Organization and Basis of Presentation Organization and Basis of Presentation (Policies)

12 Months Ended

Dec. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation, Policy [Policy Text Block]

PRINCIPLES OF CONSOLIDATION We include the accounts of Holdings and its subsidiaries in our consolidated financial statements. We eliminate the effects of all intercompany transactions, balances and profits in our consolidation.

Revenue Recognition, Policy [Policy Text Block]

REVENUE RECOGNITION We recognize revenue when products are shipped to our customers and title transfers under standard commercial terms or when realizable in accordance with our commercial agreements. If we are uncertain as to whether we will be successful collecting a balance in accordance with our understanding of a commercial agreement, we do not recognize the revenue or cost recovery until such time as the uncertainty is removed.

During the fourth quarter of 2016, we reached an agreement with a customer to increase installed capacity for a program we support. In the fourth quarter of 2016, we received $20.0 million associated with this capacity increase and recorded the payment as deferred revenue, classified as a noncurrent liability on our Consolidated Balance Sheet. We expect to begin recognizing this deferred revenue in 2018 into revenue on a straight line basis over a period of approximately five years, which is the period that we expect the customer to benefit from this increase in installed capacity.

In 2014, we reached an agreement with a customer to increase installed capacity and adjust product mix for our largest vehicle program. As a result of this agreement, we received $32.8 million in 2014 and recorded the payments as deferred revenue. We recognize this deferred revenue into revenue on a straight line basis over a period of approximately five years, which is the period we expect the customer to benefit from this capacity and mix change. We recognized revenue related to this agreement of $6.9 million in 2016 and 2015, and $5.4 million in 2014. As of December 31, 2016, we have $6.9 million of deferred revenue that is classified as a current liability and $6.9 million of deferred revenue that is recorded as a noncurrent liability on our Consolidated Balance Sheet.

Also in 2014, we reached an agreement with a customer to recover certain costs related to the delay of a major product program. We received $9.3 million in 2014 related to this agreement which was recorded as deferred revenue. We recognize this deferred revenue into revenue on a straight line basis over a period of approximately eight years, which is the period we expect the customer to benefit from this agreement. We recognized revenue related to this agreement of $1.1 million in 2016 and 2015, and $0.5 million in 2014. As of December 31, 2016, we have remaining deferred revenue of $6.6 million, $1.1 million of which is classified as a current liability and $5.5 million which is recorded as a noncurrent liability on our Consolidated Balance Sheet.

In 2009, we entered into a settlement and commercial agreement (2009 Settlement and Commercial Agreement) with GM. As part of this agreement, we received $110.0 million from GM, of which we recorded $79.7 million as deferred revenue.  As of December 31, 2016, our remaining deferred revenue related to the 2009 Settlement and Commercial Agreement is $21.6 million, $8.0 million of which is classified as a current liability and $13.6 million of which is recorded as a noncurrent liability on our Consolidated Balance Sheet.  We recognize this deferred revenue into revenue on a straight-line basis over 120 months, which ends September 2019 and is the period that we expect GM to benefit under the 2009 Settlement and Commercial Agreement.  We recognized revenue of $8.0 million, in 2016, 2015 and 2014 related to this agreement.

As of December 31, 2016, the majority of the remaining deferred revenue primarily relates to payments from customers to implement capacity programs and reimbursement for engineering, design and development (ED&D) costs on awarded programs. These deferred revenues are generally recognized into revenue over the life of these programs. We recognized $8.9 million, $7.4 million and $7.5 million of revenue for these programs in 2016, 2015 and 2014, respectively.

Research and Development Expense, Policy [Policy Text Block]

RESEARCH AND DEVELOPMENT (R&D) COSTS We expense R&D, as incurred, in selling, general and administrative expenses on our Consolidated Statement of Income. R&D spending was $139.8 million, $113.9 million and $103.9 million in 2016, 2015 and 2014, respectively.

Cash and Cash Equivalents, Policy [Policy Text Block]

CASH AND CASH EQUIVALENTSCash and cash equivalents include all cash balances, savings accounts, sweep accounts, and highly liquid investments in money market funds and certificates of deposit with maturities of 90 days or less at the time of purchase.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

ACCOUNTS RECEIVABLE The majority of our accounts receivable are due from original equipment manufacturers (OEMs) in the automotive industry and are past due when payment is not received within the stated terms. Trade accounts receivable for our largest customer, GM, are generally due within approximately 50 days from the date of receipt.

Amounts due from customers are stated net of allowances for doubtful accounts. We determine our allowances by considering factors such as the length of time accounts are past due, our previous loss history, the customer's ability to pay its obligation to us, and the condition of the general economy and the industry as a whole. The allowance for doubtful accounts was $3.1 million and $4.3 million as of December 31, 2016 and 2015, respectively. We write-off accounts receivable when they become uncollectible.

Property, Plant and Equipment, Preproduction Design and Development Costs [Policy Text Block]

CUSTOMER TOOLING AND PRE-PRODUCTION COSTS RELATED TO LONG-TERM SUPPLY AGREEMENTS Engineering, R&D, and other pre-production design and development costs for products sold on long-term supply arrangements are expensed as incurred unless we have a contractual guarantee for reimbursement from the customer. Reimbursements received for pre-production costs relating to awarded programs are deferred and recognized into revenue over the life of the associated program. Reimbursements received for pre-production costs relating to future programs that have not been awarded, or amounts received for programs that become discontinued prior to production, are recorded as a reduction of expense.

Costs for tooling used to make products sold on long-term supply arrangements for which we have either title to the assets or the noncancelable right to use the assets during the term of the supply arrangement are capitalized in property, plant and equipment. Reimbursable costs for tooling assets for which our customer has title and we do not have a noncancelable right to use during the term of the supply arrangement, are recorded in accounts receivable in our consolidated balance sheets. The reimbursement for the customer-owned tooling is recorded as a reduction of accounts receivable upon collection. Capitalized items and customer receipts in excess of tooling costs specifically related to a supply arrangement are amortized over the shorter of the term of the arrangement or over the estimated useful lives of the related assets.

Inventory, Policy [Policy Text Block]

INVENTORIES We state our inventories at the lower of cost or market.  The cost of our inventories is determined using the FIFO 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:

	December 31,
	2016			2015
	(in millions)
Raw materials and work-in-progress	$	212.7		$	228.7
Finished goods	33.8			31.1
Gross inventories	246.5			259.8
Inventory valuation reserves	(27.0		)	(29.3		)
Inventories, net	$	219.5		$	230.5

Property, Plant and Equipment, Policy [Policy Text Block]

PROPERTY, PLANT AND EQUIPMENT We state property, plant and equipment, including amortizable tooling, at historical cost, as adjusted for impairments. Construction in progress includes costs incurred for the construction of buildings and building improvements, and machinery and equipment in process. Repair and maintenance costs that do not extend the useful life or otherwise improve the utility of the asset beyond its existing useful state are expensed in the period incurred.

We record depreciation and tooling amortization using the straight-line method over the estimated useful lives of the depreciable assets. Depreciation and tooling amortization amounted to $160.4 million, $163.6 million and $166.5 million in 2016, 2015 and 2014, respectively.

Property, plant and equipment consists of the following:

	Estimated	December 31,
	Useful Lives	2016			2015
	(years)	(in millions)
Land	Indefinite	$	24.9		$	24.9
Land improvements	10-15	19.2			18.8
Buildings and building improvements	15-40	345.5			315.5
Machinery and equipment	3-12	1,976.0			1,853.1
Construction in progress		109.9			88.4
		2,475.5			2,300.7
Accumulated depreciation and amortization		(1,381.8		)	(1,254.5		)
Property, plant and equipment, net		$	1,093.7		$	1,046.2

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

IMPAIRMENT OF LONG-LIVED ASSETS When impairment indicators exist, we evaluate the carrying value of long-lived assets for potential impairment. We consider projected future undiscounted cash flows, trends and other circumstances in making such estimates and evaluations. If impairment is deemed to exist, the carrying amount of the asset is adjusted based on its fair value. Recoverability of assets “held for use” is determined by comparing the forecasted undiscounted cash flows of the operations to which the assets relate to their carrying amount. When the carrying value of an asset group exceeds its fair value and is therefore nonrecoverable, those assets are written down to fair value. Fair value is determined based on market prices, when available, or a discounted cash flow analysis performed using management estimates.

In the third quarter of 2016, we identified an indicator of impairment at our Pantnagar Manufacturing Facility in India due to changes in forecasted cash flows. Accordingly, we performed an assessment of the recoverability of these assets and, as a result, recorded an impairment charge of $3.4 million to write the assets down to fair value.

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

GOODWILL We record goodwill when the purchase price of acquired businesses exceeds the value of their identifiable net tangible and intangible assets acquired. We test our goodwill annually, or more frequently if necessary, for impairment in accordance with the accounting guidance for goodwill and other indefinite-lived intangibles. We completed impairment tests in 2016 and 2015 and concluded that there was no impairment of our goodwill. The following table provides a reconciliation of changes in goodwill:

	December 31,
	2016			2015
	(in millions)
Beginning balance	$	154.4		$	155.0
Foreign currency translation	(0.4		)	(0.6		)
Ending balance	$	154.0		$	154.4

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

INTANGIBLE ASSETS During the first quarter of 2016, we completed the final stages of implementing upgrades to our global enterprise resource planning (ERP) systems at certain remaining global locations. This implementation included upgrades to many of our existing operating and financial systems. In connection with the development of these ERP systems, we have recorded an intangible asset on our Consolidated Balance Sheet. The intangible asset is related to costs incurred to obtain software licenses from a third party, as well as costs to design and develop this internal-use software. This intangible asset is classified as other assets and deferred charges on our Consolidated Balance Sheet and will be amortized over the estimated useful life of our ERP systems. We recorded $5.0 million, $3.2 million and $0.4 million of expense for the amortization of these intangible assets in 2016, 2015 and 2014, respectively. Estimated amortization expense for these assets for the next five years is as follows: $5.0 million in 2017, $4.0 million in 2018, $3.4 million in 2019, $2.9 million in 2020, and $2.5 million in 2021.

The following table provides the gross intangible asset balance and related amortization recorded on our Consolidated Balance Sheet as of December 31, 2016 and December 31, 2015:

	December 31,
	2016			2015
	(in millions)
Capitalized computer software intangible asset	$	31.7		$	28.7
Accumulated amortization	(8.5		)	(3.7		)
Capitalized computer software intangible asset, net	$	23.2		$	25.0

In connection with our e-AAM subsidiary, we have in-process research and development intangible assets which represent the technology that will be utilized in products to be launched in 2018. Accordingly, we will begin amortizing this asset on a straight-line basis at the start of production through the expected life cycle of the related products, which is expected to be approximately 5-7 years. These intangible assets are classified as other assets and deferred charges on our Consolidated Balance Sheet.

The following table provides a reconciliation of changes in the carrying value of our in-process research and development intangible assets:

	December 31,
	2016			2015
	(in millions)
Beginning balance	$	5.7		$	6.2
Foreign currency translation	(0.4		)	(0.5		)
Ending balance	$	5.3		$	5.7

Debt, Policy [Policy Text Block]

DEBT ISSUANCE COSTSThe costs related to the issuance or modification of long-term debt are deferred and amortized into interest expense over the expected life of the borrowings. As of December 31, 2016 and December 31, 2015, our unamortized debt issuance costs were $16.7 million and $22.5 million, respectively. Debt issuance costs associated with our senior unsecured notes are recorded as a reduction to the related debt liability. Debt issuance costs of $5.0 million and $7.9 million related to our revolving credit facility, for which there is no outstanding debt liability, are classified as Other Assets and Deferred Charges on our Consolidated Balance Sheets as of December 31, 2016 and December 31, 2015, respectively. Unamortized debt issuance costs that exist upon the extinguishment of debt are expensed and classified as debt refinancing and redemption costs on our Consolidated Statement of Income.

Derivatives, Policy [Policy Text Block]

DERIVATIVES We recognize all derivatives on the balance sheet at fair value and we are not subject to master netting agreements. If a derivative qualifies under the accounting guidance as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged asset, liability or firm commitment through earnings or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative's change in fair value, and changes in the fair value of derivatives that do not qualify as hedges, are immediately recognized in earnings. See Note 4 - Derivatives and Risk Management, for more detail on our derivatives.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

CURRENCY TRANSLATION AND REMEASUREMENT We translate the assets and liabilities of our foreign subsidiaries to U.S. dollars at end-of-period exchange rates. We translate the income statement elements of our foreign subsidiaries to U.S. dollars at average-period exchange rates. We report the effect of translation for our foreign subsidiaries that use the local currency as their functional currency as a separate component of stockholders' equity. Gains and losses resulting from the remeasurement of assets and liabilities in a currency other than the functional currency of a subsidiary are reported in current period income. We also report any gains and losses arising from transactions denominated in a currency other than the functional currency of a subsidiary in current period income. These foreign currency gains and losses resulted in a net gain of $5.8 million, $9.5 million and $6.4 million, for the years ended 2016, 2015 and 2014, respectively, in Other Income (Expense).

Postemployment Benefit Plans, Policy [Policy Text Block]

PENSION AND OTHER POSTRETIREMENT DEFINED BENEFIT PLANS Net pension and postretirement benefit expenses and the related liabilities are determined on an actuarial basis. These plan expenses and obligations are dependent on management's assumptions developed in consultation with our actuaries. We review these actuarial assumptions at least annually and make modifications when appropriate. See Note 6 - Employee Benefit Plans, for more detail on our pension and other postretirement defined benefit plans.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

STOCK-BASED COMPENSATION We have stock-based compensation in the form of stock options, restricted stock units (RSUs) and performance shares. For non-performance based awards, the grant date fair value is measured as the stock price at the date of grant. For performance based awards, fair value is estimated using valuation techniques that require management to use estimates and assumptions. Certain awards require that management's estimates and assumptions be evaluated at each reporting date to determine if compensation expense related to the award should be adjusted, both on a catch-up and go-forward basis. Compensation expense is recognized over the period during which the requisite service is provided, referred to as the vesting period. See Note 7 - Stock-Based Compensation, for more detail on our accounting for stock-based compensation.

Income Tax, Policy [Policy Text Block]

DEFERRED INCOME TAX ASSETS AND LIABILITIES AND VALUATION ALLOWANCES Ourdeferred income tax assets and liabilities reflect the impact of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws.

In accordance with the accounting guidance for income taxes,we estimate whether recoverability of our deferred tax assets is “more likely than not,” based on forecasts of taxable income in the related tax jurisdictions.  In this estimate, we use historical results, projected future operating results based upon approved business plans, eligible carryforward periods, tax planning opportunities and other relevant considerations. This includes the consideration of tax law changes, prior profitability performance and the uncertainty of future projected profitability. We record a valuation allowance to reduce our deferred tax assets to the amount that is "more likely than not," to be realized.

We record uncertain tax positions on the basis of a two-step process whereby: (1) we determine whether it is "more likely than not" that the tax positions will be sustained based on the technical merits of the position: and (2) for those positions that meet the "more likely than not" recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. We record interest and penalties on uncertain tax positions in income tax expense (benefit).

See Note 8 - Income Taxes, for more detail on our accounting for income taxes.

Earnings Per Share, Policy [Policy Text Block]

EARNINGS 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 nonforfeitable dividend rights. Our participating securities include non-vested restricted stock units. See Note 9 - Earnings Per Share (EPS), for more detail on our accounting for EPS.

Authorized Share Repurchase Program [Policy Text Block]

SHARE REPURCHASE PROGRAM On May 5, 2016, AAM's Board of Directors authorized a share repurchase program of up to $100 million of AAM's common shares through December 31, 2018 as part of AAM's overall capital allocation strategy. The repurchase of shares may be made in the open market or in privately negotiated transactions and will be funded through available cash balances and cash flow from operations. The timing and amount of any share repurchases will be determined based on market and economic conditions, share price, alternative uses of capital and other factors. During the second quarter of 2016, we completed an initial share repurchase of 100,000 shares for $1.5 million under the program. As of December 31, 2016 there is approximately $98.5 million available for repurchase.

Standard Product Warranty, Policy [Policy Text Block]

PRODUCT WARRANTY See Note 10 - Commitments and Contingencies, for more detail on our accounting for product warranties.

Use of Estimates, Policy [Policy Text Block]

USE OF ESTIMATES In order to prepare consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP), we are required to make estimates and assumptions that affect the reported amounts and disclosures in our consolidated financial statements. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

EFFECT OF NEW ACCOUNTING STANDARDS

Accounting Standards Update 2016-16

On October 24, 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-16 - Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. Existing income tax guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. This existing guidance is deemed an exception to the principle of comprehensive recognition of current and deferred income taxes under GAAP. Due to the limited authoritative guidance about this exception, diversity in practice exists. ASU 2016-16 eliminates this exception for intra-entity transfers of assets other than inventory and requires that entities recognize the income tax consequences when the transfers occur. This guidance becomes effective at the beginning of our 2018 fiscal year, however early adoption is permitted. The guidance requires a modified retrospective transition method. We are currently assessing the impact that this standard will have on our consolidated financial statements.

Accounting Standards Update 2016-15

On August 26, 2016, the FASB issued ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The update addresses the following eight specific cash flow issues: 1) debt prepayment or debt extinguishment costs; 2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; 3) contingent consideration payments made after a business combination; 4) proceeds from the settlement of insurance claims; 5) proceeds from the settlement of corporate-owned life insurance policies (including bank-owned life insurance policies); 6) distributions received from equity method investees; 7) beneficial interests in securitization transactions; and 8) separately identifiable cash flows and application of the predominance principle.

Historically, we have classified certain cash flows related to debt prepayment or debt extinguishment costs as operating cash flows. Upon adoption, the guidance in ASU 2016-15 requires that these cash flows be classified as financing cash flows. We do not feel that the adoption of this guidance as it relates to any of the other seven cash flow issues specified will have a material impact on our Consolidated Statement of Cash Flows.

This guidance becomes effective at the beginning of our 2018 fiscal year, however as permitted, we have elected to early adopt this standard in the fourth quarter of 2016. The retrospective adoption of this guidance did not impact any of the periods presented in the Consolidated Statements of Cash Flows in the three years ended December 31, 2016.

Accounting Standards Update 2016-09

On March 31, 2016, the FASB issued ASU 2016-09 - Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update is intended to simplify the current guidance for stock-based compensation for a range of issues including: the timing of income statement impact for tax benefits or deficiencies in excess of compensation cost, the classification of tax-related cash flows resulting from share based payments, the allowable threshold for tax withholding without resulting in liability award classification, and a policy election for estimating forfeiture rates or recognizing forfeitures as they occur. This guidance becomes effective at the beginning of our 2017 fiscal year, however as permitted, AAM elected to early adopt this guidance in the fourth quarter of 2016. The guidance requires a retrospective, modified-retrospective, or prospective transition method depending on the applicable section of the ASU. The effect of implementing this ASU on our Consolidated Balance Sheet was an increase to our deferred tax assets and retained earnings of $4.8 million as of January 1, 2016, using the modified-retrospective transition method, for the cumulative-effect adjustment of excess tax benefits that were not previously recognized because the related tax deduction had not reduced current taxes payable. We have evaluated the aspects of this new guidance and, other than this one-time increase in deferred tax assets and retained earnings, the adoption of this ASU did not have a material impact on our accounting for share-based payments.

Accounting Standards Update 2016-02

On February 25, 2016, the FASB issued ASU 2016-02 - Leases (Topic 842), which supersedes the existing lease accounting guidance and establishes new criteria for recognizing lease assets and liabilities. The most significant impact of the update, to AAM, is that a lessee will be required to recognize a "right-of-use" asset and lease liability for operating lease agreements that were not previously included on the balance sheet under the existing lease guidance. A lessee will be permitted to make a policy election, excluding recognition of the right-of-use asset and associated liability for lease terms of 12 months or less. Expense recognition in the statement of income along with cash flow statement classification for both financing (capital) and operating leases under the new standard will not be significantly changed from existing lease guidance. This guidance becomes effective for AAM at the beginning of our 2019 fiscal year and requires transition under a modified retrospective method. We are currently assessing the impact that this standard will have on our consolidated financial statements.

Accounting Standards Update 2015-07

On May 1, 2015, the FASB issued ASU 2015-07 - Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent), which changes the disclosure requirements for investments in certain entities that calculate net asset value (NAV) per share. Under current accounting standards entities are permitted to estimate the fair value of certain investments using the investment's NAV as a practical expedient. The current disclosure guidance also permits entities to disclose the investment at NAV in the fair value hierarchy table as either Level 2 or Level 3, based upon certain criteria. The measurement basis utilizing NAV is different than the measurement criteria of all other investments which utilize inputs to calculate fair value. Due to this inconsistency, the FASB issued this ASU which prohibits entities from categorizing investments measured at NAV within the fair value hierarchy. Other than the change in presentation, which requires retrospective application, the adoption of this new guidance did not have an impact on our consolidated financial statements. AAM adopted this policy on January 1, 2016.

Accounting Standards Update 2014-09

In 2014, the FASB issued ASU 2014-09 - Revenue from Contracts with Customers (Topic 606), and has subsequently issued ASUs 2015-14 - Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, 2016-08 - Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross Versus Net), 2016-10 - Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, 2016-12 - Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, and 2016-20 - Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements to Topic 606 (collectively, the Revenue Recognition ASUs).

The Revenue Recognition ASUs outline a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersede most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. This guidance is effective for AAM beginning on January 1, 2018 and entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. We are evaluating whether we will adopt this guidance using the full retrospective or modified retrospective approach.

We are concluding the assessment phase of implementing this guidance. We have evaluated each of the five steps in the new revenue recognition model, which are as follows: 1) Identify the contract with the customer; 2) Identify the performance obligations in the contract; 3) Determine the transaction price; 4) Allocate the transaction price to the performance obligations; and 5) Recognize revenue when (or as) performance obligations are satisfied. Our preliminary conclusion is that the determination of what constitutes a contract with our customers (step 1), our performance obligations under the contract (step 2), and the determination and allocation of the transaction price (steps 3 and 4) under the new revenue recognition model will not result in significant changes in comparison to the current revenue recognition guidance.

With regard to recognizing revenue when (or as) a performance obligation is satisfied (step 5), we are thoroughly reviewing the language in our contracts with each customer to determine whether the customer obtains control of the goods at a point in time or over time. Under current revenue recognition guidance, we recognize revenue when products are shipped to our customers and title transfers under standard commercial terms or when realizable in accordance with our commercial agreements. Topic 606 provides certain criteria that, if met, require companies to recognize revenue as the product is produced (over time) instead of at a point of time (i.e. upon shipment). We are evaluating our contracts in the context of the criteria for recognizing revenue over time. If we conclude that we meet the criteria for recognizing revenue over time, our timing of revenue recognition would be accelerated, however, as we utilize lean manufacturing principles and deliver to our customers on a just-in-time basis, we do not expect any acceleration of revenue under the new guidance to be material.

There are also certain considerations related to internal control over financial reporting that are associated with implementing the new guidance under Topic 606. We are currently evaluating our control framework for revenue recognition and identifying any changes that may need to be made in response to the new guidance. Disclosure requirements under the new guidance in Topic 606 have been significantly expanded in comparison to the disclosure requirements under the current guidance. Designing and implementing the appropriate controls over gathering and reporting the information required under Topic 606 is currently in process.