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Segment and Geographic Information
 12 Months Ended
Dec. 31, 2019
Segments, Geographical Areas [Abstract]  
Segment Reporting Disclosure [Text Block]
17. SEGMENT AND GEOGRAPHIC INFORMATION

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. The Powertrain amounts previously reported for the years ended December 31, 2018 and 2017 have been reclassified to Driveline and Metal Forming accordingly.

Additionally, in the fourth quarter of 2019, we completed the Casting Sale. The Casting Sale did not include the entities that conduct AAM's casting operations in El Carmen, Mexico, which are now included in our Driveline segment.

The Casting Sale did not qualify for classification as discontinued operations, as it did not represent a strategic shift in our business that has had, or will have, a major effect on our operations and financial results. As such, we continue to present Casting as a segment in the tables below, which is now comprised entirely of the U.S. casting operations that were included in the Casting Sale. The amounts previously reported in our Casting segment for the retained operations in El Carmen, Mexico have been reclassified to our Driveline segment for the years presented.

As a result of these activities, our business is now organized into Driveline and Metal Forming segments, with each representing a reportable segment under ASC 280 Segment Reporting. 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.

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, sport utility vehicles (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
•
Prior to the Casting Sale, the Casting segment produced 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. Segment Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization for our reportable segments, excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gain (loss) on the sale of a business, impairment charges, pension settlements, and non-recurring items.

 
 
Year Ended December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
Driveline
 
Metal Forming
 
Casting
 
Corporate and Eliminations
 
Total
 
 
(in millions)
Sales
 
$
4,550.2

 
$
1,845.2

 
$
669.2


$
—

 
$
7,064.6

Less: Intersegment sales
 
100.5

 
391.7

 
41.5


—

 
533.7

Net external sales
 
$
4,449.7

 
$
1,453.5

 
$
627.7


$
—

 
$
6,530.9

 
 

 

 



 

Segment adjusted EBITDA
 
$
610.8

 
$
316.5

 
$
43.0


$
—

 
$
970.3

 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
$
307.7

 
$
186.9

 
$
42.3

 
$
—

 
$
536.9

 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
283.8

 
$
105.5

 
$
28.5

 
$
15.5

 
$
433.3

 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
3,778.8

 
$
1,900.0

 
$
—

 
$
965.8

 
$
6,644.6


 
 
Year Ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Driveline
 
Metal Forming
 
Casting
 
Corporate and Eliminations
 
Total
Sales
 
$
5,001.2

 
$
2,046.0

 
$
780.6

 
$
—

 
$
7,827.8

Less: Intersegment sales
 
89.8

 
428.3

 
39.3

 
—

 
557.4

Net external sales
 
$
4,911.4

 
$
1,617.7

 
$
741.3

 
$
—

 
$
7,270.4

 
 
 
 
 
 
 
 
 
 
 
Segment adjusted EBITDA
 
$
754.5

 
$
376.5

 
$
52.9

 
$
—

 
$
1,183.9

 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
$
272.0

 
$
192.6

 
$
64.2

 
$
—

 
$
528.8

 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
339.4

 
$
138.3

 
$
35.0

 
$
12.0

 
$
524.7

 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
3,796.6

 
$
2,607.2

 
$
521.5

 
$
585.4

 
$
7,510.7

 
 
Year Ended December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Driveline
 
Metal Forming
 
Casting
 
Corporate and Eliminations
 
Total
Sales
 
$
4,567.8

 
$
1,634.9

 
$
576.1

 
$
—

 
$
6,778.8

Less: Intersegment sales
 
65.9

 
417.7

 
29.2

 
—

 
512.8

Net external sales
 
$
4,501.9

 
$
1,217.2

 
$
546.9

 
$
—

 
$
6,266.0

 
 
 
 
 
 
 
 
 
 
 
Segment adjusted EBITDA
 
$
762.3

 
$
305.7

 
$
34.7

 
$
—

 
$
1,102.7

 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
 
$
237.3

 
$
147.8

 
$
43.4

 
$
—

 
$
428.5

 
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
$
340.2

 
$
97.7

 
$
24.7

 
$
15.1

 
$
477.7

 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
3,507.0

 
$
2,731.1

 
$
926.0

 
$
718.7

 
$
7,882.8


Assets included in the Corporate and Eliminations column of the tables above represent AAM corporate assets, as well as eliminations of intercompany assets.

The following table represents a reconciliation of Segment Adjusted EBITDA to consolidated income (loss) before income taxes for the years ended December 31, 2019, 2018 and 2017:
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in millions)
Segment adjusted EBITDA
 
$
970.3

 
$
1,183.9

 
$
1,102.7

Interest expense
 
(217.3
)
 
(216.3
)
 
(195.6
)
Depreciation and amortization
 
(536.9
)
 
(528.8
)
 
(428.5
)
Impairment charges
 
(665.0
)
 
(485.5
)
 
—

Restructuring and acquisition-related costs
 
(57.8
)
 
(78.9
)
 
(110.7
)
Pension settlement
 
(9.8
)
 
—

 
(3.2
)
Gain (loss) on sale of business
 
(21.3
)
 
15.5

 
—

Gain on bargain purchase of business
 
10.8

 
—

 
—

Gain on settlement of capital lease
 
—

 
15.6

 
—

Acquisition-related fair value inventory adjustment
 
—

 
—

 
(24.9
)
Impact of change in accounting principle
 
—

 
—

 
3.7

Debt refinancing and redemption costs
 
(8.4
)
 
(19.4
)
 
(3.5
)
Other
 
2.4

 
—

 
—

Income (loss) before income taxes
 
$
(533.0
)
 
$
(113.9
)
 
$
340.0



Financial information relating to our operations by geographic area is presented in the following table. Net sales are attributed to countries based upon location of production. Long-lived assets exclude deferred income taxes.
 
December 31,
 
2019
 
2018
 
2017
 
(in millions)
Net sales
 
 
 
 
 
United States
$
2,894.0

 
$
3,293.2

 
$
2,742.7

Mexico
2,353.1

 
2,547.1

 
2,456.1

South America
105.3

 
129.7

 
133.2

China
315.4

 
373.4

 
318.6

All other Asia
255.8

 
304.9

 
193.9

Europe
607.3

 
622.1

 
421.5

Total net sales
$
6,530.9

 
$
7,270.4

 
$
6,266.0

 
 
 
 
 
 
Long-lived assets
 
 
 
 
 
United States
$
2,805.8

 
$
3,612.3

 
$
4,253.8

Mexico
1,117.4

 
1,117.9

 
993.8

South America
61.9

 
70.6

 
61.4

China
191.4

 
177.6

 
180.9

All other Asia
106.8

 
101.0

 
103.4

Europe
439.4

 
356.0

 
307.4

Total long-lived assets
$
4,722.7

 
$
5,435.4

 
$
5,900.7