired Treasury Stock, Shares, Acquired Purchase of treasury stock Changes in cash flow hedges Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, before Tax Foreign currency translation adjustments Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, before Tax Defined benefit plans, net Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, after Tax Purchase of noncontrolling interest Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests Common stock, shares, outstanding Total AAM stockholders' equity Sales Sales Revenue, Goods, Net, Inclusive of Intersegment Sales Sales Revenue, Goods, Net, Inclusive of Intersegment Sales Intersegment sales Sales Revenue, Goods, Net, Intersegment Sales Sales Revenue, Goods, Net, Intersegment Sales. Sales between operating segments. Segment Adjusted EBITDA Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] Components of lease cost [Table] Components of lease cost [Table] Components of lease cost [Table] Components of lease expense [Line Items] Components of lease expense [Line Items] [Line Items] for Components of lease expense [Table] Finance lease cost, Amortization of right-of-use assets Finance Lease, Right-of-Use Asset, Amortization Finance lease cost, Interest on lease liabilities Finance Lease, Interest Expense Total finance lease cost Total finance lease cost Total finance lease cost Operating lease cost Operating Lease, Cost Short-term lease cost Short-term Lease, Cost Variable lease cost Variable Lease, Cost Total lease cost Total lease cost Total lease cost Lease expense Lease expense Lease expense Contract with Customer, Asset and Liability [Abstract] Contract with Customer, Asset and Liability [Table Text Block] Contract with Customer, Asset and Liability [Table Text Block] Derivative Instruments, Gain (Loss) by Hedging Relationship, by Income Statement Location, by Derivative Instrument Risk [Table] Derivative Instruments, Gain (Loss) [Table] Derivative Instruments, Gain (Loss) by Income Statement Location [Axis] Income Statement and Other Comprehensive Income (Loss) Location [Domain] Nonoperating Income (Expense) [Member] Other Nonoperating Income (Expense) [Member] Derivative Instruments, Gain (Loss) by Hedging Relationship [Axis] Hedging Relationship [Axis] Hedging Relationship [Domain] Hedging Relationship [Domain] Cash Flow Hedging [Member] Cash Flow Hedging [Member] Forecast [Member] Forecast [Member] Derivative Instruments, Gain (Loss) [Line Items] Derivative Instruments, Gain (Loss) [Line Items] Derivative Instruments, Income Statement Location Gain (Loss) Reclassified from Accumulated OCI Derivative Instruments, Income Statement Location of Gain (Loss) Reclassified from Accumulated OCI Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net Other income (expense), net Cash flow hedge gain (loss) to be reclassified within twelve months Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months Description of Location of Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments in Financial Statements Description of Location of Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments in Financial Statements Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net Product Liability Contingency [Table] Product Liability Contingency [Table] Product and Service [Axis] Product and Service [Axis] Product and Service [Domain] Product and Service [Domain] Product Liability Contingency [Line Items] Product Liability Contingency [Line Items] Product Warranty Rollforward Movement in Standard Product Warranty Accrual [Roll Forward] Beginning balance Standard and Extended Product Warranty Accrual Accruals Standard and Extended Product Warranty Accrual, Increase for Warranties Issued Payments Standard and Extended Product Warranty Accrual, Decrease for Payments Adjustment to prior period accruals Standard and Extended Product Warranty Accrual, Increase (Decrease) for Preexisting Warranties Foreign currency translation Standard and Extended Product Warranty Accrual, Foreign Currency Translation Gain (Loss) Ending balance Derivative Instruments and Hedging Activities Disclosures [Table] Derivative Instruments and Hedging Activities Disclosures [Table] Foreign Currency Forward & Foreign Currency Option Contracts [Member] Foreign Currency Forward & Foreign Currency Option Contracts [Member] Foreign Currency Forward & Foreign Currency Option Contracts [Member] Debt [Member] Debt [Member] Derivative Instruments and Hedging Activities Disclosures [Line Items] Derivative Instruments and Hedging Activities Disclosures [Line Items] Derivative, Notional Amount Derivative, Notional Amount Fair Value Liability At Date Of Dedesignation FairValueLiabilityAtDateOfDedesignation Represents the fair value of a terminated hedge in a liability position at the date of dedesignation. Derivative, Amount of Hedged Item, Through May 2020 Derivative, Amount of Hedged Item, Through May 2020 Derivative, Amount of Hedged Item, Through May 2020 Derivative, Amount of Hedged Item, Through May 2021 Derivative, Amount of Hedged Item, Through May 2021 Derivative, Amount of Hedged Item, Through May 2021 Derivative, Amount of Hedged Item, Through May 2022 Derivative, Amount of Hedged Item, Through May 2022 Derivative, Amount of Hedged Item, Through May 2022 Derivative, Amount of Hedged Item, Through May 2023 Derivative, Amount of Hedged Item, Through May 2023 Derivative, Amount of Hedged Item, Through May 2023 Derivative, Amount of Hedged Item, Through May 2024 Derivative, Amount of Hedged Item, Through May 2024 Derivative, Amount of Hedged Item, Through May 2024 Deferred revenue, current Deferred revenue, noncurrent Increase (decrease) in accounts receivable Increase (Decrease) in Receivables Contract liability, current, increase (decrease) Contract Liability Increase (Decrease), Current Contract Liability Increase (Decrease), Current Contract liability, noncurrent, increase (decrease) Contract Liabilities Increase (Decrease), Noncurrent, Net of Contract Liabilities Amortized into Revenue Contract Liabilities Increase (Decrease), Noncurrent, Net of Contract Liabilities Amortized into Revenue Contract with customer, liability, revenue recognized Contract with Customer, Liability, Revenue Recognized Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block] Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block] Earnings Per Share [Abstract] Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Table] Schedule of Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Table] Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] Numerator Numerator [Abstract] Numerator [Abstract] Net income (loss) attributable to AAM Less: Net income attributable to participating securities Undistributed Earnings (Loss) Allocated to Participating Securities, Basic Net income (loss) attributable to common shareholders - Basic and Dilutive Net Income (Loss) Available to Common Stockholders, Diluted Denominators Denominator [Abstract] Denominator [Abstract] Basic - Weighted-average shares outstanding weighted average common shares and participating securities outstanding - basic weighted average common shares and participating securities outstanding - basic Basic - Less: Participating securities Participating securities - basic Participating securities - basic Basic - Weighted-average common shares outstanding Weighted Average Number of Shares Outstanding, Basic Effect of dilutive securities - dilutive stock-based compensation Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements Diluted - Adjusted weighted-average shares after assumed conversions Weighted Average Number of Shares Outstanding, Diluted Basic EPS Diluted EPS Consideration Type [Axis] Consideration Type [Axis] Consideration Type [Axis] Consideration Type [Domain] Consideration Type [Domain] [Domain] for Consideration Type [Axis] Cash and Cash Equivalents [Member] Cash and Cash Equivalents [Member] Twelve year deferred payment obligation at 6% [Member] Twelve year deferred payment obligation at 6% [Member] Twelve year deferred payment obligation at 6% [Member] Proceeds from Divestiture of Businesses Proceeds from Divestiture of Businesses Fair Value Disclosures [Text Block] Fair Value Disclosures [Text Block] Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] Goodwill and Intangible Assets Disclosure [Text Block] Goodwill and Intangible Assets Disclosure [Text Block] Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest [Member] Accumulated Defined Benefit Plans Adjustment Including Portion Attributable to Noncontrolling Interest [Member] Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest [Member] Accumulated Foreign Currency Adjustment Including Portion Attributable to Noncontrolling Interest [Member] Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] AOCI Including Portion Attributable to Noncontrolling Interest [Member] AOCI Including Portion Attributable to Noncontrolling Interest [Member] AOCI Attributable to Parent, Net of Tax [Roll Forward] AOCI Attributable to Parent, Net of Tax [Roll Forward] Accumulated other comprehensive income (loss), net of tax - Beginning balance Accumulated Other Comprehensive Income (Loss), Net of Tax Defined benefit plans, other comprehensive income (loss), before reclassifications Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, before Tax Foreign currency translation adjustments, other comprehensive income (loss) arising during period Unrecognized gain (loss) on cash flow hedges, other comprehensive income (loss) arising during period Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax Other comprehensive income (loss) arising during period, total Other Comprehensive Income (Loss) Arising During Period, Total, Before Tax Other Comprehensive Income (Loss) Arising During Period, Total, Before Tax Income tax effect of other comprehensive income (loss) before reclassifications Other Comprehensive (Income) Loss, Defined Benefit Plan, before Reclassification Adjustment, Tax Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax Other comprehensive income (loss), derivatives qualifying as hedges, tax Other Comprehensive Income (Loss) before Reclassifications, Tax Other Comprehensive Income (Loss) before Reclassifications, Tax Defined benefit plans, amounts reclassified from accumulated other comprehensive income (loss) Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, before Tax Foreign currency translation adjustments, amounts reclassified from accumulated other comprehensive income (loss) Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax Unrecognized gain (loss) on cash flow hedges, amounts reclassified from accumulated other comprehensive income (loss) Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax Other comprehensive income (loss), reclassification before tax Other Comprehensive Income (Loss), Reclassification Adjustments, Total, Before Tax Represents the total of reclassification adjustments out of Accumulated Other Comprehensive Income (Loss) into net income (loss) during the period, before tax. Income taxes reclassified into net income Other Comprehensive (Income) Loss, Defined Benefit Plan, Reclassification Adjustment from AOCI, Tax Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax Reclassification from AOCI, Current Period, Tax Reclassification from AOCI, Current Period, Tax Defined benefit plans, net current period other comprehensive income (loss) Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax Foreign currency translation adjustments, net current period other comprehensive income (loss) Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax Other comprehensive income (loss) Accumulated other comprehensive income (loss), net of tax - Ending balance Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 2016 Restructuring Plan - Employee Severance [Member] 2016 Restructuring Plan - Employee Severance [Member] 2016 Restructuring Plan - Employee Severance [Member] 2016 Restructuring Plan - Other Restructuring [Member] 2016 Restructuring Plan - Other Restructuring [Member] 2016 Restructuring Plan - Other Restructuring [Member] Restructuring and Related Cost, Expected Cost Remaining Restructuring and Related Cost, Expected Cost Remaining Long-term Debt [Text Block] Long-term Debt [Text Block] Income Tax Disclosure [Abstract] Income Tax Authority [Axis] Income Tax Authority [Axis] Income Tax Authority [Domain] Income Tax Authority [Domain] Foreign Tax Authority [Member] Foreign Tax Authority [Member] Nature of benefit [Axis] Nature of benefit [Axis] Nature of benefit [Axis] Transition Tax [Domain] Transition Tax [Domain] Transition Tax [Domain] Effective income tax rate, continuing operations Effective Income Tax Rate Reconciliation, Percent Income tax benefit of held-for-sale impairment charge Income tax benefit of held-for-sale impairment charge Income tax benefit of held-for-sale impairment charge Other Tax Expense (Benefit) Other Tax Expense (Benefit) Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities Unrecognized tax benefit liability, including penalties and accrued interest Unrecognized tax benefit liability, including penalties and accrued interest Unrecognized tax benefit liability, including penalties and accrued interest Supplemental Guarantor Disclosure [Text Block] Supplemental Guarantor Disclosure [Text Block] The entire Supplemental Guarantor disclosure. [Text Block] Disaggregation of Revenue [Abstract] Disaggregation of Revenue [Table] Disaggregation of Revenue [Table] Geographical [Axis] Geographical [Axis] Geographical [Domain] Geographical [Domain] Disaggregation of Revenue [Line Items] Disaggregation of Revenue [Line Items] Disaggregation of Revenue [Table Text Block] Disaggregation of Revenue [Table Text Block] Statement of Comprehensive Income [Abstract] Other comprehensive income (loss) Other Comprehensive Income (Loss), Net of Tax [Abstract] Defined benefit plans, net of tax (a) Foreign currency translation adjustments Changes in cash flow hedges, net of tax (b) Comprehensive income (loss) Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest Schedule of Inventory, Current [Table Text Block] Schedule of Inventory, Current [Table Text Block] Future minimum lease payments [Table] Future minimum lease payments [Table] Future minimum lease payments [Table] Lease Arrangement, Type [Axis] Lease Arrangement, Type [Axis] Lease Arrangement, Type [Domain] Lease Arrangement, Type [Domain] Finance Lease [Member] Finance Lease [Member] Finance Lease [Member] Operating lease [Member] Operating lease [Member] Operating lease [Member] Future minimum lease payments [Line Items] Future minimum lease payments [Line Items] [Line Items] for Future minimum lease payments [Table] 2019 (excluding the nine months ended September 30, 2019) Finance Lease, Liability, Payments, Remainder of Fiscal Year 2019 (excluding the nine months ended September 30, 2019) Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year 2020 Finance Lease, Liability, Payments, Due Year Two 2020 Lessee, Operating Lease, Liability, Payments, Due Year Two 2021 Finance Lease, Liability, Payments, Due Year Three 2021 Lessee, Operating Lease, Liability, Payments, Due Year Three 2022 Finance Lease, Liability, Payments, Due Year Four 2022 Lessee, Operating Lease, Liability, Payments, Due Year Four 2023 Finance Lease, Liability, Payments, Due Year Five 2023 Lessee, Operating Lease, Liability, Payments, Due Year Five Thereafter Finance Lease, Liability, Payments, Due after Year Five Thereafter Lessee, Operating Lease, Liability, Payments, Due after Year Five Total future undiscounted minimum lease payments Finance Lease, Liability, Payment, Due Total future undiscounted minimum lease payments Lessee, Operating Lease, Liability, Payments, Due Less: impact of discounting Finance Lease, Liability, Undiscounted Excess Amount Less: impact of discounting Lessee, Operating Lease, Liability, Undiscounted Excess Amount Short-term Lease Payments Short-term Lease Payments Product Warranty Disclosure [Text Block] Product Warranty Disclosure [Text Block] Income Tax Disclosure [Text Block] Income Tax Disclosure [Text Block] Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] Derivative Instruments, Gain (Loss) [Table Text Block] Segment Reporting Disclosure [Text Block] Segment Reporting Disclosure [Text Block] Schedule of Goodwill [Table] Schedule of Goodwill [Table] Powertrain [Member] Powertrain [Member] Powertrain [Member] Goodwill [Line Items] Goodwill [Line Items] Goodwill [Roll Forward] Goodwill [Roll Forward] Goodwill Reorganization Goodwill, Other Increase (Decrease) Foreign currency translation Goodwill, Translation and Purchase Accounting Adjustments Goodwill Schedule of Segment Reporting Information, by Segment [Table Text Block] Schedule of Segment Reporting Information, by Segment [Table Text Block] Reconciliation of Total Segment Adjusted EBITDA to Income Before Income Taxes [Table Text Block] Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] Accounts receivable, net Receivables Held-for-sale, Amount Inventories Disposal Group, Including Discontinued Operation, Inventory Prepaid expenses and other Disposal Group, Including Discontinued Operation, Prepaid and Other Assets Property, plant and equipment, net Disposal Group, Including Discontinued Operation, Property, Plant and Equipment Intangible assets, net Disposal Group, Including Discontinued Operation, Intangible Assets Other assets and deferred charges Disposal Group, Including Discontinued Operation, Other Assets and Deferred Charges Disposal Group, Including Discontinued Operation, Other Assets and Deferred Charges Impairment of carrying value Impairment of assets-held-for-sale valuation adjustment Impairment of assets-held-for-sale valuation adjustment Total assets held-for-sale Accounts payable Disposal Group, Including Discontinued Operation, Accounts Payable Accrued compensation and benefits Disposal Group, Including Discontinued Operation, Accrued Compensation and Benefits Disposal Group, Including Discontinued Operation, Accrued Compensation and Benefits Accrued expenses and other Disposal Group, Including Discontinued Operation, Accrued Expenses and Other Disposal Group, Including 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Assets and Liabilities Measured on Recurring Basis [Table Text Block] Fair Value, Financial Instruments not Carried at Fair Value [Table Text Block] Fair Value, by Balance Sheet Grouping [Table Text Block] Fair Value Measurements, Nonrecurring [Table Text Block] Fair Value Measurements, Nonrecurring [Table Text Block] Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] Statement of Financial Position, Stock, Parenthetical [Abstract] Root abstract to be used for parenthetical relating to common stock par value and amount of treasury shares reported within line items on the Statement of Financial Position. Common stock, par or stated value per share Common Stock, Par or Stated Value Per Share Common stock, shares authorized Common Stock, Shares Authorized Common stock, shares, issued Common Stock, Shares, Issued Treasury stock, shares Treasury Stock, Shares New Accounting Pronouncements or Change in Accounting Principle [Table] New Accounting Pronouncements or Change in Accounting Principle [Table] New Accounting Pronouncements or Change in Accounting Principle [Line Items] New Accounting Pronouncements or Change in Accounting Principle [Line Items] Inventory, Current [Table] Inventory, Current [Table] Inventory [Axis] Inventory [Axis] Inventory [Domain] Inventory [Domain] Inventory [Line Items] Inventory [Line Items] Raw materials and work-in-progress Inventory, Work in Process and Raw Materials Finished goods Inventory, Finished Goods, Gross Gross inventories Inventory, Gross Inventory valuation reserves Inventory Valuation Reserves Inventories, net EX-101.PRE 9 axl-20190930_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT XML 10 R23.htm IDEA: XBRL DOCUMENT v3.19.3
Revenue from Contracts with Customers
9 Months Ended
Sep. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block]
15. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Net Sales

Net sales recognized from contracts with customers, disaggregated by segment and geographical location, are presented in the following table for the three and nine months ended September 30, 2019 and 2018. Net sales are attributed to regions based on the location of production. Intersegment sales have been excluded from the table.

In the first quarter of 2019, we reorganized our business to disaggregate our former Powertrain business unit, with a portion moving to our Driveline business unit and a portion moving to our Metal Forming business unit. As a result, the Powertrain amounts previously reported for the three and nine months ended September 30, 2018 have been reclassified to Driveline and Metal Forming.
 
 
Three Months Ended September 30, 2019
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
902.7

 
$
296.9

 
$
169.7

 
$
1,369.3

Asia
 
131.0

 
10.3

 

 
141.3

Europe
 
77.9

 
61.1

 

 
139.0

South America
 
26.5

 
1.3

 

 
27.8

Total
 
$
1,138.1

 
$
369.6

 
$
169.7

 
$
1,677.4

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2018
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
946.0

 
$
316.8

 
$
193.8

 
$
1,456.6

Asia
 
160.7

 
8.9

 

 
169.6

Europe
 
85.1

 
69.8

 

 
154.9

South America
 
34.6

 
1.3

 

 
35.9

Total
 
$
1,226.4

 
$
396.8

 
$
193.8

 
$
1,817.0

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2019
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
2,644.1

 
$
903.7

 
$
553.9

 
$
4,101.7

Asia
 
419.3

 
25.7

 

 
445.0

Europe
 
270.3

 
201.0

 

 
471.3

South America
 
78.2

 
4.7

 

 
82.9

Total
 
$
3,411.9

 
$
1,135.1

 
$
553.9

 
$
5,100.9

 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2018
 
 
Driveline
 
Metal Forming
 
Casting
 
Total
North America
 
$
2,892.5

 
$
983.6

 
$
613.2

 
$
4,489.3

Asia
 
481.6

 
33.7

 

 
515.3

Europe
 
240.3

 
228.8

 

 
469.1

South America
 
98.9

 
3.7

 

 
102.6

Total
 
$
3,713.3

 
$
1,249.8

 
$
613.2

 
$
5,576.3






Contract Assets and Liabilities

The following table summarizes our beginning and ending balances for accounts receivable and contract liabilities associated with our contracts with customers:

 
 
 
 
 
Accounts Receivable, Net
Contract Liabilities (Current)
Contract Liabilities (Long-term)
December 31, 2018
$
966.5

$
44.3

$
77.6

September 30, 2019
976.9

22.6

83.1

Increase/(decrease)
$
10.4

$
(21.7
)
$
5.5



Contract liabilities relate to deferred revenue associated with various settlements and commercial agreements for which we have a future performance obligation to the customer. We recognize this deferred revenue into revenue over the life of the associated program as we satisfy our performance obligations to the customer. We do not have contract assets as defined in ASC 606.

During the three and nine months ended September 30, 2019, we amortized $12.5 million and $40.3 million, respectively, of previously recorded contract liabilities into revenue as we satisfied performance obligations with our customers.
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Cover Page - shares
9 Months Ended
Sep. 30, 2019
Oct. 29, 2019
Cover page.    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2019  
Document Transition Report false  
Entity File Number 1-14303  
Entity Registrant Name AMERICAN AXLE & MANUFACTURING HOLDINGS INC  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 38-3161171  
Entity Address, Address Line One One Dauch Drive,  
Entity Address, City or Town Detroit  
Entity Address, State or Province MI  
Entity Address, Postal Zip Code 48211-1198  
City Area Code 313  
Local Phone Number 758-2000  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Trading Symbol AXL  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding (in shares)   112,475,824
Entity Central Index Key 0001062231  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Amendment Flag false  
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Assets Held for Sale (Tables)
9 Months Ended
Sep. 30, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]  
Disposal Groups, Including Discontinued Operations [Table Text Block]
The assets and liabilities classified as held-for-sale are as follows (in millions):
 
September 30, 2019
 
 
Accounts receivable, net
$
89.1

Inventories
32.8

Prepaid expenses and other
1.5

Property, plant and equipment, net
184.6

Intangible assets, net
158.2

Other assets and deferred charges
71.0

Impairment of carrying value
(225.0
)
   Total assets held-for-sale*
$
312.2

 
 
Accounts payable
$
71.3

Accrued compensation and benefits
6.8

Accrued expenses and other
3.4

Postretirement benefits and other long-term liabilities
20.2

   Total liabilities held-for-sale*
$
101.7

 

* The assets and liabilities classified as held-for-sale are classified entirely as current in the September 30, 2019 Condensed Consolidated Balance Sheet as we expect to complete the sale in the fourth quarter of 2019. As this transaction does not qualify for classification as discontinued operations, no reclassification of the assets and liabilities in the December 31, 2018 Condensed Consolidated Balance Sheet was required.

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Condensed Consolidated Balance Sheets - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 375.1 $ 476.4
Accounts receivable, net 976.9 966.5
Inventories, net 403.1 459.7
Prepaid expenses and other 130.9 127.2
Current assets held-for-sale 312.2 0.0
Total current assets 2,198.2 2,029.8
Property, plant and equipment, net 2,326.4 2,514.4
Deferred income taxes 61.9 45.5
Goodwill 1,127.5 1,141.8
Other intangible assets, net 881.5 1,111.1
GM postretirement cost sharing asset 223.1 219.4
Other assets and deferred charges 497.7 448.7
Total assets 7,316.3 7,510.7
Current liabilities    
Current portion of long-term debt 23.8 121.6
Accounts payable 703.7 840.2
Accrued compensation and benefits 165.1 179.0
Deferred revenue 22.6 44.3
Accrued expenses and other 220.2 171.7
Current liabilities held-for sale 101.7 0.0
Total current liabilities 1,237.1 1,356.8
Long-term debt, net 3,673.3 3,686.8
Deferred revenue 83.1 77.6
Deferred income taxes 21.6 92.6
Postretirement benefits and other long-term liabilities 891.6 810.6
Total liabilities 5,906.7 6,024.4
Stockholders' equity    
Common stock, par value $0.01 per share; 150.0 million shares authorized; 120.1 million shares issued as of September 30, 2019 and 118.9 million shares issued as of December 31, 2018 1.2 1.2
Paid-in capital 1,310.1 1,292.6
Retained earnings 703.0 703.5
Treasury stock at cost, 7.6 million shares as of September 30, 2019 and 7.2 million shares as of December 31, 2018 (209.3) (201.8)
Accumulated other comprehensive loss    
Defined benefit plans, net of tax (241.1) (213.9)
Foreign currency translation adjustments (131.3) (96.6)
Unrecognized loss on cash flow hedges, net of tax (25.8) (1.1)
Total AAM stockholders' equity 1,406.8 1,483.9
Noncontrolling interests in subsidiaries 2.8 2.4
Total stockholders' equity 1,409.6 1,486.3
Total liabilities and stockholders' equity $ 7,316.3 $ 7,510.7
XML 14 R9.htm IDEA: XBRL DOCUMENT v3.19.3
Organization and Basis of Presentation
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
1. ORGANIZATION AND BASIS OF PRESENTATION

Organization We are a global Tier 1 supplier to the automotive industry. We design, engineer and manufacture driveline, metal forming and casting products that are making the next generation of vehicles smarter, lighter, safer and more efficient. We employ over 25,000 associates, operating at nearly 90 facilities in 17 countries, to support our customers on global and regional platforms with a focus on quality, operational excellence and technology leadership.

In the third quarter of 2019, we entered into a definitive agreement to sell the U.S. operations of our Casting segment to entities affiliated with Gamut Capital Management, L.P. As a result, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. See Note 2 - Assets Held-for-Sale for further detail.

In the first quarter of 2019, we initiated a new global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing segments into three segments. This activity occurred through the disaggregation of our Powertrain segment, with a portion moving into our Driveline segment and a portion moving into our Metal Forming segment. See Note 4 - Restructuring and Acquisition-Related Costs for more detail on this reorganization.

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, 2018 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.

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, 2018.

Effect of New Accounting Standards

Accounting Standard Update 2018-15

On August 15, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-15 - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (Topic 350-40). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing or hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance becomes effective at the beginning of our 2020 fiscal year and may be applied either retrospectively or prospectively. We expect to adopt this guidance prospectively on January 1, 2020 and we are currently assessing the impact that this standard will have on our consolidated financial statements.

Accounting Standards Update 2018-02

On February 14, 2018, the FASB issued ASU 2018-02 - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). ASU 2018-02 allows companies the option to reclassify disproportionate tax effects in accumulated other comprehensive income (AOCI) caused by the 2017 Tax Cuts and Jobs Act, also known as stranded tax effects, to retained earnings. ASU 2018-02 also requires expanded disclosures related to disproportionate income tax effects from AOCI, some of which are applicable to all companies regardless of whether the option to reclassify the stranded tax effects is exercised. This guidance became effective on January 1, 2019, and we elected to reclassify the stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, resulting in a decrease in Accumulated other comprehensive income (loss) and an increase in Retained earnings of $27.7 million at January 1, 2019.

Accounting Standards Update 2016-02

On February 25, 2016, the FASB issued ASU 2016-02 - Leases (Topic 842), and has subsequently issued ASU 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842) (collectively the Lease ASUs) which supersede the existing lease accounting guidance and establish new criteria for recognizing lease assets and liabilities. The most significant impact of these updates, to AAM, is that a lessee is 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 previous lease guidance. Expense recognition in the statement of income, along with cash flow statement classification for both financing (capital) and operating leases under the new standard are not significantly changed from previous lease guidance. This guidance became effective for AAM on January 1, 2019. See Note 3 - Leasing for additional detail regarding the adoption of ASU 2016-02.
XML 15 R69.htm IDEA: XBRL DOCUMENT v3.19.3
Income Taxes (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2018
Income tax expense (benefit) $ (40.4) $ 11.5 $ (37.4) $ 31.4  
Effective income tax rate, continuing operations 24.60% 15.20% 55.70% 9.30%  
Income tax benefit of held-for-sale impairment charge $ 47.2        
Other Tax Expense (Benefit)     $ (9.3)    
Unrecognized tax benefit liability, including penalties and accrued interest $ 51.9   $ 51.9   $ 45.6
Foreign Tax Authority [Member]          
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities       $ 20.0  
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Fair Value of Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash Equivalents, at Carrying Value $ 160.7 $ 44.0
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash Equivalents, at Fair Value 160.7 44.0
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 2.3 1.3
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 2.3 1.3
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 0.9 0.4
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 0.9 0.4
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.3 0.8
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.3 0.8
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Postretirement benefits and other long-term liabilities [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.1 0.9
Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member] | Postretirement benefits and other long-term liabilities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.1 0.9
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 0.2 0.6
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 0.2 0.6
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.4 0.4
Foreign Exchange Forward [Member] | Not Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Liabilities, Fair Value Disclosure 0.4 0.4
Currency Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 7.0 0.0
Currency Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Foreign Currency Contract, Asset, Fair Value Disclosure 7.0 0.0
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Assets, at Fair Value 1.6 0.9
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Prepaid expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Assets, at Fair Value 1.6 0.9
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Assets, at Fair Value 4.0 1.6
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Assets [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Assets, at Fair Value 4.0 1.6
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Liabilities, at Fair Value 10.0 0.7
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Accrued expenses and other [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Liabilities, at Fair Value 10.0 0.7
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Postretirement benefits and other long-term liabilities [Member] | Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Liabilities, at Fair Value 24.2 6.9
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Postretirement benefits and other long-term liabilities [Member] | Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest Rate Derivative Liabilities, at Fair Value $ 24.2 $ 6.9

XML 18 R65.htm IDEA: XBRL DOCUMENT v3.19.3
Derivatives Narrative (Details) - USD ($)
$ in Millions
Sep. 30, 2019
May 28, 2019
Foreign Currency Forward & Foreign Currency Option Contracts [Member]    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Derivative, Notional Amount $ 191.5  
Currency Swap [Member]    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Derivative, Notional Amount 217.9  
Interest Rate Swap [Member] | Debt [Member]    
Derivative Instruments and Hedging Activities Disclosures [Line Items]    
Fair Value Liability At Date Of Dedesignation   $ 9.7
Derivative, Amount of Hedged Item, Through May 2020 1,000.0  
Derivative, Amount of Hedged Item, Through May 2021 900.0  
Derivative, Amount of Hedged Item, Through May 2022 750.0  
Derivative, Amount of Hedged Item, Through May 2023 600.0  
Derivative, Amount of Hedged Item, Through May 2024 $ 500.0  
XML 19 R46.htm IDEA: XBRL DOCUMENT v3.19.3
Assets Held for Sale (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]    
Accounts receivable, net $ 89.1  
Inventories 32.8  
Prepaid expenses and other 1.5  
Property, plant and equipment, net 184.6  
Intangible assets, net 158.2  
Other assets and deferred charges 71.0  
Impairment of carrying value (225.0)  
Total assets held-for-sale 312.2 $ 0.0
Accounts payable 71.3  
Accrued compensation and benefits 6.8  
Accrued expenses and other 3.4  
Postretirement benefits and other long-term liabilities 20.2  
Total liabilities held-for-sale $ 101.7 $ 0.0
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Supplemental Guarantor Condensed Consolidating Financial Statements (Tables)
9 Months Ended
Sep. 30, 2019
Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract]  
Supplemental Guarantor Consolidating Statement of Operations [Table Text Block]
Condensed Consolidating Statements of Operations
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
 
 
 
External
 
$

 
$
205.7

 
$
506.5

 
$
965.2

 
$

 
$
1,677.4

Intercompany
 

 
0.5

 
77.0

 
16.5

 
(94.0
)
 

Total net sales
 

 
206.2

 
583.5

 
981.7

 
(94.0
)
 
1,677.4

Cost of goods sold
 

 
221.2

 
529.6

 
771.9

 
(94.0
)
 
1,428.7

Gross profit (loss)
 

 
(15.0
)
 
53.9

 
209.8

 

 
248.7

Selling, general and administrative expenses
 

 
68.9

 
6.8

 
17.0

 

 
92.7

Amortization of intangible assets
 

 
1.4

 
21.4

 
0.9

 

 
23.7

Impairment charges
 

 

 
225.0

 

 

 
225.0

Restructuring and acquisition-related costs
 

 
6.2

 
4.1

 
1.4

 

 
11.7

Operating income (loss)
 

 
(91.5
)
 
(203.4
)
 
190.5

 

 
(104.4
)
Non-operating income (expense), net
 

 
(62.7
)
 
2.3

 
0.3

 

 
(60.1
)
Income (loss) before income taxes
 

 
(154.2
)
 
(201.1
)
 
190.8

 

 
(164.5
)
Income tax expense (benefit)
 

 
(8.5
)
 
(46.8
)
 
14.9

 

 
(40.4
)
Earnings (loss) from equity in subsidiaries
 
(124.2
)
 
50.5

 
38.2

 

 
35.5

 

Net income (loss) before royalties
 
(124.2
)
 
(95.2
)
 
(116.1
)
 
175.9

 
35.5

 
(124.1
)
Royalties
 

 
86.6

 
0.7

 
(87.3
)
 

 

Net income (loss) after royalties
 
(124.2
)
 
(8.6
)
 
(115.4
)
 
88.6

 
35.5

 
(124.1
)
Net income attributable to noncontrolling interests
 

 

 

 
(0.1
)
 

 
(0.1
)
Net income (loss) attributable to AAM
 
$
(124.2
)
 
$
(8.6
)
 
$
(115.4
)
 
$
88.5

 
$
35.5

 
$
(124.2
)
Other comprehensive income (loss), net of tax
 
(44.8
)
 
(26.4
)
 
(35.4
)
 
(36.4
)
 
98.2

 
(44.8
)
Comprehensive income (loss) attributable to AAM
 
$
(169.0
)
 
$
(35.0
)
 
$
(150.8
)
 
$
52.1

 
$
133.7

 
$
(169.0
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 

 
 

 
 

 
 

 
 

 
 

Net sales
 
 

 
 

 
 

 
 

 
 

 
 

External
 
$

 
$
247.1

 
$
544.3

 
$
1,025.6

 
$

 
$
1,817.0

Intercompany
 

 
0.7

 
75.6

 
10.8

 
(87.1
)
 

Total net sales
 

 
247.8

 
619.9

 
1,036.4

 
(87.1
)
 
1,817.0

Cost of goods sold
 

 
220.6

 
594.2

 
821.9

 
(87.1
)
 
1,549.6

Gross profit
 

 
27.2

 
25.7

 
214.5

 

 
267.4

Selling, general and administrative expenses
 

 
63.4

 
19.6

 
13.3

 

 
96.3

Amortization of intangible assets
 

 
1.0

 
22.9

 
0.9

 

 
24.8

Restructuring and acquisition-related costs
 

 
5.0

 
3.9

 
2.8

 

 
11.7

Operating income (loss)
 

 
(42.2
)
 
(20.7
)
 
197.5

 

 
134.6

Non-operating income (expense), net
 

 
(60.0
)
 
2.8

 
(1.9
)
 

 
(59.1
)
Income (loss) before income taxes
 

 
(102.2
)
 
(17.9
)
 
195.6

 

 
75.5

Income tax expense (benefit)
 

 
(1.0
)
 
0.1

 
12.4

 

 
11.5

Earnings from equity in subsidiaries
 
63.8

 
68.1

 
33.8

 

 
(165.7
)
 

Net income (loss) before royalties
 
63.8

 
(33.1
)
 
15.8

 
183.2

 
(165.7
)
 
64.0

Royalties
 

 
87.6

 
0.7

 
(88.3
)
 

 

Net income after royalties
 
63.8

 
54.5

 
16.5

 
94.9

 
(165.7
)
 
64.0

Net income attributable to noncontrolling interests
 

 

 

 
(0.2
)
 

 
(0.2
)
Net income attributable to AAM
 
$
63.8

 
$
54.5

 
$
16.5

 
$
94.7

 
$
(165.7
)
 
$
63.8

Other comprehensive income (loss), net of tax
 
1.5

 
1.0

 
(10.3
)
 

 
9.3

 
1.5

Comprehensive income attributable to AAM
 
$
65.3

 
$
55.5

 
$
6.2

 
$
94.7

 
$
(156.4
)
 
$
65.3







Condensed Consolidating Statements of Operations
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
 
 
 
 
 
 
 
 
 
 
 
External
 
$

 
$
711.8

 
$
1,561.8

 
$
2,827.3

 
$

 
$
5,100.9

Intercompany
 

 
1.5

 
219.8

 
37.2

 
(258.5
)
 

Total net sales
 

 
713.3

 
1,781.6

 
2,864.5

 
(258.5
)
 
5,100.9

Cost of goods sold
 

 
721.1

 
1,612.2

 
2,306.9

 
(258.5
)
 
4,381.7

Gross profit (loss)
 

 
(7.8
)
 
169.4

 
557.6

 

 
719.2

Selling, general and administrative expenses
 

 
208.9

 
22.4

 
43.4

 

 
274.7

Amortization of intangible assets
 

 
4.3

 
66.6

 
2.7

 

 
73.6

Impairment charges
 

 

 
225.0

 

 

 
225.0

Restructuring and acquisition-related costs
 

 
17.1

 
12.3

 
6.6

 

 
36.0

Operating income (loss)
 

 
(238.1
)
 
(156.9
)
 
504.9

 

 
109.9

Non-operating income (expense), net
 

 
(184.0
)
 
7.0

 

 

 
(177.0
)
Income (loss) before income taxes
 

 
(422.1
)
 
(149.9
)
 
504.9

 

 
(67.1
)
Income tax expense (benefit)
 

 
(23.2
)
 
(46.7
)
 
32.5

 

 
(37.4
)
Earnings (loss) from equity in subsidiaries
 
(30.1
)
 
131.9

 
105.3

 

 
(207.1
)
 

Net income (loss) before royalties
 
(30.1
)
 
(267.0
)
 
2.1

 
472.4

 
(207.1
)
 
(29.7
)
Royalties
 

 
241.2

 
2.2

 
(243.4
)
 

 

Net income (loss) after royalties
 
(30.1
)
 
(25.8
)
 
4.3

 
229.0

 
(207.1
)
 
(29.7
)
Net income attributable to noncontrolling interests
 

 

 

 
(0.4
)
 

 
(0.4
)
Net income (loss) attributable to AAM
 
$
(30.1
)
 
$
(25.8
)
 
$
4.3

 
$
228.6

 
$
(207.1
)
 
$
(30.1
)
Other comprehensive income (loss), net of tax
 
(58.9
)
 
(40.2
)
 
(32.1
)
 
(29.5
)
 
101.8

 
(58.9
)
Comprehensive income (loss) attributable to AAM
 
$
(89.0
)
 
$
(66.0
)
 
$
(27.8
)
 
$
199.1

 
$
(105.3
)
 
$
(89.0
)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 

 
 

 
 

 
 

 
 

 
 

Net sales
 
 

 
 

 
 

 
 

 
 

 
 

External
 
$

 
$
851.4

 
$
1,699.2

 
$
3,025.7

 
$

 
$
5,576.3

Intercompany
 

 
4.0

 
231.6

 
31.1

 
(266.7
)
 

Total net sales
 

 
855.4

 
1,930.8

 
3,056.8

 
(266.7
)
 
5,576.3

Cost of goods sold
 

 
804.5

 
1,713.3

 
2,410.1

 
(266.7
)
 
4,661.2

Gross profit
 

 
50.9

 
217.5

 
646.7

 

 
915.1

Selling, general and administrative expenses
 

 
183.4

 
61.4

 
43.8

 

 
288.6

Amortization of intangible assets
 

 
3.9

 
68.0

 
2.6

 

 
74.5

Restructuring and acquisition-related costs
 

 
31.1

 
31.8

 
3.9

 

 
66.8

Gain on sale of business
 

 

 
(15.5
)
 

 

 
(15.5
)
Operating income (loss)
 

 
(167.5
)
 
71.8

 
596.4

 

 
500.7

Non-operating income (expense), net
 

 
(193.8
)
 
11.0

 
18.3

 

 
(164.5
)
Income (loss) before income taxes
 

 
(361.3
)
 
82.8

 
614.7

 

 
336.2

Income tax expense
 

 
8.1

 
0.6

 
22.7

 

 
31.4

Earnings from equity in subsidiaries
 
304.3

 
241.6

 
141.6

 

 
(687.5
)
 

Net income (loss) before royalties
 
304.3

 
(127.8
)
 
223.8

 
592.0

 
(687.5
)
 
304.8

Royalties
 

 
256.8

 
2.6

 
(259.4
)
 

 

Net income after royalties
 
304.3

 
129.0

 
226.4

 
332.6

 
(687.5
)
 
304.8

Net income attributable to noncontrolling interests
 

 

 

 
(0.5
)
 

 
(0.5
)
Net income attributable to AAM
 
$
304.3

 
$
129.0

 
$
226.4

 
$
332.1

 
$
(687.5
)
 
$
304.3

Other comprehensive loss, net of tax
 
(20.9
)
 
(2.6
)
 
(50.5
)
 
(37.3
)
 
90.4

 
(20.9
)
Comprehensive income attributable to AAM
 
$
283.4

 
$
126.4

 
$
175.9

 
$
294.8

 
$
(597.1
)
 
$
283.4


Supplemental Guarantor Consolidating Balance Sheet [Table Text Block]
Condensed Consolidating Balance Sheets
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
 
    Cash and cash equivalents
 
$

 
$
79.4

 
$
0.1

 
$
295.6

 
$

 
$
375.1

    Accounts receivable, net
 

 
95.2

 
230.8

 
650.9

 

 
976.9

    Intercompany receivables
 

 
4,864.1

 
4,722.1

 
183.0

 
(9,769.2
)
 

    Inventories, net
 

 
62.8

 
116.9

 
223.4

 

 
403.1

    Prepaid expenses and other
 

 
34.3

 
3.7

 
92.9

 

 
130.9

    Current assets held-for-sale
 

 

 
312.2

 

 

 
312.2

Total current assets
 

 
5,135.8

 
5,385.8

 
1,445.8

 
(9,769.2
)
 
2,198.2

Property, plant and equipment, net
 

 
294.1

 
554.5

 
1,477.8

 

 
2,326.4

Goodwill
 

 

 
719.0

 
408.5

 

 
1,127.5

Intangible assets, net
 

 
15.4

 
836.9

 
29.2

 

 
881.5

Intercompany notes and accounts receivable
 

 
1,542.1

 
186.7

 

 
(1,728.8
)
 

Other assets and deferred charges
 

 
339.7

 
118.1

 
324.9

 

 
782.7

Investment in subsidiaries
 
2,721.4

 
2,155.9

 
1,504.1

 

 
(6,381.4
)
 

Total assets
 
$
2,721.4

 
$
9,483.0

 
$
9,305.1

 
$
3,686.2

 
$
(17,879.4
)
 
$
7,316.3

Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

 
 

Current liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$

 
$
2.1

 
$
5.3

 
$
16.4

 
$

 
$
23.8

Accounts payable
 

 
101.3

 
169.1

 
433.3

 

 
703.7

Intercompany payables
 

 
3,931.7

 
5,835.5

 
2.0

 
(9,769.2
)
 

Accrued expenses and other
 

 
165.2

 
34.9

 
207.8

 

 
407.9

    Current liabilities held-for-sale
 

 

 
101.7

 

 

 
101.7

Total current liabilities
 

 
4,200.3

 
6,146.5

 
659.5

 
(9,769.2
)
 
1,237.1

Intercompany notes and accounts payable
 
1,311.8

 
36.0

 

 
381.0

 
(1,728.8
)
 

Long-term debt, net
 

 
3,581.8

 

 
91.5

 

 
3,673.3

Other long-term liabilities
 

 
503.0

 
243.1

 
250.2

 

 
996.3

Total liabilities
 
1,311.8

 
8,321.1

 
6,389.6

 
1,382.2

 
(11,498.0
)
 
5,906.7

Total AAM Stockholders’ equity
 
1,406.8

 
1,161.9

 
2,915.5

 
2,301.2

 
(6,378.6
)
 
1,406.8

Noncontrolling interests in subsidiaries
 
2.8

 

 

 
2.8

 
(2.8
)
 
2.8

Total stockholders’ equity
 
1,409.6

 
1,161.9

 
2,915.5

 
2,304.0

 
(6,381.4
)
 
1,409.6

Total liabilities and stockholders’ equity
 
$
2,721.4

 
$
9,483.0

 
$
9,305.1

 
$
3,686.2

 
$
(17,879.4
)
 
$
7,316.3


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
 
 
 
    Cash and cash equivalents
 
$

 
$
36.7

 
$
0.2

 
$
439.5

 
$

 
$
476.4

    Accounts receivable, net
 

 
122.7

 
287.7

 
556.1

 

 
966.5

    Intercompany receivables
 

 
3,337.2

 
2,356.3

 
93.5

 
(5,787.0
)
 

    Inventories, net
 

 
42.5

 
157.7

 
259.5

 

 
459.7

    Prepaid expenses and other
 

 
34.4

 
6.0

 
86.8

 

 
127.2

Total current assets
 

 
3,573.5

 
2,807.9

 
1,435.4

 
(5,787.0
)
 
2,029.8

Property, plant and equipment, net
 

 
275.8

 
758.6

 
1,480.0

 

 
2,514.4

Goodwill
 

 

 
719.0

 
422.8

 

 
1,141.8

Intangible assets, net
 

 
18.6

 
1,059.6

 
32.9

 

 
1,111.1

Intercompany notes and accounts receivable
 

 
1,316.8

 
144.5

 

 
(1,461.3
)
 

Other assets and deferred charges
 

 
319.8

 
126.4

 
267.4

 

 
713.6

Investment in subsidiaries
 
2,790.5

 
2,241.5

 
1,748.7

 

 
(6,780.7
)
 

Total assets
 
$
2,790.5

 
$
7,746.0

 
$
7,364.7

 
$
3,638.5

 
$
(14,029.0
)
 
$
7,510.7

Liabilities and Stockholders’ Equity
 
 

 
 

 
 

 
 

 
 

 
 

Current liabilities
 
 

 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$

 
$
100.0

 
$

 
$
21.6

 
$

 
$
121.6

Accounts payable
 

 
94.2

 
246.5

 
499.5

 

 
840.2

Intercompany payables
 

 
2,050.0

 
3,615.7

 
121.3

 
(5,787.0
)
 

Accrued expenses and other
 

 
169.0

 
35.8

 
190.2

 

 
395.0

Total current liabilities
 

 
2,413.2

 
3,898.0

 
832.6

 
(5,787.0
)
 
1,356.8

Intercompany notes and accounts payable
 
1,304.2

 
12.5

 

 
144.6

 
(1,461.3
)
 

Long-term debt, net
 

 
3,578.3

 
3.0

 
105.5

 

 
3,686.8

Other long-term liabilities
 

 
508.9

 
271.7

 
200.2

 

 
980.8

Total liabilities
 
1,304.2

 
6,512.9

 
4,172.7

 
1,282.9

 
(7,248.3
)
 
6,024.4

Total AAM Stockholders’ equity
 
1,483.9

 
1,233.1

 
3,192.0

 
2,353.2

 
(6,778.3
)
 
1,483.9

Noncontrolling interests in subsidiaries
 
2.4

 

 

 
2.4

 
(2.4
)
 
2.4

Total stockholders’ equity
 
1,486.3

 
1,233.1

 
3,192.0

 
2,355.6

 
(6,780.7
)
 
1,486.3

Total liabilities and stockholders’ equity
 
$
2,790.5

 
$
7,746.0

 
$
7,364.7

 
$
3,638.5

 
$
(14,029.0
)
 
$
7,510.7


Supplemental Guarantor Consolidating Statement of Cash Flows [Table Text Block]
Condensed Consolidating Statements of Cash Flows
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
 
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2019
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$

 
$
214.1

 
$
20.4

 
$
144.1

 
$

 
$
378.6

Investing activities
 
 

 
 

 
 

 
 

 
 

 
 

Purchases of property, plant and equipment
 

 
(46.8
)
 
(91.0
)
 
(197.5
)
 

 
(335.3
)
Proceeds from sale of property, plant and equipment
 

 

 
1.7

 
0.3

 

 
2.0

Investment in joint ventures
 

 

 

 
(2.2
)
 

 
(2.2
)
Intercompany activity
 

 

 
(12.0
)
 
12.0

 

 

Net cash used in investing activities
 

 
(46.8
)
 
(101.3
)
 
(187.4
)
 

 
(335.5
)
Financing activities
 
 

 
 

 
 

 
 

 
 

 
 

Net debt activity
 

 
(113.8
)
 
(0.2
)
 
(15.3
)
 

 
(129.3
)
Debt issuance costs
 

 
(3.3
)
 

 

 

 
(3.3
)
Purchase of treasury stock
 
(7.5
)
 

 

 

 

 
(7.5
)
Intercompany activity
 
7.5


(7.5
)
 
81.0

 
(81.0
)
 

 

Net cash used in financing activities
 

 
(124.6
)
 
80.8

 
(96.3
)
 

 
(140.1
)
Effect of exchange rate changes on cash
 

 

 

 
(4.3
)
 

 
(4.3
)
Net increase (decrease) in cash, cash equivalents and restricted cash
 

 
42.7

 
(0.1
)
 
(143.9
)
 

 
(101.3
)
Cash, cash equivalents and restricted cash at beginning of period
 

 
36.7

 
2.7

 
439.5

 

 
478.9

Cash, cash equivalents and restricted cash at end of period
 
$

 
$
79.4

 
$
2.6

 
$
295.6

 
$

 
$
377.6



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Holdings
 
AAM Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Elims
 
Consolidated
2018
 
 
 
 
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$

 
$
240.0

 
$
103.0

 
$
170.2

 
$

 
$
513.2

Investing activities
 
 
 
 
 
 
 
 
 
 

 
 

Purchases of property, plant and equipment
 

 
(51.8
)
 
(121.2
)
 
(218.8
)
 

 
(391.8
)
Proceeds from sale of property, plant and equipment
 

 

 
2.7

 
0.5

 

 
3.2

Purchase buyouts of leased equipment
 

 

 
(0.5
)
 

 

 
(0.5
)
Proceeds from sale of business, net
 

 

 
42.7

 
4.4

 

 
47.1

Acquisition of business, net of cash acquired
 

 

 

 
(1.3
)
 

 
(1.3
)
Intercompany activity
 

 

 
(43.8
)
 
43.8

 

 

Net cash used in investing activities
 

 
(51.8
)
 
(120.1
)
 
(171.4
)
 

 
(343.3
)
Financing activities
 
 

 
 

 
 

 
 

 
 

 
 

Net debt activity
 

 
(140.3
)
 
(0.6
)
 
54.2

 

 
(86.7
)
Debt issuance costs
 

 
(6.9
)
 

 

 

 
(6.9
)
Purchase of treasury stock
 
(3.7
)
 

 

 

 

 
(3.7
)
Purchase of noncontrolling interest
 

 

 
(2.2
)
 

 

 
(2.2
)
Intercompany activity
 
3.7

 
(3.7
)
 
22.5

 
(22.5
)
 

 

Net cash provided by (used in) financing activities
 

 
(150.9
)
 
19.7

 
31.7

 

 
(99.5
)
Effect of exchange rate changes on cash
 

 

 

 
(5.3
)
 

 
(5.3
)
Net increase in cash, cash equivalents and restricted cash
 

 
37.3

 
2.6

 
25.2

 

 
65.1

Cash, cash equivalents and restricted cash at beginning of period
 

 
91.9

 
0.1

 
284.8

 

 
376.8

Cash, cash equivalents and restricted cash at end of period
 
$

 
$
129.2

 
$
2.7

 
$
310.0

 
$

 
$
441.9


XML 22 R74.htm IDEA: XBRL DOCUMENT v3.19.3
Revenue from Contracts with Customers Disaggregation of Revenue (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Disaggregation of Revenue [Line Items]        
Net sales $ 1,677.4 $ 1,817.0 $ 5,100.9 $ 5,576.3
North America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 1,369.3 1,456.6 4,101.7 4,489.3
Asia [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 141.3 169.6 445.0 515.3
Europe [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 139.0 154.9 471.3 469.1
South America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 27.8 35.9 82.9 102.6
Driveline [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 1,138.1 1,226.4 3,411.9 3,713.3
Driveline [Member] | North America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 902.7 946.0 2,644.1 2,892.5
Driveline [Member] | Asia [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 131.0 160.7 419.3 481.6
Driveline [Member] | Europe [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 77.9 85.1 270.3 240.3
Driveline [Member] | South America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 26.5 34.6 78.2 98.9
Metal Forming [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 369.6 396.8 1,135.1 1,249.8
Metal Forming [Member] | North America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 296.9 316.8 903.7 983.6
Metal Forming [Member] | Asia [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 10.3 8.9 25.7 33.7
Metal Forming [Member] | Europe [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 61.1 69.8 201.0 228.8
Metal Forming [Member] | South America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 1.3 1.3 4.7 3.7
Casting [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 169.7 193.8 553.9 613.2
Casting [Member] | North America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 169.7 193.8 553.9 613.2
Casting [Member] | Asia [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 0.0 0.0 0.0 0.0
Casting [Member] | Europe [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 0.0 0.0 0.0 0.0
Casting [Member] | South America [Member]        
Disaggregation of Revenue [Line Items]        
Net sales $ 0.0 $ 0.0 $ 0.0 $ 0.0
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Supplemental Guarantor Condensed Consolidating Statements of Operations (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Net sales        
External $ 1,677.4 $ 1,817.0 $ 5,100.9 $ 5,576.3
Intercompany 0.0 0.0 0.0 0.0
Net sales 1,677.4 1,817.0 5,100.9 5,576.3
Cost of goods sold 1,428.7 1,549.6 4,381.7 4,661.2
Gross profit 248.7 267.4 719.2 915.1
Selling, general and administrative expenses 92.7 96.3 274.7 288.6
Amortization of intangible assets 23.7 24.8 73.6 74.5
Impairment charge 225.0 0.0 225.0 0.0
Restructuring and acquisition-related costs 11.7 11.7 36.0 66.8
Gain on sale of business 0.0 0.0 0.0 (15.5)
Operating income (loss) (104.4) 134.6 109.9 500.7
Non-operating income (expense), net (60.1) (59.1) (177.0) (164.5)
Income (loss) before income taxes (164.5) 75.5 (67.1) 336.2
Income tax expense (benefit) (40.4) 11.5 (37.4) 31.4
Earnings (loss) from equity in subsidiaries 0.0 0.0 0.0 0.0
Net income (loss) before royalties (124.1) 64.0 (29.7) 304.8
Royalties 0.0 0.0 0.0 0.0
Net income (loss) after royalties (124.1) 64.0 (29.7) 304.8
Net income attributable to noncontrolling interests (0.1) (0.2) (0.4) (0.5)
Net income (loss) attributable to AAM (124.2) 63.8 (30.1) 304.3
Other comprehensive income (loss), net of tax (44.8) 1.5 (58.9) (20.9)
Comprehensive income (loss) attributable to AAM (169.0) 65.3 (89.0) 283.4
Consolidation, Eliminations [Member]        
Net sales        
External 0.0 0.0 0.0 0.0
Intercompany (94.0) (87.1) (258.5) (266.7)
Net sales (94.0) (87.1) (258.5) (266.7)
Cost of goods sold (94.0) (87.1) (258.5) (266.7)
Gross profit 0.0 0.0 0.0 0.0
Selling, general and administrative expenses 0.0 0.0 0.0 0.0
Amortization of intangible assets 0.0 0.0 0.0 0.0
Impairment charge 0.0   0.0  
Restructuring and acquisition-related costs 0.0 0.0 0.0 0.0
Gain on sale of business       0.0
Operating income (loss) 0.0 0.0 0.0 0.0
Non-operating income (expense), net 0.0 0.0 0.0 0.0
Income (loss) before income taxes 0.0 0.0 0.0 0.0
Income tax expense (benefit) 0.0 0.0 0.0 0.0
Earnings (loss) from equity in subsidiaries 35.5 (165.7) (207.1) (687.5)
Net income (loss) before royalties 35.5 (165.7) (207.1) (687.5)
Royalties 0.0 0.0 0.0 0.0
Net income (loss) after royalties 35.5 (165.7) (207.1) (687.5)
Net income attributable to noncontrolling interests 0.0 0.0 0.0 0.0
Net income (loss) attributable to AAM 35.5 (165.7) (207.1) (687.5)
Other comprehensive income (loss), net of tax 98.2 9.3 101.8 90.4
Comprehensive income (loss) attributable to AAM 133.7 (156.4) (105.3) (597.1)
Holdings [Member]        
Net sales        
External 0.0 0.0 0.0 0.0
Intercompany 0.0 0.0 0.0 0.0
Net sales 0.0 0.0 0.0 0.0
Cost of goods sold 0.0 0.0 0.0 0.0
Gross profit 0.0 0.0 0.0 0.0
Selling, general and administrative expenses 0.0 0.0 0.0 0.0
Amortization of intangible assets 0.0 0.0 0.0 0.0
Impairment charge 0.0   0.0  
Restructuring and acquisition-related costs 0.0 0.0 0.0 0.0
Gain on sale of business       0.0
Operating income (loss) 0.0 0.0 0.0 0.0
Non-operating income (expense), net 0.0 0.0 0.0 0.0
Income (loss) before income taxes 0.0 0.0 0.0 0.0
Income tax expense (benefit) 0.0 0.0 0.0 0.0
Earnings (loss) from equity in subsidiaries (124.2) 63.8 (30.1) 304.3
Net income (loss) before royalties (124.2) 63.8 (30.1) 304.3
Royalties 0.0 0.0 0.0 0.0
Net income (loss) after royalties (124.2) 63.8 (30.1) 304.3
Net income attributable to noncontrolling interests 0.0 0.0 0.0 0.0
Net income (loss) attributable to AAM (124.2) 63.8 (30.1) 304.3
Other comprehensive income (loss), net of tax (44.8) 1.5 (58.9) (20.9)
Comprehensive income (loss) attributable to AAM (169.0) 65.3 (89.0) 283.4
AAM Inc. [Member]        
Net sales        
External 205.7 247.1 711.8 851.4
Intercompany 0.5 0.7 1.5 4.0
Net sales 206.2 247.8 713.3 855.4
Cost of goods sold 221.2 220.6 721.1 804.5
Gross profit (15.0) 27.2 (7.8) 50.9
Selling, general and administrative expenses 68.9 63.4 208.9 183.4
Amortization of intangible assets 1.4 1.0 4.3 3.9
Impairment charge 0.0   0.0  
Restructuring and acquisition-related costs 6.2 5.0 17.1 31.1
Gain on sale of business       0.0
Operating income (loss) (91.5) (42.2) (238.1) (167.5)
Non-operating income (expense), net (62.7) (60.0) (184.0) (193.8)
Income (loss) before income taxes (154.2) (102.2) (422.1) (361.3)
Income tax expense (benefit) (8.5) (1.0) (23.2) 8.1
Earnings (loss) from equity in subsidiaries 50.5 68.1 131.9 241.6
Net income (loss) before royalties (95.2) (33.1) (267.0) (127.8)
Royalties 86.6 87.6 241.2 256.8
Net income (loss) after royalties (8.6) 54.5 (25.8) 129.0
Net income attributable to noncontrolling interests 0.0 0.0 0.0 0.0
Net income (loss) attributable to AAM (8.6) 54.5 (25.8) 129.0
Other comprehensive income (loss), net of tax (26.4) 1.0 (40.2) (2.6)
Comprehensive income (loss) attributable to AAM (35.0) 55.5 (66.0) 126.4
Guarantor Subsidiaries [Member]        
Net sales        
External 506.5 544.3 1,561.8 1,699.2
Intercompany 77.0 75.6 219.8 231.6
Net sales 583.5 619.9 1,781.6 1,930.8
Cost of goods sold 529.6 594.2 1,612.2 1,713.3
Gross profit 53.9 25.7 169.4 217.5
Selling, general and administrative expenses 6.8 19.6 22.4 61.4
Amortization of intangible assets 21.4 22.9 66.6 68.0
Impairment charge 225.0   225.0  
Restructuring and acquisition-related costs 4.1 3.9 12.3 31.8
Gain on sale of business       (15.5)
Operating income (loss) (203.4) (20.7) (156.9) 71.8
Non-operating income (expense), net 2.3 2.8 7.0 11.0
Income (loss) before income taxes (201.1) (17.9) (149.9) 82.8
Income tax expense (benefit) (46.8) 0.1 (46.7) 0.6
Earnings (loss) from equity in subsidiaries 38.2 33.8 105.3 141.6
Net income (loss) before royalties (116.1) 15.8 2.1 223.8
Royalties 0.7 0.7 2.2 2.6
Net income (loss) after royalties (115.4) 16.5 4.3 226.4
Net income attributable to noncontrolling interests 0.0 0.0 0.0 0.0
Net income (loss) attributable to AAM (115.4) 16.5 4.3 226.4
Other comprehensive income (loss), net of tax (35.4) (10.3) (32.1) (50.5)
Comprehensive income (loss) attributable to AAM (150.8) 6.2 (27.8) 175.9
Non-Guarantor Subsidiaries [Member]        
Net sales        
External 965.2 1,025.6 2,827.3 3,025.7
Intercompany 16.5 10.8 37.2 31.1
Net sales 981.7 1,036.4 2,864.5 3,056.8
Cost of goods sold 771.9 821.9 2,306.9 2,410.1
Gross profit 209.8 214.5 557.6 646.7
Selling, general and administrative expenses 17.0 13.3 43.4 43.8
Amortization of intangible assets 0.9 0.9 2.7 2.6
Impairment charge 0.0   0.0  
Restructuring and acquisition-related costs 1.4 2.8 6.6 3.9
Gain on sale of business       0.0
Operating income (loss) 190.5 197.5 504.9 596.4
Non-operating income (expense), net 0.3 (1.9) 0.0 18.3
Income (loss) before income taxes 190.8 195.6 504.9 614.7
Income tax expense (benefit) 14.9 12.4 32.5 22.7
Earnings (loss) from equity in subsidiaries 0.0 0.0 0.0 0.0
Net income (loss) before royalties 175.9 183.2 472.4 592.0
Royalties (87.3) (88.3) (243.4) (259.4)
Net income (loss) after royalties 88.6 94.9 229.0 332.6
Net income attributable to noncontrolling interests (0.1) (0.2) (0.4) (0.5)
Net income (loss) attributable to AAM 88.5 94.7 228.6 332.1
Other comprehensive income (loss), net of tax (36.4) 0.0 (29.5) (37.3)
Comprehensive income (loss) attributable to AAM $ 52.1 $ 94.7 $ 199.1 $ 294.8
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Earnings Per Share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Numerator        
Net income (loss) attributable to AAM $ (124.2) $ 63.8 $ (30.1) $ 304.3
Less: Net income attributable to participating securities 0.0 (2.0) 0.0 (8.9)
Net income (loss) attributable to common shareholders - Basic and Dilutive $ (124.2) $ 61.8 $ (30.1) $ 295.4
Denominators        
Basic - Weighted-average shares outstanding 115.8 115.3 115.6 115.0
Basic - Less: Participating securities (3.3) (3.6) (3.3) (3.4)
Basic - Weighted-average common shares outstanding 112.5 111.7 112.3 111.6
Effect of dilutive securities - dilutive stock-based compensation 0.0 1.0 0.0 0.7
Diluted - Adjusted weighted-average shares after assumed conversions 112.5 112.7 112.3 112.3
Basic EPS $ (1.10) $ 0.55 $ (0.27) $ 2.65
Diluted EPS $ (1.10) $ 0.55 $ (0.27) $ 2.63
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"FASB", "Section": "S99", "SubTopic": "10", "Subparagraph": "(SX 210.5-03.7(b))", "Topic": "220", "URI": "http://asc.fasb.org/extlink&oid=116634182&loc=SL114868664-224227" }, "r99": { "Name": "Accounting Standards Codification", "Paragraph": "2", "Publisher": "FASB", "Section": "S99", "SubTopic": "10", "Subparagraph": "(SX 210.5-03.7)", "Topic": "220", "URI": "http://asc.fasb.org/extlink&oid=116634182&loc=SL114868664-224227" } }, "version": "2.1" } XML 26 R78.htm IDEA: XBRL DOCUMENT v3.19.3
Reconciliation of Total Segment Adjusted EBITDA to Income Before Income Taxes (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Segment Reporting Information [Line Items]        
Total Segment Adjusted EBITDA $ 265.8 $ 275.0 $ 776.8 $ 939.9
Interest expense (54.3) (54.9) (163.9) (162.5)
Depreciation and amortization (134.2) (132.9) (411.5) (390.9)
Restructuring and acquisition-related costs (11.7) (11.7) (36.0) (66.8)
Gain on sale of business 0.0 0.0 0.0 15.5
Gain on settlement of capital lease 0.0 0.0 0.0 15.6
Debt refinancing and redemption costs (5.1) 0.0 (7.5) (14.6)
Impairment charge (225.0) 0.0 (225.0) 0.0
Income (loss) before income taxes $ (164.5) $ 75.5 $ (67.1) $ 336.2
XML 27 R53.htm IDEA: XBRL DOCUMENT v3.19.3
Restructuring and Acquisition-Related Costs (Details) - USD ($)
$ in Millions
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2019
Restructuring Reserve [Roll Forward]      
Restructuring reserve $ 4.0 $ 0.3  
Charges 23.5 37.7  
Cash utilization (21.6) (7.0)  
Non-cash utilization   (26.6)  
Restructuring reserve 5.9 4.4  
Minimum [Member]      
Restructuring Reserve [Roll Forward]      
Restructuring and Related Cost, Expected Cost     $ 30.0
Maximum [Member]      
Restructuring Reserve [Roll Forward]      
Restructuring and Related Cost, Expected Cost     $ 35.0
Employee Severance [Member]      
Restructuring Reserve [Roll Forward]      
Restructuring reserve 2.4 0.3  
Charges 10.4 2.3  
Cash utilization (11.7) (0.4)  
Non-cash utilization   0.0  
Restructuring reserve 1.1 2.2  
Other Restructuring [Member]      
Restructuring Reserve [Roll Forward]      
Restructuring reserve 1.6 0.0  
Charges 13.1 8.8  
Cash utilization (9.9) (6.6)  
Non-cash utilization   0.0  
Restructuring reserve 4.8 2.2  
Facility Closing [Member]      
Restructuring Reserve [Roll Forward]      
Restructuring reserve 0.0 0.0  
Charges 0.0 26.6  
Cash utilization 0.0 0.0  
Non-cash utilization   (26.6)  
Restructuring reserve $ 0.0 $ 0.0  
XML 28 R57.htm IDEA: XBRL DOCUMENT v3.19.3
Inventories (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Inventory [Line Items]    
Raw materials and work-in-progress $ 337.3 $ 375.1
Finished goods 88.0 99.0
Gross inventories 425.3 474.1
Inventory valuation reserves (22.2) (14.4)
Inventories, net $ 403.1 $ 459.7
XML 29 R36.htm IDEA: XBRL DOCUMENT v3.19.3
Employee Benefit Plans (Tables)
9 Months Ended
Sep. 30, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Schedule of Net Benefit (Credits) Costs [Table Text Block] The components of net periodic benefit cost (credit) are as follows:
 
 
Pension Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Service cost
 
$
0.4

 
$
1.1

 
$
1.1

 
$
3.2

Interest cost
 
7.1

 
6.9

 
21.3

 
20.6

Expected asset return
 
(10.3
)
 
(11.4
)
 
(30.9
)
 
(34.4
)
Amortized loss
 
1.5

 
2.2

 
4.7

 
6.6

Amortized prior service cost
 

 

 

 
0.1

Curtailment
 

 

 

 
3.2

Settlement
 
0.4

 

 
0.4

 

Net periodic benefit credit
 
$
(0.9
)
 
$
(1.2
)
 
$
(3.4
)
 
$
(0.7
)
 
 
 
 
 
 
 
 
 
Other Postretirement Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 

 
 

 
 
 
 
Service cost
 
$

 
$
0.1

 
$
0.2

 
$
0.3

Interest cost
 
3.3

 
3.1

 
9.7

 
9.3

Amortized loss
 

 
0.2

 
0.1

 
0.6

Amortized prior service credit
 
(0.4
)
 
(0.7
)
 
(1.2
)
 
(2.0
)
Net periodic benefit cost
 
$
2.9

 
$
2.7

 
$
8.8

 
$
8.2


XML 30 R32.htm IDEA: XBRL DOCUMENT v3.19.3
Long-Term Debt (Tables)
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments [Table Text Block]
Long-term debt consists of the following:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
(in millions)
 
 
 
 
 
Revolving Credit Facility
 
$

 
$

Term Loan A Facility
 
340.0

 
83.8

Term Loan B Facility
 
1,248.6

 
1,511.2

7.75% Notes due 2019
 

 
100.0

6.625% Notes due 2022
 
450.0

 
450.0

6.50% Notes due 2027
 
500.0

 
500.0

6.25% Notes due 2026
 
400.0

 
400.0

6.25% Notes due 2025
 
700.0

 
700.0

Foreign credit facilities and other
 
113.2

 
127.1

Capital lease obligations
 

 
3.4

Total debt
 
3,751.8

 
3,875.5

    Less: Current portion of long-term debt
 
23.8

 
121.6

Long-term debt
 
3,728.0

 
3,753.9

    Less: Debt issuance costs
 
54.7

 
67.1

Long-term debt, net
 
$
3,673.3

 
$
3,686.8


XML 31 R19.htm IDEA: XBRL DOCUMENT v3.19.3
Employee Benefit Plans
9 Months Ended
Sep. 30, 2019
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Pension and Other Postretirement Benefits Disclosure [Text Block]
10. EMPLOYEE BENEFIT PLANS

The components of net periodic benefit cost (credit) are as follows:
 
 
Pension Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 
 
 
 
 
 
 
Service cost
 
$
0.4

 
$
1.1

 
$
1.1

 
$
3.2

Interest cost
 
7.1

 
6.9

 
21.3

 
20.6

Expected asset return
 
(10.3
)
 
(11.4
)
 
(30.9
)
 
(34.4
)
Amortized loss
 
1.5

 
2.2

 
4.7

 
6.6

Amortized prior service cost
 

 

 

 
0.1

Curtailment
 

 

 

 
3.2

Settlement
 
0.4

 

 
0.4

 

Net periodic benefit credit
 
$
(0.9
)
 
$
(1.2
)
 
$
(3.4
)
 
$
(0.7
)
 
 
 
 
 
 
 
 
 
Other Postretirement Benefits
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions)
 
 
 

 
 

 
 
 
 
Service cost
 
$

 
$
0.1

 
$
0.2

 
$
0.3

Interest cost
 
3.3

 
3.1

 
9.7

 
9.3

Amortized loss
 

 
0.2

 
0.1

 
0.6

Amortized prior service credit
 
(0.4
)
 
(0.7
)
 
(1.2
)
 
(2.0
)
Net periodic benefit cost
 
$
2.9

 
$
2.7

 
$
8.8

 
$
8.2



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 September 30, 2019 and December 31, 2018, we have a noncurrent pension liability of $113.0 million and $128.6 million, respectively. As of September 30, 2019 and December 31, 2018, we have a noncurrent other postretirement benefits liability of $506.4 million and $506.5 million, respectively.

Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions) related to certain of our U.S. pension plans, we expect our regulatory pension funding requirements in 2019 to be approximately $2.2 million. We expect our cash payments for other postretirement benefit obligations in 2019, net of GM cost sharing, to be approximately $17.7 million.
XML 32 R11.htm IDEA: XBRL DOCUMENT v3.19.3
Leasing
9 Months Ended
Sep. 30, 2019
Leasing [Abstract]  
Leases of Lessee Disclosure [Text Block]
3. LEASING

On January 1, 2019, we adopted new accounting guidance under Accounting Standards Codification Topic 842 (ASC 842) Leases. ASC 842 superseded prior lease accounting guidance and established new criteria for recognizing right-of-use assets and lease liabilities for operating lease arrangements on our Condensed Consolidated Balance Sheet. We elected to adopt this guidance utilizing the optional transition method that allowed us to not retrospectively revise prior period balance sheets to include operating leases, and to only include the disclosures required under ASC 842 for the periods subsequent to adoption.

We have concluded that when an agreement grants us the right to substantially all of the economic benefits associated with an identified asset, and we are able to direct the use of that asset throughout the term of the agreement, we have a lease. We lease certain facilities and furniture under finance leases, and we also lease certain commercial office and production facilities, manufacturing machinery and equipment, vehicles and other assets under operating leases. Some of our leases include options to extend or terminate the leases and these options have been included in the relevant lease term to the extent that they are reasonably certain to be exercised.

The lease consideration for some of our facilities and machinery and equipment is variable, as it is based on various indices or usage of the underlying assets, respectively. Variable lease payments based on indices have been included in the related right-of-use assets and lease liabilities on our Condensed Consolidated Balance Sheet, while variable lease payments based on usage of the underlying asset have been excluded as they do not represent present rights or obligations.

Lease cost consists of the following:
 
 
Three Months Ended
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2019
 
 
(in millions)
 
 
 
 
 
Finance lease cost
 
 
 
 
     Amortization of right-of-use assets
 
$
0.2

 
$
0.6

Interest on lease liabilities
 
0.1

 
0.2

Total finance lease cost
 
0.3

 
0.8

 
 
 
 
 
Operating lease cost
 
6.5

 
19.9

Short-term lease cost
 
1.4

 
4.8

Variable lease cost
 
2.5

 
6.7

 
 
 
 
 
Total lease cost
 
$
10.7

 
$
32.2



For the three months ended September 30, 2019, $8.0 million and $2.4 million were recorded to Cost of goods sold (COGS) and Selling, general and administrative expenses (SG&A), respectively, on our Condensed Consolidated Statement of Operations, as compared to $7.1 million and $2.4 million, respectively, for the three months ended September 30, 2018. For the nine months ended September 30, 2019, $24.0 million and $7.4 million were recorded to COGS and SG&A, respectively, on our Condensed Consolidated Statement of Operations, as compared to $21.4 million and $7.4 million, respectively for the nine months ended September 30, 2018.
The following table summarizes additional information related to our lease agreements.
 
 
Nine Months Ended
 
 
September 30,
 
 
2019
 
 
(in millions, except lease term and rate)
 
 
 
Cash paid for amounts included in measurement of lease liabilities
 
 
     Operating cash flows from finance leases
 
$
0.2

Operating cash flows from operating leases
 
18.2

Financing cash flows from finance leases
 
0.6

 
 
 
Weighted-average remaining lease term - finance leases
 
3.1 years

Weighted-average remaining lease term - operating leases
 
7.5 years

 
 


Weighted-average discount rate - finance leases
 
8.1
%
Weighted-average discount rate - operating leases
 
5.6
%


As the rate implicit in the lease is typically unknown, the discount rate used to determine the lease liability for the majority of our leases is the collateralized incremental borrowing rate in the applicable geographic area for a similar term and amount as the lease agreement.

Future undiscounted minimum payments under non-cancelable leases are as follows:
 
 
Finance Leases
 
Operating Leases
 
 
(in millions)
2019 (excluding the nine months ended September 30, 2019)
 
$
0.3

 
$
6.9

2020
 
1.1

 
25.6

2021
 
1.0

 
18.1

2022
 
0.9

 
14.5

2023
 
0.9

 
9.7

Thereafter
 

 
38.9

Total future undiscounted minimum lease payments
 
4.2

 
113.7

Less: Impact of discounting
 
(1.4
)
 
(20.0
)
Total
 
$
2.8

 
$
93.7



For the full year 2019, we expect payments for short-term leases to be approximately $5.0 million.

The right-of-use assets and lease liabilities recorded on our Condensed Consolidated Balance Sheet as of September 30, 2019 are as follows:
 
 
Finance Leases
 
Operating Leases
 
 
(in millions)
Property, plant and equipment, net
 
$
2.8

 
$

Other assets and deferred charges
 

 
93.7

Total
 
$
2.8

 
$
93.7

 
 
 
 
 
Accrued expenses and other
 
$
0.9

 
$
21.4

Postretirement benefits and other long-term liabilities
 
1.9

 
72.3

Total
 
$
2.8

 
$
93.7




ASC 842 Adoption of Practical Expedients

We have elected to adopt, for all classes of underlying assets, a package of practical expedients provided under ASC 842 that allow us to 1) not reassess whether existing or expired contracts contain or contained a lease; 2) not reassess the lease classification (operating or financing) of our existing leases at adoption; and 3) not reassess initial direct costs for existing leases.

ASC 842 also provides a practical expedient that allows companies to exclude balance sheet recognition of right-of-use assets and associated liabilities for lease terms of 12 months or less, which we have elected as part of our adoption of ASC 842 for all classes of underlying assets. We do not include right-of-use assets and operating lease liabilities on our Condensed Consolidated Balance Sheet for leases with a term of 12 months or less.

We have also elected to adopt the practical expedient under ASC 842 to not separate lease and non-lease components in contracts that contain both. These lease agreements are accounted for as a single lease component for all classes of underlying assets.

Leases Not Yet Commenced

As of September 30, 2019, we have entered into additional operating leases that have not yet commenced of approximately $1.4 million, which primarily reflects the lease of machinery and equipment with a term of 5 years that is expected to commence in 2019.
XML 33 R15.htm IDEA: XBRL DOCUMENT v3.19.3
Long-Term Debt
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Long-term Debt [Text Block]
7. LONG-TERM DEBT

Long-term debt consists of the following:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
(in millions)
 
 
 
 
 
Revolving Credit Facility
 
$

 
$

Term Loan A Facility
 
340.0

 
83.8

Term Loan B Facility
 
1,248.6

 
1,511.2

7.75% Notes due 2019
 

 
100.0

6.625% Notes due 2022
 
450.0

 
450.0

6.50% Notes due 2027
 
500.0

 
500.0

6.25% Notes due 2026
 
400.0

 
400.0

6.25% Notes due 2025
 
700.0

 
700.0

Foreign credit facilities and other
 
113.2

 
127.1

Capital lease obligations
 

 
3.4

Total debt
 
3,751.8

 
3,875.5

    Less: Current portion of long-term debt
 
23.8

 
121.6

Long-term debt
 
3,728.0

 
3,753.9

    Less: Debt issuance costs
 
54.7

 
67.1

Long-term debt, net
 
$
3,673.3

 
$
3,686.8



Senior Secured Credit Facilities In 2017, American Axle & Manufacturing Holdings, Inc. (Holdings) and American Axle & Manufacturing, Inc. (AAM, Inc.) entered into a credit agreement (the Credit Agreement). In connection with the Credit Agreement, Holdings, AAM, Inc. and certain of their restricted subsidiaries entered into a Collateral Agreement and Guarantee Agreement with the financial institutions party thereto. The Credit Agreement included 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 $932 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 Senior Secured Credit Facilities).

In July 2019, Holdings, AAM, Inc., and certain subsidiaries of Holdings entered into the First Amendment (First Amendment) to the Credit Agreement (as amended by the First Amendment, the Amended Credit Agreement). The First Amendment, among other things, established $340 million in incremental term loan A commitments under the Amended Credit Agreement with a maturity date of July 29, 2024 (Term Loan A Facility due 2024), extended the maturity date of the Revolving Credit Facility from April 6, 2022 to July 29, 2024 and modified the applicable margin with respect to interest rates under the Term Loan A Facility due 2024 and interest rates and commitment fees under the Revolving Credit Facility. The applicable margin and the maturity date for the Term Loan B Facility remain unchanged. The proceeds of $340 million were used to repay all of the outstanding loans under the existing Term Loan A Facility and a portion of the outstanding Term Loan B Facility, resulting in no additional indebtedness. In the third quarter of 2019, we expensed $5.1 million for the write-off of the unamortized debt issuance costs related to the existing Term Loan A Facility and a portion of the unamortized debt issuance costs related to our Term Loan B Facility that we had been amortizing over the expected life of the borrowings.

At September 30, 2019, we had $890.8 million available under the Revolving Credit Facility. This availability reflects a reduction of $34.2 million for standby letters of credit issued against the facility. The proceeds of the Revolving Credit Facility are used for general corporate purposes.

The 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 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 September 30, 2019, $107.8 million was outstanding under our foreign credit facilities, as compared to $127.1 million at December 31, 2018. At September 30, 2019, an additional $93.7 million was available under our foreign credit facilities.

Weighted-Average Interest Rate The weighted-average interest rate of our long-term debt outstanding was 5.8% at September 30, 2019 and 5.9% at December 31, 2018.  

Capital lease obligations Upon our adoption of ASC 842 Leases, our capital (finance) lease obligations are now presented in Accrued expenses and other, and Postretirement benefits and other long-term liabilities on our Condensed Consolidated Balance Sheet. See Note 3 - Leasing for additional detail regarding our adoption of ASC 842.

Redemption of 7.75% Notes due 2019 In the second quarter of 2019, we voluntarily redeemed the remaining balance outstanding under our 7.75% Notes due 2019. This resulted in a principal payment of $100 million and $0.3 million in accrued interest. We also expensed approximately $0.1 million for the write-off of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing, and approximately $2.2 million for an early redemption premium.
XML 34 R79.htm IDEA: XBRL DOCUMENT v3.19.3
Supplemental Guarantor Condensed Consolidating Financial Statements Narrative (Details)
Sep. 30, 2019
Debt Instrument [Line Items]  
Ownership in Subsidiary, Percentage 100.00%
Unsecured Debt [Member] | 6.625% Notes [Member]  
Debt Instrument [Line Items]  
Debt Instrument, Interest Rate, Stated Percentage 6.625%
Unsecured Debt [Member] | 6.50% Notes [Member]  
Debt Instrument [Line Items]  
Debt Instrument, Interest Rate, Stated Percentage 6.50%
Unsecured Debt [Member] | 6.25% Notes Due 2026 [Member]  
Debt Instrument [Line Items]  
Debt Instrument, Interest Rate, Stated Percentage 6.25%
Unsecured Debt [Member] | 6.25% Notes due 2025 [Member]  
Debt Instrument [Line Items]  
Debt Instrument, Interest Rate, Stated Percentage 6.25%
XML 35 R75.htm IDEA: XBRL DOCUMENT v3.19.3
Revenue from Contracts with Customers Contract Assets and Liabilities (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Dec. 31, 2018
Accounts receivable, net $ 976.9 $ 976.9 $ 966.5
Deferred revenue, current 22.6 22.6 44.3
Deferred revenue, noncurrent 83.1 83.1 $ 77.6
Increase (decrease) in accounts receivable   10.4  
Contract liability, current, increase (decrease)   (21.7)  
Contract liability, noncurrent, increase (decrease)   5.5  
Contract with customer, liability, revenue recognized $ 12.5 $ 40.3  
XML 36 R81.htm IDEA: XBRL DOCUMENT v3.19.3
Supplemental Guarantor Condensed Consolidating Balance Sheets (Details) - USD ($)
$ in Millions
Sep. 30, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 375.1 $ 476.4
Accounts receivable, net 976.9 966.5
Intercompany receivables 0.0 0.0
Inventories, net 403.1 459.7
Prepaid expenses and other 130.9 127.2
Current assets held-for-sale 312.2 0.0
Total current assets 2,198.2 2,029.8
Property, plant and equipment, net 2,326.4 2,514.4
Goodwill 1,127.5 1,141.8
Other intangible assets, net 881.5 1,111.1
Intercompany notes and accounts receivable 0.0 0.0
Other assets and deferred charges 782.7 713.6
Investment in subsidiaries 0.0 0.0
Total assets 7,316.3 7,510.7
Current liabilities    
Current portion of long-term debt 23.8 121.6
Accounts payable 703.7 840.2
Intercompany payables 0.0 0.0
Accrued expenses and other 407.9 395.0
Current liabilities held-for sale 101.7 0.0
Total current liabilities 1,237.1 1,356.8
Intercompany notes and accounts payable 0.0 0.0
Long-term debt, net 3,673.3 3,686.8
Other long-term liabilities 996.3 980.8
Total liabilities 5,906.7 6,024.4
Total AAM Stockholders’ equity 1,406.8 1,483.9
Noncontrolling interests in subsidiaries 2.8 2.4
Total stockholders' equity 1,409.6 1,486.3
Total liabilities and stockholders' equity 7,316.3 7,510.7
Consolidation, Eliminations [Member]    
Current assets    
Cash and cash equivalents 0.0 0.0
Accounts receivable, net 0.0 0.0
Intercompany receivables (9,769.2) (5,787.0)
Inventories, net 0.0 0.0
Prepaid expenses and other 0.0 0.0
Current assets held-for-sale 0.0  
Total current assets (9,769.2) (5,787.0)
Property, plant and equipment, net 0.0 0.0
Goodwill 0.0 0.0
Other intangible assets, net 0.0 0.0
Intercompany notes and accounts receivable (1,728.8) (1,461.3)
Other assets and deferred charges 0.0 0.0
Investment in subsidiaries (6,381.4) (6,780.7)
Total assets (17,879.4) (14,029.0)
Current liabilities    
Current portion of long-term debt 0.0 0.0
Accounts payable 0.0 0.0
Intercompany payables (9,769.2) (5,787.0)
Accrued expenses and other 0.0 0.0
Current liabilities held-for sale 0.0  
Total current liabilities (9,769.2) (5,787.0)
Intercompany notes and accounts payable (1,728.8) (1,461.3)
Long-term debt, net 0.0 0.0
Other long-term liabilities 0.0 0.0
Total liabilities (11,498.0) (7,248.3)
Total AAM Stockholders’ equity (6,378.6) (6,778.3)
Noncontrolling interests in subsidiaries (2.8) (2.4)
Total stockholders' equity (6,381.4) (6,780.7)
Total liabilities and stockholders' equity (17,879.4) (14,029.0)
Holdings [Member]    
Current assets    
Cash and cash equivalents 0.0 0.0
Accounts receivable, net 0.0 0.0
Intercompany receivables 0.0 0.0
Inventories, net 0.0 0.0
Prepaid expenses and other 0.0 0.0
Current assets held-for-sale 0.0  
Total current assets 0.0 0.0
Property, plant and equipment, net 0.0 0.0
Goodwill 0.0 0.0
Other intangible assets, net 0.0 0.0
Intercompany notes and accounts receivable 0.0 0.0
Other assets and deferred charges 0.0 0.0
Investment in subsidiaries 2,721.4 2,790.5
Total assets 2,721.4 2,790.5
Current liabilities    
Current portion of long-term debt 0.0 0.0
Accounts payable 0.0 0.0
Intercompany payables 0.0 0.0
Accrued expenses and other 0.0 0.0
Current liabilities held-for sale 0.0  
Total current liabilities 0.0 0.0
Intercompany notes and accounts payable 1,311.8 1,304.2
Long-term debt, net 0.0 0.0
Other long-term liabilities 0.0 0.0
Total liabilities 1,311.8 1,304.2
Total AAM Stockholders’ equity 1,406.8 1,483.9
Noncontrolling interests in subsidiaries 2.8 2.4
Total stockholders' equity 1,409.6 1,486.3
Total liabilities and stockholders' equity 2,721.4 2,790.5
AAM Inc. [Member]    
Current assets    
Cash and cash equivalents 79.4 36.7
Accounts receivable, net 95.2 122.7
Intercompany receivables 4,864.1 3,337.2
Inventories, net 62.8 42.5
Prepaid expenses and other 34.3 34.4
Current assets held-for-sale 0.0  
Total current assets 5,135.8 3,573.5
Property, plant and equipment, net 294.1 275.8
Goodwill 0.0 0.0
Other intangible assets, net 15.4 18.6
Intercompany notes and accounts receivable 1,542.1 1,316.8
Other assets and deferred charges 339.7 319.8
Investment in subsidiaries 2,155.9 2,241.5
Total assets 9,483.0 7,746.0
Current liabilities    
Current portion of long-term debt 2.1 100.0
Accounts payable 101.3 94.2
Intercompany payables 3,931.7 2,050.0
Accrued expenses and other 165.2 169.0
Current liabilities held-for sale 0.0  
Total current liabilities 4,200.3 2,413.2
Intercompany notes and accounts payable 36.0 12.5
Long-term debt, net 3,581.8 3,578.3
Other long-term liabilities 503.0 508.9
Total liabilities 8,321.1 6,512.9
Total AAM Stockholders’ equity 1,161.9 1,233.1
Noncontrolling interests in subsidiaries 0.0 0.0
Total stockholders' equity 1,161.9 1,233.1
Total liabilities and stockholders' equity 9,483.0 7,746.0
Guarantor Subsidiaries [Member]    
Current assets    
Cash and cash equivalents 0.1 0.2
Accounts receivable, net 230.8 287.7
Intercompany receivables 4,722.1 2,356.3
Inventories, net 116.9 157.7
Prepaid expenses and other 3.7 6.0
Current assets held-for-sale 312.2  
Total current assets 5,385.8 2,807.9
Property, plant and equipment, net 554.5 758.6
Goodwill 719.0 719.0
Other intangible assets, net 836.9 1,059.6
Intercompany notes and accounts receivable 186.7 144.5
Other assets and deferred charges 118.1 126.4
Investment in subsidiaries 1,504.1 1,748.7
Total assets 9,305.1 7,364.7
Current liabilities    
Current portion of long-term debt 5.3 0.0
Accounts payable 169.1 246.5
Intercompany payables 5,835.5 3,615.7
Accrued expenses and other 34.9 35.8
Current liabilities held-for sale 101.7  
Total current liabilities 6,146.5 3,898.0
Intercompany notes and accounts payable 0.0 0.0
Long-term debt, net 0.0 3.0
Other long-term liabilities 243.1 271.7
Total liabilities 6,389.6 4,172.7
Total AAM Stockholders’ equity 2,915.5 3,192.0
Noncontrolling interests in subsidiaries 0.0 0.0
Total stockholders' equity 2,915.5 3,192.0
Total liabilities and stockholders' equity 9,305.1 7,364.7
Non-Guarantor Subsidiaries [Member]    
Current assets    
Cash and cash equivalents 295.6 439.5
Accounts receivable, net 650.9 556.1
Intercompany receivables 183.0 93.5
Inventories, net 223.4 259.5
Prepaid expenses and other 92.9 86.8
Current assets held-for-sale 0.0  
Total current assets 1,445.8 1,435.4
Property, plant and equipment, net 1,477.8 1,480.0
Goodwill 408.5 422.8
Other intangible assets, net 29.2 32.9
Intercompany notes and accounts receivable 0.0 0.0
Other assets and deferred charges 324.9 267.4
Investment in subsidiaries 0.0 0.0
Total assets 3,686.2 3,638.5
Current liabilities    
Current portion of long-term debt 16.4 21.6
Accounts payable 433.3 499.5
Intercompany payables 2.0 121.3
Accrued expenses and other 207.8 190.2
Current liabilities held-for sale 0.0  
Total current liabilities 659.5 832.6
Intercompany notes and accounts payable 381.0 144.6
Long-term debt, net 91.5 105.5
Other long-term liabilities 250.2 200.2
Total liabilities 1,382.2 1,282.9
Total AAM Stockholders’ equity 2,301.2 2,353.2
Noncontrolling interests in subsidiaries 2.8 2.4
Total stockholders' equity 2,304.0 2,355.6
Total liabilities and stockholders' equity $ 3,686.2 $ 3,638.5
XML 37 R71.htm IDEA: XBRL DOCUMENT v3.19.3
Earnings Per Share Earnings Per Share (EPS) Antidilutive Shares (Details) - shares
shares in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2019
Earnings Per Share [Abstract]    
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 0.3 0.4
XML 38 R52.htm IDEA: XBRL DOCUMENT v3.19.3
Restructuring Reserve Narrative (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended 36 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges     $ 23.5 $ 37.7  
Restructuring and acquisition-related costs $ 11.7 $ 11.7 36.0 66.8  
2016 Restructuring Plan - Employee Severance [Member]          
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges         $ 2.8
2016 Restructuring Plan - Other Restructuring [Member]          
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges         $ 29.6
Employee Severance [Member]          
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges     10.4 2.3  
Other Restructuring [Member]          
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges     13.1 8.8  
Facility Closing [Member]          
Restructuring Cost and Reserve [Line Items]          
Restructuring Charges     $ 0.0 $ 26.6  
XML 39 R56.htm IDEA: XBRL DOCUMENT v3.19.3
Intangible Assets Table (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Dec. 31, 2019
Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]            
Gross Carrying Amount $ 1,106.3   $ 1,106.3     $ 1,293.4
Accumulated Amortization (224.8)   (224.8)     (182.3)
Net Carrying Amount 881.5   881.5     1,111.1
Amortization of Intangible Assets 23.7 $ 24.8 73.6 $ 74.5    
Finite-Lived Intangible Assets, Amortization Expense, Current Fiscal Year         $ 95.0  
Finite-Lived Intangible Assets, Amortization Expense, Year Two 87.0   87.0      
Finite-Lived Intangible Assets, Amortization Expense, Year Three 87.0   87.0      
Finite-Lived Intangible Assets, Amortization Expense, Year Four 87.0   87.0      
Finite-Lived Intangible Assets, Amortization Expense, Year Five 87.0   87.0      
Computer Software, Intangible Asset [Member]            
Finite-Lived Intangible Assets [Line Items]            
Gross Carrying Amount 41.4   41.4     38.0
Accumulated Amortization (26.0)   (26.0)     (20.1)
Net Carrying Amount 15.4   15.4     17.9
Customer Platforms - Intangible Assets [Member]            
Finite-Lived Intangible Assets [Line Items]            
Gross Carrying Amount 856.2   856.2     952.2
Accumulated Amortization (158.6)   (158.6)     (123.5)
Net Carrying Amount 697.6   697.6     828.7
Customer Relationships - Intangible Assets [Member]            
Finite-Lived Intangible Assets [Line Items]            
Gross Carrying Amount 53.0   53.0     147.0
Accumulated Amortization (8.5)   (8.5)     (16.5)
Net Carrying Amount 44.5   44.5     130.5
Technology-Based Intangible Assets [Member]            
Finite-Lived Intangible Assets [Line Items]            
Gross Carrying Amount 155.7   155.7     156.2
Accumulated Amortization (31.7)   (31.7)     (22.2)
Net Carrying Amount $ 124.0   $ 124.0     $ 134.0
XML 40 R37.htm IDEA: XBRL DOCUMENT v3.19.3
Earnings Per Share (Tables)
9 Months Ended
Sep. 30, 2019
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
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
 
Nine Months Ended
 
 
September 30,
 
September 30,
 
 
2019
 
2018
 
2019
 
2018
 
 
(in millions, except per share data)
Numerator
 
 

 
 
 
 
 
 
Net income (loss) attributable to AAM
 
$
(124.2
)
 
$
63.8

 
$
(30.1
)
 
$
304.3

    Less: Net income attributable to participating securities
 

 
(2.0
)
 

 
(8.9
)
Net income (loss) attributable to common shareholders - Basic and Dilutive
 
$
(124.2
)
 
$
61.8

 
$
(30.1
)
 
$
295.4

 
 
 
 
 
 
 
 
 
Denominators
 
 

 
 

 
 
 
 
Basic common shares outstanding -
 
 

 
 

 
 
 
 
   Weighted-average shares outstanding
 
115.8

 
115.3

 
115.6

 
115.0

        Less: Participating securities
 
(3.3
)
 
(3.6
)
 
(3.3
)
 
(3.4
)
    Weighted-average common shares outstanding
 
112.5

 
111.7

 
112.3

 
111.6

 
 
 
 
 
 
 
 
 
Effect of dilutive securities -
 
 

 
 

 
 
 
 
   Dilutive stock-based compensation
 

 
1.0

 

 
0.7

 
 


 


 
 
 
 
Diluted shares outstanding -
 
 

 
 

 
 
 
 
   Adjusted weighted-average shares after assumed conversions
 
112.5

 
112.7

 
112.3

 
112.3

 
 
 

 
 

 
 
 
 
Basic EPS
 
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.65

 
 
 

 
 

 
 
 
 
Diluted EPS
 
$
(1.10
)
 
$
0.55

 
$
(0.27
)
 
$
2.63



XML 41 R33.htm IDEA: XBRL DOCUMENT v3.19.3
Fair Value (Tables)
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] 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:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Carrying Amount
 
Fair Value
 
Carrying Amount
 
Fair Value
 
Input
 
 
(in millions)
 
 
Balance Sheet Classification
 
 
 
 
 
 
 
 
 
 
Cash equivalents
 
$
160.7

 
$
160.7

 
$
44.0

 
$
44.0

 
Level 1
Prepaid expenses and other
 
 

 
 

 
 

 
 

 
 
Cash flow hedges - currency forward contracts
 
2.3

 
2.3

 
1.3

 
1.3

 
Level 2
Cash flow hedges - variable-to-fixed interest rate swap
 
1.6

 
1.6

 
0.9

 
0.9

 
Level 2
Nondesignated - currency forward contracts
 
0.2

 
0.2

 
0.6

 
0.6

 
Level 2
Other assets and deferred charges
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.9

 
0.9

 
0.4

 
0.4

 
Level 2
     Cash flow hedges - fixed-to-fixed cross-currency swap
 
7.0

 
7.0

 

 

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
4.0

 
4.0

 
1.6

 
1.6

 
Level 2
Accrued expenses and other
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.3

 
0.3

 
0.8

 
0.8

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
10.0

 
10.0

 
0.7

 
0.7

 
Level 2
     Nondesignated - currency forward contracts
 
0.4

 
0.4

 
0.4

 
0.4

 
Level 2
Postretirement benefits and other long-term liabilities
 
 
 
 
 
 
 
 
 
 
     Cash flow hedges - currency forward contracts
 
0.1

 
0.1

 
0.9

 
0.9

 
Level 2
     Cash flow hedges - variable-to-fixed interest rate swap
 
24.2

 
24.2

 
6.9

 
6.9

 
Level 2

Fair Value, Financial Instruments not Carried at Fair Value [Table Text Block]
We estimated the fair value of the amounts outstanding on our debt using available market information and other observable data, to be as follows:
 
 
 
September 30, 2019
 
December 31, 2018
 
 
 
 
Carrying  Amount
 
Fair Value
 
Carrying  Amount
 
Fair Value
 
 
Input
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Revolving Credit Facility
 
$

 
$

 
$

 
$

 
Level 2
Term Loan A Facility
 
340.0

 
334.9

 
83.8

 
79.5

 
Level 2
Term Loan B Facility
 
1,248.6

 
1,217.4

 
1,511.2

 
1,420.6

 
Level 2
7.75% Notes due 2019
 

 

 
100.0

 
102.1

 
Level 2
6.625% Notes due 2022
 
450.0

 
454.5

 
450.0

 
444.4

 
Level 2
6.50% Notes due 2027
 
500.0

 
474.4

 
500.0

 
446.3

 
Level 2
6.25% Notes due 2026
 
400.0

 
380.0

 
400.0

 
358.0

 
Level 2
6.25% Notes due 2025
 
700.0

 
665.0

 
700.0

 
636.7

 
Level 2

Fair Value Measurements, Nonrecurring [Table Text Block]
The following table summarizes the impairments of long-lived assets measured at fair value on a nonrecurring basis subsequent to initial recognition:
 
 
 
 
 
Balance Sheet Classification
 
Fair Value at September 30, 2018
 
Asset Impairment for the Nine Months Ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
$

 
$
25.7

Other assets and deferred charges
 

 
0.9


XML 42 R10.htm IDEA: XBRL DOCUMENT v3.19.3
Assets Held for Sale
9 Months Ended
Sep. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
2. ASSETS HELD-FOR-SALE

In the third quarter of 2019, we entered into a definitive agreement to sell the U.S. operations of our Casting segment to entities affiliated with Gamut Capital Management, L.P. for a sales price of $245.0 million, subject to certain customary adjustments. The sales price consists of $185.0 million in cash and a $60.0 million deferred payment obligation, which will accrue interest at an annual rate of 6% beginning on January 1, 2020 for a period of twelve years. The sale is expected to close in the fourth quarter of 2019.

As a result, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale in our Condensed Consolidated Balance Sheet as of September 30, 2019. Upon reclassification to held-for-sale in the third quarter of 2019, we recorded a pre-tax impairment charge of $225.0 million to reduce the carrying value of this business to fair value less cost to sell. The sale of the U.S. operations of our Casting segment did not qualify for classification as discontinued operations as the sale does not represent a strategic shift in our business that has had, or will have, a major effect on our operations and financial results.

The assets and liabilities classified as held-for-sale are as follows (in millions):
 
September 30, 2019
 
 
Accounts receivable, net
$
89.1

Inventories
32.8

Prepaid expenses and other
1.5

Property, plant and equipment, net
184.6

Intangible assets, net
158.2

Other assets and deferred charges
71.0

Impairment of carrying value
(225.0
)
   Total assets held-for-sale*
$
312.2

 
 
Accounts payable
$
71.3

Accrued compensation and benefits
6.8

Accrued expenses and other
3.4

Postretirement benefits and other long-term liabilities
20.2

   Total liabilities held-for-sale*
$
101.7

 

* The assets and liabilities classified as held-for-sale are classified entirely as current in the September 30, 2019 Condensed Consolidated Balance Sheet as we expect to complete the sale in the fourth quarter of 2019. As this transaction does not qualify for classification as discontinued operations, no reclassification of the assets and liabilities in the December 31, 2018 Condensed Consolidated Balance Sheet was required.

XML 43 R14.htm IDEA: XBRL DOCUMENT v3.19.3
Inventories
9 Months Ended
Sep. 30, 2019
Inventory Disclosure [Abstract]  
Inventory Disclosure [Text Block]
6. INVENTORIES

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: 
 
 
September 30, 2019
 
December 31, 2018
 
 
(in millions)
 
 
 
 
 
Raw materials and work-in-progress
 
$
337.3

 
$
375.1

Finished goods
 
88.0

 
99.0

Gross inventories
 
425.3

 
474.1

Inventory valuation reserves
 
(22.2
)
 
(14.4
)
Inventories, net
 
$
403.1

 
$
459.7


XML 44 R18.htm IDEA: XBRL DOCUMENT v3.19.3
Derivatives
9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
9. DERIVATIVES

Our business and financial results are affected by fluctuations in global 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 derivative contracts  From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies.  As of September 30, 2019, we have currency forward contracts outstanding with a total notional amount of $191.5 million that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the third quarter of 2022 and other items into the second quarter of 2020. 

Fixed-to-fixed cross-currency swap In the third quarter of 2019, we entered into a fixed-to-fixed cross-currency swap to reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. As of September 30, 2019, the notional amount of the fixed-to-fixed cross-currency swap was $217.9 million, and hedges our exposure to changes in exchange rates on the intercompany loans into the second quarter of 2024.

Variable-to-fixed interest rate swap In 2018, we entered into a variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. In the second quarter of 2019, we discontinued this variable-to-fixed interest rate swap, which was a liability of $9.7 million on the date that it was discontinued.

Also in the second quarter of 2019, we entered into a new variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. We have the following notional amounts hedged in relation to our variable-to-fixed interest rate swap: $1.0 billion through May 2020, $900.0 million through May 2021, $750.0 million through May 2022, $600.0 million through May 2023 and $500.0 million through May 2024.

The following table summarizes the reclassification of derivative gains and losses into net income from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow hedges under ASC 815 - Derivatives and Hedging:
 
 
Location
 
Gain (Loss) Reclassified During
 
Total of Financial
 
Gain (Loss) Expected
 
 
of Gain (Loss)
 
Three Months Ended
 
Nine Months Ended
 
Statement
 
to be Reclassified
 
 
  Reclassified into
 
September 30,
 
September 30,
 
Line Item
 
During the
 
 
  Net Income
 
2019
 
2018
 
2019
 
2018
 
2019
 
Next 12 Months
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Currency forward contracts
 
Cost of Goods Sold
 
$
0.9

 
$
(0.9
)
 
$
1.8

 
$
(3.7
)
 
$
4,381.7

 
$
2.0

Fixed-to-fixed cross-currency swap
 
Other Income (Expense), net
 
7.6

 

 
7.6

 

 
(9.0
)
 

Variable-to-fixed interest rate swap
 
Interest Expense
 
(1.7
)
 
0.8

 
0.2

 
2.1

 
(163.9
)
 
(9.1
)
 

See Note 14 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three and nine months ended September 30, 2019 and 2018.

The following table summarizes the amount and location of gains and losses recognized in the Condensed Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:

 
 
 
 
Gain (Loss) Recognized During
Total of Financial
 
 
Location of Gain (Loss)
 
Three Months Ended
 
Nine Months Ended
Statement Line
 
 
 Recognized in
 
September 30,
 
September 30,
Item
 
 
  Net Income
 
2019

2018
 
2019
 
2018
2019
 
 
 
 
(in millions)
 
 
 
 
 
 
 
 
 
 
 
 
Currency forward contracts
 
Cost of Goods Sold
 
$
(0.5
)
 
$
2.3

 
$
1.3

 
$
2.8

$
4,381.7

Currency forward contracts
 
Other Income (Expense), net
 
0.1

 
(0.5
)
 
(0.5
)
 
1.3

(9.0
)

XML 45 R8.htm IDEA: XBRL DOCUMENT v3.19.3
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Treasury Stock
AOCI Attributable to Parent
Noncontrolling Interest
Common stock, shares, outstanding at Dec. 31, 2017 111.3            
Total AAM stockholders' equity at Dec. 31, 2017   $ 1.2 $ 1,264.6 $ 761.0 $ (198.1) $ (292.7) $ 4.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM       89.4      
Net income (loss) attributable to noncontrolling interest             0.1
Stock issued during period, shares, share-based compensation, net of forfeitures 0.6            
Stock-based compensation     6.6        
Treasury stock, shares, acquired (0.2)            
Purchase of treasury stock         (3.5)    
Changes in cash flow hedges           15.1  
Foreign currency translation adjustments           37.9  
Defined benefit plans, net           1.3  
Purchase of noncontrolling interest             (0.9)
Common stock, shares, outstanding at Mar. 31, 2018 111.7            
Total AAM stockholders' equity at Mar. 31, 2018   1.2 1,271.2 850.4 (201.6) (238.4) 3.2
Common stock, shares, outstanding at Dec. 31, 2017 111.3            
Total AAM stockholders' equity at Dec. 31, 2017   1.2 1,264.6 761.0 (198.1) (292.7) 4.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM $ 304.3            
Net income (loss) attributable to noncontrolling interest 0.5            
Purchase of treasury stock $ 3.7            
Common stock, shares, outstanding at Sep. 30, 2018 111.6            
Total AAM stockholders' equity at Sep. 30, 2018   1.2 1,285.5 1,065.3 (201.8) (313.6) 2.1
Common stock, shares, outstanding at Mar. 31, 2018 111.7            
Total AAM stockholders' equity at Mar. 31, 2018   1.2 1,271.2 850.4 (201.6) (238.4) 3.2
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM       151.1      
Net income (loss) attributable to noncontrolling interest             0.2
Stock-based compensation     7.1        
Treasury stock, shares, acquired 0.0            
Purchase of treasury stock         (0.1)    
Changes in cash flow hedges           (7.9)  
Foreign currency translation adjustments           (81.0)  
Defined benefit plans, net           12.2  
Purchase of noncontrolling interest             (1.4)
Common stock, shares, outstanding at Jun. 30, 2018 111.7            
Total AAM stockholders' equity at Jun. 30, 2018   1.2 1,278.3 1,001.5 (201.7) (315.1) 2.0
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM $ 63.8     63.8      
Net income (loss) attributable to noncontrolling interest $ 0.2           0.2
Exercise of stock options     0.1        
Stock-based compensation     7.1        
Treasury stock, shares, acquired (0.1)            
Purchase of treasury stock         (0.1)    
Changes in cash flow hedges           12.4  
Foreign currency translation adjustments           (11.9)  
Defined benefit plans, net           1.0  
Purchase of noncontrolling interest             (0.1)
Common stock, shares, outstanding at Sep. 30, 2018 111.6            
Total AAM stockholders' equity at Sep. 30, 2018   1.2 1,285.5 1,065.3 (201.8) (313.6) 2.1
Common stock, shares, outstanding at Dec. 31, 2018 111.7            
Total AAM stockholders' equity at Dec. 31, 2018 $ 1,483.9 1.2 1,292.6 703.5 (201.8) (311.6) 2.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM       41.6      
Net income (loss) attributable to noncontrolling interest             0.1
Stock issued during period, shares, share-based compensation, net of forfeitures 1.2            
Stock-based compensation     5.5        
New accounting pronouncement or change in accounting principle, effect of adoption, quantification | ASU 2016-02 [Member]       1.9      
New accounting pronouncement or change in accounting principle, effect of adoption, quantification | ASU 2018-02 [Member]       27.7   (27.7)  
Treasury stock, shares, acquired (0.4)            
Purchase of treasury stock         (7.3)    
Changes in cash flow hedges           (2.5)  
Foreign currency translation adjustments           (2.5)  
Defined benefit plans, net           0.7  
Common stock, shares, outstanding at Mar. 31, 2019 112.5            
Total AAM stockholders' equity at Mar. 31, 2019   1.2 1,298.1 774.7 (209.1) (343.6) 2.5
Common stock, shares, outstanding at Dec. 31, 2018 111.7            
Total AAM stockholders' equity at Dec. 31, 2018 $ 1,483.9 1.2 1,292.6 703.5 (201.8) (311.6) 2.4
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM (30.1)            
Net income (loss) attributable to noncontrolling interest 0.4            
Purchase of treasury stock $ 7.5            
Common stock, shares, outstanding at Sep. 30, 2019 112.5            
Total AAM stockholders' equity at Sep. 30, 2019 $ 1,406.8 1.2 1,310.1 703.0 (209.3) (398.2) 2.8
Common stock, shares, outstanding at Mar. 31, 2019 112.5            
Total AAM stockholders' equity at Mar. 31, 2019   1.2 1,298.1 774.7 (209.1) (343.6) 2.5
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM       52.5      
Net income (loss) attributable to noncontrolling interest             0.2
Stock-based compensation     5.7        
Treasury stock, shares, acquired 0.0            
Purchase of treasury stock         (0.2)    
Changes in cash flow hedges           (15.8)  
Foreign currency translation adjustments           4.9  
Defined benefit plans, net           1.1  
Common stock, shares, outstanding at Jun. 30, 2019 112.5            
Total AAM stockholders' equity at Jun. 30, 2019   1.2 1,303.8 827.2 (209.3) (353.4) 2.7
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Net income (loss) attributable to AAM $ (124.2)     (124.2)      
Net income (loss) attributable to noncontrolling interest $ 0.1           0.1
Stock-based compensation     6.3        
Changes in cash flow hedges           (6.4)  
Foreign currency translation adjustments           (37.1)  
Defined benefit plans, net           (1.3)  
Common stock, shares, outstanding at Sep. 30, 2019 112.5            
Total AAM stockholders' equity at Sep. 30, 2019 $ 1,406.8 $ 1.2 $ 1,310.1 $ 703.0 $ (209.3) $ (398.2) $ 2.8
XML 46 R22.htm IDEA: XBRL DOCUMENT v3.19.3
Reclassifications out of Accumulated Other Comprehensive Income (Loss)
9 Months Ended
Sep. 30, 2019
Reclassifications out of Accumulated Other Comprehensive Income (Loss) [Abstract]  
Disclosure of Reclassification Amount [Text Block]
14. 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 September 30, 2019 and September 30, 2018 are as follows (in millions):

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at June 30, 2019
$
(239.8
)
 
$
(94.2
)
 
$
(19.4
)
 
$
(353.4
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
(2.9
)
 
(37.1
)
 
(0.7
)
 
(40.7
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
0.6

 

 
(0.1
)
 
0.5

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss
1.3

(a)

 
(6.8
)
(b)
(5.5
)
 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.3
)
 

 
1.2

 
0.9

 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive loss
(1.3
)
 
(37.1
)
 
(6.4
)
 
(44.8
)
 
 
 
 
 
 
 
 
Balance at September 30, 2019
$
(241.1
)
 
$
(131.3
)
 
$
(25.8
)
 
$
(398.2
)

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at June 30, 2018
$
(238.5
)
 
$
(77.2
)
 
$
0.6

 
$
(315.1
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications

 
(11.9
)
 
12.8

 
0.9

 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications

 

 
(0.7
)
 
(0.7
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
1.3

(a)

 
0.1

(b)
1.4

 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.3
)
 

 
0.2

 
(0.1
)
 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive income (loss)
1.0

 
(11.9
)
 
12.4

 
1.5

 
 
 
 
 
 
 
 
Balance at September 30, 2018
$
(237.5
)
 
$
(89.1
)
 
$
13.0

 
$
(313.6
)
(a)
The amount reclassified from AOCI included $1.2 million in COGS and $0.1 million in SG&A for the three months ended September 30, 2019 and $1.5 million in COGS and $(0.1) million in SG&A for the three months ended September 30, 2018.
 
 
(b)
The amounts reclassified from AOCI included $(0.9) million in COGS, $1.7 million in interest expense and $(7.6) million in other income for the three months ended September 30, 2019 and $0.9 million in COGS and $(0.8) million in interest expense for the three months ended September 30, 2018.

Reclassification adjustments and other activity impacting accumulated other comprehensive income (loss) during the nine months ended September 30, 2019 and September 30, 2018 are as follows (in millions):
 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at December 31, 2018
$
(213.9
)
 
$
(96.6
)
 
$
(1.1
)
 
$
(311.6
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
(30.8
)
(a)
(34.7
)
 
(22.4
)
 
(87.9
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
0.6

 

 
5.7

 
6.3

 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive loss
3.8

(b)

 
(9.6
)
(c)
(5.8
)
 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(0.8
)
 

 
1.6

 
0.8

 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive loss
(27.2
)
 
(34.7
)
 
(24.7
)
 
(86.6
)
 
 
 
 
 
 
 
 
Balance at September 30, 2019
$
(241.1
)
 
$
(131.3
)
 
$
(25.8
)
 
$
(398.2
)

 
Defined Benefit Plans
 
Foreign Currency Translation Adjustments
 
Unrecognized Gain (Loss) on Cash Flow Hedges
 
Total
Balance at December 31, 2017
$
(252.0
)
 
$
(34.1
)
 
$
(6.6
)
 
$
(292.7
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
14.7

 
(55.2
)
 
19.7

 
(20.8
)
 
 
 
 
 
 
 
 
Income tax effect of other comprehensive income (loss) before reclassifications
(3.6
)
 

 
(2.2
)
 
(5.8
)
 
 
 
 
 
 
 
 
Amounts reclassified from accumulated other comprehensive income (loss)
4.6

(b)
0.2

 
1.6

(c)
6.4

 
 
 
 
 
 
 
 
Income taxes reclassified into net income
(1.2
)
 

 
0.5

 
(0.7
)
 
 
 
 
 
 
 
 
Net change in accumulated other comprehensive income (loss)
14.5

 
(55.0
)
 
19.6

 
(20.9
)
 
 
 
 
 
 
 
 
Balance at September 30, 2018
$
(237.5
)
 
$
(89.1
)
 
$
13.0

 
$
(313.6
)
(a)
ASU 2018-02 became effective on January 1, 2019, and we elected to reclassify the stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, resulting in a decrease in Accumulated other comprehensive income (loss) of $27.7 million at January 1, 2019. See Note 1 - Organization and Basis of Presentation for further detail.
 
 
(b)
The amount reclassified from AOCI included $3.6 million in COGS and $0.2 million in SG&A for the nine months ended September 30, 2019 and $4.5 million in COGS and $0.1 million in SG&A for the nine months ended September 30, 2018.
 
 
(c)
The amounts reclassified from AOCI included $(1.8) million in COGS, $(0.2) million in interest expense and $(7.6) million in other income for the nine months ended September 30, 2019 and $3.7 million in COGS and $(2.1) million in interest expense for the nine months ended September 30, 2018.

XML 47 R26.htm IDEA: XBRL DOCUMENT v3.19.3
Organization and Basis of Presentation (Policies)
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
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, 2018 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.

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, 2018.

New Accounting Pronouncements, Policy [Policy Text Block]
Effect of New Accounting Standards

Accounting Standard Update 2018-15

On August 15, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-15 - Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (Topic 350-40). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a cloud computing or hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This guidance becomes effective at the beginning of our 2020 fiscal year and may be applied either retrospectively or prospectively. We expect to adopt this guidance prospectively on January 1, 2020 and we are currently assessing the impact that this standard will have on our consolidated financial statements.

Accounting Standards Update 2018-02

On February 14, 2018, the FASB issued ASU 2018-02 - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220). ASU 2018-02 allows companies the option to reclassify disproportionate tax effects in accumulated other comprehensive income (AOCI) caused by the 2017 Tax Cuts and Jobs Act, also known as stranded tax effects, to retained earnings. ASU 2018-02 also requires expanded disclosures related to disproportionate income tax effects from AOCI, some of which are applicable to all companies regardless of whether the option to reclassify the stranded tax effects is exercised. This guidance became effective on January 1, 2019, and we elected to reclassify the stranded tax effects caused by the 2017 Tax Cuts and Jobs Act, resulting in a decrease in Accumulated other comprehensive income (loss) and an increase in Retained earnings of $27.7 million at January 1, 2019.

Accounting Standards Update 2016-02

On February 25, 2016, the FASB issued ASU 2016-02 - Leases (Topic 842), and has subsequently issued ASU 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842) (collectively the Lease ASUs) which supersede the existing lease accounting guidance and establish new criteria for recognizing lease assets and liabilities. The most significant impact of these updates, to AAM, is that a lessee is 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 previous lease guidance. Expense recognition in the statement of income, along with cash flow statement classification for both financing (capital) and operating leases under the new standard are not significantly changed from previous lease guidance. This guidance became effective for AAM on January 1, 2019. See Note 3 - Leasing for additional detail regarding the adoption of ASU 2016-02.



XML 48 R4.htm IDEA: XBRL DOCUMENT v3.19.3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Other comprehensive income (loss), pension and other postretirement benefit plans, tax $ 0.3 $ (0.3) $ (0.2) $ (4.8)
Other comprehensive income (loss), derivatives qualifying as hedges, tax $ 1.1 $ (0.5) $ 7.3 $ (1.7)
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