14. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

Holdings has no significant assets other than its 100% ownership in AAM, Inc. and no direct subsidiaries other than AAM, Inc. The 7.75% Notes, 6.625% Notes, 6.25% Notes and 5.125% Notes are senior unsecured obligations of AAM Inc.; all of which are fully and unconditionally guaranteed by Holdings and substantially all domestic subsidiaries of AAM, Inc., which are 100% indirectly owned by Holdings.

These Condensed Consolidating Financial Statements are prepared under the equity method of accounting whereby the investments in subsidiaries are recorded at cost and adjusted for the parent's share of the subsidiaries' cumulative results of operations, capital contributions and distributions, and other equity changes.



Condensed Consolidating Statements of Income

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




2012	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net sales
External	$	—		$	704.8		$	214.4		$	2,011.7		$	—		$	2,930.9
Intercompany	—			18.6			226.8			25.2			(270.6		)	—
Total net sales	—			723.4			441.2			2,036.9			(270.6		)	2,930.9
Cost of goods sold	—			709.8			389.8			1,702.2			(270.6		)	2,531.2
Gross profit	—			13.6			51.4			334.7			—			399.7
Selling, general and administrative expenses	—			186.5			—			56.8			—			243.3
Operating income (loss)	—			(172.9		)	51.4			277.9			—			156.4
Non-operating income (expense), net	—			(135.2		)	(2.2		)	12.5			—			(124.9		)
Income (loss) before income taxes	—			(308.1		)	49.2			290.4			—			31.5
Income tax expense (benefit)	—			(343.9		)	(5.5		)	14.2			—			(335.2		)
Earnings (loss) from equity in subsidiaries	367.7			79.0			(49.2		)	—			(397.5		)	—
Net income before royalties and dividends	367.7			114.8			5.5			276.2			(397.5		)	366.7
Royalties and dividends	—			252.9			—			(252.9		)	—			—
Net income after royalties and dividends	367.7			367.7			5.5			23.3			(397.5		)	366.7
Net loss attributable to noncontrolling interests	—			—			—			1.0			—			1.0
Net income attributable to AAM	$	367.7		$	367.7		$	5.5		$	24.3		$	(397.5	)	$	367.7
Other comprehensive loss, net of tax	(60.5		)	(60.5		)	(10.1		)	(3.6		)	74.2			(60.5		)
Foreign currency translation adjustments attributable to noncontrolling interests	0.3			0.3			—			0.3			(0.6		)	0.3
Comprehensive income (loss) attributable to AAM	$	306.9		$	306.9		$	(4.6	)	$	20.4		$	(322.7	)	$	306.9

2011	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net sales
External	$	—		$	777.7		$	195.3		$	1,612.0		$	—		$	2,585.0
Intercompany	—			25.1			189.8			12.7			(227.6		)	—
Total net sales	—			802.8			385.1			1,624.7			(227.6		)	2,585.0
Cost of goods sold	—			727.0			334.2			1,296.3			(227.6		)	2,129.9
Gross profit	—			75.8			50.9			328.4			—			455.1
Selling, general and administrative expenses	—			192.0			—			39.7			—			231.7
Operating income (loss)	—			(116.2		)	50.9			288.7			—			223.4
Non-operating income (expense), net	—			(91.8		)	1.0			5.5			—			(85.3		)
Income (loss) before income taxes	—			(208		)	51.9			294.2			—			138.1
Income tax expense (benefit)	—			(5.2		)	1.2			5.0			—			1
Earnings (loss) from equity in subsidiaries	142.8			165.5			(37.7		)	—			(270.6		)	—
Net income (loss) before royalties and dividends	142.8			(37.3		)	13.0			289.2			(270.6		)	137.1
Royalties and dividends	—			180.1			—			(180.1		)	—			—
Net income after royalties and dividends	142.8			142.8			13.0			109.1			(270.6		)	137.1
Net loss attributable to noncontrolling interests	—			—			—			5.7			—			5.7
Net income attributable to AAM	$	142.8		$	142.8		$	13.0		$	114.8		$	(270.6	)	$	142.8
Other comprehensive loss, net of tax	(97.6		)	(97.6		)	(29.0		)	(35.6		)	162.2			(97.6		)
Foreign currency translation adjustments attributable to noncontrolling interests	0.2			0.2			—			0.2			(0.4		)	0.2
Comprehensive income (loss) attributable to AAM	$	45.0		$	45.0		$	(16.0	)	$	79.0		$	(108.0	)	$	45.0



Condensed Consolidating Balance Sheets
2013	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Elims			Consolidated
Assets	(in millions)
Current assets
Cash and cash equivalents	$	—		$	36.9		$	—		$	117.1	$	—		$	154.0
Accounts receivable, net	—			102.7			25.6			330.2		—			458.5
Inventories, net	—			62.4			34.2			165.2		—			261.8
Other current assets	—			43.8			3.2			76.5		—			123.5
Total current assets	—			245.8			63.0			689.0		—			997.8
Property, plant and equipment, net	—			239.8			83.0			735.7		—			1,058.5
Goodwill	—			—			147.8			8.6		—			156.4
Other assets and deferred charges	—			671.7			44.8			99.8		—			816.3
Investment in subsidiaries	360.5			1,233.2			—			—		(1,593.7		)	—
Total assets	$	360.5		$	2,390.5		$	338.6		$	1,533.1	$	(1,593.7	)	$	3,029.0
Liabilities and stockholders' equity (deficit)
Current liabilities
Accounts payable	$	—		$	106.2		$	44.5		295.1		$	—		$	445.8
Other current liabilities	—			120.4			4.1			96.8		—			221.3
Total current liabilities	—			226.6			48.6			391.9		—			667.1
Intercompany payable (receivable)	326.9			(390.1		)	(219.5		)	282.7		—			—
Long-term debt	—			1,500.0			5.3			53.8		—			1,559.1
Investment in subsidiaries obligation	—			—			15.2			—		(15.2		)	—
Other long-term liabilities	—			693.5			0.5			75.2		—			769.2
Total liabilities	326.9			2,030.0			(149.9		)	803.6		(15.2		)	2,995.4
Total AAM Stockholders' equity	33.6			360.5			488.5			729.5		(1,578.5		)	33.6
Noncontrolling interests in subsidiaries	—			—			—			—		—			—
Total stockholders' equity	33.6			360.5			488.5			729.5		(1,578.5		)	33.6
Total liabilities and stockholders' equity	$	360.5		$	2,390.5		$	338.6		$	1,533.1	$	(1,593.7	)	$	3,029.0


2012	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Elims			Consolidated
Assets
Current assets
Cash and cash equivalents	$	—		$	10.6		$	—		$	51.8	$	—		$	62.4
Accounts receivable, net	—			94.4			25.3			343.7		—			463.4
Inventories, net	—			48.7			31.6			144.0		—			224.3
Other current assets	—			48.8			3.5			69.7		—			122.0
Total current assets	—			202.5			60.4			609.2		—			872.1
Property, plant and equipment, net	—			250.4			84.2			675.1		—			1,009.7
Goodwill	—			—			147.8			8.6		—			156.4
Other assets and deferred charges	—			706.1			40.0			81.7		—			827.8
Investment in subsidiaries	202.9			1,094.6			—			—		(1,297.5		)	—
Total assets	$	202.9		$	2,253.6		$	332.4		$	1,374.6	$	(1,297.5	)	$	2,866.0
Liabilities and stockholders' equity (deficit)
Current liabilities
Accounts payable	$	—		$	91.4		$	37.3		$	267.4	$	—		$	396.1
Other current liabilities	—			124.5			3.8			76.4		—			204.7
Total current liabilities	—			215.9			41.1			343.8		—			600.8
Intercompany payable (receivable)	323.7			(420.6		)	(188.7		)	285.6		—			—
Long-term debt	—			1,387.5			5.6			61.0		—			1,454.1
Investment in subsidiaries obligation	—			—			7.6			—		(7.6		)	—
Other long-term liabilities	—			867.9			1.2			62.8		—			931.9
Total liabilities	323.7			2,050.7			(133.2		)	753.2		(7.6		)	2,986.8
Total AAM Stockholders' equity (deficit)	(120.8		)	202.9			465.6			621.4		(1,289.9		)	(120.8		)
Noncontrolling interests in subsidiaries	—			—			—			—		—			—
Total stockholders' equity (deficit)	(120.8		)	202.9			465.6			621.4		(1,289.9		)	(120.8		)
Total liabilities and stockholders' equity (deficit)	$	202.9		$	2,253.6		$	332.4		$	1,374.6	$	(1,297.5	)	$	2,866.0



Condensed Consolidating Statements of Cash Flows

2013	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims		Consolidated
	(in millions)
Net cash provided by (used in) operating activities	$	—		$	(70.4	)	$	84.9		$	208.5		$	—	$	223.0
Investing activities
Purchases of property, plant and equipment	—			(61.2		)	(12.5		)	(178.2		)	—		(251.9		)
Proceeds from sale of property, plant and equipment	—			5.1			0.5			3.5			—		9.1
Proceeds from sale-leaseback of equipment	—			24.1			—			—			—		24.1
Net cash used in investing activities	—			(32.0		)	(12.0		)	(174.7		)	—		(218.7		)
Financing activities
Net debt activity	—			110.1			(0.3		)	(5.0		)	—		104.8
Intercompany activity	0.4			34.1			(72.6		)	38.1			—		—
Debt issuance costs	—			(16.6		)	—			(0.1		)	—		(16.7		)
Employee stock option exercises	—			1.1			—			—			—		1.1
Purchase of treasury stock	(0.4		)	—			—			—			—		(0.4		)
Net cash provided by (used in) financing activities	—			128.7			(72.9		)	33.0			—		88.8
Effect of exchange rate changes on cash	—			—			—			(1.5		)	—		(1.5		)
Net increase in cash and cash equivalents	—			26.3			—			65.3			—		91.6
Cash and cash equivalents at beginning of period	—			10.6			—			51.8			—		62.4
Cash and cash equivalents at end of period	$	—		$	36.9		$	—		$	117.1		$	—	$	154.0

2012	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims		Consolidated
Net cash provided by (used in) operating activities	$	—		$	(228.2	)	$	56.8		$	(4.1	)	$	—	$	(175.5	)
Investing activities
Purchases of property, plant and equipment	—			(59.4		)	(9.0		)	(139.2		)	—		(207.6		)
Proceeds from sale of property, plant and equipment	—			7.0			—			3.1			—		10.1
Proceeds from sale-leaseback of equipment	—			12.1			—			—			—		12.1
Net cash used in investing activities	—			(40.3		)	(9.0		)	(136.1		)	—		(185.4		)
Financing activities
Net debt activity	—			257.9			(0.2		)	16.2			—		273.9
Intercompany activity	5.9			(52.0		)	(47.6		)	93.7			—		—
Debt issuance costs	—			(10.6		)	—			—			—		(10.6		)
Employee stock option exercises	—			0.1			—			—			—		0.1
Purchase of treasury stock	(5.9		)	—			—			—			—		(5.9		)
Purchase of noncontrolling interest	—			—			—			(4.0		)	—		(4.0		)
Net cash provided by (used in) financing activities	—			195.4			(47.8		)	105.9			—		253.5
Effect of exchange rate changes on cash	—			—			—			0.6			—		0.6
Net decrease in cash and cash equivalents	—			(73.1		)	—			(33.7		)	—		(106.8		)
Cash and cash equivalents at beginning of period	—			83.7			—			85.5			—		169.2
Cash and cash equivalents at end of period	$	—		$	10.6		$	—		$	51.8		$	—	$	62.4



2011	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims		Consolidated

Net cash provided by (used in) operating activities	$	—		$	(119.3	)	$	40.1		$	22.9		$	—	$	(56.3	)
Investing activities
Purchases of property, plant and equipment	—			(43.9		)	(4.9		)	(114.3		)	—		(163.1		)
Proceeds from sale of property, plant and equipment	—			1.5			—			7.4			—		8.9
Acquisition, net	—			—			(16.5		)	—			—		(16.5		)
Purchase buyouts of leased equipment	—			(13.4		)	—			—			—		(13.4		)
Net cash used in investing activities	—			(55.8		)	(21.4		)	(106.9		)	—		(184.1		)
Financing activities
Net debt activity	—			159.6			(0.2		)	14.2			—		173.6
Intercompany activity	0.1			37.9			(18.5		)	(19.5		)	—		—
Debt issuance costs	—			(10.9		)	—			—			—		(10.9		)
Employee stock option exercises, including tax benefit	—			4.6			—			—			—		4.6
Purchase of treasury stock	(0.1		)	—			—			—			—		(0.1		)
Net cash provided by (used in) financing activities	—			191.2			(18.7		)	(5.3		)	—		167.2
Effect of exchange rate changes on cash	—			—			—			(2.2		)	—		(2.2		)
Net increase (decrease) in cash and cash equivalents	—			16.1			—			(91.5		)	—		(75.4		)
Cash and cash equivalents at beginning of period	—			67.6			—			177.0			—		244.6
Cash and cash equivalents at end of period	$	—		$	83.7		$	—		$	85.5		$	—	$	169.2