DELAWARE | 38-3161171 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) | |
ONE DAUCH DRIVE, DETROIT, MICHIGAN | 48211-1198 | |
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Name of Each Exchange on Which Registered | |
COMMON STOCK, PAR VALUE $0.01 PER SHARE | NEW YORK STOCK EXCHANGE | |
PREFERRED SHARE PURCHASE RIGHTS, PAR VALUE $0.01 PER SHARE | NEW YORK STOCK EXCHANGE |
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Part I |
Item 1. | Business |
• | AAM received the 2017 and 2016 GM Supplier of the Year Award, which is awarded to suppliers that consistently exceed GM's expectations, create outstanding value or bring new innovations to GM. |
• | We also received Jaguar Land Rover's (JLR) Supplier Excellence award for AAM's contribution to their business, cost transformation and operational delivery during 2017. |
• | During 2018, we launched more than 50 programs across our four business units, supporting a variety of customers including Ford, JLR and Mercedes-AMG. In 2019, we expect to launch approximately 50 new and replacement programs across our business units. |
• | We continue to focus on cost management through the implementation of the AAM Operating System to improve quality, eliminate waste and reduce lead time and total costs globally. |
• | We have established a cost competitive, operationally flexible global manufacturing, engineering and sourcing footprint to increase our presence in global growth markets, support global product development initiatives and establish regional cost competitiveness. |
• | Our business is vertically integrated to reduce cost and mitigate risk in the supply chain. Our acquisitions of MPG and USM Mexico Manufacturing LLC (USM Mexico) in 2017 furthered our efforts to vertically integrate the supply chain and helped ensure continuity of supply for certain parts to our largest manufacturing facility. |
• | In 2018, we had five facilities in the United States, one facility in China and one facility in South Korea awarded the GM Supplier Quality Excellence Award for outstanding quality performance during the 2017 performance year. For our Changshu Manufacturing Facility in China, it was the fourth consecutive year that they earned this award. |
• | Our Fraser and Royal Oak, Michigan facilities were awarded the FCA Outstanding Quality Award in 2018 for the 2017 performance year. |
• | Also in 2018, our Suzhou Manufacturing Facility in China was recognized with Ford's Q1 Award, which recognizes suppliers who consistently deliver exceptional quality and Chery International's 2017 Excellent Quality Performance Supplier Award. |
• | Several other facilities were recognized for outstanding quality performance by OEMs such as Daimler, Honda and JLR. |
• | AAM has an enhanced internal quality assurance system that drives continuous improvement to meet and exceed the growing expectations of our OEM customers. |
• | In our Driveline segment, AAM's significant investment in research and development (R&D) has resulted in the development of advanced technology products designed to assist our customers in meeting the market demands for improved fuel efficiency; lower emissions; enhanced power density; advanced, sophisticated electronic controls; improved safety, ride and handling performance; and enhanced reliability and durability. |
• | e-AAM was created to design and commercialize battery electric and hybrid driveline systems designed to improve fuel efficiency, reduce CO2 emissions and provide AWD capability. To date, e-AAM has |
• | AAM's EcoTrac® Disconnecting AWD system is a fuel-efficient driveline system that provides OEMs the option of an all-wheel-drive system that disconnects when not needed to improve fuel efficiency and reduce CO2 emissions compared to conventional AWD systems. In 2018, AAM launched the next generation of our EcoTrac® Disconnecting AWD system (EcoTrac® Gen II), which is smaller, lighter in weight and more efficient. This technology is featured on several significant global crossover platforms, including GM's Chevrolet Equinox and GMC Terrain, FCA's AWD Jeep Cherokee and its derivatives, as well as the Cadillac XT4 and the Ford Edge. |
• | AAM has established a high-efficiency product portfolio that is designed to improve axle efficiency and fuel economy through innovative product design technologies. Our high-efficiency axles are featured on several premium OEM vehicles, including Mercedes-Benz and Jaguar Land Rover. As our customers focus on reducing weight through the use of aluminum and other lightweighting alternatives, AAM is well positioned to offer innovative, industry leading solutions. Our portfolio includes high-efficiency axles, aluminum axles and AWD applications for hybrid electric vehicles to full-electric vehicles. AAM's QuantumTM lightweight axle technology features a revolutionary design, which offers significant mass reduction and increased fuel economy and efficiency that is scalable across multiple applications without loss of performance or power. During 2018, AAM's QuantumTM lightweight axle technology received multiple awards, including the inaugural Future of Lightweighting Altair Enlighten Award and the inaugural Society of Automotive Analysts' Lightweighting Innovation Award. |
• | In our Powertrain segment, we have identified opportunities to apply our high strength connecting rod technology and refined vibration control systems to support hybrid powertrain systems and power dense four cylinder and three cylinder engines that are smaller in size. Also in our Powertrain segment, our Subiaco Manufacturing Facility has been recognized by the Metal Powder Industries Federation with a 2018 Powder Metallurgy Design Award of Distinction. |
• | In our Metal Forming segment, we have developed forged axle tubes, which deliver significant weight and cost reductions as compared to the traditional welded axle tubes. These forged axle tubes are expected to enter production on a program for a major OEM customer in 2019. |
• | Our Casting segment has developed patented high strength ductile iron called Ductile - ITE™, which provides the potential to reduce mass by up to 20% while providing greater overall strength. Also in our Casting segment, we have identified an opportunity to begin utilizing three-dimensional printed sand cores in our production process, which has the potential to reduce costs and floor space requirements. |
• | AAM's Advanced Technology Development Center (ATDC) at our Detroit campus, allows us to accelerate technological advancements. This state-of-the-art facility is our center for technology benchmarking, prototype development, advanced technology development, supplier collaboration, customer showcasing and associate training on our future products, processes, and systems. |
• | In addition to maintaining and building upon our longstanding relationships with GM and FCA, we are focused on generating profitable growth with new and existing global customers. New business launches in 2018 included key customers such as Ford, JLR and Mercedes-AMG. |
• | We are working on approximately $1.5 billion in quoted and emerging new business opportunities. These opportunities would allow us to continue the diversification and expansion of our customer base, product portfolio and global footprint. |
• | We continue to evaluate and consider strategic opportunities that will complement our core strengths and supplement our diversification strategies while providing future, profitable growth prospects. Our |
• | As our customers design their products for global markets, they will continue to require global support from their suppliers. For this reason, it is critical that we maintain a global presence in these markets in order to remain competitive for new contracts. As a result of our acquisition of MPG, we have expanded our global presence, primarily in Asia and Europe. |
• | In 2018, we entered into a new joint venture (JV) with Liuzhou Wuling Automobile Industry Co., Ltd. (Liuzhou Wuling), a subsidiary of Guangxi Automotive Group Co., Ltd. This is in addition to our existing JV with Hefei Automobile Axle Co., Ltd. (HAAC), a subsidiary of the JAC Group (Anhui Jianghuai Automotive Group Co., Ltd.), which includes 100% of HAAC's light commercial axle business. Liuzhou Wuling manufactures independent rear axles and driveheads to be used on crossovers, including SUVs, minivans and multi-purposes vehicles and HAAC supplies front and rear beam axles to several leading Chinese light truck manufacturers, including JAC and Foton (Beiqi Foton Motor Co., Ltd.). These joint ventures continue to be a strong advantage for building relationships with leading Chinese manufacturers. |
Name | Age | Position | ||
David C. Dauch | 54 | Chairman of the Board & Chief Executive Officer | ||
Michael K. Simonte | 55 | President | ||
David E. Barnes | 60 | Vice President & General Counsel | ||
Timothy E. Bowes | 55 | President - Casting | ||
David M. Buckley | 54 | President - Europe | ||
Gregory Deveson | 57 | President - Driveline | ||
Terri M. Kemp | 53 | Vice President - Human Resources | ||
Michael J. Lynch | 54 | Vice President - Finance & Controller | ||
Christopher J. May | 49 | Vice President & Chief Financial Officer | ||
Tolga Oal | 47 | Senior Vice President - Global Procurement & Supplier Quality Engineering | ||
Alberto L. Satine | 62 | Senior Vice President - Special Projects | ||
James Voeffray | 53 | Senior Vice President - Global Sales & Product Management | ||
Norman Willemse | 62 | President - Metal Forming |
Item 1A. | Risk Factors |
• | reduced flexibility in planning for, or reacting to, changes in our business, the competitive environment and the markets in which we operate, and to technological and other changes; |
• | reduced access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenses and for general corporate purposes; |
• | lowered credit ratings; |
• | reduced funds available for operations, capital expenditures and other activities; and |
• | competitive disadvantages relative to other companies with lower debt levels. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
North America | Europe | Asia | South America | ||||
United States | Czech Republic | China | Brazil | ||||
Brewton, AL (d) | Oxford, MI (b) | Oslavany (b) | Changshu (a) | Araucária (a) | |||
Columbiana, AL (d) | Rochester Hills, MI (e) | Zbysov (b) | Hefei (JV) (a) | Indaiatuba (c) | |||
Paris, AR (c) | Royal Oak, MI (b) | England | Huzhou City (JV) (b) | ||||
Subiaco, AR (c) | Southfield, MI (e) | Halifax (c) | Shanghai (e) | ||||
Bolingbrook, IL (b) | Three Rivers, MI (a) | France | Suzhou (c) | ||||
Chicago, IL (b) | Troy, MI (b) | Decines (c) | India | ||||
Bluffton, IN (c) | Warren, MI (c) | Lyon (c) | Chennai (a) | ||||
Columbus, IN (b) | St. Cloud, MN (d) | Germany | Jamshedpur (JV) (c) | ||||
Fort Wayne, IN (b) | Biscoe, NC (d) | Bad Homburg (e) | Pune (a), (e) | ||||
Fremont, IN (c) | Malvern, OH (b) | Nurnberg (b) | Japan | ||||
New Castle, IN (d) | Minerva, OH (b) | Zell (b) | Tokyo (e) | ||||
North Vernon, IN (c) | Twinsburg, OH (c) | Luxembourg | South Korea | ||||
Remington, IN (b) | Ridgway, PA (c) | Steinfort (e) | Pyeongtaek (c) | ||||
Rochester, IN (a) | St. Mary's, PA (c) | Poland | Thailand | ||||
Auburn Hills, MI (b) | Charleston, SC (a) | Swidnica (a) | Rayong (a) | ||||
Detroit, MI (e) | Browntown, WI (d) | Scotland | |||||
Fraser, MI (b) | Menomonee Falls, WI (d) | Glasgow (a) | |||||
Kingsford, MI (d) | Reedsburg, WI (d) | Spain | |||||
Litchfield, MI (c) | Wauwatosa, WI (d) | Barcelona (c) | |||||
Mexico | Valencia (c) | ||||||
El Carmen (d) | Silao (a), (b) | Sweden | |||||
Ramos Arizpe (c) | Arjeplog (e) | ||||||
Trollhättan (a), (e) |
Item 3. | Legal Proceedings |
Item 4. | Mine Safety Disclosures |
Part II |
2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||
(in millions, except per share data) | ||||||||||||||||||||
Statement of operations data | ||||||||||||||||||||
Net sales | $ | 7,270.4 | $ | 6,266.0 | $ | 3,948.0 | $ | 3,903.1 | $ | 3,696.0 | ||||||||||
Gross profit | 1,140.4 | 1,119.1 | 726.1 | 635.4 | 522.8 | |||||||||||||||
Selling, general and | ||||||||||||||||||||
administrative expenses | 385.7 | 390.1 | 314.2 | 274.1 | 255.2 | |||||||||||||||
Amortization of intangibles | 99.4 | 75.3 | 5.0 | 3.2 | 0.4 | |||||||||||||||
Goodwill impairment | 485.5 | (a) | — | — | — | — | ||||||||||||||
Restructuring and acquisition-related costs | 78.9 | 110.7 | 26.2 | — | — | |||||||||||||||
Gain on sale of business | 15.5 | (b) | — | — | — | — | ||||||||||||||
Operating income | 106.4 | 543.0 | 380.7 | 358.1 | 267.6 | |||||||||||||||
Net interest expense | 214.3 | 192.7 | 90.5 | 96.6 | 97.8 | |||||||||||||||
Gain on settlement of capital lease | 15.6 | (c) | — | — | — | — | ||||||||||||||
Net income (loss) | (56.8 | ) | (d)(e) | 337.5 | (d)(e) | 240.7 | (d) | 235.6 | (e) | 143.0 | (f) | |||||||||
Net income (loss) attributable to AAM | (57.5 | ) | (d)(e) | 337.1 | (d)(e) | 240.7 | (d) | 235.6 | (e) | 143.0 | (f) | |||||||||
Diluted earnings (loss) per share | $ | (0.51 | ) | $ | 3.21 | $ | 3.06 | $ | 3.02 | $ | 1.85 | |||||||||
Balance sheet data | ||||||||||||||||||||
Cash and cash equivalents | $ | 476.4 | $ | 376.8 | $ | 481.2 | $ | 282.5 | $ | 249.2 | ||||||||||
Total assets | 7,510.7 | 7,882.8 | 3,422.3 | (g) | 3,176.9 | (g) | 3,214.6 | (g) | ||||||||||||
Total long-term debt, net | 3,686.8 | 3,969.3 | 1,400.9 | 1,375.7 | 1,504.6 | |||||||||||||||
Total AAM stockholders' equity | 1,483.9 | 1,536.0 | 504.2 | (g) | 275.7 | (g) | 87.6 | (g) | ||||||||||||
Dividends declared per share | — | — | — | — | — | |||||||||||||||
Statement of cash flows data | ||||||||||||||||||||
Cash provided by operating activities | $ | 771.5 | $ | 647.0 | $ | 407.6 | $ | 377.6 | $ | 318.4 | ||||||||||
Cash used in investing activities | (478.2 | ) | (1,378.1 | ) | (227.7 | ) | (188.1 | ) | (195.3 | ) | ||||||||||
Cash provided by (used in) financing activities | (184.5 | ) | 615.6 | 18.4 | (143.6 | ) | (21.4 | ) | ||||||||||||
Other data | ||||||||||||||||||||
Depreciation and amortization | $ | 528.8 | $ | 428.5 | $ | 201.8 | $ | 198.4 | $ | 199.9 | ||||||||||
Capital expenditures | 524.7 | 477.7 | 223.0 | 193.5 | 206.5 | |||||||||||||||
Proceeds from sale of business, net | 47.1 | (b) | 5.9 | — | — | — | ||||||||||||||
Acquisition of business, net of cash acquired | 1.3 | 895.5 | 5.6 | — | — | |||||||||||||||
Purchase buyouts of leased equipment | 0.5 | 13.3 | 4.6 | — | — |
(a) | We recorded a goodwill impairment charge in 2018 associated with the annual goodwill impairment test for our Powertrain and Casting segments. |
(b) | In 2018, we completed the sale of the aftermarket business associated with our Powertrain segment for approximately $50 million, of which we received net proceeds of $47.1 million. As a result of the sale, we recorded a $15.5 million pre-tax gain. |
(c) | In 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 pre-tax gain of $15.6 million, including accrued interest. |
(d) | For 2018, these amounts include goodwill impairment charges of $400.3 million, net of tax, acquisition and integration related charges of $27.5 million, net of tax, asset impairment and plant closure costs of $25.7 million, net of tax, and implementation costs, including professional expenses, relating to restructuring of $9.2 million, net of tax. For 2017, these amounts include acquisition and integration related charges of $56.0 million, net of tax, asset impairment and plant closure costs of $2.3 million, net of tax, and implementation costs, including professional expenses, relating to restructuring of $9.0 million, net of tax. For 2016, these amounts include acquisition and integration related charges of $7.1 million, net of tax, asset impairment and plant closure costs of $4.7 million and implementation costs, including professional expenses, relating to restructuring of $6.6 million, net of tax. |
(e) | Includes charges of $15.3 million, net of tax, in 2018, $2.3 million, net of tax, in 2017 and $0.5 million, net of tax, in 2015 related to debt refinancing and redemption costs. |
(f) | Includes a settlement charge of $23.1 million, net of tax, related to our terminated vested lump-sum pension payout in the U.S. |
(g) | Each of these amounts have been adjusted by $25.8 million, net of tax, related to the retrospective application of our change in accounting principle for indirect inventory, in which we changed our method of accounting from capitalizing indirect inventory and recording as expense when the inventory was consumed, to expensing indirect inventory at the time of purchase. This change in accounting principle was effective in the second quarter of 2017. |
• | Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, transfer cases, 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, transmission gears, and suspension components for Original Equipment Manufacturers and Tier 1 automotive suppliers; |
• | The Powertrain segment products consist primarily of transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for Original Equipment Manufacturers and Tier 1 automotive suppliers; and |
• | The Casting segment produces both thin wall castings and high strength ductile iron casting, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the global light vehicle, commercial and industrial markets. |
Year Ended December 31, 2018 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 4,254.8 | $ | 1,515.4 | $ | 1,128.5 | $ | 919.8 | $ | — | $ | 7,818.5 | ||||||||||||
Less: Intersegment sales | 0.8 | 418.0 | 13.8 | 115.5 | — | 548.1 | ||||||||||||||||||
Net external sales | $ | 4,254.0 | $ | 1,097.4 | $ | 1,114.7 | $ | 804.3 | $ | — | $ | 7,270.4 | ||||||||||||
Segment adjusted EBITDA | $ | 660.7 | $ | 285.9 | $ | 163.7 | $ | 73.6 | $ | — | $ | 1,183.9 |
Year Ended December 31, 2017 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 4,040.8 | $ | 1,242.6 | $ | 816.5 | $ | 676.4 | $ | — | $ | 6,776.3 | ||||||||||||
Less: Intersegment sales | 1.1 | 412.6 | 9.9 | 86.7 | — | 510.3 | ||||||||||||||||||
Net external sales | $ | 4,039.7 | $ | 830.0 | $ | 806.6 | $ | 589.7 | $ | — | $ | 6,266.0 | ||||||||||||
Segment adjusted EBITDA | $ | 692.3 | $ | 232.3 | $ | 131.1 | $ | 47.0 | $ | — | $ | 1,102.7 |
Year Ended December 31, 2016 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 3,735.6 | $ | 552.2 | $ | — | $ | — | $ | — | $ | 4,287.8 | ||||||||||||
Less: Intersegment sales | 4.9 | 334.9 | — | — | — | 339.8 | ||||||||||||||||||
Net external sales | $ | 3,730.7 | $ | 217.3 | $ | — | $ | — | $ | — | $ | 3,948.0 | ||||||||||||
Segment adjusted EBITDA | $ | 515.8 | $ | 103.6 | $ | — | $ | — | $ | — | $ | 619.4 |
Year Ended December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
Net income (loss) | $ | (56.8 | ) | $ | 337.5 | $ | 240.7 | ||||
Interest expense | 216.3 | 195.6 | 93.4 | ||||||||
Income tax expense (benefit) | (57.1 | ) | 2.5 | 58.3 | |||||||
Depreciation and amortization | 528.8 | 428.5 | 201.8 | ||||||||
EBITDA | $ | 631.2 | $ | 964.1 | $ | 594.2 | |||||
Restructuring and acquisition-related costs | 78.9 | 110.7 | 26.2 | ||||||||
Debt refinancing and redemption costs | 19.4 | 3.5 | — | ||||||||
Gain on sale of business | (15.5 | ) | — | — | |||||||
Goodwill impairment | 485.5 | — | — | ||||||||
Non-recurring items: | |||||||||||
Gain on settlement of capital lease | (15.6 | ) | — | — | |||||||
Pension settlement | — | 3.2 | — | ||||||||
Acquisition-related fair value inventory adjustment | — | 24.9 | — | ||||||||
Impact of change in accounting principle | — | (3.7 | ) | — | |||||||
Other non-recurring items | — | — | (1.0 | ) | |||||||
Total Segment Adjusted EBITDA | $ | 1,183.9 | $ | 1,102.7 | $ | 619.4 |
Corporate Family Rating | Senior Unsecured Notes Rating | Senior Secured Notes Rating | Outlook | |
Standard & Poor's | BB- | B | BB | Stable |
Moody's Investors Services | B1 | B2 | Ba2 | Stable |
Payments due by period | |||||||||||||||||||
Total | <1yr | 1-3 yrs | 3-5 yrs | >5 yrs | |||||||||||||||
(in millions) | |||||||||||||||||||
Current and long-term debt | $ | 3,872.1 | $ | 151.3 | $ | 126.8 | $ | 544.7 | $ | 3,049.3 | |||||||||
Interest obligations | 1,201.3 | 224.9 | 435.5 | 315.7 | 225.2 | ||||||||||||||
Capital lease obligations | 3.4 | 0.9 | 1.7 | 0.8 | — | ||||||||||||||
Operating leases (1) | 112.0 | 32.6 | 40.5 | 20.1 | 18.8 | ||||||||||||||
Purchase obligations (2) | 287.2 | 258.5 | 28.7 | — | — | ||||||||||||||
Other long-term liabilities (3) | 602.7 | 60.7 | 119.1 | 117.3 | 305.6 | ||||||||||||||
Total | $ | 6,078.7 | $ | 728.9 | $ | 752.3 | $ | 998.6 | $ | 3,598.9 |
(1) | Operating leases include all lease payments through the end of the contractual lease terms, which includes elections for repurchase options. These commitments include machinery and equipment, commercial office and production facilities, vehicles and other assets. |
(2) | Purchase obligations represent our obligated purchase commitments for capital expenditures and related project expense. |
(3) | Other long-term liabilities primarily represent our estimated pension and other postretirement benefit obligations, net of GM cost sharing, that were actuarially determined through 2028. |
• | An assessment as to whether an adverse event or circumstance has triggered the need for an impairment review; |
• | Determination of asset groups, the primary asset within each group, and the primary asset's average estimated useful life; |
• | Undiscounted future cash flows generated by the assets; and |
• | Determination of fair value when an impairment is deemed to exist, which may require assumptions related to future general economic conditions, future expected production volumes, product pricing and cost estimates, working capital and capital investment requirements, discount rates and estimated liquidation values. |
Expected | |||||||
Discount | Return on | ||||||
Rate | Assets | ||||||
(in millions) | |||||||
Decline in funded status | $ | 48.2 | N/A | ||||
Increase in 2018 expense | $ | — | $ | 3.3 |
Forward-Looking Statements |
• | 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 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 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; |
• | 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; |
• | our suppliers', our customers' and their suppliers' 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 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. |
Item 8. | Financial Statements and Supplementary Data |
2018 | 2017 | 2016 | |||||||||
(in millions, except per share data) | |||||||||||
Net sales | $ | 7,270.4 | $ | 6,266.0 | $ | 3,948.0 | |||||
Cost of goods sold | 6,130.0 | 5,146.9 | 3,221.9 | ||||||||
Gross profit | 1,140.4 | 1,119.1 | 726.1 | ||||||||
Selling, general and administrative expenses | 385.7 | 390.1 | 314.2 | ||||||||
Amortization of intangible assets | 99.4 | 75.3 | 5.0 | ||||||||
Goodwill impairment | 485.5 | — | — | ||||||||
Restructuring and acquisition-related costs | 78.9 | 110.7 | 26.2 | ||||||||
Gain on sale of business | (15.5 | ) | — | — | |||||||
Operating income | 106.4 | 543.0 | 380.7 | ||||||||
Interest expense | (216.3 | ) | (195.6 | ) | (93.4 | ) | |||||
Investment income | 2.0 | 2.9 | 2.9 | ||||||||
Other income (expense) | |||||||||||
Debt refinancing and redemption costs | (19.4 | ) | (3.5 | ) | — | ||||||
Gain on settlement of capital lease | 15.6 | — | — | ||||||||
Other, net | (2.2 | ) | (6.8 | ) | 8.8 | ||||||
Income (loss) before income taxes | (113.9 | ) | 340.0 | 299.0 | |||||||
Income tax expense (benefit) | (57.1 | ) | 2.5 | 58.3 | |||||||
Net income (loss) | $ | (56.8 | ) | $ | 337.5 | $ | 240.7 | ||||
Net income attributable to noncontrolling interests | (0.7 | ) | (0.4 | ) | — | ||||||
Net income (loss) attributable to AAM | $ | (57.5 | ) | $ | 337.1 | $ | 240.7 | ||||
Basic earnings (loss) per share | $ | (0.51 | ) | $ | 3.22 | $ | 3.08 | ||||
Diluted earnings (loss) per share | $ | (0.51 | ) | $ | 3.21 | $ | 3.06 | ||||
2018 | 2017 | 2016 | |||||||||
(in millions) | |||||||||||
Net income (loss) | $ | (56.8 | ) | $ | 337.5 | $ | 240.7 | ||||
Other comprehensive income (loss) | |||||||||||
Defined benefit plans, net of $(9.8) million, $3.4 million and $4.7 million of tax in 2018, 2017 and 2016, respectively | 38.1 | (8.5 | ) | (19.6 | ) | ||||||
Foreign currency translation adjustments | (62.5 | ) | 88.3 | (3.2 | ) | ||||||
Changes in cash flow hedges, net of tax of $0.5 and $(0.2) million in 2018 and 2017, respectively | 5.5 | 17.1 | (10.3 | ) | |||||||
Other comprehensive income (loss) | (18.9 | ) | 96.9 | (33.1 | ) | ||||||
Comprehensive income (loss) | $ | (75.7 | ) | $ | 434.4 | $ | 207.6 | ||||
Net income attributable to noncontrolling interests | (0.7 | ) | (0.4 | ) | — | ||||||
Comprehensive income (loss) attributable to AAM | $ | (76.4 | ) | $ | 434.0 | $ | 207.6 | ||||
2018 | 2017 | ||||||
Assets | (in millions, except per share data) | ||||||
Current assets | |||||||
Cash and cash equivalents | $ | 476.4 | $ | 376.8 | |||
Accounts receivable, net | 966.5 | 1,035.9 | |||||
Inventories, net | 459.7 | 392.0 | |||||
Prepaid expenses and other | 127.2 | 140.3 | |||||
Total current assets | 2,029.8 | 1,945.0 | |||||
Property, plant and equipment, net | 2,514.4 | 2,402.9 | |||||
Deferred income taxes | 45.5 | 37.1 | |||||
Goodwill | 1,141.8 | 1,654.3 | |||||
Other intangible assets, net | 1,111.1 | 1,212.5 | |||||
GM postretirement cost sharing asset | 219.4 | 252.2 | |||||
Other assets and deferred charges | 448.7 | 378.8 | |||||
Total assets | $ | 7,510.7 | $ | 7,882.8 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities | |||||||
Current portion of long-term debt | $ | 121.6 | $ | 5.9 | |||
Accounts payable | 840.2 | 799.0 | |||||
Accrued compensation and benefits | 179.0 | 200.0 | |||||
Deferred revenue | 44.3 | 34.1 | |||||
Accrued expenses and other | 171.7 | 177.4 | |||||
Total current liabilities | 1,356.8 | 1,216.4 | |||||
Long-term debt, net | 3,686.8 | 3,969.3 | |||||
Deferred revenue | 77.6 | 78.8 | |||||
Deferred income taxes | 92.6 | 101.7 | |||||
Postretirement benefits and other long-term liabilities | 810.6 | 976.6 | |||||
Total liabilities | 6,024.4 | 6,342.8 | |||||
Stockholders' equity | |||||||
Series A junior participating preferred stock, par value $0.01 per share; | |||||||
0.1 million shares authorized; no shares outstanding in 2018 or 2017 | — | — | |||||
Preferred stock, par value $0.01 per share; 10.0 million shares | |||||||
authorized; no shares outstanding in 2018 or 2017 | — | — | |||||
Series common stock, par value $0.01 per share; 40.0 million | |||||||
shares authorized; no shares outstanding in 2018 or 2017 | — | — | |||||
Common stock, par value $0.01 per share; 150.0 million shares authorized; | |||||||
118.9 million and 118.2 million shares issued as of December 31, 2018 and December 31, 2017, respectively | 1.2 | 1.2 | |||||
Paid-in capital | 1,292.6 | 1,264.6 | |||||
Retained earnings | 703.5 | 761.0 | |||||
Treasury stock at cost, 7.2 million shares in 2018 and 6.9 million shares in 2017 | (201.8 | ) | (198.1 | ) | |||
Accumulated other comprehensive loss | |||||||
Defined benefit plans, net of tax | (213.9 | ) | (252.0 | ) | |||
Foreign currency translation adjustments | (96.6 | ) | (34.1 | ) | |||
Unrecognized loss on cash flow hedges, net of tax | (1.1 | ) | (6.6 | ) | |||
Total AAM stockholders' equity | 1,483.9 | 1,536.0 | |||||
Noncontrolling interests in subsidiaries | 2.4 | 4.0 | |||||
Total stockholders' equity | 1,486.3 | 1,540.0 | |||||
Total liabilities and stockholders' equity | $ | 7,510.7 | $ | 7,882.8 |
2018 | 2017 | 2016 | |||||||||
(in millions) | |||||||||||
Operating activities | |||||||||||
Net income (loss) | $ | (56.8 | ) | $ | 337.5 | $ | 240.7 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||||||||||
Depreciation and amortization | 528.8 | 428.5 | 201.8 | ||||||||
Impairment of property, plant and equipment | 30.0 | 1.5 | 3.4 | ||||||||
Impairment of goodwill | 485.5 | — | — | ||||||||
Deferred income taxes | (35.0 | ) | (154.2 | ) | 33.2 | ||||||
Stock-based compensation | 27.9 | 43.4 | 21.0 | ||||||||
Pensions and other postretirement benefits, net of contributions | (9.9 | ) | (6.0 | ) | (12.6 | ) | |||||
Gain on sale of business | (15.5 | ) | — | — | |||||||
(Gain) loss on disposal of property, plant and equipment, net | (3.2 | ) | 1.6 | 4.3 | |||||||
Debt refinancing and redemption costs and (gain) on settlement of capital lease | 4.0 | 3.5 | — | ||||||||
Changes in operating assets and liabilities, net of amounts acquired or disposed | |||||||||||
Accounts receivable | 56.1 | (44.9 | ) | (19.3 | ) | ||||||
Inventories | (83.1 | ) | 2.5 | 12.2 | |||||||
Accounts payable and accrued expenses | 7.5 | (12.6 | ) | (14.2 | ) | ||||||
Deferred revenue | 10.7 | 14.8 | 7.2 | ||||||||
Other assets and liabilities | (175.5 | ) | 31.4 | (70.1 | ) | ||||||
Net cash provided by operating activities | 771.5 | 647.0 | 407.6 | ||||||||
Investing activities | |||||||||||
Purchases of property, plant and equipment | (524.7 | ) | (477.7 | ) | (223.0 | ) | |||||
Proceeds from sale of property, plant and equipment | 4.9 | 2.5 | 1.7 | ||||||||
Purchase buyouts of leased equipment | (0.5 | ) | (13.3 | ) | (4.6 | ) | |||||
Proceeds from sale of business, net | 47.1 | 5.9 | — | ||||||||
Acquisition of business, net of cash acquired | (1.3 | ) | (895.5 | ) | (5.6 | ) | |||||
Investment in affiliates | (3.7 | ) | — | — | |||||||
Other, net | — | — | 3.8 | ||||||||
Net cash used in investing activities | (478.2 | ) | (1,378.1 | ) | (227.7 | ) | |||||
Financing activities | |||||||||||
Net short-term proceeds from credit facilities | — | 4.4 | — | ||||||||
Proceeds from issuance of long-term debt | 509.6 | 2,862.7 | 30.3 | ||||||||
Payments of long-term debt, capital lease obligations and other | (681.2 | ) | (2,154.4 | ) | (7.0 | ) | |||||
Debt issuance costs | (6.9 | ) | (91.0 | ) | — | ||||||
Purchase of noncontrolling interest | (2.3 | ) | — | — | |||||||
Employee stock option exercises | — | 0.9 | 0.3 | ||||||||
Purchase of treasury stock | (3.7 | ) | (7.0 | ) | (5.2 | ) | |||||
Net cash provided by (used in) financing activities | (184.5 | ) | 615.6 | 18.4 | |||||||
Effect of exchange rate changes on cash | (6.7 | ) | 11.1 | 0.4 | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 102.1 | (104.4 | ) | 198.7 | |||||||
Cash, cash equivalents and restricted cash at beginning of year | 376.8 | 481.2 | 282.5 | ||||||||
Cash, cash equivalents and restricted cash at end of year | $ | 478.9 | $ | 376.8 | $ | 481.2 | |||||
Supplemental cash flow information | |||||||||||
Interest paid | $ | 199.7 | $ | 182.7 | $ | 87.2 | |||||
Income taxes paid, net | $ | 46.0 | $ | 31.9 | $ | 48.6 | |||||
Non-cash investing activities: AAM common shares issued for acquisition of MPG | $ | — | $ | 576.7 | $ | — |
Common Stock | Accumulated Other | Noncontrolling | ||||||||||||||||||
Shares | Par | Paid-in | Retained | Treasury | Comprehensive | Interest | ||||||||||||||
Outstanding | Value | Capital | Earnings | Stock | Loss | in Subsidiaries | ||||||||||||||
(in millions) | ||||||||||||||||||||
Balance at January 1, 2016 | 76.1 | $ | 0.8 | $ | 638.9 | $ | 178.4 | $ | (185.9 | ) | $ | (356.5 | ) | $ | — | |||||
Net income | 240.7 | |||||||||||||||||||
Changes in cash flow hedges | (10.3 | ) | ||||||||||||||||||
Foreign currency translation adjustments | (3.2 | ) | ||||||||||||||||||
Defined benefit plans, net | (19.6 | ) | ||||||||||||||||||
Exercise of stock options and vesting of restricted stock units and performance shares | 0.7 | 0.1 | 0.2 | |||||||||||||||||
Stock-based compensation | 21.0 | |||||||||||||||||||
Modified-retrospective application of ASU 2016-09 | 4.8 | |||||||||||||||||||
Purchase of treasury stock | (0.3 | ) | (5.2 | ) | ||||||||||||||||
Balance at December 31, 2016 | 76.5 | $ | 0.9 | $ | 660.1 | $ | 423.9 | $ | (191.1 | ) | $ | (389.6 | ) | $ | — | |||||
Net income | 337.1 | 0.4 | ||||||||||||||||||
Changes in cash flow hedges | 17.1 | |||||||||||||||||||
Foreign currency translation adjustments | 88.3 | |||||||||||||||||||
Defined benefit plans, net | (8.5 | ) | ||||||||||||||||||
Acquisition of MPG | 34.3 | 0.3 | 579.6 | (1.7 | ) | 3.6 | ||||||||||||||
Exercise of stock options and vesting of restricted stock units and performance shares | 0.8 | 0.9 | ||||||||||||||||||
Stock-based compensation | 24.0 | |||||||||||||||||||
Purchase of treasury stock | (0.3 | ) | (5.3 | ) | ||||||||||||||||
Balance at December 31, 2017 | 111.3 | $ | 1.2 | $ | 1,264.6 | $ | 761.0 | $ | (198.1 | ) | $ | (292.7 | ) | $ | 4.0 | |||||
Net income (loss) | (57.5 | ) | 0.7 | |||||||||||||||||
Changes in cash flow hedges | 5.5 | |||||||||||||||||||
Foreign currency translation adjustments | (62.5 | ) | ||||||||||||||||||
Defined benefit plans, net | 38.1 | |||||||||||||||||||
Purchase of noncontrolling interest | (2.3 | ) | ||||||||||||||||||
Exercise of stock options and vesting of restricted stock units and performance shares | 0.7 | 0.1 | ||||||||||||||||||
Stock-based compensation | 27.9 | |||||||||||||||||||
Purchase of treasury stock | (0.3 | ) | (3.7 | ) | ||||||||||||||||
Balance at December 31, 2018 | 111.7 | $ | 1.2 | $ | 1,292.6 | $ | 703.5 | $ | (201.8 | ) | $ | (311.6 | ) | $ | 2.4 |
December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Raw materials and work-in-progress | $ | 375.1 | $ | 319.7 | |||
Finished goods | 99.0 | 89.6 | |||||
Gross inventories | 474.1 | 409.3 | |||||
Inventory valuation reserves | (14.4 | ) | (17.3 | ) | |||
Inventories, net | $ | 459.7 | $ | 392.0 |
Estimated | December 31, | ||||||||
Useful Lives | 2018 | 2017 | |||||||
(years) | (in millions) | ||||||||
Land | Indefinite | $ | 53.6 | $ | 58.0 | ||||
Land improvements | 10-15 | 22.0 | 20.8 | ||||||
Buildings and building improvements | 15-40 | 501.5 | 465.8 | ||||||
Machinery and equipment | 3-12 | 3,342.8 | 2,962.8 | ||||||
Construction in progress | 511.1 | 567.7 | |||||||
4,431.0 | 4,075.1 | ||||||||
Accumulated depreciation and amortization | (1,916.6 | ) | (1,672.2 | ) | |||||
Property, plant and equipment, net | $ | 2,514.4 | $ | 2,402.9 |
• | Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, transfer cases, 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, transmission gears, and suspension components for Original Equipment Manufacturers and Tier 1 automotive suppliers; |
• | The Powertrain segment products consist primarily of transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for Original Equipment Manufacturers and Tier 1 automotive suppliers; and |
• | The Casting segment produces both thin wall castings and high strength ductile iron casting, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the global light vehicle, commercial and industrial markets. |
Twelve Months Ended December 31, 2018 | ||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Total | ||||||||||||||||
North America | $ | 3,435.4 | $ | 824.9 | $ | 775.7 | $ | 804.3 | $ | 5,840.3 | ||||||||||
Asia | 557.8 | 6.0 | 114.5 | — | 678.3 | |||||||||||||||
Europe | 135.9 | 266.5 | 219.7 | — | 622.1 | |||||||||||||||
South America | 124.9 | — | 4.8 | — | 129.7 | |||||||||||||||
Total | $ | 4,254.0 | $ | 1,097.4 | $ | 1,114.7 | $ | 804.3 | $ | 7,270.4 | ||||||||||
Twelve Months Ended December 31, 2017 | ||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Total | ||||||||||||||||
North America | $ | 3,400.2 | $ | 644.2 | $ | 564.7 | $ | 589.7 | $ | 5,198.8 | ||||||||||
Asia | 409.4 | 3.3 | 99.8 | — | 512.5 | |||||||||||||||
Europe | 97.4 | 182.5 | 141.6 | — | 421.5 | |||||||||||||||
South America | 132.7 | — | 0.5 | — | 133.2 | |||||||||||||||
Total | $ | 4,039.7 | $ | 830.0 | $ | 806.6 | $ | 589.7 | $ | 6,266.0 | ||||||||||
Twelve Months Ended December 31, 2016 | ||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Total | ||||||||||||||||
North America | $ | 3,283.1 | $ | 217.3 | $ | — | $ | — | $ | 3,500.4 | ||||||||||
Asia | 265.9 | — | — | — | 265.9 | |||||||||||||||
Europe | 83.5 | — | — | — | 83.5 | |||||||||||||||
South America | 98.2 | — | — | — | 98.2 | |||||||||||||||
Total | $ | 3,730.7 | $ | 217.3 | $ | — | $ | — | $ | 3,948.0 |
Accounts Receivable, Net | Contract Liabilities (Current) | Contract Liabilities (Long-term) | |||||||
December 31, 2017 | $ | 1,035.9 | $ | 34.1 | $ | 78.8 | |||
December 31, 2018 | 966.5 | 44.3 | 77.6 | ||||||
Increase/(decrease) | $ | (69.4 | ) | $ | 10.2 | $ | (1.2 | ) |
Severance Charges | Implementation Costs | Asset Impairment Charges | Total | ||||||||||||
(in millions) | |||||||||||||||
Accrual at January 1, 2016 | $ | — | $ | — | $ | — | $ | — | |||||||
Charges | 0.6 | 10.2 | 4.5 | 15.3 | |||||||||||
Cash utilization | — | (1.0 | ) | — | (1.0 | ) | |||||||||
Non-cash utilization | — | — | (4.5 | ) | (4.5 | ) | |||||||||
Accrual at December 31, 2016 | 0.6 | 9.2 | — | 9.8 | |||||||||||
Charges | 2.0 | 13.9 | 1.5 | 17.4 | |||||||||||
Cash utilization | (2.3 | ) | (23.1 | ) | — | (25.4 | ) | ||||||||
Non-cash utilization | — | — | (1.5 | ) | (1.5 | ) | |||||||||
Accrual at December 31, 2017 | 0.3 | — | — | 0.3 | |||||||||||
Charges | 2.5 | 11.7 | 30.0 | 44.2 | |||||||||||
Cash utilization | (0.4 | ) | (10.1 | ) | — | (10.5 | ) | ||||||||
Non-cash utilization | — | — | (30.0 | ) | (30.0 | ) | |||||||||
Accrual at December 31, 2018 | $ | 2.4 | $ | 1.6 | $ | — | $ | 4.0 |
Acquisition-Related Costs | Severance Charges | Integration Expenses | Total | ||||||||||||
(in millions) | |||||||||||||||
Charges | $ | 1.2 | $ | 0.5 | $ | 33.0 | $ | 34.7 | |||||||
Total restructuring and acquisition-related charges in 2018 | $ | 78.9 |
(in millions) | April 6, 2017 | ||
Cash consideration | $ | 953.5 | |
Share consideration | 576.7 | ||
Total consideration transferred | $ | 1,530.2 | |
Fair value of MPG noncontrolling interests | 3.6 | ||
Total fair value of MPG | $ | 1,533.8 | |
Cash and cash equivalents | $ | 202.1 | |
Accounts receivable | 403.1 | ||
Inventories | 199.0 | ||
Prepaid expenses and other long-term assets | 119.9 | ||
Property, plant and equipment | 971.8 | ||
Intangible assets | 1,223.1 | ||
Total assets acquired | $ | 3,119.0 | |
Accounts payable | 287.8 | ||
Accrued expenses and other | 137.7 | ||
Deferred income tax liabilities | 580.2 | ||
Debt | 1,918.7 | ||
Postretirement benefits and other long-term liabilities | 54.1 | ||
Net assets acquired | $ | 140.5 | |
Goodwill | $ | 1,393.3 |
(in millions) | March 1, 2017 | ||
Contractual purchase price | $ | 162.5 | |
Adjustment to contractual purchase price for working capital settlement | 2.5 | ||
Adjustments to contractual purchase price for capital equipment | 4.9 | ||
Adjustment to contractual purchase price for settlement of existing accounts payable balance | (22.8 | ) | |
Cash acquired | (0.5 | ) | |
Adjusted purchase price, net of cash acquired | $ | 146.6 | |
Accounts receivable | 1.1 | ||
Inventories | 4.8 | ||
Prepaid expenses and other | 3.6 | ||
Property, plant and equipment | 38.4 | ||
Intangible assets | 31.7 | ||
Total assets acquired | $ | 79.6 | |
Accounts payable | 10.8 | ||
Accrued expenses and other | 2.7 | ||
Deferred income tax liabilities | 1.2 | ||
Net assets acquired | $ | 64.9 | |
Goodwill | $ | 81.7 |
Driveline | Metal Forming | Powertrain | Casting | Consolidated | |||||||||||||||
(in millions) | |||||||||||||||||||
Balance as of January 1, 2017 | $ | 130.1 | $ | 23.9 | $ | — | $ | — | $ | 154.0 | |||||||||
Acquisition of MPG | — | 515.3 | 471.6 | 405.5 | 1,392.4 | ||||||||||||||
Acquisition of USM Mexico | 80.4 | — | — | — | 80.4 | ||||||||||||||
Foreign currency translation | 0.6 | 19.7 | 7.2 | — | 27.5 | ||||||||||||||
Balance as of December 31, 2017 | $ | 211.1 | $ | 558.9 | $ | 478.8 | $ | 405.5 | $ | 1,654.3 | |||||||||
Acquisition of MPG | — | 0.9 | — | — | 0.9 | ||||||||||||||
Acquisition of USM Mexico | 1.3 | — | — | — | 1.3 | ||||||||||||||
Impairment charge | — | — | (80.0 | ) | (405.5 | ) | (485.5 | ) | |||||||||||
Sale of business | — | — | (15.1 | ) | — | (15.1 | ) | ||||||||||||
Foreign currency translation | (0.3 | ) | (7.4 | ) | (6.4 | ) | — | (14.1 | ) | ||||||||||
Balance as of December 31, 2018 | $ | 212.1 | $ | 552.4 | $ | 377.3 | $ | — | $ | 1,141.8 |
December 31, | December 31, | ||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Capitalized computer software | $ | 38.0 | $ | (20.1 | ) | $ | 17.9 | $ | 35.6 | $ | (14.3 | ) | $ | 21.3 | |||||||||
Customer platforms | 952.2 | (123.5 | ) | 828.7 | 952.2 | (52.9 | ) | 899.3 | |||||||||||||||
Customer relationships | 147.0 | (16.5 | ) | 130.5 | 151.8 | (7.3 | ) | 144.5 | |||||||||||||||
Technology and other | 156.2 | (22.2 | ) | 134.0 | 150.8 | (9.3 | ) | 141.5 | |||||||||||||||
Total | $ | 1,293.4 | $ | (182.3 | ) | $ | 1,111.1 | $ | 1,290.4 | $ | (83.8 | ) | $ | 1,206.6 |
December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Revolving credit facility | $ | — | $ | — | |||
Term Loan A Facility | 83.8 | 92.5 | |||||
Term Loan B Facility | 1,511.2 | 1,526.8 | |||||
7.75% Notes due 2019 | 100.0 | 200.0 | |||||
6.625% Notes due 2022 | 450.0 | 550.0 | |||||
6.50% Notes due 2027 | 500.0 | 500.0 | |||||
6.25% Notes due 2026 | 400.0 | — | |||||
6.25% Notes due 2025 | 700.0 | 700.0 | |||||
6.25% Notes due 2021 | — | 400.0 | |||||
Foreign credit facilities | 127.1 | 53.2 | |||||
Capital lease obligations | 3.4 | 28.3 | |||||
Debt | 3,875.5 | 4,050.8 | |||||
Less: Current portion of long-term debt | 121.6 | 5.9 | |||||
Long-term debt | 3,753.9 | 4,044.9 | |||||
Less: Debt issuance costs | 67.1 | 75.6 | |||||
Long-term debt, net | $ | 3,686.8 | $ | 3,969.3 |
2019 | $ | 152.2 | |
2020 | 37.0 | ||
2021 | 91.5 | ||
2022 | 530.0 | ||
2023 | 15.5 | ||
Thereafter | 3,049.3 | ||
Total | $ | 3,875.5 |
Location of Gain (Loss) Reclassified into Net Income (Loss) | Gain (Loss) Reclassified During the Twelve Months Ended December 31, | Total of Financial Statement Line Item | Gain Expected to be Reclassified During the Next 12 Months | ||||||||||||||||||
2018 | 2017 | 2016 | 2018 | ||||||||||||||||||
(in millions) | |||||||||||||||||||||
Currency forward contracts | Cost of Goods Sold | $ | (2.8 | ) | $ | (5.3 | ) | $ | (10.5 | ) | $ | 6,130.0 | $ | 0.4 | |||||||
Variable-to-fixed interest rate swap | Interest Expense | 3.2 | — | — | (216.3 | ) | 2.6 |
Location of Gain/(Loss) Recognized in Net Income (Loss) | Gain/(Loss) Recognized During the Twelve Months Ended December 31, | Total of Financial Statement Line Item | ||||||||||||||
2018 | 2017 | 2016 | 2018 | |||||||||||||
(in millions) | ||||||||||||||||
Currency forward contracts | Cost of Goods Sold | $ | 1.6 | $ | 2.7 | $ | (5.8 | ) | 6,130.0 | |||||||
Currency forward contracts | Other Income (Expense), Net | 1.4 | (0.1 | ) | (0.7 | ) | (2.2 | ) | ||||||||
Currency option contracts | Cost of Goods Sold | — | 0.8 | — | 6,130.0 |
• | 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. |
December 31, 2018 | December 31, 2017 | ||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Input | |||||||||||||
(in millions) | |||||||||||||||||
Balance Sheet Classification | |||||||||||||||||
Cash equivalents | $ | 44.0 | $ | 44.0 | $ | 72.8 | $ | 72.8 | Level 1 | ||||||||
Prepaid expenses and other | |||||||||||||||||
Cash flow hedges - currency forward contracts | 1.3 | 1.3 | 0.1 | 0.1 | Level 2 | ||||||||||||
Cash flow hedges - variable-to-fixed interest rate swap | 0.9 | 0.9 | 1.3 | 1.3 | Level 2 | ||||||||||||
Nondesignated - currency forward contracts | 0.6 | 0.6 | — | — | Level 2 | ||||||||||||
Other assets and deferred charges | |||||||||||||||||
Cash flow hedges - currency forward contracts | 0.4 | 0.4 | 0.2 | 0.2 | Level 2 | ||||||||||||
Cash flow hedges - variable-to-fixed interest rate swap | 1.6 | 1.6 | 0.9 | 0.9 | Level 2 | ||||||||||||
Accrued expenses and other | |||||||||||||||||
Cash flow hedges - currency forward contracts | 0.8 | 0.8 | 6.0 | 6.0 | Level 2 | ||||||||||||
Cash flow hedges - variable-to-fixed interest rate swap | 0.7 | 0.7 | — | — | Level 2 | ||||||||||||
Nondesignated - currency forward contracts | 0.4 | 0.4 | 2.8 | 2.8 | Level 2 | ||||||||||||
Postretirement benefits and other long-term liabilities | |||||||||||||||||
Cash flow hedges - currency forward contracts | 0.9 | 0.9 | 2.6 | 2.6 | Level 2 | ||||||||||||
Cash flow hedges - variable-to-fixed interest rate swap | 6.9 | 6.9 | 0.3 | 0.3 | Level 2 |
December 31, 2018 | December 31, 2017 | ||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | Input | |||||||||||||
(in millions) | |||||||||||||||||
Revolving Credit Facility | $ | — | $ | — | $ | — | $ | — | Level 2 | ||||||||
Term Loan A Facility | 83.8 | 79.5 | 92.5 | 92.5 | Level 2 | ||||||||||||
Term Loan B Facility | 1,511.2 | 1,420.6 | 1,526.8 | 1,528.7 | Level 2 | ||||||||||||
7.75% Notes due 2019 | 100.0 | 102.1 | 200.0 | 217.5 | Level 2 | ||||||||||||
6.625% Notes due 2022 | 450.0 | 444.4 | 550.0 | 570.2 | Level 2 | ||||||||||||
6.50% Notes due 2027 | 500.0 | 446.3 | 500.0 | 527.5 | Level 2 | ||||||||||||
6.25% Notes due 2026 | 400.0 | 358.0 | — | — | Level 2 | ||||||||||||
6.25% Notes due 2025 | 700.0 | 636.7 | 700.0 | 736.8 | Level 2 | ||||||||||||
6.25% Notes due 2021 | — | — | 400.0 | 410.0 | Level 2 |
December 31, 2018 | December 31, 2017 | |||||||||||||||
Balance Sheet Classification | Fair Value | Asset Impairment | Fair Value | Asset Impairment | ||||||||||||
(in millions) | ||||||||||||||||
Property, plant and equipment, net | $ | — | $ | 28.8 | $ | — | $ | 1.5 | ||||||||
Other assets and deferred charges | — | 1.2 | — | — |
Pension Benefits | OPEB | |||||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | |||||||||||||||||||||
U.S. | U.K. | U.S. | U.K. | U.S. | U.K. | |||||||||||||||||||||
Discount rate | 4.30 | % | 2.95 | % | 3.65 | % | 2.75 | % | 4.15 | % | 2.70 | % | 4.35 | % | 3.65 | % | 4.20 | % | ||||||||
Expected return on plan assets | 7.50 | % | 5.10 | % | 7.45 | % | 5.10 | % | 7.50 | % | 5.00 | % | N/A | N/A | N/A | |||||||||||
Rate of compensation increase | 4.00 | % | 3.40 | % | 4.00 | % | 3.40 | % | 4.00 | % | 3.45 | % | 4.00 | % | 4.00 | % | 4.00 | % |
Pension Benefits | OPEB | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Change in benefit obligation | |||||||||||||||
Benefit obligation at beginning of year | $ | 824.0 | $ | 717.6 | $ | 613.3 | $ | 571.7 | |||||||
Service cost | 2.6 | 3.6 | 0.4 | 0.3 | |||||||||||
Interest cost | 27.3 | 28.9 | 12.4 | 13.3 | |||||||||||
Plan amendments | 4.3 | 0.5 | (2.3 | ) | — | ||||||||||
Actuarial loss (gain) | (63.2 | ) | 28.1 | (43.8 | ) | 22.6 | |||||||||
Change in GM portion of OPEB obligation | — | — | (32.6 | ) | 16.5 | ||||||||||
Participant contributions | 0.3 | 0.3 | — | — | |||||||||||
Curtailments | (11.6 | ) | — | (0.2 | ) | — | |||||||||
Settlements | (0.6 | ) | (14.3 | ) | — | — | |||||||||
Benefit payments | (39.7 | ) | (40.8 | ) | (9.9 | ) | (12.5 | ) | |||||||
MPG acquisition / business combination | — | 82.3 | — | 1.4 | |||||||||||
Currency fluctuations | (9.4 | ) | 17.8 | — | — | ||||||||||
Other | 0.5 | — | — | — | |||||||||||
Net change | (89.5 | ) | 106.4 | (76.0 | ) | 41.6 | |||||||||
Benefit obligation at end of year | $ | 734.5 | $ | 824.0 | $ | 537.3 | $ | 613.3 | |||||||
Change in plan assets | |||||||||||||||
Fair value of plan assets at beginning of year | $ | 702.2 | $ | 611.3 | $ | — | $ | — | |||||||
Actual return on plan assets | (31.0 | ) | 74.9 | — | — | ||||||||||
Employer contributions | 4.4 | 4.4 | 9.9 | 12.5 | |||||||||||
Participant contributions | 0.3 | 0.3 | — | — | |||||||||||
Benefit payments | (39.8 | ) | (40.8 | ) | (9.9 | ) | (12.5 | ) | |||||||
Settlements | (0.6 | ) | (14.3 | ) | — | — | |||||||||
MPG acquisition / business combination | — | 49.9 | — | — | |||||||||||
Currency fluctuations | (9.7 | ) | 16.5 | — | — | ||||||||||
Net change | (76.4 | ) | 90.9 | — | — | ||||||||||
Fair value of plan assets at end of year | $ | 625.8 | $ | 702.2 | $ | — | $ | — |
Pension Benefits | OPEB | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Noncurrent assets | $ | 26.4 | $ | 18.9 | $ | — | $ | — | |||||||
Current liabilities | (6.5 | ) | (6.0 | ) | (30.8 | ) | (30.3 | ) | |||||||
Noncurrent liabilities | (128.6 | ) | (134.7 | ) | (506.5 | ) | (583.0 | ) | |||||||
Net liability | $ | (108.7 | ) | $ | (121.8 | ) | $ | (537.3 | ) | $ | (613.3 | ) |
Pension Benefits | OPEB | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in millions) | |||||||||||||||
Net actuarial gain (loss) | $ | (230.6 | ) | $ | (237.4 | ) | $ | 31.3 | $ | (13.5 | ) | ||||
Net prior service credit (cost) | (1.2 | ) | (0.1 | ) | 6.2 | 7.2 | |||||||||
Total amounts recorded | $ | (231.8 | ) | $ | (237.5 | ) | $ | 37.5 | $ | (6.3 | ) |
Pension Benefits | OPEB | ||||||||||||||||||||||
2018 | 2017 | 2016 | 2018 | 2017 | 2016 | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Service cost | $ | 2.6 | $ | 3.6 | $ | 2.9 | $ | 0.4 | $ | 0.3 | $ | 0.3 | |||||||||||
Interest cost | 27.3 | 28.9 | 28.8 | 12.4 | 13.3 | 14.0 | |||||||||||||||||
Expected asset return | (45.8 | ) | (44.0 | ) | (42.1 | ) | — | — | — | ||||||||||||||
Amortized actuarial loss | 7.8 | 7.1 | 5.5 | 0.8 | 0.6 | 0.5 | |||||||||||||||||
Amortized prior service credit | 0.1 | (0.1 | ) | (0.1 | ) | (2.7 | ) | (2.7 | ) | (2.7 | ) | ||||||||||||
Curtailment loss (gain) | 3.2 | — | — | (0.6 | ) | — | — | ||||||||||||||||
Settlement charge | 0.4 | 3.2 | — | — | — | — | |||||||||||||||||
Net periodic benefit cost (credit) | $ | (4.4 | ) | $ | (1.3 | ) | $ | (5.0 | ) | $ | 10.3 | $ | 11.5 | $ | 12.1 |
U.S. | U.K. | ||||||||||||||
Target | Target | ||||||||||||||
2018 | 2017 | Allocation | 2018 | 2017 | Allocation | ||||||||||
Equity securities | 31.9 | % | 42.7 | % | 30% - 55% | 19.0 | % | 28.6 | % | 25% - 35% | |||||
Fixed income securities | 57.5 | 47.5 | 40% - 60% | 68.3 | 57.9 | 55% - 65% | |||||||||
Alternative assets | 10.0 | 8.2 | 5% - 10% | 10.5 | 11.2 | 5% - 15% | |||||||||
Cash | 0.6 | 1.6 | 0% - 5% | 2.2 | 2.3 | 0% - 5% | |||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
December 31, 2018 | ||||||||||||||||
Asset Categories | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | ||||||||||||||||
Cash and Cash Equivalents | $ | 3.5 | $ | 3.2 | $ | — | $ | 6.7 | ||||||||
Equity | ||||||||||||||||
U.S. Large Cap | 72.5 | 3.4 | — | 75.9 | ||||||||||||
U.S. Small/Mid Cap | 17.4 | 0.1 | — | 17.5 | ||||||||||||
World Equity | 79.5 | 5.3 | — | 84.8 | ||||||||||||
Fixed Income Securities | ||||||||||||||||
Government & Agencies | 86.5 | 54.3 | — | 140.8 | ||||||||||||
Corporate Bonds - Investment Grade | 177.2 | 2.7 | — | 179.9 | ||||||||||||
Corporate Bonds - Non-investment Grade | 19.8 | 1.5 | — | 21.3 | ||||||||||||
Emerging Market Debt | 18.0 | 0.9 | — | 18.9 | ||||||||||||
Other | 6.9 | 8.9 | — | 15.8 | ||||||||||||
Other | ||||||||||||||||
Property Funds (a) | — | — | — | 56.0 | ||||||||||||
Liquid Alternatives Fund (a) | — | — | — | 2.5 | ||||||||||||
Structured Credit Fund (a) | — | — | — | 5.7 | ||||||||||||
Multi Strategy Hedge Fund (a) | — | — | — | — | ||||||||||||
Total Plan Assets | $ | 481.3 | $ | 80.3 | $ | — | $ | 625.8 | ||||||||
December 31, 2017 | ||||||||||||||||
Asset Categories | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
(in millions) | ||||||||||||||||
Cash and Cash Equivalents | $ | 10.1 | $ | 2.8 | $ | — | $ | 12.9 | ||||||||
Equity | ||||||||||||||||
U.S. Large Cap | 92.0 | 6.3 | — | 98.3 | ||||||||||||
U.S. Small/Mid Cap | 44.0 | 1.2 | — | 45.2 | ||||||||||||
World Equity | 123.5 | 6.2 | — | 129.7 | ||||||||||||
Fixed Income Securities | ||||||||||||||||
Government & Agencies | 81.3 | 46.4 | — | 127.7 | ||||||||||||
Corporate Bonds - Investment Grade | 150.5 | 4.2 | — | 154.7 | ||||||||||||
Corporate Bonds - Non-investment Grade | 24.8 | 1.8 | — | 26.6 | ||||||||||||
Emerging Market Debt | 25.2 | 1.2 | — | 26.4 | ||||||||||||
Other | 8.7 | 8.1 | — | 16.8 | ||||||||||||
Other | ||||||||||||||||
Property Funds (a) | — | — | — | 52.4 | ||||||||||||
Liquid Alternatives Fund (a) | — | — | — | 4.6 | ||||||||||||
Structured Credit Fund (a) | — | — | — | 6.0 | ||||||||||||
Multi Strategy Hedge Fund (a) | — | — | — | 0.9 | ||||||||||||
Total Plan Assets | $ | 560.1 | $ | 78.2 | $ | — | $ | 702.2 |
Weighted-Average | ||||||
Number of | Grant Date Fair | |||||
Shares/Units | Value per Share/Unit | |||||
(in millions, except per share data) | ||||||
Outstanding at January 1, 2016 | 1.7 | $ | 18.19 | |||
Granted | 0.9 | 15.41 | ||||
Vested | (0.7 | ) | 13.23 | |||
Canceled | (0.1 | ) | 18.75 | |||
Outstanding at December 31, 2016 | 1.8 | $ | 18.70 | |||
Granted | 1.3 | 18.09 | ||||
Vested | (0.4 | ) | 19.70 | |||
Canceled | (0.2 | ) | 16.79 | |||
Outstanding at December 31, 2017 | 2.5 | $ | 18.35 | |||
Granted | 1.7 | 14.57 | ||||
Vested | (0.4 | ) | 24.16 | |||
Canceled | (0.3 | ) | 15.84 | |||
Outstanding at December 31, 2018 | 3.5 | $ | 16.00 |
Weighted Average | ||||||
Number of | Grant Date Fair | |||||
Shares | Value per Share | |||||
EBITDA Awards | (in millions, except per share data) | |||||
Outstanding at January 1, 2016 | 0.3 | $ | 32.27 | |||
Granted | 0.2 | 28.04 | ||||
Vested | — | — | ||||
Canceled | — | — | ||||
Outstanding at December 31, 2016 | 0.5 | $ | 30.19 | |||
Granted | 0.2 | 39.01 | ||||
Vested | (0.1 | ) | 27.73 | |||
Canceled | — | — | ||||
Outstanding at December 31, 2017 | 0.6 | $ | 33.91 | |||
Granted | — | — | ||||
Vested | (0.1 | ) | 37.67 | |||
Canceled | — | — | ||||
Outstanding at December 31, 2018 | 0.5 | $ | 34.49 | |||
TSR Awards | ||||||
Outstanding at January 1, 2016 | 0.3 | $ | 25.77 | |||
Granted | 0.2 | 13.16 | ||||
Vested | — | — | ||||
Canceled | — | — | ||||
Outstanding at December 31, 2016 | 0.5 | $ | 19.55 | |||
Granted | 0.2 | 24.58 | ||||
Vested | (0.1 | ) | 22.78 | |||
Canceled | — | — | ||||
Outstanding at December 31, 2017 | 0.6 | $ | 20.93 | |||
Granted | 0.3 | 13.91 | ||||
Vested | (0.1 | ) | 31.21 | |||
Canceled | — | — | ||||
Outstanding at December 31, 2018 | 0.8 | $ | 16.25 | |||
Free Cash Flow Awards | ||||||
Outstanding at January 1, 2018 | — | $ | — | |||
Granted | 0.3 | 14.28 | ||||
Vested | — | — | ||||
Canceled | — | — | ||||
Outstanding at December 31, 2018 | 0.3 | $ | 14.28 |
2018 | 2017 | 2016 | |||||||||
(in millions) | |||||||||||
U.S. income (loss) | $ | (549.4 | ) | $ | (37.1 | ) | $ | 90.0 | |||
Non - U.S. income | 435.5 | 377.1 | 209.0 | ||||||||
Total income (loss) before income taxes | $ | (113.9 | ) | $ | 340.0 | $ | 299.0 |
2018 | 2017 | 2016 | |||||||||
(in millions) | |||||||||||
Current | |||||||||||
Federal | $ | (81.5 | ) | $ | 87.1 | $ | 0.4 | ||||
State and local | 3.2 | (0.7 | ) | — | |||||||
Foreign | 46.5 | 62.4 | 27.5 | ||||||||
Total current | $ | (31.8 | ) | $ | 148.8 | $ | 27.9 | ||||
Deferred | |||||||||||
Federal | $ | (5.1 | ) | $ | (122.3 | ) | $ | 31.2 | |||
State and local | (6.7 | ) | (17.0 | ) | — | ||||||
Foreign | (13.5 | ) | (7.0 | ) | (0.8 | ) | |||||
Total deferred | (25.3 | ) | (146.3 | ) | 30.4 | ||||||
Total income tax expense (benefit) | $ | (57.1 | ) | $ | 2.5 | $ | 58.3 |
2018 | 2017 | 2016 | |||||||||
Federal statutory | $ | (23.9 | ) | $ | 119.0 | $ | 104.7 | ||||
Foreign income taxes | (39.7 | ) | (96.3 | ) | (61.3 | ) | |||||
Change in enacted tax rate | (8.3 | ) | (107.6 | ) | (0.7 | ) | |||||
Transition tax | 5.8 | 108.3 | — | ||||||||
State and local | (12.8 | ) | (6.3 | ) | — | ||||||
Tax credits | (20.1 | ) | (8.8 | ) | (3.3 | ) | |||||
Valuation allowance | 12.9 | (6.1 | ) | 1.1 | |||||||
Goodwill impairment | 21.6 | — | — | ||||||||
Withholding taxes | 6.6 | 4.7 | 1.2 | ||||||||
U.S. tax on unremitted foreign earnings | 4.1 | (18.6 | ) | 0.6 | |||||||
Global intangible low-taxed income | 8.0 | — | — | ||||||||
Uncertain tax positions | (9.8 | ) | 13.5 | 1.6 | |||||||
Other | (1.5 | ) | 0.7 | 14.4 | |||||||
Effective income tax expense (benefit) | $ | (57.1 | ) | $ | 2.5 | $ | 58.3 |
• | Requires companies to pay a one-time transition tax (Transition Tax) on certain foreign earnings for which U.S. income tax was previously deferred |
• | Generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries |
• | Requires a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations referred to as global intangible low-taxed income (GILTI) |
• | Eliminates the corporate alternative minimum tax (AMT) and changes how existing AMT credits can be realized |
• | Creates a new limitation on deductible net interest expense incurred by U.S. corporations |
• | Allows for immediate expensing of certain capital investments in the U.S. for the period September 27, 2017 through December 31, 2022 |
• | Creates a new base erosion anti-abuse minimum tax (BEAT) |
• | Allows for a current deduction for a portion of foreign derived intangible income (FDII) |
December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Deferred tax assets | |||||||
Employee benefits | $ | 152.9 | $ | 155.9 | |||
Inventory | 22.9 | 20.8 | |||||
Net operating loss (NOL) carryforwards | 166.0 | 172.4 | |||||
Tax credit carryforwards | 44.3 | 96.4 | |||||
Capital allowance carryforwards | 10.0 | 11.2 | |||||
Fixed assets | 4.7 | 5.1 | |||||
Deferred revenue | 7.4 | 14.7 | |||||
Capitalized expenditures | 25.9 | 35.4 | |||||
Other | 35.2 | 26.9 | |||||
Valuation allowances | (183.3 | ) | (180.4 | ) | |||
Deferred tax assets | $ | 286.0 | $ | 358.4 | |||
Deferred tax liabilities | |||||||
U.S. tax on unremitted foreign earnings | (6.5 | ) | (2.4 | ) | |||
Other intangible assets | (176.0 | ) | (281.6 | ) | |||
Fixed assets | (141.9 | ) | (120.3 | ) | |||
Other | (8.7 | ) | (18.7 | ) | |||
Deferred tax liabilities | $ | (333.1 | ) | $ | (423.0 | ) | |
Deferred tax asset (liability), net | $ | (47.1 | ) | $ | (64.6 | ) |
December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
U.S. federal and state deferred tax liability, net | $ | (76.6 | ) | $ | (79.4 | ) | |
Other foreign deferred tax asset, net | 29.5 | 14.8 | |||||
Deferred tax liability, net | $ | (47.1 | ) | $ | (64.6 | ) |
Unrecognized Income Tax | Interest and | ||||||
Benefits | Penalties | ||||||
(in millions) | |||||||
Balance at January 1, 2016 | $ | 41.6 | $ | 6.9 | |||
Increase in prior year tax positions | 0.4 | 2.0 | |||||
Decrease in prior year tax positions | (2.5 | ) | (0.5 | ) | |||
Increase in current year tax positions | 9.3 | — | |||||
Settlement | (17.3 | ) | (5.6 | ) | |||
Foreign currency remeasurement adjustment | (3.3 | ) | (0.3 | ) | |||
Balance at December 31, 2016 | $ | 28.2 | $ | 2.5 | |||
Increase in prior year tax positions | 1.5 | 3.1 | |||||
Decrease in prior year tax positions | (0.4 | ) | — | ||||
Increase in current year tax positions | 10.5 | — | |||||
Increase from acquisitions | 8.3 | 1.9 | |||||
Settlement | (1.2 | ) | (0.1 | ) | |||
Foreign currency remeasurement adjustment | 0.8 | 0.1 | |||||
Balance at December 31, 2017 | $ | 47.7 | $ | 7.5 | |||
Increase in prior year tax positions | 5.6 | 3.5 | |||||
Decrease in prior year tax positions | (16.9 | ) | (2.5 | ) | |||
Increase in current year tax positions | 6.0 | — | |||||
Settlement | (3.7 | ) | (1.6 | ) | |||
Balance at December 31, 2018 | $ | 38.7 | $ | 6.9 |
2018 | 2017 | 2016 | |||||||||
(in millions, except per share data) | |||||||||||
Numerator | |||||||||||
Net income (loss) attributable to AAM | $ | (57.5 | ) | $ | 337.1 | $ | 240.7 | ||||
Less: Net income allocated to participating securities | — | (7.5 | ) | (5.5 | ) | ||||||
Net income (loss) attributable to common shareholders - Basic and Dilutive | $ | (57.5 | ) | $ | 329.6 | $ | 235.2 | ||||
Denominators | |||||||||||
Basic common shares outstanding - | |||||||||||
Weighted-average shares outstanding | 115.0 | 104.6 | 78.2 | ||||||||
Less: Participating securities | (3.4 | ) | (2.3 | ) | (1.8 | ) | |||||
Weighted-average common shares outstanding | 111.6 | 102.3 | 76.4 | ||||||||
Effect of dilutive securities - | |||||||||||
Dilutive stock-based compensation | — | 0.5 | 0.5 | ||||||||
Diluted shares outstanding - | |||||||||||
Adjusted weighted-average shares after assumed conversions | 111.6 | 102.8 | 76.9 | ||||||||
Basic EPS | $ | (0.51 | ) | $ | 3.22 | $ | 3.08 | ||||
Diluted EPS | $ | (0.51 | ) | $ | 3.21 | $ | 3.06 |
December 31, | |||||||
2018 | 2017 | ||||||
(in millions) | |||||||
Beginning balance | $ | 49.5 | $ | 42.9 | |||
Accruals | 19.1 | 20.6 | |||||
Settlements | (10.7 | ) | (5.6 | ) | |||
Adjustments to prior period accruals | 0.4 | (9.2 | ) | ||||
Foreign currency translation | (0.6 | ) | 0.8 | ||||
Ending balance | $ | 57.7 | $ | 49.5 |
Defined Benefit Plans | Foreign Currency Translation Adjustments | Unrecognized Loss on Cash Flow Hedges | Total | ||||||||||||
Balance at January 1, 2016 | $ | (223.9 | ) | $ | (119.2 | ) | $ | (13.4 | ) | $ | (356.5 | ) | |||
Other comprehensive loss before reclassifications | (27.5 | ) | (3.2 | ) | (20.8 | ) | (51.5 | ) | |||||||
Income tax effect of other comprehensive loss before reclassifications | 5.8 | — | — | 5.8 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss into net income | 3.2 | (a) | — | 10.5 | (b) | 13.7 | |||||||||
Income taxes reclassified into net income | (1.1 | ) | — | — | (1.1 | ) | |||||||||
Net current period other comprehensive loss | (19.6 | ) | (3.2 | ) | (10.3 | ) | (33.1 | ) | |||||||
Balance at December 31, 2016 | $ | (243.5 | ) | $ | (122.4 | ) | $ | (23.7 | ) | $ | (389.6 | ) | |||
Other comprehensive income (loss) before reclassifications | (20.1 | ) | 88.3 | 12.0 | 80.2 | ||||||||||
Income tax effect of other comprehensive income (loss) before reclassifications | 5.5 | — | (0.2 | ) | 5.3 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss into net income | 8.2 | (a) | — | 5.3 | (b) | 13.5 | |||||||||
Income taxes reclassified into net income | (2.1 | ) | — | — | (2.1 | ) | |||||||||
Net current period other comprehensive income (loss) | (8.5 | ) | 88.3 | 17.1 | 96.9 | ||||||||||
Balance at December 31, 2017 | $ | (252.0 | ) | $ | (34.1 | ) | $ | (6.6 | ) | $ | (292.7 | ) | |||
Other comprehensive income (loss) before reclassifications | 41.9 | (62.7 | ) | 5.4 | (15.4 | ) | |||||||||
Income tax effect of other comprehensive income (loss) before reclassifications | (8.4 | ) | — | (0.2 | ) | (8.6 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss into net income | 6.0 | (a) | 0.2 | (0.4 | ) | (b) | 5.8 | ||||||||
Income taxes reclassified into net income | (1.4 | ) | — | 0.7 | (0.7 | ) | |||||||||
Net current period other comprehensive income (loss) | 38.1 | (62.5 | ) | 5.5 | (18.9 | ) | |||||||||
Balance at December 31, 2018 | $ | (213.9 | ) | $ | (96.6 | ) | $ | (1.1 | ) | $ | (311.6 | ) | |||
(a) The amount reclassified from AOCI included $6.0 million in cost of goods sold (COGS) for the year ended December 31, 2018, $8.7 million in COGS and $(0.5) million in SG&A for the year ended December 31, 2017 and $4.4 million in COGS and $(1.2) million in SG&A for the year ended December 31, 2016. | |||||||||||||||
(b) The amounts reclassified from AOCI included $2.8 million in COGS and $(3.2) million in interest expense for the year ended December 31, 2018, $5.3 million in COGS for the year ended December 31, 2017, and $10.5 million in COGS for the year ended December 31, 2016. | |||||||||||||||
• | Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, transfer cases, 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, transmission gears, and suspension components for Original Equipment Manufacturers and Tier 1 automotive suppliers; |
• | The Powertrain segment products consist primarily of transmission module and differential assemblies, transmission valve bodies, connecting rod forging and assemblies, torsional vibration dampers, and variable valve timing products for Original Equipment Manufacturers and Tier 1 automotive suppliers; and |
• | The Casting segment produces both thin wall castings and high strength ductile iron casting, as well as differential cases, steering knuckles, control arms, brackets, and turbo charger housings for the global light vehicle, commercial and industrial markets. |
Year Ended December 31, 2018 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 4,254.8 | $ | 1,515.4 | $ | 1,128.5 | $ | 919.8 | $ | — | $ | 7,818.5 | ||||||||||||
Less: Intersegment sales | 0.8 | 418.0 | 13.8 | 115.5 | — | 548.1 | ||||||||||||||||||
Net external sales | $ | 4,254.0 | $ | 1,097.4 | $ | 1,114.7 | $ | 804.3 | $ | — | $ | 7,270.4 | ||||||||||||
Segment adjusted EBITDA | $ | 660.7 | $ | 285.9 | $ | 163.7 | $ | 73.6 | $ | — | $ | 1,183.9 | ||||||||||||
Depreciation and amortization | $ | 211.7 | $ | 118.6 | $ | 120.9 | $ | 77.6 | $ | — | $ | 528.8 | ||||||||||||
Capital Expenditures | $ | 283.3 | $ | 102.2 | $ | 97.6 | $ | 41.6 | $ | — | $ | 524.7 | ||||||||||||
Total Assets | $ | 2,463.5 | $ | 2,143.1 | $ | 1,679.6 | $ | 664.7 | $ | 559.8 | $ | 7,510.7 |
Year Ended December 31, 2017 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 4,040.8 | $ | 1,242.6 | $ | 816.5 | $ | 676.4 | $ | — | $ | 6,776.3 | ||||||||||||
Less: Intersegment sales | 1.1 | 412.6 | 9.9 | 86.7 | — | 510.3 | ||||||||||||||||||
Net external sales | $ | 4,039.7 | $ | 830.0 | $ | 806.6 | $ | 589.7 | $ | — | $ | 6,266.0 | ||||||||||||
Segment adjusted EBITDA | $ | 692.3 | $ | 232.3 | $ | 131.1 | $ | 47.0 | $ | — | $ | 1,102.7 | ||||||||||||
Depreciation and amortization | $ | 189.4 | $ | 95.1 | $ | 81.7 | $ | 50.8 | $ | 11.5 | $ | 428.5 | ||||||||||||
Capital Expenditures | $ | 296.9 | $ | 65.2 | $ | 84.7 | $ | 30.9 | $ | — | $ | 477.7 | ||||||||||||
Total Assets | $ | 2,303.0 | $ | 2,175.3 | $ | 1,824.0 | $ | 984.3 | $ | 596.2 | $ | 7,882.8 |
Year Ended December 31, 2016 | ||||||||||||||||||||||||
Driveline | Metal Forming | Powertrain | Casting | Corporate and Eliminations | Total | |||||||||||||||||||
Sales | $ | 3,735.6 | $ | 552.2 | $ | — | $ | — | $ | — | $ | 4,287.8 | ||||||||||||
Less: Intersegment sales | 4.9 | 334.9 | — | — | — | 339.8 | ||||||||||||||||||
Net external sales | $ | 3,730.7 | $ | 217.3 | $ | — | $ | — | $ | — | $ | 3,948.0 | ||||||||||||
Segment adjusted EBITDA | $ | 515.8 | $ | 103.6 | $ | — | $ | — | $ | — | $ | 619.4 | ||||||||||||
Depreciation and amortization | $ | 160.8 | $ | 24.1 | $ | — | $ | — | $ | 16.9 | $ | 201.8 | ||||||||||||
Capital Expenditures | $ | 159.0 | $ | 22.9 | $ | — | $ | — | $ | 41.1 | $ | 223.0 | ||||||||||||
Total Assets | $ | 2,183.9 | $ | 410.3 | $ | — | $ | — | $ | 828.1 | $ | 3,422.3 |
Year Ended December 31, | ||||||||||||
2018 | 2017 | 2016 | ||||||||||
Segment adjusted EBITDA | $ | 1,183.9 | $ | 1,102.7 | $ | 619.4 | ||||||
Interest expense | (216.3 | ) | (195.6 | ) | (93.4 | ) | ||||||
Depreciation and amortization | (528.8 | ) | (428.5 | ) | (201.8 | ) | ||||||
Goodwill impairment | (485.5 | ) | — | — | ||||||||
Restructuring and acquisition-related costs | (78.9 | ) | (110.7 | ) | (26.2 | ) | ||||||
Pension settlement | — | (3.2 | ) | — | ||||||||
Gain on sale of business | 15.5 | — | — | |||||||||
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 | (19.4 | ) | (3.5 | ) | — | |||||||
Other | — | — | 1.0 | |||||||||
Income (loss) before income taxes | $ | (113.9 | ) | $ | 340.0 | $ | 299.0 |
December 31, | |||||||||||
2018 | 2017 | 2016 | |||||||||
(in millions) | |||||||||||
Net sales | |||||||||||
United States | $ | 3,293.2 | $ | 2,742.7 | $ | 1,321.7 | |||||
Mexico | 2,547.1 | 2,456.1 | 2,178.7 | ||||||||
South America | 129.7 | 133.2 | 98.2 | ||||||||
China | 373.4 | 318.6 | 137.3 | ||||||||
All other Asia | 304.9 | 193.9 | 128.6 | ||||||||
Europe | 622.1 | 421.5 | 83.5 | ||||||||
Total net sales | $ | 7,270.4 | $ | 6,266.0 | $ | 3,948.0 | |||||
Long-lived assets | |||||||||||
United States | $ | 3,612.3 | $ | 4,253.8 | $ | 831.0 | |||||
Mexico | 1,117.9 | 993.8 | 529.2 | ||||||||
South America | 70.6 | 61.4 | 61.5 | ||||||||
China | 177.6 | 180.9 | 129.8 | ||||||||
All other Asia | 101.0 | 103.4 | 92.0 | ||||||||
Europe | 356.0 | 307.4 | 111.7 | ||||||||
Total long-lived assets | $ | 5,435.4 | $ | 5,900.7 | $ | 1,755.2 |
Three Months Ended, | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
(in millions, except per share data) | ||||||||||||||||
2018 | ||||||||||||||||
Net sales | $ | 1,858.4 | $ | 1,900.9 | $ | 1,817.0 | $ | 1,694.1 | ||||||||
Gross profit | 316.3 | 331.4 | 267.4 | 225.3 | ||||||||||||
Net income (loss) | 89.5 | 151.3 | 64.0 | (361.6 | ) | (2) | ||||||||||
Net income (loss) attributable to AAM | 89.4 | 151.1 | 63.8 | (361.8 | ) | (2) | ||||||||||
Basic EPS (1) | $ | 0.78 | $ | 1.31 | $ | 0.55 | $ | (3.24 | ) | (2) | ||||||
Diluted EPS (1) | $ | 0.78 | $ | 1.30 | $ | 0.55 | $ | (3.24 | ) | (2) | ||||||
2017 | ||||||||||||||||
Net sales | $ | 1,049.9 | $ | 1,757.8 | $ | 1,724.4 | $ | 1,733.9 | ||||||||
Gross profit | 210.7 | 316.4 | 297.7 | 294.3 | ||||||||||||
Net income | 78.4 | 66.3 | 86.3 | 106.5 | ||||||||||||
Net income attributable to AAM | 78.4 | 66.2 | 86.2 | 106.3 | ||||||||||||
Basic EPS (1) | $ | 1.00 | $ | 0.59 | $ | 0.76 | $ | 0.93 | ||||||||
Diluted EPS (1) | $ | 0.99 | $ | 0.59 | $ | 0.75 | $ | 0.93 | ||||||||
(2) | In the fourth quarter of 2018, we recorded a goodwill impairment charge of approximately $400 million, net of tax, associated with the annual goodwill impairment test for our Powertrain and Casting segments. See Note 5 - Goodwill and Other Intangible Assets for further detail. |
Condensed Consolidating Statements of Operations | |||||||||||||||||||||||
2018 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net sales | |||||||||||||||||||||||
External | $ | — | $ | 1,088.4 | $ | 2,204.8 | $ | 3,977.2 | $ | — | $ | 7,270.4 | |||||||||||
Intercompany | — | 4.2 | 294.8 | 41.9 | (340.9 | ) | — | ||||||||||||||||
Total net sales | — | 1,092.6 | 2,499.6 | 4,019.1 | (340.9 | ) | 7,270.4 | ||||||||||||||||
Cost of goods sold | — | 1,033.8 | 2,249.0 | 3,188.1 | (340.9 | ) | 6,130.0 | ||||||||||||||||
Gross profit | — | 58.8 | 250.6 | 831.0 | — | 1,140.4 | |||||||||||||||||
Selling, general and administrative expenses | — | 210.3 | 81.4 | 94.0 | — | 385.7 | |||||||||||||||||
Amortization of intangible assets | — | 5.1 | 90.8 | 3.5 | — | 99.4 | |||||||||||||||||
Goodwill impairment | — | — | 485.5 | — | — | 485.5 | |||||||||||||||||
Restructuring and acquisition-related costs | — | 34.2 | 40.4 | 4.3 | — | 78.9 | |||||||||||||||||
Gain on sale of business | — | — | (15.5 | ) | — | — | (15.5 | ) | |||||||||||||||
Operating income (loss) | — | (190.8 | ) | (432.0 | ) | 729.2 | — | 106.4 | |||||||||||||||
Non-operating income (expense), net | — | (260.6 | ) | 15.6 | 24.7 | — | (220.3 | ) | |||||||||||||||
Income (loss) before income taxes | — | (451.4 | ) | (416.4 | ) | 753.9 | — | (113.9 | ) | ||||||||||||||
Income tax expense (benefit) | — | (34.2 | ) | (55.4 | ) | 32.5 | — | (57.1 | ) | ||||||||||||||
Earnings (loss) from equity in subsidiaries | (57.5 | ) | (168.3 | ) | 168.0 | — | 57.8 | — | |||||||||||||||
Net income (loss) before royalties | (57.5 | ) | (585.5 | ) | (193.0 | ) | 721.4 | 57.8 | (56.8 | ) | |||||||||||||
Royalties | — | 276.6 | 3.4 | (280.0 | ) | — | — | ||||||||||||||||
Net income (loss) after royalties | (57.5 | ) | (308.9 | ) | (189.6 | ) | 441.4 | 57.8 | (56.8 | ) | |||||||||||||
Net income attributable to noncontrolling interests | — | — | — | (0.7 | ) | — | (0.7 | ) | |||||||||||||||
Net income (loss) attributable to AAM | $ | (57.5 | ) | $ | (308.9 | ) | $ | (189.6 | ) | $ | 440.7 | $ | 57.8 | $ | (57.5 | ) | |||||||
Other comprehensive income (loss), net of tax | (18.9 | ) | 9.4 | (51.6 | ) | (44.2 | ) | 86.4 | (18.9 | ) | |||||||||||||
Comprehensive income (loss) | $ | (76.4 | ) | $ | (299.5 | ) | $ | (241.2 | ) | $ | 396.5 | $ | 144.2 | $ | (76.4 | ) |
2017 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
Net sales | |||||||||||||||||||||||
External | $ | — | $ | 1,074.6 | $ | 1,668.2 | $ | 3,523.2 | $ | — | $ | 6,266.0 | |||||||||||
Intercompany | — | 2.4 | 285.2 | 27.5 | (315.1 | ) | — | ||||||||||||||||
Total net sales | — | 1,077.0 | 1,953.4 | 3,550.7 | (315.1 | ) | 6,266.0 | ||||||||||||||||
Cost of goods sold | — | 996.6 | 1,730.9 | 2,734.5 | (315.1 | ) | 5,146.9 | ||||||||||||||||
Gross profit | — | 80.4 | 222.5 | 816.2 | — | 1,119.1 | |||||||||||||||||
Selling, general and administrative expenses | — | 223.2 | 63.9 | 103.0 | — | 390.1 | |||||||||||||||||
Amortization of intangible assets | — | 5.6 | 67.5 | 2.2 | — | 75.3 | |||||||||||||||||
Restructuring and acquisition-related costs | — | 105.2 | 1.9 | 3.6 | — | 110.7 | |||||||||||||||||
Operating income (loss) | — | (253.6 | ) | 89.2 | 707.4 | — | 543.0 | ||||||||||||||||
Non-operating income (expense), net | — | (210.0 | ) | 18.6 | (11.6 | ) | — | (203.0 | ) | ||||||||||||||
Income (loss) before income taxes | — | (463.6 | ) | 107.8 | 695.8 | — | 340.0 | ||||||||||||||||
Income tax expense (benefit) | — | 194.1 | (247.0 | ) | 55.4 | — | 2.5 | ||||||||||||||||
Earnings (loss) from equity in subsidiaries | 337.1 | 289.5 | 76.1 | — | (702.7 | ) | — | ||||||||||||||||
Net income (loss) before royalties | 337.1 | (368.2 | ) | 430.9 | 640.4 | (702.7 | ) | 337.5 | |||||||||||||||
Royalties | — | 317.3 | 3.6 | (320.9 | ) | — | — | ||||||||||||||||
Net income (loss) after royalties | 337.1 | (50.9 | ) | 434.5 | 319.5 | (702.7 | ) | 337.5 | |||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | (0.4 | ) | — | (0.4 | ) | |||||||||||||||
Net income (loss) attributable to AAM | $ | 337.1 | $ | (50.9 | ) | $ | 434.5 | $ | 319.1 | $ | (702.7 | ) | $ | 337.1 | |||||||||
Other comprehensive income (loss), net of tax | 96.9 | 40.1 | 87.3 | 102.6 | (230.0 | ) | 96.9 | ||||||||||||||||
Comprehensive income (loss) | $ | 434.0 | $ | (10.8 | ) | $ | 521.8 | $ | 421.7 | $ | (932.7 | ) | $ | 434.0 | |||||||||
2016 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
Net sales | |||||||||||||||||||||||
External | $ | — | $ | 1,109.6 | $ | 212.2 | $ | 2,626.2 | $ | — | $ | 3,948.0 | |||||||||||
Intercompany | — | 8.3 | 241.6 | 16.1 | (266.0 | ) | — | ||||||||||||||||
Total net sales | — | 1,117.9 | 453.8 | 2,642.3 | (266.0 | ) | 3,948.0 | ||||||||||||||||
Cost of goods sold | — | 1,063.8 | 375.4 | 2,048.7 | (266.0 | ) | 3,221.9 | ||||||||||||||||
Gross profit | — | 54.1 | 78.4 | 593.6 | — | 726.1 | |||||||||||||||||
Selling, general and administrative expenses | — | 243.6 | — | 70.6 | — | 314.2 | |||||||||||||||||
Amortization of intangible assets | — | 5.0 | — | — | — | 5.0 | |||||||||||||||||
Restructuring and acquisition-related costs | — | 21.1 | — | 5.1 | — | 26.2 | |||||||||||||||||
Operating income (loss) | — | (215.6 | ) | 78.4 | 517.9 | — | 380.7 | ||||||||||||||||
Non-operating income (expense), net | — | (96.6 | ) | 10.9 | 4.0 | — | (81.7 | ) | |||||||||||||||
Income (loss) before income taxes | — | (312.2 | ) | 89.3 | 521.9 | — | 299.0 | ||||||||||||||||
Income tax expense | — | 27.4 | 4.2 | 26.7 | — | 58.3 | |||||||||||||||||
Earnings (loss) from equity in subsidiaries | 240.7 | 267.4 | (16.7 | ) | — | (491.4 | ) | — | |||||||||||||||
Net income (loss) before royalties | 240.7 | (72.2 | ) | 68.4 | 495.2 | (491.4 | ) | 240.7 | |||||||||||||||
Royalties | — | 312.9 | — | (312.9 | ) | — | — | ||||||||||||||||
Net income after royalties | 240.7 | 240.7 | 68.4 | 182.3 | (491.4 | ) | 240.7 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | |||||||||||||||||
Net income attributable to AAM | $ | 240.7 | $ | 240.7 | $ | 68.4 | $ | 182.3 | $ | (491.4 | ) | $ | 240.7 | ||||||||||
Other comprehensive loss, net of tax | (33.1 | ) | (33.1 | ) | (1.2 | ) | (12.1 | ) | 46.4 | (33.1 | ) | ||||||||||||
Comprehensive income | $ | 207.6 | $ | 207.6 | $ | 67.2 | $ | 170.2 | $ | (445.0 | ) | $ | 207.6 |
Condensed Consolidating Balance Sheets | ||||||||||||||||||||||||
2018 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | ||||||||||||||||||
Assets | (in millions) | |||||||||||||||||||||||
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 | ||||||||||||||||||
Other current assets | — | 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 | ||||||||||||||||||
Other 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 | ) | — | |||||||||||||||||
Other current liabilities | — | 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 | |||||||||||
2017 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | ||||||||||||||||||
Assets | ||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 91.9 | $ | 0.1 | $ | 284.8 | $ | — | $ | 376.8 | ||||||||||||
Accounts receivable, net | — | 138.9 | 287.9 | 609.1 | — | 1,035.9 | ||||||||||||||||||
Intercompany receivables | — | 3,475.2 | 479.9 | 7.5 | (3,962.6 | ) | — | |||||||||||||||||
Inventories, net | — | 37.2 | 147.4 | 207.4 | — | 392.0 | ||||||||||||||||||
Other current assets | — | 40.4 | 9.9 | 90.0 | — | 140.3 | ||||||||||||||||||
Total current assets | — | 3,783.6 | 925.2 | 1,198.8 | (3,962.6 | ) | 1,945.0 | |||||||||||||||||
Property, plant and equipment, net | — | 250.9 | 786.8 | 1,365.2 | — | 2,402.9 | ||||||||||||||||||
Goodwill | — | — | 1,218.4 | 435.9 | — | 1,654.3 | ||||||||||||||||||
Other intangible assets, net | — | 21.0 | 1,155.6 | 35.9 | — | 1,212.5 | ||||||||||||||||||
Intercompany notes and accounts receivable | 11.7 | — | 243.5 | — | (255.2 | ) | — | |||||||||||||||||
Other assets and deferred charges | — | 349.1 | 122.8 | 196.2 | — | 668.1 | ||||||||||||||||||
Investment in subsidiaries | 2,841.3 | 1,955.2 | 1,280.1 | — | (6,076.6 | ) | — | |||||||||||||||||
Total assets | $ | 2,853.0 | $ | 6,359.8 | $ | 5,732.4 | $ | 3,232.0 | $ | (10,294.4 | ) | $ | 7,882.8 | |||||||||||
Liabilities and stockholders' equity | ||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Current portion of long-term debt | $ | — | $ | — | $ | — | $ | 5.9 | $ | — | $ | 5.9 | ||||||||||||
Accounts payable | — | 139.0 | 204.6 | 455.4 | — | 799.0 | ||||||||||||||||||
Intercompany payables | 1,313.0 | 563.7 | 2,017.7 | 68.2 | (3,962.6 | ) | — | |||||||||||||||||
Other current liabilities | — | 181.6 | 52.4 | 177.5 | — | 411.5 | ||||||||||||||||||
Total current liabilities | 1,313.0 | 884.3 | 2,274.7 | 707.0 | (3,962.6 | ) | 1,216.4 | |||||||||||||||||
Intercompany notes and accounts payable | — | 11.7 | — | 243.5 | (255.2 | ) | — | |||||||||||||||||
Long-term debt, net | — | 3,894.6 | 4.4 | 70.3 | — | 3,969.3 | ||||||||||||||||||
Other long-term liabilities | — | 639.1 | 333.2 | 184.8 | — | 1,157.1 | ||||||||||||||||||
Total liabilities | 1,313.0 | 5,429.7 | 2,612.3 | 1,205.6 | (4,217.8 | ) | 6,342.8 | |||||||||||||||||
Total AAM stockholders' equity | 1,536.0 | 930.1 | 3,120.1 | 2,022.4 | (6,072.6 | ) | 1,536.0 | |||||||||||||||||
Noncontrolling interests in subsidiaries | 4.0 | — | — | 4.0 | (4.0 | ) | 4.0 | |||||||||||||||||
Total stockholders' equity | $ | 1,540.0 | $ | 930.1 | $ | 3,120.1 | $ | 2,026.4 | $ | (6,076.6 | ) | $ | 1,540.0 | |||||||||||
Total liabilities and stockholders' equity | $ | 2,853.0 | $ | 6,359.8 | $ | 5,732.4 | $ | 3,232.0 | $ | (10,294.4 | ) | $ | 7,882.8 |
Condensed Consolidating Statements of Cash Flows | |||||||||||||||||||||||
2018 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
(in millions) | |||||||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 262.0 | $ | 145.5 | $ | 364.0 | $ | — | $ | 771.5 | |||||||||||
Investing activities | |||||||||||||||||||||||
Purchases of property, plant and equipment | — | (63.2 | ) | (163.8 | ) | (297.7 | ) | — | (524.7 | ) | |||||||||||||
Proceeds from sale of property, plant and equipment | — | — | 4.3 | 0.6 | — | 4.9 | |||||||||||||||||
Purchase buyouts of leased equipment | — | — | (0.5 | ) | — | — | (0.5 | ) | |||||||||||||||
Proceeds from sale of business | — | — | 42.7 | 4.4 | — | 47.1 | |||||||||||||||||
Acquisition of business, net of cash acquired | — | — | — | (1.3 | ) | — | (1.3 | ) | |||||||||||||||
Investment in affiliates | — | (3.0 | ) | — | (0.7 | ) | — | (3.7 | ) | ||||||||||||||
Intercompany activity | — | — | (44.1 | ) | 44.1 | — | — | ||||||||||||||||
Net cash used in investing activities | — | (66.2 | ) | (161.4 | ) | (250.6 | ) | — | (478.2 | ) | |||||||||||||
Financing activities | |||||||||||||||||||||||
Net debt activity | — | (240.4 | ) | (0.7 | ) | 69.5 | — | (171.6 | ) | ||||||||||||||
Debt issuance costs | — | (6.9 | ) | — | — | — | (6.9 | ) | |||||||||||||||
Purchase of treasury stock | (3.7 | ) | — | — | — | — | (3.7 | ) | |||||||||||||||
Purchase of noncontrolling interest | — | — | (2.3 | ) | — | — | (2.3 | ) | |||||||||||||||
Intercompany activity | 3.7 | (3.7 | ) | 21.5 | (21.5 | ) | — | — | |||||||||||||||
Net cash provided by (used in) financing activities | — | (251.0 | ) | 18.5 | 48.0 | — | (184.5 | ) | |||||||||||||||
Effect of exchange rate changes on cash | — | — | — | (6.7 | ) | — | (6.7 | ) | |||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | — | (55.2 | ) | 2.6 | 154.7 | — | 102.1 | ||||||||||||||||
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 | $ | — | $ | 36.7 | $ | 2.7 | $ | 439.5 | $ | — | $ | 478.9 | |||||||||||
2017 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 410.4 | $ | 33.1 | $ | 203.5 | $ | — | $ | 647.0 | |||||||||||
Investing activities | |||||||||||||||||||||||
Purchases of property, plant and equipment | — | (69.1 | ) | (100.4 | ) | (308.2 | ) | — | (477.7 | ) | |||||||||||||
Proceeds from sale of property, plant and equipment | — | 0.3 | 0.3 | 1.9 | — | 2.5 | |||||||||||||||||
Purchase buyouts of leased equipment | — | (13.3 | ) | — | — | — | (13.3 | ) | |||||||||||||||
Proceeds from sale of business | — | 7.5 | (1.6 | ) | — | — | 5.9 | ||||||||||||||||
Acquisition of business, net of cash acquired | — | (953.5 | ) | 64.6 | (6.6 | ) | — | (895.5 | ) | ||||||||||||||
Net cash used in investing activities | — | (1,028.1 | ) | (37.1 | ) | (312.9 | ) | — | (1,378.1 | ) | |||||||||||||
Financing activities | |||||||||||||||||||||||
Net debt activity | — | 725.6 | (0.7 | ) | (12.2 | ) | — | 712.7 | |||||||||||||||
Debt issuance costs | — | (91.0 | ) | — | — | — | (91.0 | ) | |||||||||||||||
Employee stock option exercises | — | 0.9 | — | — | — | 0.9 | |||||||||||||||||
Purchase of treasury stock | (7.0 | ) | — | — | — | — | (7.0 | ) | |||||||||||||||
Intercompany activity | 7.0 | (10.2 | ) | 3.2 | — | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | — | 625.3 | 2.5 | (12.2 | ) | — | 615.6 | ||||||||||||||||
Effect of exchange rate changes on cash | — | — | — | 11.1 | — | 11.1 | |||||||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | — | 7.6 | (1.5 | ) | (110.5 | ) | — | (104.4 | ) | ||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | — | 84.3 | 1.6 | 395.3 | — | 481.2 | |||||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | — | $ | 91.9 | $ | 0.1 | $ | 284.8 | $ | — | $ | 376.8 |
2016 | Holdings | AAM Inc. | Guarantor Subsidiaries | Non-Guarantor Subsidiaries | Elims | Consolidated | |||||||||||||||||
Net cash provided by operating activities | $ | — | $ | 78.3 | $ | 25.3 | $ | 304.0 | $ | — | $ | 407.6 | |||||||||||
Investing activities | |||||||||||||||||||||||
Purchases of property, plant and equipment | — | (36.8 | ) | (18.0 | ) | (168.2 | ) | — | (223.0 | ) | |||||||||||||
Proceeds from sale of property, plant and equipment | — | — | 0.3 | 1.4 | — | 1.7 | |||||||||||||||||
Purchase buyouts of leased equipment | — | (4.6 | ) | — | — | — | (4.6 | ) | |||||||||||||||
Acquisition of business, net of cash acquired | — | — | (5.6 | ) | — | — | (5.6 | ) | |||||||||||||||
Other, net | — | 1.0 | — | 2.8 | — | 3.8 | |||||||||||||||||
Net cash used in investing activities | — | (40.4 | ) | (23.3 | ) | (164.0 | ) | — | (227.7 | ) | |||||||||||||
Financing activities | |||||||||||||||||||||||
Net debt activity | — | (0.7 | ) | (0.4 | ) | 24.4 | — | 23.3 | |||||||||||||||
Employee stock option exercises | — | 0.3 | — | — | — | 0.3 | |||||||||||||||||
Purchase of treasury stock | (5.2 | ) | — | — | — | — | (5.2 | ) | |||||||||||||||
Intercompany activity | 5.2 | (5.2 | ) | — | — | — | — | ||||||||||||||||
Net cash provided by (used in) financing activities | — | (5.6 | ) | (0.4 | ) | 24.4 | — | 18.4 | |||||||||||||||
Effect of exchange rate changes on cash | — | — | — | 0.4 | — | 0.4 | |||||||||||||||||
Net increase in cash, cash equivalents and restricted cash | — | 32.3 | 1.6 | 164.8 | — | 198.7 | |||||||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | — | 52.0 | — | 230.5 | — | 282.5 | |||||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | — | $ | 84.3 | $ | 1.6 | $ | 395.3 | $ | — | $ | 481.2 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 9B. | Other Information |
Part III |
Item 10. | Directors, Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accounting Fees and Services |
Part IV |
1. | All Financial Statements |
2. | Financial Statement Schedules |
3. | Exhibits |
Number | Description of Exhibit | |
2.1 | ||
3.01 | ||
3.02 | ||
4.01 | ||
4.02 | ||
4.03 | ||
Number | Description of Exhibit | |
4.04 | ||
4.05 | ||
4.06 | ||
4.07 | ||
4.08 | ||
4.09 | ||
4.10 | ||
4.11 | ||
4.12 | ||
4.13 | ||
4.14 | ||
4.15 | ||
Number | Description of Exhibit | |
10.01 | ||
10.02 | ||
++10.03 | ||
++10.04 | ||
10.05 | ||
++10.06 | ||
‡10.07 | ||
10.08 | ||
10.09 | ||
‡10.10 | ||
‡10.11 | ||
Number | Description of Exhibit | |
‡10.12 | ||
‡10.13 | ||
‡10.14 | ||
‡10.15 | ||
10.16 | ||
10.17 | ||
10.18 | ||
10.19 | ||
‡10.20 | ||
‡10.21 | ||
Number | Description of Exhibit | |
‡10.22 | ||
‡10.23 | ||
‡10.24 | ||
‡10.25 | ||
‡10.26 | ||
‡10.27 | ||
‡10.28 | ||
‡*10.29 | ||
‡*10.30 | ||
‡*10.31 | ||
*21 | ||
*23 | ||
*31.1 | ||
*31.2 | ||
*32 |
Number | Description of Exhibit | |
**101.INS | XBRL Instance Document | |
**101.SCH | XBRL Taxonomy Extension Schema Document | |
**101.PRE | XBRL Extension Presentation Linkbase Document | |
**101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |
**101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
**101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
(All other exhibits are not applicable.) |
Additions - | |||||||||||||||||||||
Balance at | Charged to | Acquisitions | Deductions - | Balance | |||||||||||||||||
Beginning of | Costs and | and | See Notes | At End of | |||||||||||||||||
Period | Expenses | Other (a) | Below | Period | |||||||||||||||||
(in millions) | |||||||||||||||||||||
Year Ended December 31, 2016: | |||||||||||||||||||||
Allowance for doubtful accounts | $ | 4.3 | $ | 0.4 | $ | — | $ | 1.6 | (1) | $ | 3.1 | ||||||||||
Allowance for deferred taxes | 167.3 | 18.4 | — | 20.9 | (3) | 164.8 | |||||||||||||||
Inventory valuation allowance | 17.1 | 7.5 | — | 9.8 | (2) | 14.8 | |||||||||||||||
Year Ended December 31, 2017: | |||||||||||||||||||||
Allowance for doubtful accounts | 3.1 | 4.6 | 2.1 | 2.8 | (1) | 7.0 | |||||||||||||||
Allowance for deferred taxes | 164.8 | 26.6 | 13.7 | 24.7 | (4) | 180.4 | |||||||||||||||
Inventory valuation allowance | 14.8 | 39.1 | 9.2 | 45.8 | (2) | 17.3 | |||||||||||||||
Year Ended December 31, 2018: | |||||||||||||||||||||
Allowance for doubtful accounts | 7.0 | 6.6 | — | 5.2 | (1) | 8.4 | |||||||||||||||
Allowance for deferred taxes | 180.4 | 12.9 | — | 10.0 | (5) | 183.3 | |||||||||||||||
Inventory valuation allowance | 17.3 | 22.2 | — | 25.1 | (2) | 14.4 | |||||||||||||||
(a) | Amounts represent reserves recognized in conjunction with our acquisitions in 2017. |
(1) | Uncollectible accounts charged off net of recoveries. |
(2) | Primarily relates to write-offs of excess and obsolete inventories, as well as adjustments for physical quantity discrepancies. |
(3) | Primarily reflects a reduction in deferred tax assets at various foreign locations due to foreign currency translation, as well as the reversal of the valuation allowance of $5.4 million against our deferred tax assets in China. |
(4) | Reflects an increase related to valuation allowances of MPG that existed as of the acquisition date and the impact of tax reform resulting from the 2017 Act. This was partially offset by the reversal of certain state valuation allowances as a result of re-evaluating our state valuation allowances subsequent to the acquisition of MPG. |
(5) | Primarily reflects a reduction in deferred tax assets at various foreign locations due to foreign currency translation. |
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. |
(Registrant) |
/s/ Christopher J. May |
Christopher J. May |
Vice President & Chief Financial Officer |
(Chief Accounting Officer) |
Signature | Title | Date | ||
/s/ David C. Dauch | Chairman of the Board & | February 15, 2019 | ||
David C. Dauch | Chief Executive Officer | |||
/s/ Christopher J. May | Vice President & | February 15, 2019 | ||
Christopher J. May | Chief Financial Officer | |||
/s/ Elizabeth A. Chappell | Director | February 15, 2019 | ||
Elizabeth A. Chappell | ||||
/s/ William L. Kozyra | Director | February 15, 2019 | ||
William L. Kozyra | ||||
/s/ Peter D. Lyons | Director | February 15, 2019 | ||
Peter D. Lyons | ||||
/s/ James A. McCaslin | Director | February 15, 2019 | ||
James A. McCaslin | ||||
/s/ William P. Miller II | Director | February 15, 2019 | ||
William P. Miller II | ||||
/s/ Herbert K. Parker | Director | February 15, 2019 | ||
Herbert K. Parker | ||||
/s/ Sandra Pierce | Director | February 15, 2019 | ||
Sandra Pierce | ||||
/s/ John F. Smith | Director | February 15, 2019 | ||
John F. Smith | ||||
/s/ Samuel Valenti III | Director | February 15, 2019 | ||
Samuel Valenti III |
Page | ||
Article I INTRODUCTION | 1 | |
1.1 | Purpose of Plan | 1 |
1.2 | “Top Hat” Pension Benefit Plan | 1 |
1.3 | Funding | 1 |
1.4 | Effective Date | 1 |
Article II DEFINITIONS | 2 | |
2.1 | Actuarial Equivalent Value | 2 |
2.2 | Average Monthly Base Salary | 2 |
2.3 | Average Monthly Incentive Compensation | 2 |
2.4 | Average Total Direct Compensation | 2 |
2.5 | Base Salary | 3 |
2.6 | Board of Directors | 3 |
2.7 | Cash Balance Benefit | 3 |
2.8 | Cause | 3 |
2.9 | Code | 3 |
2.10 | Compensation Committee | 3 |
2.11 | Corporation | 4 |
2.12 | Credited Service | 4 |
2.13 | Disability | 4 |
2.14 | Employee | 4 |
2.15 | ERISA | 5 |
2.16 | Final Average Compensation | 5 |
2.17 | Frozen Benefit | 5 |
2.18 | Grandfathered Participant | 5 |
2.19 | Health Care Program | 5 |
2.20 | Joint and Survivor Annuity | 6 |
2.21 | Management Benefits Committee | 6 |
2.22 | Non-Grandfathered Participant | 6 |
2.23 | Participant | 6 |
2.24 | Salaried Savings Plan | 6 |
2.25 | Salaried Retirement Plan | 6 |
2.26 | Specified Employee | 6 |
2.27 | Spouse | 6 |
Article III PARTICIPATION AND ELIGIBILITY | 7 | |
3.1 | Participation | 7 |
3.2 | Eligibility for Retirement Benefits | 7 |
3.3 | Eligibility for Pre-Retirement Surviving Spouse Benefits | 8 |
Article IV BENEFITS | 9 | |
4.1 | Current Benefit Formula | 9 |
4.2 | Prior Benefit Formula | 9 |
4.3 | Time and Form of Payment of Benefits | 11 |
4.4 | Pre-Retirement Surviving Spouse Benefit | 12 |
4.5 | Terms and Conditions | 12 |
4.6 | Freeze of Accruals | 12 |
Article V ADMINISTRATION | 13 | |
5.1 | Management Benefits Committee | 13 |
5.2 | Administrator | 13 |
5.3 | Compensation | 14 |
5.4 | Agent for Service of Process | 14 |
5.5 | Indemnification | 14 |
Article VI CLAIMS PROCEDURE | 15 | |
6.1 | Filing of Claim | 15 |
6.2 | Denial of Claim | 15 |
6.3 | Appeal | 16 |
6.4 | Review of Appeal | 16 |
6.5 | Decision on Appeal | 16 |
Article VII MISCELLANEOUS | 17 | |
7.1 | No Contract of Employment | 17 |
7.2 | Non-Assignability of Benefits | 17 |
7.3 | Withholding | 17 |
7.4 | Amendment and Termination | 17 |
7.5 | No Fiduciary Relationship Created | 17 |
7.6 | Unsecured General Creditor Status of Employee | 17 |
7.7 | Severability | 18 |
7.8 | Offset | 18 |
7.9 | Intent to Comply with IRC Section 409A | 18 |
7.10 | Governing Laws | 18 |
7.11 | Binding Effect | 18 |
7.12 | Number and Gender | 18 |
7.13 | Headings | 18 |
7.14 | Entire Agreement | 18 |
1.1 | Purpose of Plan. |
1.2 | “Top Hat” Pension Benefit Plan. |
1.3 | Funding. |
1.4 | Effective Date. |
2.1 | Actuarial Equivalent Value. |
(a) | In the case of a benefit payable pursuant to the Salaried Retirement Plan and, if applicable, the Albion Automotive Pension Plan, a benefit of equal value when computed on the basis of RP 2000 Unisex Mortality Table with white collar adjustments and projected improvements to 2020 using scale AA and interest rate assumption of 6.0% calculated using the date of May 1, 2018 for any Participant that |
(b) | In the case of a Cash Balance Benefit, the hypothetical value of the Participant’s Cash Balance Account under the Salaried Retirement Plan. Such hypothetical value to be calculated using the date of May 1, 2018 for any Participant that would, assuming a not for Cause termination on such date, qualify under the Eligibility Criteria in Section 3.2 of this Plan. For any Participant that would fail to qualify under such formula, such hypothetical value to be calculated as of the date the Participant would, assuming a not for Cause termination on such date, first qualify under the Eligibility Criteria. |
2.2 | Average Monthly Base Salary. |
(a) | For any month for which the Employee received Base Salary at less than his or her full monthly Base Salary rate, his or her full monthly Base Salary rate last received preceding such month shall be used for such month. |
(b) | For any month during which an Employee was on the hourly payroll and subsequent to which the Employee commenced service as a salaried Employee, his or her monthly Base Salary rate immediately following the commencement of such service as a salaried Employee shall be used for such month. |
2.3 | Average Monthly Incentive Compensation. |
2.4 | Average Total Direct Compensation. |
2.5 | Base Salary. |
2.6 | Board of Directors. |
2.7 | Cash Balance Benefit. |
2.8 | Cause. |
(a) | the willful and continued failure or refusal of the Employee to perform the duties reasonably required of him/her by the Corporation; |
(b) | the Employee’s conviction of, or plea of nolo contendere to, (i) any felony or (ii) another crime involving dishonesty or moral turpitude or which reflects negatively upon the Corporation or otherwise impairs or impedes its operations; |
(c) | the Employee’s engaging in any misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Corporation or any of its subsidiaries or affiliates; |
(d) | the Employee’s material breach of any applicable agreement with or policy of the Corporation or any of its subsidiaries or affiliates; or |
(e) | any other willful misconduct by the Employee which is injurious to the financial condition or business reputation of the Corporation or any of its subsidiaries or affiliates. |
2.9 | Code. |
2.10 | Compensation Committee. |
2.11 | Corporation. |
2.12 | Credited Service. |
2.13 | Disability. |
2.14 | Employee. |
(a) | General Definition. “Employee” shall mean a regular employee of the Corporation compensated by salary or by commission who is (i) working in the United States, or (ii) a citizen of or domiciled in the United States and who has been or may hereafter be hired in the United States by the Corporation and who is sent out of the United States by the Corporation to work in foreign operations, and whose services, if discontinued, would be discontinued by recalling said employee to the United States and terminating his or her services in the United States and (iii) a nonresident alien receiving income from the Corporation’s United States payroll. |
(b) | Temporary, Part-Time and Flexible Service Employees. The term “Employee” shall not include employees who are classified by the Corporation as (i) Temporary Employees, including per diem employees, (ii) Part-Time Employees, or (iii) Flexible Service Employees. |
(c) | Service with Controlled Group Members. An Employee’s service with non-domestic members of the Corporation’s controlled group (as defined in Code Section 414(b) and (c)) shall be counted for eligibility purposes but not for benefit accrual purposes. |
(d) | Leased Employees. The term “Employee” shall not include any Leased Employee (within the meaning of Code Section 414(n)) or any individual classified as a Leased Employee by the Corporation. If a Leased Employee later becomes an Employee, service as a Leased Employee shall be counted under this Plan for eligibility purposes. |
(e) | Union Employees. The term “Employee” shall not include employees represented by a labor organization who are covered by a collective bargaining agreement so long as retirement benefits are the subject of good-faith bargaining and so long as the collective bargaining agreement does not expressly provide for participation in this Plan. |
(f) | Directors. The term “Employee” shall not include members of the Board of Directors of American Axle & Manufacturing Holdings, Inc., or of any committee appointed by such board, who are not regular employees of the Corporation. |
(g) | Independent Contractors. The term “Employee” shall not include an independent contractor or any individual classified as an independent contractor by the Corporation regardless of any later classification or reclassification of any such individual as a common law employee of the Corporation. |
2.15 | ERISA. |
2.16 | Final Average Compensation. |
2.17 | Frozen Benefit. |
2.18 | Grandfathered Participant. |
2.19 | Health Care Program. |
2.20 | Joint and Survivor Annuity. |
2.21 | Management Benefits Committee. |
2.22 | Non-Grandfathered Participant. |
2.23 | Participant. |
2.24 | Salaried Savings Plan. |
2.25 | Salaried Retirement Plan. |
2.26 | Specified Employee. |
2.27 | Spouse. |
3.1 | Participation. |
3.2 | Eligibility for Retirement Benefits. |
(a) | Eligibility Criteria. To be eligible for a benefit under Section IV of this Plan, an Employee must: |
(1) | Prior to April 1, 2018, be defined as Unclassified, as such term is defined by the Corporation; |
(2) | Be an active employee of the Corporation or an affiliated entity on his or her date of death, retirement or commencement of his or her Disability; |
(3) | As of the date the employment relationship is terminated, (i) be credited with 10 or more years of Credited Service and have attained age 55 at the time of his or her retirement, death or commencement of his or her Disability, (ii) be credited with five or more years of Credited Service and have attained age 60 at the time of his or her retirement, death, or commencement of his or her Disability, or (iii) have attained age 65 at the time of his or her retirement, death, or commencement of his or her Disability; and |
(4) | Not have been terminated by the Corporation for Cause. |
(b) | Non-Grandfathered Participant. A Non-Grandfathered Participant shall, upon meeting the requirements set forth in Section 3.1(a), be eligible for a benefit determined pursuant to Section 4.1. |
(c) | Grandfathered Participant. A Grandfathered Participant who continued in the employ of the Corporation after December 31, 2011 shall, upon meeting the requirements of Section 3.1, be eligible for the greater of: |
(1) | his or her benefit determined pursuant to Section 4.1; |
(2) | his or her Frozen Benefit under the Basic Benefit formula determined pursuant to Section 4.2 (a); or |
(3) | if he or she shall have attained age 62 at the time of his or her retirement , death or commencement of his or her Disability, his or her Frozen Benefit under the Alternative Benefit formula determined pursuant to Section 4.2(c). |
3.3 | Eligibility for Pre-Retirement Surviving Spouse Benefits. |
4.1 | Current Benefit Formula. |
(a) | The lump sum Actuarial Equivalent Value of his or her benefits payable pursuant to the Salaried Retirement Plan, including the Cash Balance Benefit, and, if applicable, the Albion Automotive Pension Plan (determined for the Albion Plan as of the date benefits are to commence under this Plan, without further indexing in the future and after conversion to U.S. dollars), and |
(b) | The Participant’s AAM Retirement Contribution Account established pursuant to Section 3.2(b) of the Salaried Savings Plan, plus the Participant’s Account established to credit any employer contributions made under the Salaried Savings Plan which replaces or supplements the AAM Retirement Contributions. |
4.2 | Prior Benefit Formula. |
(a) | Amount of Basic Benefit. The Basic Benefit shall, subject to Section 4.2(b), be a monthly benefit equal to 2% of a Participant’s Average Monthly Base Salary (calculated as of December 31, 2011) multiplied by his or her years of Credited Service (calculated as of December 31, 2011), less the sum of: |
(1) | All monthly benefits payable to the eligible Employee under the Salaried Retirement Plan, including the Cash Balance Benefit, before reduction for any survivor option, plus |
(2) | 2% of the eligible Employee’s monthly age 65 primary Social Security benefit multiplied by his or her years of Credited Service. |
(i) | The monthly age 65 primary Social Security benefit will be determined and applied to the Basic Benefit formula at death or retirement, regardless of the Employee’s age at death or retirement and regardless of the Employee’s eligibility for Social Security benefits. |
(ii) | The monthly age 65 primary Social Security benefit will be determined at death or retirement using the maximum monthly Social Security benefit amount payable at age 65 in the year the Employee retires or dies. |
(b) | Rules Applicable to Basic Benefits. |
(1) | At age 62 and one month, for those retiring prior to age 62 with a Basic Benefit, the Basic Benefit will not be redetermined when Temporary Benefits or supplements under the Salaried Retirement Plan are reduced or eliminated. |
(2) | The “Special” benefit (Part B Medicare reimbursement) paid under the Health Care Plan will not be taken into account in determining any monthly benefit amount payable under Section 4.2(a). |
(3) | Post-retirement increases under the Salaried Retirement Plan will not reduce any monthly benefit amount payable under this Section 4.2(a). |
(4) | The award or denial of a Social Security disability insurance benefit that affects the monthly amount of benefits payable under the Salaried Retirement Plan will be taken into account in determining any monthly benefit amount payable under Section 4.2(a). However, any subsequent modification of a Social Security disability insurance benefit will not be taken into account in determining the monthly benefit amount payable under Section 4.2(a). |
(c) | Amount of Alternative Benefit. The Alternative Benefit shall, subject to Section 4.2(d), be a monthly benefit equal to 1.5% of a Participant’s Average Total Direct Compensation (calculated as of December 31, 2011), multiplied by his or her years of Credited Service (determined as of December 31, 2011), less the sum of: |
(1) | All monthly benefits determined under the terms of the Salaried Retirement Plan, including the Cash Balance Benefit, before reduction for any survivor option, plus |
(2) | 100% of the maximum monthly age 65 primary Social Security benefit. |
(i) | Differing time periods over the last 10 years of employment with the Corporation may be used for the blended calculation of Average Monthly Base Salary and Average Monthly Incentive Compensation, both calculated as of December 31, 2011. |
(ii) | The monthly age 65 primary Social Security benefit is the monthly age 65 primary Social Security benefit payable in the year of the Employee’s death or retirement, regardless of the Employee’s age at such time and regardless of the Employee’s eligibility for Social Security benefits. |
(iii) | The monthly age 65 primary Social Security benefit will not be redetermined for any subsequent Social Security increase. |
(d) | Rules Applicable to Alternative Benefits. |
(1) | Post-retirement increases under the Salaried Retirement Plan will not reduce any monthly benefit amount payable under Section 4.2(c). |
(2) | The “Special” benefit (Part B Medicare reimbursement) payable under the Health Care Program will not be taken into account in determining any monthly benefit amount payable under Section 4.2(c). |
4.3 | Time and Form of Payment of Benefits. |
(a) | Lump Sum Payment. Payments to (i) Non-Grandfathered Participants pursuant to Section 4.1, and (ii) Grandfathered Participants entitled to benefits pursuant to Section 4.1, will be paid in a lump sum payment. The lump sum payment shall be made six months after the date of the Participant’s separation from service. If the Participant dies prior to the receipt of his or her benefits pursuant to Section 4.1, the Spouse will receive a death benefit equal to the amount payable to the Participant. The death benefit shall be payable in one lump sum as soon as practicable after the death of the Participant. If a Participant is not survived by his Spouse, his or her benefits will be forfeited. No interest shall accrue on the lump sum payment for the six-month period from the separation of service date to the payment distribution date. |
(b) | Annuity Payments to Grandfathered Participants. A Grandfathered Participant entitled to benefits pursuant to Section 4.2 shall have his or her benefits paid in an annuity form as follows: |
(1) | Commencement of Benefits. Benefit payments shall commence as soon as practicable after an Employee separates from service with the Corporation (or a related entity); provided, however, that the portion of a Specified Employee’s benefit that was not vested within the meaning of Code Section 409A on December 31, 2004, may not be paid to the Employee before the date which is six months after the date of separation from service. A Specified Employee’s annuity for the post-December 31, 2004 benefits shall commence at the beginning of the seventh month following his or her separation from service date and shall include applicable payments for the previous six months. Any portion of the benefit payments which are deferred for six months shall not be adjusted for interest. |
(2) | Single Life Annuity. Except as provided in Section 4.3(b)(3), or Section 4.3(c), an Employee entitled to a Basic Benefit or an Alternative Benefit will receive his or her benefit in the form of a single life annuity for the Employee’s lifetime. Notwithstanding the foregoing, benefits are paid in accordance with the Corporation’s payroll cycle for salaried employees and all payments are subject to the restrictions and risk of forfeiture under Section 4.5(a) and (b) and Section 7.6. |
(3) | Automatic Survivor Benefit. |
(A) | Basic Benefit. An Employee entitled to a Basic Benefit or Alternative Benefit who has a Spouse who is otherwise eligible for survivor benefits under the Salaried Retirement Plan on the commencement date for benefits under this Plan, will receive his or her benefit determined in the form of a Joint and Survivor Annuity. |
(B) | Alternative Benefit. An Employee who (i) has attained age 62 or such earlier age specified in a special separation program, (ii) has been credited with 10 or more years of Credited Service, and (iii) on the date Alternative Benefits begin, has a Spouse who is otherwise eligible for survivor benefits under the Salaried Retirement Plan on the commencement date for benefits under this Plan, will receive his or her benefit in the form of a Joint and Survivor Annuity. |
(C) | Loss of Spouse Due to Death or Divorce. If an Employee who is receiving a Joint and Survivor Annuity loses his or her Spouse due to death or divorce, the Employee’s Basic or Alternative Benefit, as applicable, will be recalculated on a prospective basis in the form of a single life annuity under Section 4.3(b)(2) assuming the Corporation is notified of such death or divorce within 90 days of such event. If the Employee subsequently remarries, no Joint and Survivor Annuity is permitted for the Employee and his or her new spouse. |
(c) | Exception for Small Benefits. Notwithstanding anything in this Section 4.3 to the contrary, if, upon separation from service or at any subsequent date during the annuity payment period, the value of |
4.4 | Pre-Retirement Surviving Spouse Benefit. |
(a) | Current Benefit Formula. The pre-retirement surviving spouse benefit payable pursuant to Section 4.1 to an eligible Spouse shall be equal to the Participant’s benefit calculated pursuant to Section 4.1 and shall be payable in one lump sum payment as soon as administratively practicable following the Participant’s death. |
(b) | Prior Benefit Formula. The pre-retirement surviving spouse benefit payable to the eligible spouse of a Grandfathered Participant pursuant to Section 4.2(a) or (c) shall equal the amount that the Spouse would have been entitled to receive under the Joint and Survivor Annuity if the Employee had retired with an immediate Joint and Survivor Annuity on the day before his death. In the event that an Employee is eligible for both a Basic Benefit and an Alternative Benefit on his date of death, the Pre-Retirement Surviving Spouse Benefit will equal the Pre-Retirement Surviving Spouse Benefit based on the greater of the Employee’s Basic Benefit or the Employee’s Alternative Benefit. |
4.5 | Terms and Conditions. |
(a) | Benefits Not Guaranteed. Benefits payable under Article IV are not guaranteed and may be reduced or eliminated at any time, and from time to time, by the Compensation Committee, the Management Benefits Committee or the Board of Directors. No prior notice is required. |
(b) | Forfeiture Upon Termination For Cause. Notwithstanding any provision in the Plan to the contrary, an Employee whose employment is terminated for Cause shall forfeit all rights to benefits under the Plan. |
4.6 | Freeze of Accruals. |
5.1 | Management Benefits Committee. |
(a) | Appointment and Removal of Management Benefits Committee. The Management Benefits Committee shall consist of three or more individuals appointed by, and serving at the discretion of, the Compensation Committee. A member of the Management Benefits Committee may (i) resign upon 30 days written notice to the Compensation Committee, or (ii) be removed from the Management Benefits Committee at any time at the discretion of the Compensation Committee. |
(b) | Decisions by Management Benefits Committee. The Management Benefits Committee shall act by majority vote either at a meeting of the Management Benefits Committee or by written consent. Meetings may be attended telephonically. |
(c) | Authority. The Management Benefits Committee shall have the following duties and authority under the Plan. |
(1) | Compliance. The Management Benefits Committee shall monitor the performance of the Plan to ensure that the Plan is administered in accordance with its terms and in compliance with applicable law or regulation. |
(2) | Discretionary Authority. The Management Benefits Committee shall have full and exclusive discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine an Employee’s or other individual’s eligibility to receive a benefit from the Plan and the amount of that benefit. The Management Benefits Committee shall determine all Claims appeals as set forth in Section 6.5 of this Plan and shall have the authority to determine all questions of fact relating to such an appeal. Any determination by the Management Benefits Committee pursuant to this Section 5.1(c)(2) or the Claims Procedure shall be binding and conclusive on all parties. |
(3) | Plan Amendments. The Management Benefits Committee shall have the authority to make Plan amendments as long as such amendments do not have a significant cost impact to the Corporation. |
(4) | Adoption of Plan. The Management Benefits Committee may provide for the adoption of the Plan by an affiliated employer pursuant to such terms and conditions as the Management Benefits Committee, in its discretion, may determine. The Management Benefits Committee shall have the right to remove an affiliated employer as a Plan sponsor if, in its discretion, it deems such removal to be appropriate. |
5.2 | Administrator. |
(a) | Procedures and Forms. Establish such administrative procedures and prepare, or cause to be prepared, such forms, as may be necessary or desirable for the proper administration of the Plan; |
(b) | Advisors. Retain the services of such consultants and advisors as may be appropriate to the administration of the Plan; |
(c) | Claims. Have the discretionary authority to determine all claims filed pursuant to Section 6.2 of this Plan and shall have the authority to determine issues of fact relating to such claim; |
(d) | Payment of Benefits. Direct, or establish procedures for, the payment of benefits from the Plan; and |
(e) | Plan Records. Maintain, or cause to be maintained, all documents and records necessary or appropriate to the maintenance of the Plan. |
5.3 | Compensation. |
5.4 | Agent for Service of Process. |
5.5 | Indemnification. |
6.1 | Filing of Claim. |
6.2 | Denial of Claim. |
(a) | the specific reason or reasons for denial; |
(b) | specific reference to pertinent Plan provisions on which the denial is based; |
(c) | a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; |
(d) | an explanation of the Plan’s claim review procedures and the time limits applicable to such procedures including a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claimant’s claim for benefits; |
(e) | a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review; and, if applicable in the case of a disability benefit; |
(f) | the specific rule, guideline, protocol or similar criterion (if any) that was relied on in making the benefit determination, or a statement that the rule, guideline, protocol or other similar criterion was relied on and will be provided to the claimant free of charge upon request; and |
(g) | if a disability claim, the identity of the medical or vocational experts whose advice was obtained by the Plan Administrator in the process of deciding the claim, regardless of whether the advice was relied upon. |
6.3 | Appeal. |
6.4 | Review of Appeal. |
6.5 | Decision on Appeal. |
(a) | the specific reason or reasons for the adverse determination; |
(b) | specific references to pertinent Plan provisions on which the denial is based; |
(c) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant to the claimant’s claim for benefits; |
(d) | for disability benefits, if an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion or a statement that such rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination and that a copy will be provided free of charge to the claimant upon request; and |
(e) | a statement of the claimant’s right to bring an action under ERISA Section 502(a) and, for disability claims, the following statement: “You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency. |
7.1 | No Contract of Employment. |
7.2 | Non-Assignability of Benefits. |
7.3 | Withholding. |
7.4 | Amendment and Termination. |
(a) | Board of Directors. The Board of Directors shall have the right to amend, in whole or in part, any or all of the provisions of the Plan or to terminate the Plan at any time and without the consent of any other party or person. |
(b) | Management Benefits Committee. The Management Benefits Committee shall have the right, at any time, without the consent of any other party or person, to modify or amend any or all of the provisions of the Plan, but only to the extent provided in Section 5.1(c). |
(c) | Limitations. Except as provided in Section 4.5, no amendment or termination of this Plan shall impair the rights of an Employee to the extent earned as of the date of amendment or termination. For purposes of this Section 7.4, a Participant’s right to Plan benefits shall not be considered earned until such date as the Employee terminates employment and has begun receiving benefits under the Plan. |
7.5 | No Fiduciary Relationship Created. |
7.6 | Unsecured General Creditor Status of Employee. |
(a) | The payments to a Participant, his or her Beneficiary or any other distributee hereunder shall be made from assets which shall continue, for all purposes, to be a part of the general, unrestricted assets of the Corporation; no person shall have nor acquire any interest in any such assets by virtue of the provisions of this Plan. |
(b) | The Corporation’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. To the extent that the Employee or other distributee acquires a right to receive payments from the Corporation under the provisions hereof, such right shall be no greater than the right of any |
7.7 | Severability. |
7.8 | Offset. |
7.9 | Intent to Comply with IRC Section 409A. |
7.10 | Governing Laws. |
7.11 | Binding Effect. |
7.12 | Number and Gender. |
7.13 | Headings. |
7.14 | Entire Agreement. |
Specified Participant | Effective Date | Credited Service |
Norman Willemse | December 31, 2016 | 15.667 years |
1.1. | Purpose. The purpose of this Executive Retirement Savings Plan (the “Plan”) is to provide a select group of highly compensated employees of American Axle & Manufacturing Holdings, Inc. (the “Company,” and together with its subsidiaries, the “Company Group”) and its selected subsidiaries the opportunity to defer the receipt of income that would otherwise be payable to them. It is intended that the Plan, by providing these eligible persons with these benefits and the deferral of income tax recognition of these benefits, will assist in retaining and attracting individuals of exceptional ability. |
1.2. | Effective Date. It is the intent that all of the amounts contributed under the Plan and benefits provided hereunder will be subject to the terms of Section 409A of the Code, and the Plan shall be effective as of January 1, 2019. |
1.3. | Plan Type. For purposes of Section 409A of the Code, the Plan shall be considered a nonelective account balance plan as defined in Treas. Reg. §1.409A-1(c)(2)(i)(B), or as otherwise provided by the Code. |
2.1. | 401(k) Plan. “401(k) Plan” means the Company’s 401(k) Savings Plan. |
2.2. | Account. “Account” means the account or accounts maintained on the books of the Company used solely to calculate the amount payable to each Participant under the Plan and shall not constitute a separate fund of assets. An Account shall be deemed to exist from the time amounts are first credited to an Account until such time that the entire Account balance has been distributed in accordance with the Plan. |
2.3. | Administrator. “Administrator” means the Management Benefits Committee acting through the Company’s Human Resources Department in the administration of the Plan pursuant to Section 7.2. |
2.4. | Beneficiary. “Beneficiary” means the person, persons or entity as designated by the Participant, or who is otherwise entitled under Article VI, to receive any Plan benefits payable after the Participant’s death. |
2.5. | Board. “Board” means the Board of Directors of the Company, or any successor thereto. |
2.6. | Cause. “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following: (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group; (b) the Participant’s conviction of, or plea of nolo contendere to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company or its Subsidiaries or affiliates or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group. |
2.7. | Code. “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code. Any references to a specific provision shall be deemed to include references to any successor Code provision. |
2.8. | Company. “Company” means American Axle & Manufacturing Holdings, Inc. and any successor. |
2.9. | Compensation Committee. “Compensation Committee” means the Compensation Committee of the Board. |
2.10. | Determination Date. “Determination Date” means any business day on which the New York Stock Exchange is open for trading. |
2.11. | Disability. “Disability” shall mean either of the following: (a) inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (b) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company Group. |
2.12. | Distribution Election. “Distribution Election” means the form prescribed by the Management Benefits Committee and completed by the Participant, indicating the chosen form of payment for benefits payable from the Participant’s Account, as elected by the Participant. |
2.13. | Eligible Person. “Eligible Person” means (a) US-based executives of the Company Group having the title of Vice President and above and (b) any other US-based employee of the Company Group designated by the Compensation Committee consistent with Section 10.1. |
2.14. | ERSP Contribution. “ERSP Contribution” means the Company contribution credited to a Participant’s Account under Section 4.4. |
2.15. | Executive Officer. “Executive Officer” means any executive whose compensation must be reviewed and approved by the Compensation Committee. |
2.16. | Interest. “Interest” means the amount credited to or debited against a Participant’s Account on a Determination Date, which shall be based on the Valuation Funds chosen by the Participant pursuant to Section 4.3, in order to reflect the increase or decrease in value of the Account in accordance with the provisions of the Plan. |
2.17. | Management Benefits Committee. “Management Benefits Committee” means the committee appointed by the Compensation Committee to govern and monitor the administration of the Plan pursuant to Section 7.1. |
2.18. | Management Investment Committee. “Management Investment Committee” means the committee appointed by the Compensation Committee to govern and monitor all Plan assets and investments. |
2.19. | Participant. “Participant” means (i) any Eligible Person identified in Section 2.13(a) and (ii) any Eligible Person designated by the Compensation Committee in accordance with Section 2.13(b). |
2.20. | Plan. “Plan” means this Executive Retirement Savings Plan, as amended from time to time. |
2.21. | Plan Year. “Plan Year” shall mean a calendar year (January 1-December 31). |
2.22. | Retirement. “Retirement” means a Participant’s voluntary resignation at any time (a) after attaining age 65, (b) after attaining age 55 but prior to age 65 with ten or more years of continuous service with the Company Group, or (c) after attaining age 60 but prior to age 65 with five or more years of continuous service with the Company Group. |
2.23. | Termination. “Termination”, “terminates employment” or any other similar such phrase means the Participant’s “separation from service” with the Company Group, for any reason, within the meaning of Section 409A of the Code. |
2.24. | Unforeseeable Emergency. “Unforeseeable Emergency” means an event that results in a severe financial hardship to the Participant resulting from (a) an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary or a dependent of the Participant, (b) loss of the Participant’s property due to casualty or (c) other similar extraordinary and unforeseeable circumstances as a result of events beyond the control of the Participant, in each case in compliance with Section 409A of the Code. |
2.25. | Valuation Funds. “Valuation Funds” means one or more of the independently established funds or indices that are approved by the Management Investment Committee. These Valuation Funds are used solely to calculate the Interest that is credited to each Participant’s Account in accordance with Article IV, and the term “Valuation Funds” does not represent, nor should it be interpreted to convey, any beneficial interest on the part of the Participant in any asset or other property of the Company or any member of the Company Group. The determination of the increase or decrease in the performance of each Valuation Fund shall be made by the Management Investment Committee in its reasonable discretion. The Management Investment Committee shall select the various Valuation Funds available to the Participants and may add or remove any Valuation Funds on a prospective basis at any time in its sole discretion. |
3.1. | Eligibility and Participation. |
a) | Eligibility. All US-based executives of the Company Group having the title of Vice President and above shall be Eligible Persons. With respect to other employees of the Company, the Compensation Committee shall designate those employees of the Company Group who are Eligible Persons. |
b) | Participation. An individual’s participation in the Plan shall be effective upon the date such individual becomes an Eligible Person. |
3.2. | Participant Elections. No more than 30 days after a Participant is first designated as a Participant as set forth in Section 3.1(b) (or if such Participant was prior to such designation participating in another nonelective account balance plan of the Company Group, the first date on which such Participant may make such election in compliance with Section 409A of the Code), the Participant may submit the following forms to the Administrator: |
a) | Distribution Election. The Participant may submit a Distribution Election, on which the Participant shall elect a form of payment to be made with respect to the Participant’s Account. The Participant may submit a new Distribution Election at any time prior to the end of the 30-day period referenced in this Section 3.2, and the Distribution Election most recently filed at the end of such 30-day period shall be irrevocable. In the event that a Participant does not timely submit a properly completed Distribution Election, the form of payment deemed to be elected will be a lump sum. |
b) | Allocation Election. The Participant may submit an allocation form, which shall provide instructions on how the ERSP Contributions credited to the Participant’s Account shall be allocated among the various available Valuation Funds. In the event that a Participant does not submit a timely and properly completed allocation form, the Administrator shall allocate the ERSP Contributions to the default Valuation Fund designated by the Management Benefits Committee until a properly completed allocation form is submitted. |
3.3. | Subsequent Distribution Election. Except to the extent otherwise required or permitted under Section 409A of the Code, the Participant shall not be permitted to change or revoke the form of payment with respect to his or her Account on or after the date on which such election would otherwise be irrevocable under Section 3.2(a) unless all of the following requirements are satisfied with respect to such Participant’s subsequent election to change the form of payment: (i) such election shall not take effect until 12 months after the date on which the election is made; (ii) such election shall not apply to any scheduled distribution date that occurs 12 months or less after the date on which the election is made; and (iii) except in the case of a payment due to death, as described in Section 5.2, or Disability, as described in Section 5.3, the |
4.1. | Accounts. The ERSP Contributions and Interest thereon shall be credited to the Participant’s Account as otherwise provided in this Article IV. The Participant’s Account shall be used solely to calculate the amount payable to the Participant under the Plan and shall not constitute a separate fund of assets. |
4.2. | Timing of Credits; Withholding. Any ERSP Contributions shall be credited to a Participant’s Account as of a time and in a manner provided by the Administrator, but typically as soon as practicable in the first quarter of the calendar year following the Plan Year to which such ERSP Contribution relates. Any withholding of taxes or other amounts with respect to the ERSP Contribution credited to a Participant’s Account that is required by local, state or federal law shall reduce the amount credited to the Participant’s Account in any manner specified by the Management Benefits Committee. Any Participant who suffers a Termination and is vested in his or her Account in accordance with Section 4.6 at the time of Termination shall receive any final contribution within 30 days following such Participant’s Termination date. |
4.3. | Valuation Funds. A Participant shall be permitted to designate one or more Valuation Funds for the sole purpose of determining the amount of Interest to be credited or debited to the Participant’s Account. Such election shall designate how each ERSP Contribution shall be allocated among the available Valuation Fund(s). A Participant shall also be permitted to reallocate the balance in the Participant’s Account among the available Valuation Funds. The manner in which such elections shall be made and the frequency with which such elections may be changed and the manner in which such elections shall become effective shall be determined in accordance with the procedures adopted by the Management Investment Committee from time to time. |
4.4. | ERSP Contributions. A Participant’s Account shall be credited with an ERSP Contribution in accordance with this Section 4.4. |
a) | Contribution Amount. The amount of the ERSP Contribution for any Participant shall be stated as (i) a flat dollar amount, (ii) a percentage of the Participant’s base salary and annual incentive compensation paid in the applicable Plan Year less the maximum eligible Company matching and non-elective contributions to the 401(k) Plan in the Plan Year (irrespective of whether the Participant maximized the Company contributions or not) or (iii) a formula as determined by the Compensation Committee in its sole discretion. |
b) | Special Contributions. By way of further clarity, notwithstanding the provisions of Section 4.4(a), the Compensation Committee may make, in its complete and sole discretion, a special contribution on behalf of a Participant to such Participant’s Account with respect to a particular Plan Year in any amount as determined by the Compensation Committee. Such special contribution may be in addition to or in lieu of any other contribution with respect to the particular Plan Year, as determined by the Compensation Committee in its complete and sole discretion. |
c) | No Guarantee of Future Contributions. The designation of any Participant as being eligible to receive an ERSP Contribution in any year shall not be a guarantee of future contributions, and the crediting of any particular level of ERSP Contribution in any year shall not be a guarantee of that level in future years. |
4.5. | Determination of Accounts. Each Participant’s Account on a Determination Date shall consist of the balance of the Account as of the immediately preceding Determination Date, adjusted as follows: |
a) | ERSP Contributions. Each Account shall be increased by any ERSP Contribution credited since such prior Determination Date as set forth in Section 4.4. |
b) | Distributions. Each Account shall be reduced by the amount of each benefit payment made from that Account since the prior Determination Date. Distributions shall be deemed to have been made proportionally from each of the Valuation Funds maintained within such Account based on the proportion that such Valuation Fund bears to the sum of all Valuation Funds maintained within the Account for that Participant as of the Determination Date immediately preceding the date of payment. |
c) | Interest. Each Account shall be increased or decreased by the Interest credited or debited to such Account as though the balance of that Account was invested in the applicable Valuation Funds chosen by the Participant. |
4.6. | Vesting of Accounts. Unless otherwise specified by the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) in writing, or except as set forth in Section 4.7, each Participant shall be 100% vested in the Participant’s Account, including any Interest thereon, upon the earliest of: (a) death; (b) Disability; or (c) becoming eligible for Retirement. |
4.7. | Forfeiture of Accounts. Any Participant who Terminates employment before becoming fully vested in the Participant’s Account shall immediately forfeit the unvested balance of his or her Account. Any Participant whose employment is terminated for Cause, or whose employment is terminated for any reason at a time when such termination could have been for Cause, shall immediately forfeit the balance of his or her Account, including any vested amounts. In addition, if a Participant’s employment is not terminated for Cause, but the Management Benefits Committee (with respect to non-Executive Officer Participants) or the Compensation Committee (with respect to Executive Officer Participants) later determines that such termination could have been for Cause if all the facts had been known at the time of such termination, then any unpaid portion of the Participant’s Account shall be immediately forfeited as of the date of such Committee’s determination. |
4.8. | Statement of Accounts. To the extent that the Company does not arrange for a Participant’s Account balance to be accessible online by the Participant, the Administrator shall provide to each Participant a statement showing the balance in the Participant’s Account no less frequently than annually. |
5.1. | A Participant’s Account. The Participant’s vested Account balance shall be distributable to the Participant upon the Participant’s Termination. |
a) | Form of Payment. The form of benefit payment shall be that form selected by the Participant in his or her Distribution Election made (or deemed made) pursuant to Section 3.2(a) (as may be amended in accordance with a subsequent Distribution Election under Section 3.3), and as permitted pursuant to Section 5.5. |
b) | Timing of Payment. Benefits payable from a Participant’s Account shall be paid (if a lump sum) or commence (if installments) on the first Determination Date that occurs on or immediately following six months following the Participant’s Termination date. If installments, each subsequent payment shall occur in January of the next calendar year following the initial benefit payment. |
5.2. | Death Benefit. Upon the death of a Participant prior to the commencement of distributions from the Participant’s Account, the Company shall pay to the Participant’s Beneficiary an amount equal to the Participant’s vested Account balance in the form of a lump sum payment as soon as administratively practicable (but in no event more than 90 days) after the Participant’s death. In the event of the death of the Participant after the commencement of distributions from the Participant’s Account, the remaining unpaid balance of the Participant’s Account shall be paid to the Participant’s Beneficiary in the form of a lump sum as soon as administratively possible (but in no event more than 90 days) after the Participant’s death. If the Participant’s Beneficiary, estate or legal representative fails to notify the Management Benefits Committee of the death of the Participant in the manner specified in Section 10.9, such that the Company is unable to make timely payment hereunder, then the Company shall not be treated as in breach of the Plan and shall not be liable to the Beneficiary, estate or legal representative for any losses, damages, or other claims resulting from such late payment. |
5.3. | Disability Distributions. Upon a finding by the Management Benefits Committee that a Participant has suffered a Disability, the Company shall make a full distribution of the Participant’s Account. The payment of such distribution shall be made in the form of a lump sum in an amount equal to the Participant’s vested Account balance as soon as administratively practical (but in no event more than 90 days) after the date of such Disability. |
5.4. | Permitted Acceleration of Payments. To the extent permitted by Section 409A of the Code, the Management Benefits Committee may, in its sole discretion, accelerate the time or schedule of a distribution under the Plan, such as accelerated distributions to address the payment of employment taxes or early income inclusion that may occur for a Participant’s Account balance. |
5.5. | Form of Payment. Unless otherwise specified in this Article V, the benefits payable from a Participant’s Account shall be paid in the form of benefit as provided below, and specified by the Participant in the Distribution Election or as otherwise set forth in Section 3.2(a). The permitted forms of benefit payments are: |
a) | A lump sum amount that is equal to the Participant’s vested Account balance; and |
b) | Annual installments for a period of up to 10 years where the annual payment shall be equal to the Participant’s vested Account balance immediately prior to the payment, multiplied by a fraction, the numerator of which is one and the denominator of which commences at the number of annual payments initially chosen and is reduced by one in each succeeding year. Interest on the unpaid balance shall be based on the most recent allocation among the available Valuation Funds chosen by the Participant, made in accordance with Section 4.3. |
5.6. | Small Account. If the Participant’s vested Account balance as of the time the payments are to commence is less than $50,000, then such Account shall be paid in a lump sum, notwithstanding any election by the Participant to the contrary. |
5.7. | Unforeseeable Emergency Distribution. The Management Benefits Committee may at any time, upon written request of a Participant, cause to be paid to such Participant, an amount equal to all or any part of the Participant’s vested Account balance if the Management Benefits Committee determines, based on such |
5.8. | Withholding; Payroll Taxes. The Company shall withhold from any payment made pursuant to the Plan any taxes required to be withheld from such payments under local, state or federal law. |
5.9. | Payments in Connection with a Domestic Relations Order. Notwithstanding anything herein to the contrary, the Company may make distributions to someone other than the Participant if such payment is necessary to comply with a domestic relations order, as defined in Section 414(p)(1)(B) of the Code, involving the Participant. |
5.10. | Payment to Guardian. If a Plan benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of the property, then the Management Benefits Committee may direct payment to the guardian, legal representative or person having the care and custody of such minor, incompetent or person. The Management Benefits Committee may require proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to distribution. Such distribution shall completely discharge the Management Benefits Committee and the Company from all liability with respect to such benefit. |
5.11. | Effect of Payment. The full payment of the applicable benefit under this Article V shall completely discharge all obligations on the part of the Company to the Participant (and the Participant’s Beneficiary) with respect to the operation of the Plan, and the Participant’s (and the Participant’s Beneficiary’s) rights under the Plan shall terminate. |
5.12. | Amount of Payment. Notwithstanding anything herein to the contrary, the amount payable from a Participant’s vested Account balance may be determined and valued within a period of up to 10 business days preceding the date of actual payment. |
6.1. | Beneficiary Designation. Each Participant shall have the right, at any time, to designate one or more persons or entity as a Beneficiary (both primary as well as secondary) to whom benefits under the Plan shall be paid in the event of the Participant’s death prior to complete distribution of the Participant’s vested Account balance. Each Beneficiary designation shall be in the form prescribed by the Administrator, including through an online designation system, and shall be effective only when filed with the Administrator during the Participant’s lifetime. |
6.2. | Changing Beneficiary. Except in instances when the listed Beneficiary is the spouse of the Participant, a Participant may change the Beneficiary designation without the consent of the previously named Beneficiary by filing a new Beneficiary designation with the Administrator during the Participant’s lifetime. If the listed Beneficiary is the spouse of the Participant, the Participant shall obtain such Beneficiary’s consent by the execution of a spousal consent form provided by the Company. |
6.3. | No Beneficiary Designation. If any Participant fails to designate a Beneficiary in the manner provided above, if the designation is void, or if the Beneficiary designated by a deceased Participant dies before the Participant or before complete distribution of the Participant’s benefits, and the Beneficiary designation form does not specify to whom payments should be made in such event, then the Participant’s Beneficiary shall be the Participant’s estate. |
6.4. | Effect of Payment. Payment to the Beneficiary shall completely discharge the Company’s obligations under the Plan. |
7.1. | Management Benefits Committee. The Compensation Committee shall appoint a Management Benefits Committee for the Plan. |
a) | Appointment and Removal of Management Benefits Committee. The Management Benefits Committee shall consist of three or more individuals appointed by, and serving at the discretion of, the Compensation Committee. A member of the Management Benefits Committee may (i) resign upon 30 days’ written notice to the Compensation Committee, or (ii) be removed from the Management Benefits Committee at any time at the discretion of the Compensation Committee. |
b) | Decisions by Management Benefits Committee. The Management Benefits Committee shall act by majority vote either at a meeting of the Management Benefits Committee or by written consent. Meetings may be attended telephonically. |
c) | Authority. The Management Benefits Committee shall: (i) monitor the performance of the Plan to ensure that the Plan is administered in accordance with its terms and in compliance with applicable law or regulation; (ii) have full and exclusive discretionary authority to determine all questions arising in the administration, application and interpretation of the Plan including the authority to correct any defect or reconcile any inconsistency or ambiguity in the Plan and the authority to determine a Participant’s eligibility to receive a benefit from the Plan and the amount of that benefit; (iii) determine all Claims appeals as set forth in Section 8.1 of the Plan and shall have the authority to determine all questions of fact relating to such an appeal, and any determination by the Management Benefits Committee pursuant to this Section 7.1(c) or Section 8.1 shall be binding and conclusive on all parties; and (iv) have the authority to make Plan amendments as long as such amendments do not have a significant cost impact to the Company. The Management Benefits Committee may also provide for the adoption of the Plan by an affiliated employer pursuant to such terms and conditions as the Management Benefits Committee, in its discretion, may determine. The Management Benefits Committee shall have the right to remove an affiliated employer as a Plan sponsor if, in its discretion, it deems such removal to be appropriate. |
d) | Liability. No member of the Management Benefits Committee or any other committee to which Plan administrative authority has been delegated, shall be personally liable by reason of any action taken by him or her in good faith or on his or her behalf as the Management Benefits Committee, nor for any mistake in judgment made in good faith. |
7.2. | Administrator. The Company shall be the Plan Administrator. The Administrator shall act on its behalf and perform the duties of the Plan Administrator as set forth herein. The Administrator shall administer the Plan in accordance with all applicable laws and regulations and, except as otherwise expressly provided to the contrary herein, shall have all powers and discretionary authority to carry out that obligation. Specifically, but not by way of limitation, the Administrator shall: |
a) | Procedures and Forms. Establish such administrative procedures and prepare, or cause to be prepared, such forms, as may be necessary or desirable for the proper administration of the Plan; |
b) | Advisors. Retain the services of such consultants and advisors as may be appropriate to the administration of the Plan; |
c) | Payment of Benefits. Direct, or establish procedures for, the payment of benefits from the Plan; and |
d) | Plan Records. Maintain, or cause to be maintained, all documents and records necessary or appropriate to the maintenance of the Plan. |
7.3. | Binding Effect of Decisions. The decision or action of any member of the Management Benefits Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan. |
7.4. | Indemnity of Members of the Management Benefits Committee. The Company shall indemnify and hold harmless the members of the Management Benefits Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to the Plan on account of such member’s service for the Management Benefits Committee, except in the case of gross negligence or willful misconduct. |
8.1. | Claim. Any person or entity claiming a benefit, or requesting an interpretation, ruling, or information under the Plan, shall present the request in writing to the Management Benefits Committee within one year following the date that such person or entity knew or, exercising reasonable care, should have known of such claim in accordance with Company policy. All decisions on review shall be final and bind all parties concerned. |
9.1. | Amendment. The Board or its appointed delegates may at any time amend the Plan by written instrument, notice of which is given to all the Participants and to each Beneficiary receiving installment payments who are affected by such amendment, except that no amendment shall reduce the amount vested or accrued in any Participant’s Account as of the date the amendment is adopted. In addition, any amendment which adds a distribution event to the Plan shall not be affective with respect to any Participant’s Account that is already established as of the time of such amendment. Notwithstanding anything in the Plan to the contrary, the Board or its appointed delegates shall have the unilateral right to amend the Plan to comply with Section 409A of the Code. |
9.2. | Company’s Right to Terminate. The Board may, in its sole discretion, terminate the entire Plan and require distribution of all benefits due under the Plan or portion thereof, provided that: |
a) | The termination of the Plan does not occur proximate to a downturn in the financial health, as determined by the Management Benefits Committee, of the Company and all entities considered to be part of the same controlled group under Treas. Reg. §1.409A-1(g) (the “AAM Controlled Group”); |
b) | The AAM Controlled Group also terminates all other plans or arrangements which are considered to be of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), or as otherwise provided by the Code; |
c) | No payments made in connection with the termination of the Plan occur earlier than 12 months following the Plan termination date other than payments the Plan would have made irrespective of Plan termination; |
d) | All payments made in connection with the termination of the Plan are completed within 24 months following the Plan termination date; |
e) | The AAM Controlled Group does not establish a new plan of a similar type as defined in Treas. Reg. §1.409A-1(c)(2)(i), within three years following the Plan termination date; and |
f) | The AAM Controlled Group meets any other requirements deemed necessary to comply with provisions of the Code and applicable regulations which permit the acceleration of the time and form of payment made in connection with plan terminations and liquidations. |
10.1. | Unfunded Plan. The Plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. |
10.2. | Unsecured General Creditor. The Plan constitutes an unsecured promise by the Company to pay benefits in the future. Notwithstanding any other provision of the Plan, all Participants and each Participant’s Beneficiary shall be unsecured general creditors, with no secured or preferential rights to any assets of the Company or any other party for payment of benefits under the Plan. The Plan is unfunded for Federal tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. Any property held by the Company for the purpose of generating the cash flow for benefit payments shall remain its general, unpledged and unrestricted assets. The Company’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in the future. No other member of the Company Group shall have any obligations or liabilities under the Plan. Any obligations on the Plan are solely those of the Company. |
10.3. | Trust Fund. The Company shall be responsible for the payment of all benefits provided under the Plan. At its discretion, the Company may establish one or more trusts, with such trustees as the Board may approve, for the purpose of assisting in the payment of such benefits. The assets of any such trust shall be held for payment of all the Company’s general creditors in the event of insolvency. To the extent any benefits provided under the Plan are paid from any such trust, the Company shall have no further obligation to pay them. If not paid from the trust, such benefits shall remain the obligation of the Company. |
10.4. | Compliance with Section 409A of the Code. It is intended that the Plan comply with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which such amounts would otherwise actually be paid or made available to the Participants or Beneficiaries. The Plan shall be construed, administered, and governed in a manner that affects such intent. Neither the Company, any other member of the Company Group nor any Committee guarantees or provides any warranties with respect to the tax treatment of amounts deferred under the Plan. Neither the Company, any other member of the Company Group, the Board, any director, officer, employee and advisor, nor any Committee (nor its designee) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant, Beneficiary or other taxpayer as a result of the Plan. For purposes of the Plan, the phrase “permitted by Section 409A of the Code,” or words or phrases of similar import, shall mean that the event or circumstance shall only be permitted to the extent it would not cause an amount deferred or payable under the Plan to be includible in the gross income of a Participant or Beneficiary under Section 409A(a)(1) of the Code. |
10.5. | Nonassignability and Offset. |
a) | Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and non-transferable, other than (i) to a Participant’s Beneficiary pursuant to Article VI, (ii) pursuant to a domestic relations order deemed legally sufficient by the Management Benefits Committee, or (iii) by will or the laws of descent and distribution. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance |
b) | Offset. If, at the time a payment is due hereunder, the Company determines that the Participant is indebted or obligated to the Company or any other member of the Company Group (including, but not limited to, for amounts owed as a result of the Participant’s breach of his or her fiduciary duty owed to, or breach of any restrictive covenant in effect with, the Company Group), then the payment to be made to or with respect to such Participant (including a payment to the Participant’s Beneficiary) may, at the discretion of the Company, be reduced by the amount of such indebtedness or obligation; provided, however, that an election by the Company to not reduce any such payment shall not constitute a waiver of its claim for such indebtedness or obligation. |
10.6. | Not a Contract of Employment. The Plan shall not constitute a contract of employment between the Company Group and the Participant. Nothing in the Plan shall give a Participant the right to be retained in the service of the Company Group or to interfere with the right of the Company Group to discipline or discharge a Participant at any time. |
10.7. | Protective Provisions. A Participant will cooperate with the Company by furnishing any and all information requested by the Company, in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as the Company may deem necessary and taking such other action as may be requested by the Company. |
10.8. | Governing Law. The provisions of the Plan shall be construed and interpreted according to the laws of the State of Michigan, without giving effect to any choice of law or conflict of law provision or rule, except as preempted by federal law. |
10.9. | Validity. If any provision of the Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein. |
10.10. | Notice. Any notice required or permitted under the Plan shall be sufficient if in writing and sent by (i) registered, certified mail, or (ii) electronic mail at benefits@aam.com (with a simultaneous confirmation copy sent by first class mail properly addressed and postage prepaid). Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Mailed notice shall be directed to “Administrator: ERSP, Attention Human Resources Department” at the Company’s headquarters address. Mailed notice to a Participant or Beneficiary shall be directed to the individual’s last known address in the Company’s records. |
10.11. | Successors. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity. |
1. | Purpose. The purpose of the American Axle & Manufacturing Holdings, Inc. Executive Officer Severance Plan (the “Plan”) is to advance the interests of American Axle & Manufacturing Holdings, Inc. (the “Company,” and together with its subsidiaries, the “Company Group”) and its shareholders by providing financial protection to selected executive officers and certain other employees as determined by the Administrator in its sole discretion from time to time upon termination of a participant’s employment in specific circumstances and to attract and retain talent. |
2. | Definitions. For purposes of the Plan, the following words and phrases have the meanings specified below: |
2.1 | “Accountants” has the meaning set forth in Section 9.2. |
2.2 | “Administrator” has the meaning set forth in Section 3. |
2.3 | “Base Salary” with respect to a Participant means the rate of annual base salary paid to the Participant by the Company Group immediately preceding the Participant’s Date of Separation. |
2.4 | “Benefit Continuation” has the meaning set forth in Section 6.2(d). |
2.5 | “Board” means the Board of Directors of the Company. |
2.6 | “Bonus” with respect to a Participant means the target annual bonus amount for the year in which the Participant’s Date of Separation occurs. |
2.7 | “Cause” means with respect to a Participant, unless otherwise defined in the employment agreement of the Participant, any of the following: (a) the Participant’s willful and continued failure or refusal to perform the duties reasonably required of him or her to the Company Group; (b) the Participant’s conviction of, or plea of nolo contendere to any felony or another crime involving dishonesty or moral turpitude or which reflects negatively upon the Company Group or otherwise impairs or impedes its operations; (c) the Participant’s engagement in any willful misconduct, gross negligence, act of dishonesty, violence or threat of violence (including any violation of federal securities laws) that is injurious to the Company Group; (d) the Participant’s material breach of any applicable agreement with or policy of the Company Group; (e) the Participant’s material failure to comply with any applicable laws and regulations or professional standards relating to the business of the Company Group; or (f) any other misconduct by the Participant that is injurious to the financial condition or business reputation of the Company Group. |
2.8 | “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time and as interpreted by regulations and rulings issued pursuant to the Code. Any references to a specific provision shall be deemed to include references to any successor Code provision. |
2.9 | “Committee” means the Compensation Committee of the Board. |
2.10 | “Covered Payments” has the meaning set forth in Section 9.1. |
2.11 | “Date of Separation” means, with respect to a Participant, the date on which a Participant incurs a termination of employment that is a “separation from service” within the meaning of Section 409A of the Code. |
2.12 | “Effective Date” has the meaning set forth in Section 17. |
2.13 | “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. |
2.14 | “Excise Tax” has the meaning set forth in Section 9.1. |
2.15 | “Good Reason” means any one or more of the following actions or omissions: |
(a) | any material reduction in a Participant’s annual base salary or bonus opportunity as in effect immediately prior to the reduction; or |
(b) | the relocation (other than by mutual agreement) of the office at which the Participant is to perform the majority of his or her duties to a location more than 50 miles from the location at which the Participant performed such duties prior to the relocation; |
2.16 | “Participant” has the meaning set forth in Section 4. |
2.17 | “Plan” means this Executive Officer Severance Plan, as described in this document and as amended from time to time. |
2.18 | “Release” has the meaning set forth in Section 7. |
2.19 | “Severance Multiple” means the number applicable to a Participant’s position as set forth on Exhibit A, as amended from time to time. |
2.20 | “Severance Period” has the meaning set forth in Section 6.2. |
3. | Administration. The Plan shall be administered by the Committee (the “Administrator”). Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan, to establish, amend and rescind appropriate rules and regulations relating to the Plan, to delegate some or all of its authority under the Plan to the extent permitted by law, and to take all such steps and make all such determinations in connection with the Plan and the benefits granted pursuant to the Plan as it may deem necessary or advisable. Any decision of the Administrator in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. Except to the extent it would violate applicable law or rules, the Administrator may delegate all or a portion of its authority for administering the Plan to an officer or officers of the Company. To the extent so delegated, the term “Administrator” hereunder shall be deemed to refer to such officer or officers. The Administrator shall take such actions it deems necessary or desirable to ensure that such officer or officers have sufficient and appropriate authority for carrying out the intent and purpose of the Plan. |
4. | Eligibility. The participants under the Plan shall be limited to (i) executive officers of the Company, other than those executive officers who have an employment agreement or other separate arrangement providing for severance benefits upon a termination of employment (the “Executive Officer Participants”) and (ii) certain other employees of the Company Group as determined by the Administrator in its sole discretion from time |
5. | No Effect on Equity Awards. The Plan does not alter or amend any vesting or other terms and conditions of any equity-based compensation awards under the Company’s equity incentive compensation plans (including, but not limited to, the Company’s 2012 Omnibus Incentive Plan or 2018 Omnibus Incentive Plan), which shall be governed by the terms and conditions set forth in the equity incentive compensation plans and separate written grant agreements. |
6. | Severance Benefits. |
6.1 | No severance benefits shall be payable under the Plan unless the Participant’s employment with the Company is involuntarily terminated by the Company without Cause or by the Participant’s resignation with Good Reason (a “Qualifying Event”). For the avoidance of doubt, if in connection with a transaction or series or combination of transactions (i) a Participant’s employment transfers to an acquiror or its affiliate or (ii) a Participant is offered a comparable position with an acquiror or its affiliate with a level of compensation no less than and benefits comparable to that enjoyed by the Participant immediately prior to the closing of the applicable transaction, then a termination from the Company Group shall not constitute a Qualifying Event for purposes of the Plan. In the event of a Change in Control (as defined in the Company Change in Control Plan), the Company Change in Control Plan or, if applicable, the terms provided under the Participant’s employment agreement, shall apply. |
6.2 | Upon a Qualifying Event, subject to the provisions of the Plan (including compliance with the Restrictive Covenants) and timely execution and nonrevocation of a Release, the Participant shall receive the following benefits: |
(a) | Severance. A cash amount equal to the Participant’s Base Salary plus Bonus multiplied by the applicable Severance Multiple, payable in a lump sum on the 60th day following the Date of Separation; |
(b) | Annual Bonus. Any unpaid annual bonus for any completed performance year immediately preceding the year in which the Qualifying Event occurs as determined based on actual performance, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document; |
(c) | Pro rata Annual Bonus. A cash amount equal to the annual bonus for the performance year in which the Qualifying Event occurs, determined based on actual performance and then prorated based on the number of days in such performance year elapsed through the date of the Qualifying Event, payable to the Participant on the date such bonus would have been paid had the Participant remained employed with the Company, but in no event later than March 15th of the year following the year in which the Qualifying Event occurs, notwithstanding anything to the contrary in an applicable plan or award document; |
(d) | Medical Coverage. Upon a Qualifying Event, the Participant (and his or her eligible dependents) shall be entitled to continued participation in the Company’s medical plans, as in effect from time to time, at then-existing participation and coverage levels for active similarly situated employees (the “Benefit Continuation”) for the number of months equal to 12 multiplied by the applicable Severance Multiple (the “Severance Period”). In the event that such Benefit Continuation is not permitted or advisable or the Company, in its sole discretion, elects, in lieu of Benefit Continuation, the Company shall pay to the Participant a cash amount (in the Company’s determination) equal to the then-current difference between the Participant’s monthly medical insurance cost immediately prior to the applicable Qualifying Event and the monthly cost for COBRA multiplied by the number of months remaining in the Severance Period, payable in three separate semi-annual installments. Any obligation to provide Benefit Continuation or payment in lieu of such Benefit Continuation shall cease upon the earlier of (i) the Participant becoming eligible to receive group health benefits under a program of a subsequent employer or (ii) the Participant not complying with the provisions of this Plan. For the avoidance of doubt, the Participant (and his or her eligible dependents) shall be responsible for paying all employee contributions, deductibles and other cost-sharing items under such plans. Nothing in this Section 6.2 shall be construed to impair or reduce a Participant’s rights under COBRA or other applicable law. |
(e) | Outplacement. The Participant shall be entitled to reimbursement for outplacement service costs incurred (which shall include appropriate itemization and substantiation of expenses incurred) during the period from the Participant’s Date of Separation through the end of the applicable Severance Period, subject to a maximum amount of $20,000; provided, that such claims for reimbursement are submitted to the Company within 90 days following the date of invoice. |
6.3 | General. Nothing in this Section 6 shall be construed to impair or reduce a Participant’s right to any other accrued but unpaid compensation or benefits nor create a right or entitlement to any additional senior executive retirement benefit. |
7. | Release and Restrictive Covenant. |
7.1 | Release. A Participant shall only be entitled to receive the payments and benefits pursuant to Section 6 if he or she shall have executed and delivered (and not revoked) a release of claims against the Company (and its officers, directors, employees, affiliates, stockholders, etc.) substantially in the form attached hereto as Exhibit B (the “Release”), and such Release is in full force and effect by the 60th day following the Date of Separation. Should the Participant revoke all or any portion of the Release within any allowed revocation period, then the Participant will be treated hereunder as if he or she did not execute the Release. |
7.2 | Restrictive Covenant. During the Severance Period, the Participant shall not, without the prior written consent of the Company, directly or indirectly, and whether as principal or investor or as an employee, officer, director, manager, partner, consultant, agent or otherwise, alone or in association with any other person, firm, corporation or other business organization, carry on a business competitive with the Company in any geographic area in which the Company Group has engaged in business, or is reasonably expected to engage in business during such Severance Period (including, without limitation, any area in which any customer of the Company Group may be located); provided, however, that nothing herein shall limit the Participant’s right to own not more than 1% of any of the debt or equity securities of any business organization that is then filing reports with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act (the “Restrictive Covenant”). For the avoidance of doubt, (i) amounts payable pursuant to Section 6.2 are consideration for the Participant’s compliance with this Restrictive Covenant and (ii) the Restrictive Covenant shall be effective for the full Severance Period irrespective of whether any payments under Section 6.2 are terminated prior to the end of the Severance Period. |
7.3 | Breach. If a Participant breaches any provision of the Release or the Restrictive Covenant, the Administrator may determine that the Participant (i) will forfeit any unpaid portion of the payments provided pursuant to the Plan and (ii) will repay to the Company any amounts previously paid to him or her pursuant to the Plan. |
8. | No Funding. Nothing herein contained shall require or be deemed to require the Company to segregate, earmark or otherwise set aside any funds or other assets to provide for any payments made hereunder. The rights of any Participant under the Plan shall be solely those of a general creditor of the Company. However, in the event the Company foresees payment under the Plan, the Company may deposit cash or property, or both, equal in value to all or a portion of the benefits anticipated to be payable hereunder for any or all Participants into a trust, the assets of which are to be distributed at such times as are otherwise provided for in the Plan and are subject to the rights of the general creditors of the Company. |
9. | Section 280G. |
9.1 | Notwithstanding any other provision of the Plan or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to a Participant or for the Participant’s benefit pursuant to the terms of the Plan or otherwise (“Covered Payments”) constitute parachute payments within the meaning of Section 280G of the Code and would, but for this Section 9, be subject to the excise tax imposed under Section 4999 of the Code (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be payable either (i) in full or (ii) reduced to the minimum extent necessary to ensure that no portion of the Covered Payments is subject to the Excise Tax, whichever of the foregoing (i) or (ii) results in the Participant’s receipt on an after-tax basis of the greatest amount of payments and benefits after taking into account the applicable federal, state, local and foreign income, employment and excise taxes (including the Excise Tax). Any such reduction shall be made by the Company in its sole discretion consistent with the requirements of Section 409A of the Code. |
9.2 | Any determination required under this Section 9 shall be made in writing in good faith by the accounting firm that was the Company’s independent auditor immediately before the Qualifying Event (the “Accountants”). The Company and the Participant shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 9. The Company shall be responsible for all fees and expenses of the Accountants. |
10. | Section 409A. Notwithstanding anything to the contrary contained in the Plan, the payments and benefits provided under the Plan are intended to comply with or be exempt from Section 409A of the Code, and the provisions of the Plan shall be interpreted or construed consistently with that intent. The Administrator may |
10.1 | It is intended that the terms “termination” and “termination of employment” as used herein shall constitute a “separation from service” within the meaning of Section 409A. |
10.2 | Anything in the Plan to the contrary notwithstanding, each payment of compensation made to a Participant shall be treated as a separate and distinct payment from all other such payments for purposes of Section 409A. |
10.3 | In no event may a Participant be permitted to control the year in which any payment occurs. |
10.4 | Anything in the Plan to the contrary notwithstanding, if a Participant is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Participant’s termination of employment, then any payment or benefit which would be considered “nonqualified deferred compensation” within the meaning of Section 409A that the Participant is entitled to receive upon the Participant’s termination of employment and which otherwise would be payable during the six-month period immediately following the Participant’s termination of employment will instead be paid or made available on the first day of the seventh month following the Participant’s termination of employment (or, if earlier, the date of the Participant’s death). |
10.5 | With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder. |
11. | Clawback. Any amounts payable under the Plan are subject to any policy providing for clawback, recoupment or recovery of amounts that were paid to the Participant as established from time to time by the Committee. The Company shall make any determination for clawback, recoupment or recovery in its sole discretion and in accordance with any such policy and applicable law or regulation. |
12. | Withholding. The Company shall be entitled to withhold from payments to or on behalf of the Participant taxes and other authorized deductions. |
13. | Governing Law. The Plan shall be construed, interpreted and governed in accordance with the laws of the State of Michigan, without giving effect to the principles of conflicts of law. |
14. | Effect on Other Plans. The Plan supersedes in all respects any other severance benefit plans, arrangements or policies of the Company that apply to Participants upon a Qualifying Event, but does not supersede (i) employment agreements between an employee and the Company Group and (ii) to the extent applicable, the Company Executive Officer Change in Control Plan. No Participant shall be eligible to receive severance benefits under more than one severance arrangement of the Company (whether through an employment agreement or a benefit plan) at any time. Notwithstanding the foregoing, the Company and the Board reserve the right to adhere to other policies and practices that may be in effect for other groups of employees. |
15. | Amendment, Modification and Termination. The Plan (including Exhibit A) may be modified, amended or terminated at any time by the Administrator without notice to Participants. |
16. | No Employment Rights. Neither the Plan nor the benefits hereunder shall be a term of the employment of any employee, and the Company Group shall not be obligated in any way to continue the Plan. The terms of the Plan shall not give any employee the right to be retained in the employment of the Company Group. |
17. | Effective Date and Term. The Plan shall become effective as of April 10, 2018 (the “Effective Date”). |
Participants | Applicable Severance Multiple |
Business Unit Presidents VP/CFO VP-HR VP- Controller | 1.5 |
Other Executive Officer Participants | 1 |
Subsidiary (1) | Organized Under Laws of |
American Axle & Manufacturing Holdings, Inc. | Delaware |
American Axle & Manufacturing, Inc. | Delaware |
Colfor Manufacturing, Inc. | Delaware |
MSP Industries Corporation | Michigan |
AccuGear, Inc. | Delaware |
Oxford Forge, Inc. | Delaware |
Auburn Hills Manufacturing, Inc. | Delaware |
AAM Travel Services, LLC | Michigan |
Rochester Manufacturing, LLC | Indiana |
AAM International Holdings, Inc. | Delaware |
AAM Comércio e Participações Ltda. | Brazil |
AAM do Brasil Ltda. | Brazil |
Changshu AAM Automotive Driveline High Technology Manufacturing Co., Ltd. | China |
American Axle & Manufacturing Korea, Inc. | Korea |
AAM India Manufacturing Corporation Private Limited | India |
AAM Poland Sp. z o. o. | Poland |
Albion Automotive (Holdings) Ltd. | Scotland |
Albion Automotive Limited | Scotland |
AAM Germany GmbH | Germany |
American Axle & Manufacturing (Thailand) Co., Ltd. | Thailand |
AAM Luxembourg S.á r.l. | Luxembourg |
AAM International S.á r.l. | Luxembourg |
e-AAM Driveline Systems AB | Sweden |
AAM Investment Management (Shanghai) Co., Ltd. | China |
AAM Commercial & Trading (Shanghai) Co., Ltd. | China |
USM Mexico Manufacturing, LLC | Delaware |
USM Holdings, LLC II | Michigan |
AAM Mexico Holdings LLC | Delaware |
Mergedco, S. de R.L. de C.V. | Mexico |
AAM Maquiladora Mexico S. de R.L. de C.V. | Mexico |
American Axle & Manufacturing de Mexico Holdings S. de R.L. de C.V. | Mexico |
American Axle & Manufacturing de Mexico S. de R.L. de C.V. | Mexico |
Metaldyne Performance Group, Inc. | Delaware |
MPG Holdco I Inc. | Delaware |
ASP Grede Intermediate Holdings LLC | Delaware |
ASP Grede AcquisitionCo LLC | Delaware |
GSC RIII - Grede LLC | Delaware |
Grede Holdings LLC | Delaware |
Grede II LLC | Delaware |
Grede Machining LLC | Delaware |
Citation Lost Foam Patterns LLC | Delaware |
Grede Wisconsin Subsidiaries LLC | Wisconsin |
Grede Omaha LLC | Delaware |
Grede Radford LLC | Delaware |
Citation Camden Casting Center LLC | Tennessee |
Skokie Castings LLC | Illinois |
Novocast, S. de R. L. de C.V. | Mexico |
Transformaciones Especializadas NC, S.A. de C.V. | Mexico |
Brillion Iron Works, Inc. | Delaware |
Grede LLC | Delaware |
AAM Casting Corp. | Delaware |
Novogredetek Holdings, S. de. R.L. de C.V. | Mexico |
Shop IV Subsidiary Investment (Grede), LLC | Delaware |
ASP MD Holdings, Inc. | Delaware |
ASP MD Intermediate Holdings, Inc. | Delaware |
ASP MD Intermediate Holdings II, Inc. | Delaware |
MD Investors Corporation | Delaware |
Metaldyne, LLC | Delaware |
Metaldyne SinterForged Products, LLC | Delaware |
Metaldyne BSM, LLC | Delaware |
Metaldyne Sintered Ridgway, LLC | Delaware |
Metaldyne M&A Bluffton, LLC | Delaware |
Metaldyne Powertrain Components, Inc. | Delaware |
Gear Design and Manufacturing, LLC | Delaware |
Punchcraft Machining and Tooling, LLC | Delaware |
Metaldyne Tubular Components, LLC | Delaware |
Metaldyne S.à.r.l. | Luxembourg |
MetaldyneLux Holding S.à.r.l. | Luxembourg |
Metaldyne Europe S.a r.l. | Luxembourg |
Metaldyne Engine Holdings, S.L.U. | Spain |
Metaldyne International Spain, S.L.U. | Spain |
Metaldyne Sintered Components España, S.L.U. | Spain |
Metaldyne International France SAS | France |
Metaldyne GmbH | Germany |
Metaldyne Zell Verwaltungs GmbH | Germany |
Metaldyne International (UK) Ltd | United Kingdom |
Metaldyne International Deutschland GmbH | Germany |
Metaldyne Nürnberg GmbH | Germany |
Metaldyne Oslavany spol. s.r.o. | Czech Republic |
Metaldyne Grundstrücks GbR | Germany |
Metaldyne Componentes Automotivos do Brasil Ltda. | Brazil |
Metaldyne Netherlands Sintered Holdings B.V. | Netherlands |
Metaldyne Powertrain Mexico, S. de R.L. de C.V. | Mexico |
MPG México, S. de R.L. de C.V. | Mexico |
Metaldyne Sintered Components Services, S. de R.L. de C.V. | Mexico |
Metaldyne Sintered Components Mexico, S. de R.L. de C.V. | Mexico |
Metaldyne Drivetrain Mexico, S. de R.L. de C.V. | Mexico |
Metaldyne Forged Products, S. de R.L. de C.V. | Mexico |
Holzer Limited | United Kingdom |
Metaldyne Korea Limited | Korea |
Metaldyne Hong Kong Limited | Hong Kong |
Metaldyne Mauritius Limited | Mauritius |
Metaldyne Industries Limited | India |
Metaldyne (Suzhou) Automotive Components Co., Ltd | China |
ASP HHI Holdings Inc. | Delaware |
ASP HHI Intermediate Holdings, Inc. | Delaware |
ASP HHI Intermediate Holdings II, Inc. | Delaware |
ASP HHI Acquisition Co., Inc. | Delaware |
HHI Holdings, LLC | Delaware |
Bearing Holdings, LLC | Delaware |
Kyklos Holdings, LLC | Delaware |
Kyklos Bearing International, LLC | Delaware |
Forging Holdings, LLC | Delaware |
Hephaestus Holdings, LLC | Delaware |
HHI FormTech Holdings LLC | Delaware |
HHI FormTech, LLC | Delaware |
HHI Forging, LLC | Delaware |
Jernberg Holdings, LLC | Delaware |
Jernberg Industries, LLC | Delaware |
Impact Forge Holdings, LLC | Delaware |
Impact Forge Group, LLC | Delaware |
HHI Funding II, LLC | Delaware |
Gearing Holdings, LLC | Delaware |
Cloyes Gear Holdings, LLC | Delaware |
AAM Powder Metal Components, Inc. | Ohio |
The Mesh Company, LLC. | Arkansas |
Cloyes Acquisition Company | Delaware |
/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 | |||
February 15, 2019 | February 15, 2019 |
Document and Entity Information - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Feb. 12, 2019 |
Jun. 30, 2018 |
|
Document Information [Line Items] | |||
Entity Registrant Name | AMERICAN AXLE & MANUFACTURING HOLDINGS INC | ||
Entity Central Index Key | 0001062231 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Type | 10-K | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Public Float | $ 1,727.8 | ||
Entity Common Stock, Shares Outstanding | 111,732,271 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Trading Symbol | AXL |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Net income (loss) | $ (56.8) | $ 337.5 | $ 240.7 |
Other comprehensive income (loss) | |||
Defined benefit plans, net of $(9.8) million, $3.4 million and $4.7 million of tax in 2018, 2017 and 2016, respectively | 38.1 | (8.5) | (19.6) |
Foreign currency translation adjustments | (62.5) | 88.3 | (3.2) |
Changes in cash flow hedges, net of tax of $0.5 and $(0.2) million in 2018 and 2017, respectively | 5.5 | 17.1 | (10.3) |
Other comprehensive income (loss) | (18.9) | 96.9 | (33.1) |
Comprehensive income (loss) | (75.7) | 434.4 | 207.6 |
Net income attributable to noncontrolling interests | (0.7) | (0.4) | 0.0 |
Comprehensive income (loss) attributable to AAM | $ (76.4) | $ 434.0 | $ 207.6 |
Consolidated Statements of Comprehensive Income (Loss) Parenthetical (Parentheticals) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract] | |||
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, Tax | $ (9.8) | $ 3.4 | $ 4.7 |
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax | $ 0.5 | $ (0.2) | $ 0.0 |
Consolidated Balance Sheets Parenthetical (Parentheticals) - $ / shares shares in Thousands |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Common stock, shares, outstanding | 111,700 | 111,300 |
Series A Preferred Stock [Member] | ||
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100 | 100 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred Stock [Member] | ||
Preferred stock, par or stated value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares outstanding | 0 | 0 |
Series Common Stock [Member] | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares, outstanding | 0 | 0 |
Common Stock [Member] | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000 | 150,000 |
Common stock, shares issued | 118,900 | 118,200 |
Treasury stock, shares | 7,200 | 6,900 |
Organization and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION On April 6, 2017, Alpha SPV I, Inc., a wholly-owned subsidiary of American Axle & Manufacturing Holdings, Inc. (Holdings), merged with and into Metaldyne Performance Group, Inc. (MPG) with MPG as the surviving corporation in the merger. Upon consummation of the merger, MPG became a wholly-owned subsidiary of Holdings. We are a global Tier I supplier to the automotive, commercial and industrial markets. We design, engineer, validate and manufacture driveline, metal forming, powertrain and casting products, employing over 25,000 associates, operating at nearly 90 facilities in 17 countries, to support our customers on global and regional platforms with a continued focus on delivering operational excellence, technology leadership and quality. 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 We are obligated under our contracts with customers to manufacture and supply products for use in our customers’ operations. We satisfy these performance obligations at the point in time that the customer obtains control of the products, which is the point in time that the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the products. This typically occurs upon shipment to the customer in accordance with purchase orders and delivery releases issued by our customers. There is judgment involved in determining when the customer obtains control of the products and we have utilized the following indicators of control in our assessment: •We have the present right to payment for the asset; •The customer has legal title to the asset; •We have transferred physical possession of the asset; •The customer has the significant risks and rewards of ownership of the asset; and •The customer has accepted the asset. See Note 2 - Revenue from Contracts with Customers for more detail on our revenue. RESEARCH AND DEVELOPMENT (R&D) COSTS We expense R&D, as incurred, in selling, general and administrative expenses on our Consolidated Statements of Operations. R&D spending was $146.2 million, $161.5 million and $139.8 million in 2018, 2017 and 2016, respectively. CASH AND CASH EQUIVALENTS Cash 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. 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 terms stated within the contract. Trade accounts receivable for our customers are generally due within approximately 50 days from the date our customers receive our product. 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 $8.4 million and $7.0 million as of December 31, 2018 and 2017, respectively. We write-off accounts receivable when they become uncollectible. 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. INVENTORIES We state our inventories at the lower of cost or net realizable value. 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:
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 $367.0 million, $301.6 million and $160.4 million in 2018, 2017 and 2016, respectively. Property, plant and equipment consists of the following:
As of December 31, 2018, 2017 and 2016, we had unpaid purchases of plant and equipment in our accounts payable of $84.1 million, $103.0 million and $19.0 million, respectively. 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 is performed using management estimates. 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 as of October 1, or more frequently if necessary, for impairment in accordance with the accounting guidance for goodwill and other indefinite-lived intangibles. See Note 5 - Goodwill and Other Intangible Assets, for more detail on our goodwill. OTHER INTANGIBLE ASSETS In connection with our acquisitions of USM Mexico Manufacturing LLC (USM Mexico) and MPG, we recognized $1,254.8 million of amortizable intangible assets for customer platforms, customer relationships, developed technology and licensing agreements. These intangible assets were assigned useful lives ranging from five to 17 years from the dates of the acquisitions. The intangible assets were valued using primarily the relief from royalty method or the multi-period excess earnings method, both of which utilize significant unobservable inputs. These inputs are defined in the fair value hierarchy as Level 3 inputs, which require management to make estimates and assumptions regarding certain financial measures using forecasted or projected information. See Note 5 - Goodwill and Other Intangible Assets, for more detail on our intangible assets. DEBT ISSUANCE COSTS The 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, 2018 and December 31, 2017, our unamortized debt issuance costs were $80.7 million and $93.1 million, respectively. Debt issuance costs associated with our senior unsecured notes, as well as our Term Loan A Facility and Term Loan B Facility (as defined in Note 6 - Long-Term Debt and Lease Obligations), are recorded as a reduction to the related debt liability. Debt issuance costs of $13.6 million and $17.5 million related to our Revolving Credit Facility (also as defined in Note 6 - Long-Term Debt and Lease Obligations), are classified as Other assets and deferred charges on our Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017, 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 Statements of Operations. 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. Changes in the fair value of derivatives that do not qualify as hedges, are immediately recognized in earnings. See Note 7 - Derivatives and Risk Management, for more detail on our derivatives. 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 net losses of $0.2 million and $7.3 million for the years 2018 and 2017, respectively, and a net gain of $5.8 million for 2016, in Other income (expense). 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 9 - Employee Benefit Plans, for more detail on our pension and other postretirement defined benefit plans. STOCK-BASED COMPENSATION We have stock-based compensation in the form of 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 10 - Stock-Based Compensation, for more detail on our accounting for stock-based compensation. DEFERRED INCOME TAX ASSETS AND LIABILITIES AND VALUATION ALLOWANCES Our deferred 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 review the likelihood that we will realize the benefit of deferred tax assets and 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 determining the requirement for a valuation allowance, the historical results, projected future operating results based upon approved business plans, eligible carry forward periods, and tax planning opportunities are considered, along with other relevant positive and negative evidence. If, based upon available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. 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 11 - Income Taxes, for more detail on our accounting for income taxes. 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. See Note 12 - Earnings (Loss) Per Share (EPS), for more detail on our accounting for EPS. SHARE REPURCHASE PROGRAM In 2016, AAM's Board of Directors authorized a share repurchase program of up to $100 million of AAM's common shares as part of AAM's overall capital allocation strategy. The program expired on December 31, 2018. We repurchased a total of $1.5 million of shares under the share repurchase program and there were no share repurchases under the program during 2018. PRODUCT WARRANTY See Note 13 - Commitments and Contingencies, for detail on our accounting for product warranties. 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. EFFECT OF NEW ACCOUNTING STANDARDS Accounting Standards 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 early adoption is permitted for financial statements which have not yet been issued. This guidance may be applied either retrospectively or prospectively 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. The guidance becomes effective at the beginning of our 2019 fiscal year, and we expect to record an adjustment to AOCI and Retained earnings of approximately $28 million associated with the adoption of this guidance. Accounting Standards Update 2017-12 On August 28, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12 - Targeted Improvements to Accounting for Hedging Activities (Topic 815). ASU 2017-12 is intended to better align the risk management activities of a company with the company's financial reporting for hedging relationships. This guidance expands and refines several aspects of hedge accounting. The most applicable changes to AAM as a result of the new guidance are as follows: 1) the concept of risk component hedging is introduced in ASU 2017-12, which could allow us to hedge contractually specified components in a contract; 2) the guidance now allows entities to utilize a 31-day period in assessing whether the critical terms of a forecasted transaction match the maturity of the hedging derivative, which could allow for expanded use of hedging instruments for certain sales and purchases; and 3) we may now qualitatively assess hedge effectiveness on a quarterly basis when the facts and circumstances related to the hedging relationship have not changed significantly. This guidance becomes effective at the beginning of our 2019 fiscal year, however early adoption is permitted, and we have adopted this guidance effective January 1, 2018. The adoption of this guidance did not have any impact on the measurement or presentation of our existing hedging relationships. See Note 7 - Derivatives and Risk Management for additional detail on our hedging instruments. Accounting Standards Update 2017-07 On March 10, 2017, the FASB issued ASU 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require that an employer disaggregate the service cost component from the other components of defined benefit pension cost and postretirement benefit cost (net benefit cost). Subsequent to the adoption of this guidance, only the service cost component of net benefit cost is included in the subtotal Operating income in our Consolidated Statements of Operations and only the service cost component is eligible for capitalization. This guidance became effective at the beginning of our 2018 fiscal year and required a retrospective transition method for the income statement classification of the net benefit cost components and a prospective transition method for the capitalization of the service cost component in assets. The adoption of this guidance did not have a material impact on our consolidated financial statements. Accounting Standards Update 2017-04 On January 26, 2017, the FASB issued ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, or what is referred to under existing guidance as "Step 2." Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance becomes effective at the beginning of our 2020 fiscal year, however early adoption is permitted and we elected to early adopt this guidance in conjunction with our annual goodwill impairment test that was conducted in the fourth quarter of 2018. See Note 5 - Goodwill and Other Intangible Assets for further discussion regarding the results of our annual goodwill impairment test for 2018. Accounting Standards Update 2016-16 On October 24, 2016, the 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 accounting principles generally accepted in the United States of America (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 was effective January 1, 2018 and required a modified retrospective transition method. The adoption of this guidance did not have a significant impact on our consolidated financial statements. 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 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. 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. We are finalizing the inputs to our calculations and expect to record right-of-use assets and lease liabilities in the range of $85 million to $95 million as a result of implementing this guidance. We plan to elect the package of practical expedients that will allow us to 1) not reassess whether existing or expired contracts contain or contained a lease; 2) not reassess the classification (operating or financing) of our existing leases; and 3) not reassess initial direct costs for existing leases. We also plan to elect the optional transition method that will allow us to not retrospectively revise prior period balance sheets to include operating leases. We plan to also elect the practical expedient that will allow us to exclude recognition of a right-of-use asset and associated liability for lease terms of 12 months or less. Finally, we plan to elect the practical expedient to not separate lease and non-lease components in contracts that contain both, and will account for these types of contracts entirely as a single lease component. 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, 2016-20 - Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements to Topic 606 and 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842) (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 became effective for AAM on January 1, 2018 and we have adopted this guidance using the modified retrospective approach. See Note 2 - Revenue from Contracts with Customers for more detail. |
Revenue from Contracts with Customers (Notes) |
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Revenue from Contract with Customers [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Text Block] | 2. REVENUE FROM CONTRACTS WITH CUSTOMERS On January 1, 2018, we adopted new accounting guidance under Accounting Standards Codification Topic 606 (ASC 606) Revenue from Contracts with Customers. ASC 606 outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most prior 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. We elected to adopt this guidance utilizing the modified retrospective transition method. No adjustment to retained earnings was required as of January 1, 2018 as there was no impact to previously reported revenue or expenses associated with adopting ASC 606. We are obligated under our contracts with customers to manufacture and supply products for use in our customers’ operations. We satisfy these performance obligations at the point in time that the customer obtains control of the products, which is the point in time that the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the products. This typically occurs upon shipment to the customer in accordance with purchase orders and delivery releases issued by our customers. There is judgment involved in determining when the customer obtains control of the products and we have utilized the following indicators of control in our assessment: •We have the present right to payment for the asset; •The customer has legal title to the asset; •We have transferred physical possession of the asset; •The customer has the significant risks and rewards of ownership of the asset; and •The customer has accepted the asset. Our product offerings by segment are as follows:
Our contracts with customers generally state the terms of the sale, including the quantity and price of each product purchased. Trade accounts receivable from our customers are generally due approximately 50 days from the date our customers receive our product. Our contracts typically do not contain variable consideration as the contracts include stated prices. We provide our customers with assurance type warranties, which are not separate performance obligations and are outside the scope of ASC 606. Refer to Note 13 - Commitments and Contingencies for further information on our product warranties. 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 years ended December 31, 2018, December 31, 2017 and December 31, 2016. Net sales are attributed to regions based on the location of production. Intersegment sales have been excluded from the table.
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:
Contract liabilities relate to deferred revenue associated with various settlements and commercial agreements for which we have future performance obligations 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. For the twelve months ended December 31, 2018, we recognized contract liabilities of $56.9 million. During the twelve months ended December 31, 2018, we also amortized $47.9 million of previously recorded contract liabilities into revenue as we satisfied performance obligations with our customers. Sales and Other Taxes ASC 606 provides a practical expedient that allows companies to exclude from the transaction price any amounts collected from customers for all sales (and other similar) taxes. We do not include sales and other taxes in our transaction price and thus do not recognize these amounts as revenue. |
Restructuring and Acquisition-Related Costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block] | 3. 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. Since the inception of the 2016 Program, we have incurred severance charges totaling $2.8 million and implementation costs totaling $29.6 million. We do not expect to incur any additional restructuring charges in future periods related to the 2016 Program. A summary of our restructuring activity for the years 2018, 2017 and 2016 is shown below:
In addition to costs incurred under the 2016 program, we initiated actions in 2018 to exit operations at manufacturing facilities in our Driveline, Metal Forming and Powertrain segments. As part of our total restructuring actions, we incurred severance charges of approximately $2.5 million, as well as implementation costs, including professional expenses, of approximately $11.7 million, and asset impairment charges of $30.0 million to impair long-lived assets that were not to be redeployed to other AAM facilities. In 2017, we incurred severance charges of approximately $2.0 million, as well as other implementation costs, including professional fees, of approximately $13.9 million, and asset impairment charges of $1.5 million. In 2016, severance charges were approximately $0.6 million, while implementation costs were $10.2 million and asset impairment charges were $4.5 million. In 2019, we plan to initiate a new global restructuring program (the 2019 Program) to further streamline our business by consolidating our four existing business units into three business units. This activity will occur through the disaggregation of our Powertrain business unit, with a portion moving into our Driveline business unit and a portion moving into our Metal Forming business unit. The primary objectives of this consolidation are to finalize the integration of MPG in a timely manner, 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. We did not incur any charges under the 2019 Program during 2018. We expect to incur approximately $25 million to $35 million of total restructuring charges in 2019, including costs incurred under the 2019 Program. Also in 2017, we completed our acquisitions of MPG and USM Mexico. The following table represents a summary of charges incurred in 2018 related to these acquisitions:
Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred. Integration expenses reflect costs incurred for information technology systems, ongoing operational activities, and consulting fees incurred in conjunction with the acquisitions. In 2017, there were $40.7 million of acquisition-related costs, $7.2 million of severance charges and $45.4 million of integration expenses, as compared to $9.5 million of acquisition-related costs and $1.4 million of integration expenses in 2016, related to the acquisitions of MPG and USM Mexico. Total restructuring charges and acquisition-related charges of $78.9 million, $110.7 million and $26.2 million are shown on a separate line item titled "Restructuring and Acquisition-Related Costs" in our Consolidated Statements of Operations for 2018, 2017 and 2016, respectively. |
Business Combinations |
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Business Combination Disclosure [Text Block] | 4. BUSINESS COMBINATIONS Acquisition of MPG On April 6, 2017, AAM completed our acquisition of 100% of the equity interests of MPG for a total purchase price of approximately $1.5 billion plus the assumption of approximately $1.7 billion in net debt (comprised of approximately $1.9 billion in debt less approximately $0.2 billion of MPG cash and cash equivalents). Under the terms of the agreement and plan of merger (Merger Agreement), each share of MPG common stock (other than MPG excluded shares as defined in the Merger Agreement) was converted into the right to receive (a) $13.50 in cash, without interest, and (b) 0.5 of a share of AAM common stock (Merger Consideration). Further, MPG stock options outstanding immediately prior to the effective time of the merger were accelerated and holders of the stock options received in cash the Merger Consideration less the per share exercise price of the MPG stock options. All MPG restricted shares and restricted stock unit awards outstanding under an MPG equity plan were also accelerated and each holder thereof received the Merger Consideration for each restricted share or restricted stock unit award of MPG common stock. MPG provides highly-engineered components for use in powertrain and safety-critical platforms for the global light, commercial and industrial markets. MPG produces these components using complex metal-forming manufacturing technologies and processes for a global customer base of OEMs and Tier I suppliers, which help their customers meet fuel economy, performance and safety standards. Our acquisition of MPG contributes significantly to diversifying our global customer base and end markets, while also allowing us to expand our presence as a global Tier I supplier to the commercial and industrial markets, in addition to our existing presence as a global Tier I supplier to the automotive industry. The aggregate cash consideration for our acquisition of MPG was financed using (i) net proceeds from the issuance in March 2017 by AAM of $1.2 billion of new senior notes consisting of $700.0 million aggregate principal amount of 6.25% senior notes due 2025, and $500.0 million aggregate principal amount of 6.50% senior notes due 2027, and on April 6, 2017: (ii) borrowings by AAM of $100.0 million under the Term Loan A that matures in 2022, (iii) borrowings by AAM of $1.55 billion under the Term Loan B that matures in 2024, and (iv) cash on hand. Our acquisition of MPG was accounted for under the acquisition method under Accounting Standards Codification 805 Business Combinations (ASC 805) with the purchase price allocated to the identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities. The following represents the final fair values of the assets acquired and liabilities assumed resulting from the acquisition, as well as the calculation of goodwill:
Under the guidance in ASC 805, estimated amounts that are designated as provisional may be adjusted during a period referred to as the "measurement period." The measurement period is a period not to exceed one year from the acquisition date during which we may adjust estimated or provisional amounts recorded during purchase accounting if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. Measurement period adjustments are recorded in the period identified with an offsetting entry to goodwill. Any adjustments to amounts recorded in purchase accounting that do not qualify as measurement period adjustments are included in earnings in the period identified. We finalized the valuation of the assets and liabilities of MPG in the first quarter of 2018. In doing so, we made measurement period adjustments to reflect changes to facts and circumstances that existed as of the acquisition date, which resulted in a net increase in Goodwill of $0.9 million. These adjustments related to Property, plant and equipment, as well as the corresponding impact on Deferred income tax liabilities, as a result of customary post-closing reviews. Goodwill resulting from the acquisition is primarily attributable to anticipated synergies and economies of scale from which we expect to benefit as a combined entity. None of the goodwill is deductible for tax purposes. We recognized $1,223.1 million of amortizable intangible assets for customer platforms, customer relationships, developed technology and licensing agreements as a result of our acquisition of MPG. These intangible assets were assigned useful lives ranging from five to 17 years. The intangible assets were valued using primarily the relief from royalty method or the multi-period excess earnings method, both of which utilize significant unobservable inputs. These inputs are defined in the fair value hierarchy as Level 3 inputs, which require management to make estimates and assumptions regarding certain financial measures using forecasted or projected information. AAM had an existing accounts payable balance of $12.4 million with MPG as of the date of acquisition. As a result of the acquisition, this pre-existing accounts payable balance was settled and AAM accounted for this settlement separately from the acquisition. This resulted in a $12.4 million reduction in the purchase price and this portion of the cash paid to acquire MPG has been reflected as an operating cash outflow in our Consolidated Statement of Cash Flows for the year ended December 31, 2017. Included in Net sales and Net income attributable to AAM for the period from the acquisition date on April 6, 2017 through December 31, 2017 was $2,022 million and approximately $320 million, respectively, attributable to MPG. The $320 million of Net income attributable to MPG in 2017 included a tax benefit of approximately $227 million as a result of remeasuring our net deferred tax liabilities in the U.S. subsequent to the enactment of the Tax Cuts and Jobs Act. For the year ended December 31, 2017, AAM's consolidated income before income taxes was $340.0 million, of which $93.5 million related to MPG. Unaudited Pro Forma Financial Information Pro forma net sales for AAM, on a combined basis with MPG for the years ended December 31, 2017 and December 31, 2016, were $7.0 billion and $6.6 billion, respectively, excluding MPG sales to AAM during those periods. Pro forma net income amounts for the years ended December 31, 2017 and December 31, 2016 were approximately $400 million and $220 million, respectively. Pro forma earnings per share amounts for the years ended December 31, 2017 and December 31, 2016 were $3.51 per share and $1.95 per share, respectively. The pro forma net income amounts for the years ended December 31, 2017 and December 31, 2016 have been adjusted by approximately $20 million for a one-time charge for MPG stock-based compensation that was accelerated and settled on the date of acquisition, approximately $25 million related to the step-up of inventory to fair value as a result of the acquisition, and approximately $55 million in acquisition-related costs. This adjustment resulted in a reclassification of approximately $65 million, net of tax, from pro forma net income for 2017 into pro forma net income for 2016, as we are required to disclose the pro forma amounts as if our acquisition of MPG had been completed on January 1, 2016. The disclosure of pro forma net sales and earnings is for informational purposes only and does not purport to indicate the results that would actually have been obtained had the merger been completed on the assumed date for the periods presented, or which may be realized in the future. Acquisition of USM Mexico On March 1, 2017, AAM completed our acquisition of 100% of USM Mexico, a former subsidiary of U.S. Manufacturing Corporation (USM). The purchase price was funded with available cash and the acquisition was accounted for under the acquisition method. USM Mexico includes USM's operations in Guanajuato, Mexico, which has historically been one of the largest suppliers to AAM's Guanajuato Manufacturing Complex. This acquisition allows AAM to vertically integrate the supply chain and helps ensure continuity of supply for certain parts to our largest manufacturing facility. The following represents the final fair value of the assets acquired and liabilities assumed resulting from the acquisition, as well as the calculation of goodwill:
The purchase agreement specified a period of time subsequent to the acquisition date for calculating the final working capital amount of USM Mexico as of the acquisition date, which was finalized in the first quarter of 2018. None of the goodwill is deductible for tax purposes. AAM had an existing accounts payable balance of $22.8 million with USM Mexico as of the date of acquisition. As a result of our acquisition, this pre-existing accounts payable balance was settled and AAM accounted for this settlement separately from our acquisition. This resulted in a $22.8 million reduction in the purchase price and this portion of the cash paid to acquire USM Mexico has been reflected as an operating cash outflow in our Consolidated Statement of Cash Flows for the year ended December 31, 2017. The operating results of USM Mexico for the period from our acquisition date through December 31, 2017, were insignificant to AAM's Consolidated Statement of Income for this period. Further, we have not disclosed pro forma revenue and earnings for the years ended December 31, 2017 and December 31, 2016, as the operating results of USM Mexico would be insignificant to AAM's consolidated results for these periods. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | 5. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The following table provides a reconciliation of changes in goodwill for the year ended December 31, 2018 and the year ended December 31, 2017:
We conduct our annual goodwill impairment test in the fourth quarter of each year. In performing this test, we utilize a third-party valuation specialist to assist management in determining the fair value of our reporting units. Fair value of each 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 each 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 units, and appropriate discount and long-term growth rates. This fair value determination is categorized as Level 3 within the fair value hierarchy. As a result of our test in the fourth quarter of 2018, we determined that the carrying values of our Powertrain and Casting reporting units were greater than their respective fair values. As such, we recorded non-cash goodwill impairment charges of $80.0 million associated with Powertrain and $405.5 million associated with Casting in 2018. These impairments were primarily the result of a general contraction of pricing multiples associated with capital intensive businesses such as the business conducted by our Powertrain and Casting reporting units, as well as a decline in the projected cash flows of these reporting units under our long-range plan completed in the fourth quarter of 2018, as compared to the long-range plan completed in the fourth quarter of 2017. The decline in projected cash flows for the Powertrain reporting unit was primarily the result of decreased contribution margin on lower production volumes for certain passenger car programs that we support. The decline in projected cash flows for the Casting reporting unit was primarily the result of a projected increase in labor costs in an effort to address workforce shortages at certain locations, as well as an increase in other maintenance and capital requirements. At December 31, 2018, accumulated goodwill impairment losses were $485.5 million and there were no such accumulated goodwill impairment losses as of December 31, 2017. In 2019, we plan to initiate a new global restructuring program to further streamline our business by consolidating our four existing business units into three business units. This activity will occur through the disaggregation of our Powertrain business unit, with a portion moving into our Driveline business unit and a portion moving into our Metal Forming business unit. As a result of this activity, we expect to evaluate goodwill for impairment in the first quarter of 2019. These goodwill impairment charges represented a triggering event for testing the recoverability of other long-lived assets, including property, plant and equipment and amortizable intangible assets associated with our Powertrain and Casting segments. No further impairments were identified. In the second quarter of 2018, we completed the sale of the aftermarket business associated with our Powertrain segment. We allocated $15.1 million of goodwill to the sold business, which represents the fair value of the business sold relative to the fair value of the associated reporting unit. Other Intangible Assets As a result of our acquisitions of MPG and USM Mexico, AAM identified and recognized $1,254.8 million of intangible assets that are subject to amortization. These intangible assets were assigned useful lives ranging from five to 17 years and the weighted-average amortization period for all intangible assets recognized as a result of these acquisitions is 13.6 years from the dates of the acquisitions. The intangible assets were valued using primarily the relief from royalty method or the multi-period excess earnings method, both of which utilize significant unobservable inputs. These inputs are defined in the fair value hierarchy as Level 3 inputs, which require management to make estimates and assumptions regarding certain financial measures using forecasted or projected information. The following table provides a reconciliation of the gross carrying amount and associated accumulated amortization for AAM's total intangible assets, which are all subject to amortization, as of December 31, 2018 and December 31, 2017:
As a result of the acquisition of MPG in 2017, we recorded intangible assets related to aftermarket customer relationships that were associated with the Powertrain aftermarket business that we sold in the second quarter of 2018. As such, during 2018 we reduced the gross carrying amount of our customer relationships by $4.8 million, and reduced the associated accumulated amortization by $0.3 million. Amortization expense for our intangible assets was $99.4 million for the year ended December 31, 2018, $75.3 million for the year ended December 31, 2017, and $5.0 million for the year ended December 31, 2016. The increase in amortization expense in 2018, as compared to 2017, was primarily attributable to the impact of twelve months of amortization on the MPG intangibles in 2018, as compared to nine months of amortization in 2017. The increase in amortization expense in 2017, as compared to 2016, was attributable to the increase in intangible assets as a result of the MPG and USM Mexico acquisitions in 2017. Estimated amortization expense is approximately $100 million per year for each of the years 2019 through 2023. |
Long-Term Debt and Lease Obligations |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt [Text Block] | 6. LONG-TERM DEBT AND LEASE OBLIGATIONS Long-term debt, net consists of the following:
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 as collateral agent and administrative agent. The Credit Agreement includes 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). The proceeds of the Revolving Credit Facility are used for general corporate purposes. We incurred debt issuance costs of $54.0 million in 2017 related to the Senior Secured Credit Facilities. As of December 31, 2018, we have prepaid $8.8 million of the outstanding principal on our Term Loan A Facility and $15.5 million of the outstanding principal on our Term Loan B Facility. These payments satisfy our obligation for principal payments under the Term Loan A Facility and Term Loan B Facility for the next four quarters. As a result, there are no amounts related to the Term Loan A Facility or Term Loan B Facility in the Current portion of long-term debt line item in our Consolidated Balance Sheet as of December 31, 2018. At December 31, 2018, $894.7 million was available under the Revolving Credit Facility. This availability reflects a reduction of $37.3 million for standby letters of credit issued against the facility. 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 Consolidated Balance Sheet. 6.25% NOTES DUE 2026 In the first quarter of 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 during 2018 related to the 6.25% Notes due 2026. TENDER OFFER OF 6.25% NOTES DUE 2021 Also during the first quarter of 2018, we made a tender offer for our 6.25% Notes due 2021. Under this tender offer, we retired the $400.0 million of the 6.25% Notes due 2021 and 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 the second quarter of 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 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. REDEMPTION OF 7.75% NOTES DUE 2019 In the fourth quarter of 2018, we voluntarily redeemed a portion of our 7.75% Notes due 2019. This resulted in a principal payment of $100.0 million and $3.9 million in accrued interest. We also expensed approximately $0.3 million for the write-off of a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing, and approximately $4.5 million for an early redemption premium. 6.50% NOTES DUE 2027 AND 6.25% NOTES DUE 2025 During the first quarter of 2017, we issued $700.0 million in aggregate principal amount of 6.25% senior notes due 2025 and $500.0 million in aggregate principal amount of 6.50% senior notes due 2027 (the Notes). Proceeds from the Notes were used primarily to fund the cash consideration related to our acquisition of MPG, related fees and expenses, refinance certain existing indebtedness of MPG and borrowings under our previous revolving credit facility, which has been replaced by our new Revolving Credit Facility, together with borrowings under the Senior Secured Credit Facilities. We incurred debt issuance costs of $37.2 million in 2017 related to the Notes. REPAYMENT OF MPG INDEBTEDNESS Upon our acquisition of MPG in 2017, we assumed approximately $1.9 billion of existing MPG indebtedness, which we repaid in its entirety on the date of acquisition. This indebtedness was comprised of approximately $0.2 billion of a Euro denominated term loan, approximately $1.0 billion of a U.S. dollar denominated term loan and approximately $0.7 billion of outstanding MPG bonds. Upon settlement of the debt, we paid approximately $24.6 million of accrued interest. In addition, we expensed $2.7 million of prepayment premiums related to the extinguishment of MPG's debt, which has been presented in the Debt refinancing and redemption costs line item within our Consolidated Statements of Operations for the year ended December 31, 2017. LEASES We lease certain facilities and furniture under capital leases expiring at various dates. The gross asset cost of our capital leases was $10.5 million and $10.1 million at December 31, 2018 and 2017, respectively. The net book value included in property, plant and equipment, net on the balance sheet was $3.4 million and $5.3 million at December 31, 2018 and 2017, respectively. The weighted-average interest rate on these capital lease obligations at December 31, 2018 was 7.9%. In the second quarter of 2018, we reached a settlement agreement related to a capital lease obligation that we had recognized as part of the acquisition of MPG, and as a result we recorded a gain of $15.6 million, which is recorded in the Gain on settlement of capital lease line item of the Consolidated Statements of Operations. During 2018, we paid $11.4 million related to this settlement agreement. We also lease certain manufacturing machinery and equipment, commercial office and production facilities, vehicles and other assets under operating leases expiring at various dates. Future minimum payments under non-cancelable operating leases are as follows: $32.6 million in 2019, $24.3 million in 2020, $16.2 million in 2021, $12.6 million in 2022, and $7.5 million in 2023. Our total expense relating to operating leases was $36.9 million, $28.6 million and $26.9 million in 2018, 2017 and 2016, respectively. FOREIGN CREDIT FACILITIES We utilize local currency credit facilities to finance the operations of certain foreign subsidiaries. These credit facilities, some of which are guaranteed by Holdings and/or AAM, Inc., expire at various dates through January 2021. At December 31, 2018, $127.1 million was outstanding under these facilities and an additional $78.2 million was available. At December 31, 2017, $53.2 million was outstanding under these facilities and an additional $159.7 million was available. DEBT MATURITIES Aggregate maturities of long-term debt are as follows (in millions):
INTEREST EXPENSE AND INVESTMENT INCOME Interest expense was $216.3 million in 2018, $195.6 million in 2017 and $93.4 million in 2016. The change in interest expense in 2018, as compared to 2017, is primarily attributable to additional interest expense incurred on borrowings outstanding under our Senior Secured Credit Facilities entered into in April 2017, as well as on $700.0 million aggregate principal amount of 6.25% senior notes due 2025 and $500.0 million in aggregate principal amount of 6.50% senior notes due 2027, which were issued in March 2017. The change in interest expense in 2017, as compared to 2016, primarily reflects the interest incurred on these additional borrowings in 2017. We capitalized interest of $28.4 million in 2018, $18.3 million in 2017 and $6.5 million in 2016. The weighted-average interest rate of our long-term debt outstanding at December 31, 2018 was 5.9% as compared to 5.7% and 6.6% at December 31, 2017 and 2016, respectively. Investment income was $2.0 million in 2018 and $2.9 million in 2017 and 2016. Investment income includes interest earned on cash and cash equivalents and realized and unrealized gains and losses on our short-term investments during the period. |
Derivatives and Risk Management |
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Derivative Instruments and Hedging Activities Disclosure [Text Block] | 7. DERIVATIVES AND RISK MANAGEMENT DERIVATIVE FINANCIAL INSTRUMENTS In the normal course of business, we are exposed to market risk associated with changes in foreign currency exchange rates and interest rates. To manage a portion of these inherent risks, we may purchase certain types of derivative financial instruments based on management's judgment of the trade-off between risk, opportunity and cost. We do not hold or issue derivative financial instruments for trading or speculative purposes. The impact of hedge ineffectiveness was not significant in any of the periods presented. CURRENCY DERIVATIVE CONTRACTS From time to time, we use foreign currency forward and option contracts to reduce the effects of fluctuations in exchange rates relating to the Mexican Peso, Euro, Brazilian Real, British Pound Sterling, Thai Baht, Swedish Krona, Chinese Yuan, Polish Zloty and Indian Rupee. We had currency forward and option contracts outstanding with a notional amount of $185.8 million and $162.2 million at December 31, 2018 and 2017, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the third quarter of 2021 and the purchase of certain direct and indirect inventory and other working capital items into the fourth quarter of 2019. VARIABLE-TO-FIXED INTEREST RATE SWAP In 2017, 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 2018, we discontinued this variable-to-fixed interest rate swap, which was in an asset position of $5.6 million on the date that it was discontinued. Also in the second quarter of 2018, 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. As of December 31, 2018, we have the following notional amounts hedged in relation to our variable-to-fixed interest rate swap: $900.0 million through May 2019, $750.0 million through May 2020, $500.0 million through May 2021, $400.0 million through May 2022 and $400.0 million through May 2023. The following table summarizes the reclassification of pre-tax derivative gains (losses) into net income (loss) from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow hedges under Accounting Standards Codification 815 - Derivatives and Hedging (ASC 815):
See Note 14 - Reclassifications Out of Accumulated Other Comprehensive Income (Loss) for amounts recognized in other comprehensive income (loss) during the years ended December 31, 2018, December 31, 2017 and December 31, 2016. The following table summarizes the amount and location of gains (losses) recognized in the Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:
CONCENTRATIONS OF CREDIT RISK In the normal course of business, we provide credit to customers. We periodically evaluate the creditworthiness of our customers and we maintain reserves for potential credit losses. Sales to GM were approximately 41% of our consolidated net sales in 2018, 47% in 2017, and 67% in 2016. Accounts and other receivables due from GM were $353.7 million at year-end 2018 and $466.8 million at year-end 2017. Sales to FCA US LLC (FCA), were approximately 13% of our consolidated net sales in 2018, 14% in 2017 and 18% in 2016. Accounts and other receivables due from FCA were $176.0 million at year-end 2018 and $129.0 million at year-end 2017. No other single customer accounted for more than 10% of our consolidated net sales in any year presented. In addition, our total GM postretirement cost sharing asset was $232.9 million as of December 31, 2018 and $265.5 million as of December 31, 2017. See Note 9 - Employee Benefit Plans for more detail on this cost sharing asset. We diversify the concentration of invested cash and cash equivalents among different financial institutions and we monitor the selection of counterparties to other financial instruments to avoid unnecessary concentrations of credit risk. |
Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Text Block] | 8. FAIR VALUE The fair value accounting guidance 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:
FINANCIAL INSTRUMENTS The estimated fair values 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:
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 values due to the frequent resetting of the interest rates. We estimated the fair value of our outstanding debt using available market information and other observable data to be as follows:
Investments in our defined benefit pension plans are stated at fair value. See Note 9 - Employee Benefit Plans for additional fair value disclosures of our pension plan assets. LONG-LIVED ASSETS During the years ended December 31, 2018 and December 31, 2017, we recorded asset impairment charges as a result of restructuring actions initiated during these periods. See Note 3 - Restructuring and Acquisition-Related Costs for further detail. The following table summarizes the impairments of long-lived assets measured at fair value on a nonrecurring basis subsequent to initial recognition:
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Employee Benefit Plans [Text Block] | 9. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT DEFINED BENEFIT PLANS We sponsor various qualified and non-qualified defined benefit pension plans for our eligible associates. We also maintain hourly and salaried benefit plans that provide postretirement medical, dental, vision and life insurance benefits (OPEB) to our eligible retirees and their dependents in the U.S. Actuarial valuations of our benefit plans were made as of December 31, 2018 and 2017. The primary weighted-average assumptions used in the year-end valuation of our principal plans appear in the following table. The U.S. discount rates are based on an actuarial review of a hypothetical portfolio of long-term, high quality corporate bonds matched against the expected payment stream for each of our plans. The U.K. discount rates are based on hypothetical yield curves developed from corporate bond yield information within each regional market. The assumptions for expected return on plan assets are based on future capital market expectations for the asset classes represented within our portfolios and a review of long-term historical returns. The rates of increase in compensation and health care costs are based on current market conditions, inflationary expectations and historical information.
The accumulated benefit obligation for all defined benefit pension plans was $732.5 million and $807.9 million at December 31, 2018 and December 31, 2017, respectively. As of December 31, 2018, the accumulated benefit obligation for our underfunded defined benefit pension plans was $623.2 million, the projected benefit obligation was $623.2 million and the fair value of assets for these plans was $488.1 million. AAM and GM share proportionally in the cost of OPEB for eligible retirees based on the length of service an employee had with AAM and GM. We have included in our OPEB obligation the amounts expected to be received pursuant to this agreement of $232.9 million and $265.5 million at December 31, 2018 and December 31, 2017, respectively. We have also recorded a corresponding asset for these amounts on our Consolidated Balance Sheet, $13.5 million that is classified as a current asset and $219.4 million that is classified as a noncurrent asset as of December 31, 2018. The following table summarizes the changes in projected benefit obligations and plan assets and reconciles the funded status of the benefit plans, which is the net benefit plan liability:
Amounts recognized in our Consolidated Balance Sheets are as follows:
Pre-tax amounts recorded in accumulated other comprehensive income (loss) (AOCI), not yet recognized in net periodic benefit cost (credit) as of December 31, 2018 and 2017, consists of:
The components of net periodic benefit cost (credit) are as follows:
Our postretirement cost sharing asset from GM is measured on the same basis as the portion of the obligation to which it relates. The actuarial gains and losses related to the GM portion of the OPEB obligation are recognized immediately in the Consolidated Statements of Operations as an offset against the gains and losses related to the change in the corresponding GM postretirement cost sharing asset. These items are presented net in the change in benefit obligation and net periodic benefit cost components disclosed above. Remaining actuarial gains and losses are deferred and amortized over the expected future service periods of the active participants or the remaining life expectancy of the inactive participants. The estimated net actuarial loss and prior service cost for the defined benefit pension plans that is expected to be amortized from AOCI into net periodic benefit credit in 2019 are $6.3 million and $0.1 million, respectively. The estimated net actuarial loss and prior service credit for the other defined benefit postretirement plans that is expected to be amortized from AOCI into net periodic benefit cost in 2019 are $0.1 million and $1.5 million, respectively. For measurement purposes, a weighted average annual increase in the per-capita cost of covered health care benefits of 6.75% was assumed for 2019. The rate was assumed to decrease gradually to 5.00% by 2026 and to remain at that level thereafter. Health care cost trend rates may have a significant effect on the amounts reported for the health care plans. A 1.0% increase in the assumed health care cost trend rate would have increased total service and interest cost in 2018 and the postretirement obligation, net of GM cost sharing, at December 31, 2018 by $1.4 million and $31.0 million, respectively. A 1.0% decrease in the assumed health care cost trend rate would have decreased total service and interest cost in 2018 and the postretirement obligation, net of GM cost sharing, at December 31, 2018 by $1.2 million and $26.1 million, respectively. The expected future pension and other postretirement benefits to be paid, net of GM cost sharing, for each of the next five years and in the aggregate for the succeeding five years thereafter are as follows: $60.7 million in 2019; $59.0 million in 2020; $60.1 million in 2021; $58.4 million in 2022; $58.9 million in 2023 and $305.6 million for 2024 through 2028. These amounts were estimated using the same assumptions that were used to measure our 2018 year-end pension and OPEB obligations and include an estimate of future employee service. Contributions We contributed $2.2 million to our pension trusts in 2018. 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, net of GM cost sharing, for OPEB to be approximately $17.7 million in 2019. Pension plan assets The weighted-average asset allocations of our pension plan assets at December 31, 2018 and 2017 appear in the following table. The asset allocation for our plans is developed in consideration of the demographics of the plan participants and expected payment stream of the benefit obligation.
The primary objective of our pension plan assets is to provide a source of retirement income for participants and beneficiaries. Our primary financial objectives for the pension plan assets have been established in conjunction with a comprehensive review of our current and projected financial requirements. These objectives include having the ability to pay all future benefits and expenses when due, maintaining flexibility and minimizing volatility. These objectives are based on a long-term investment horizon. Defined Benefit Pension Plan Assets Investments in our defined benefit plans are stated at fair value. Level 1 assets are valued using quoted market prices that represent the asset value of the shares held by the trusts. The level 2 assets are investments in pooled funds, which are valued using a model to reflect the valuation of their underlying assets that are publicly traded with observable values. The fair values of our pension plan assets are as follows:
(a) In accordance with ASC 810-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets. DEFINED CONTRIBUTION PLANS Most of our salaried and hourly U.S. associates, including certain UAW represented associates at our legacy U.S. locations, are eligible to participate in voluntary savings plans. Our maximum match is 50% of eligible associates' contribution up to 10% of their eligible salary. Matching contributions amounted to $12.4 million in 2018, $10.0 million in 2017 and $5.6 million in 2016. Certain U.S. associates are eligible annually to receive an additional AAM Retirement Contribution (ARC) benefit between 3% to 5% of eligible salary, depending on years of service. We made ARC contributions of $7.3 million, $7.1 million and $7.7 million in 2018, 2017 and 2016, respectively. DEFERRED COMPENSATION PLAN Certain U.S. associates are eligible to participate in a non-qualified deferred compensation plan. Payments of $0.7 million, $0.6 million and $0.5 million have been made in 2018, 2017 and 2016, respectively, to eligible associates that have elected distributions. At December 31, 2018 and 2017, our deferred compensation liability was $5.8 million and $6.0 million, respectively. |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 10. STOCK-BASED COMPENSATION At December 31, 2018, we had stock-based awards outstanding under stock incentive compensation plans approved by our stockholders. Under these plans, shares have been authorized for issuance to our directors, officers and certain other associates in the form of unvested restricted stock units, performance shares or other awards that are based on the value of our common stock. Shares available for future grants at December 31, 2018 were 5.3 million. The current stock plan will expire in May 2028. RESTRICTED STOCK UNITS We have awarded restricted stock units (RSUs). Compensation expense associated with RSUs settled in stock is recorded to paid-in-capital ratably over the three-year vesting period. The following table summarizes activity relating to our RSUs:
As of December 31, 2018, unrecognized compensation cost related to unvested RSUs totaled $22.9 million. The weighted average period over which this cost is expected to be recognized is approximately two years. In 2018 and 2017, the total fair market value of RSUs vested was $6.1 million and $8.8 million, respectively. PERFORMANCE SHARES As of December 31, 2018, we have performance shares (PS) outstanding under our 2012 Omnibus Incentive Plan. We grant performance shares payable in stock to officers which vest in full over a three-year performance period. In 2018, these grants were based equally on a total shareholder return (TSR) measure, and AAM's three-year cumulative free cash flow. In 2017 and 2016, these grants were based equally on a TSR measure and AAM's three-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin. The TSR metric compares our TSR over the three-year performance period relative to the TSR of our pre-defined competitor peer group. Based on these EBITDA, free cash flow and relative TSR performance metrics, the number of performance shares that will vest will be between 0% and 200% of the grant date amount. Share price appreciation and dividends paid are measured over the performance period to determine TSR. As these awards are settled in stock, the compensation expense is recorded ratably over the vesting period to paid-in-capital. The following table summarizes activity relating to our performance shares:
We estimate the fair value of our EBITDA performance shares on the date of grant using our estimated three-year adjusted EBITDA margin, based on AAM's budget and long-range plan assumptions at that time, and adjust quarterly as necessary. We estimate the fair value of our TSR performance shares on the date of grant using the Monte Carlo simulation approach. The Monte Carlo simulation approach utilizes inputs on volatility assumptions, risk free rates, the price of the Company’s and our competitor peer group's common stock and their correlation as of each valuation date. Volatility assumptions are based on historical and implied volatility measurements. We estimate the fair value of our free cash flow performance shares on the date of grant using our estimated three-year cumulative free cash flow, based on AAM's budget and long-range plan assumptions at the time, and adjust quarterly as necessary. Based on the current fair value, the estimated unrecognized compensation cost related to unvested PS totaled $10.8 million, as of December 31, 2018. The weighted-average period over which this cost is expected to be recognized is approximately two years. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | 11. INCOME TAXES The components of income (loss) before income taxes are as follows:
The following is a summary of the components of our provision for income taxes:
The following is a reconciliation of income taxes calculated at the U.S. federal statutory income tax rate of 21% in 2018 and 35% in 2017 and 2016 to our provision for income taxes:
In 2018, our income tax benefit is higher than the tax benefit computed at the U.S. federal statutory rate, and in 2017 and 2016 our income tax expense was lower than tax expense computed at the U.S. federal statutory rate, primarily due to the impact of favorable foreign tax rates, and the impact of income tax credits, partially offset by our inability to realize an income tax benefit for losses incurred in certain foreign and state jurisdictions. In addition, during 2018, we finalized an advance pricing agreement in a foreign jurisdiction and settled various other matters, which resulted in an income tax benefit and a reduction of our liability for unrecognized tax benefits and related interest and penalties of approximately $20 million. We also recorded an income tax benefit of approximately $85 million in 2018 as a result of the goodwill impairment charge, partially offset by a discrete tax expense related to the sale of the aftermarket business associated with our Powertrain segment. Our income tax expense and effective income tax rate for 2017 were lower than our income tax expense and effective income tax rate for 2016 primarily as a result of an increase in the proportionate share of earnings attributable to lower tax rate jurisdictions. In addition, subsequent to the acquisition of MPG, we re-evaluated our valuation allowance position with regard to jurisdictions in which consolidated state tax returns are filed and recorded an income tax benefit for the year ended December 31, 2017. This was partially offset by a discrete tax adjustment related to certain non-deductible transaction and acquisition-related costs. Additionally, we recognized a net tax benefit of approximately $20 million in 2017 related to accounting for the various provisions of the Tax Cuts and Jobs Act (the 2017 Act) under U.S. tax reform. The 2017 Act was enacted on December 22, 2017 in the United States. The following is a summary of the key provisions of the 2017 Act: •Reduces the U.S. federal statutory income tax rate for corporations from 35% to 21%
Following the enactment of the 2017 Act, the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) 118 to provide guidance on the accounting and reporting impacts of the 2017 Act. SAB 118 stated that companies should have accounted for changes related to the 2017 Act in the period of enactment if all information was available and the accounting could have been completed. In situations where companies did not have enough information to complete the accounting in the period of enactment, the company either 1) recorded an estimated provisional amount if the impact of the change was reasonably estimable; or 2) continued to apply the accounting guidance that was in effect immediately prior to the 2017 Act if the impact of the change could not be reasonably estimated. If estimated provisional amounts were recorded, SAB 118 provided a measurement period of no longer than one year during which companies should adjust those amounts as additional information became available. In connection with our analysis of the impacts of the 2017 Act, we recorded estimated provisional amounts under SAB 118, resulting in a discrete net tax benefit of approximately $20 million for the year ended December 31, 2017. This net benefit primarily consisted of a benefit of approximately $110 million for the remeasurement of our net deferred tax liabilities as a result of the change in tax rate and a benefit of $18 million related to the reduction of a previously recorded deferred tax liability on certain foreign earnings, partially offset by expense of approximately $108 million related to the Transition Tax. These were provisional amounts at December 31, 2017 under SAB 118 because we had not yet completed our accounting for all of the enactment-date income tax effects of the 2017 Act. As of December 31, 2018, we have now completed our accounting for all of the enactment-date income tax effects of the 2017 Act. Upon further analysis of the 2017 Act, and based on notices and regulations issued and proposed by the U.S. Department of Treasury and the Internal Revenue Service, we finalized our calculations of the Transition Tax liability during 2018 and adjusted our December 31, 2017 provisional amount by an additional tax expense of $5.8 million. Also, based on finalizing our calculations during 2018 related to the remeasurement of certain deferred tax assets and liabilities, we adjusted our December 31, 2017 provisional amount by an additional tax benefit of $8.3 million. These adjustments to our provisional amounts resulted in a net income tax benefit of $2.5 million, which is included as a component of Income tax expense (benefit) in our Consolidated Statement of Operations for the year ended December 31, 2018. Also as part of the completion of our SAB 118 analysis, the balance of the 2018 Transition Tax liability was determined to be satisfied with existing U.S. tax attributes resulting in no current income tax payable. Finally, the 2017 Act subjects a U.S. shareholder to tax on GILTI earned by certain foreign subsidiaries. Under GAAP, we must make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years, or to provide for the tax expense related to GILTI in the year the tax is incurred as period expense. As we were evaluating the provisions of GILTI at December 31, 2017, we recorded no deferred amounts related to GILTI in 2017. We have elected to account for GILTI in the year the tax is incurred. As of December 31, 2018, we have refundable income taxes of $9.8 million classified as Prepaid expenses and other on our Consolidated Balance Sheet. At December 31, 2017, we had refundable income taxes of $30.0 million, of which $9.6 million was classified as Prepaid expenses and other, and $20.4 million was classified as Other assets and deferred charges on our Consolidated Balance Sheet. We also have income taxes payable of $10.0 million and $11.6 million classified as Accrued expenses and other on our Consolidated Balance Sheets as of December 31, 2018 and 2017, respectively. The approximate tax effect of each significant type of temporary difference and carryforward that results in a deferred tax asset or liability is as follows:
Deferred tax assets and liabilities recognized in our Consolidated Balance Sheets are as follows:
DEFERRED INCOME TAX ASSETS AND LIABILITIES AND VALUATION ALLOWANCES The deferred income tax assets and liabilities summarized above 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. ASC 740 - Income Taxes states that companies must measure deferred tax amounts at the rate at which they are expected to be realized. As of December 31, 2018 and December 31, 2017, we had deferred tax assets from domestic and foreign net operating loss and tax credit carryforwards of $220.3 million and $280.0 million, respectively. Approximately $106.0 million of the deferred tax assets at December 31, 2018 relate to NOL and tax credits that can be carried forward indefinitely with the remainder expiring between 2019 and 2038. Accounting guidance for income taxes requires a deferred tax liability to be established for the U.S. tax impact of undistributed earnings of foreign subsidiaries unless it can be shown that these earnings will be permanently reinvested outside the U.S. We have provided deferred income taxes for the estimated U.S. federal income tax, foreign income tax, and applicable withholding taxes on earnings of subsidiaries expected to be distributed. As a result of the enactment of the 2017 Act in the fourth quarter of 2017, we recognized a one-time transition tax expense related to certain foreign earnings for which U.S. tax had been previously deferred, and remeasured our deferred tax liability related to foreign earnings. In general, the 2017 Act allows for a dividends received deduction for the repatriation of foreign earnings to the U.S. and, as such, no additional U.S. federal income tax is expected. In accordance with the accounting guidance for income taxes, we review the likelihood that we will realize the benefit of deferred tax assets and 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 determining the requirement for a valuation allowance, the historical results, projected future operating results based upon approved business plans, eligible carry forward periods, and tax planning opportunities are considered, along with other relevant positive and negative evidence. If, based upon available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. During 2018, we recorded a net tax expense of $16.0 million resulting from net losses in certain foreign and U.S. state and local jurisdictions with no corresponding tax benefit due to increases in our valuation allowance. This was partially offset by a net tax benefit of $3.1 million resulting from changes in determinations relating to the potential realization of deferred tax assets and the resulting reversal of a valuation allowance in a foreign jurisdiction. In 2016, we released a valuation allowance in China resulting in a $5.4 million tax benefit in our provision for income taxes. As of December 31, 2018 and December 31, 2017, we have a valuation allowance of $183.3 million and $180.4 million, respectively, related to net deferred tax assets in several foreign jurisdictions and U.S. state and local jurisdictions. UNRECOGNIZED INCOME TAX BENEFITS To the extent that we have uncertain tax positions, a determination is made as to whether such positions meet the “more likely than not” threshold. This threshold must be met in order to record any tax benefit and, to the extent that an uncertain tax position meets the "more likely than not" threshold, we have measured and recorded the highest probable benefit, and have established appropriate reserves for benefits that exceed the amount likely to be sustained upon examination. A reconciliation of the beginning and ending amounts of unrecognized income tax benefits is as follows:
At December 31, 2018 and December 31, 2017, we had $38.7 million and $47.7 million of gross unrecognized income tax benefits, respectively. The decrease in unrecognized income tax benefits at December 31, 2018, as compared to December 31, 2017, is primarily attributable to finalizing an advance pricing agreement in a foreign jurisdiction, which resulted in a reduction of our liability for unrecognized tax benefits and related interest and penalties of approximately $20.0 million. In January 2016, we completed negotiations with the Mexican tax authorities to settle 2007 through 2009 transfer pricing audits. We made a payment of $22.9 million in January 2016 that fully satisfied our obligations for transfer pricing issues for tax years 2007 through 2013. Including these settlements, we made payments of approximately $28 million in 2016 to the Mexican tax authorities related to transfer pricing matters. In 2018, 2017, and 2016, we recognized expense of $1.0 million, $3.1 million and $1.5 million, respectively, related to interest and penalties in Income tax expense (benefit) on our Consolidated Statements of Operations. We have a liability of $6.9 million and $7.5 million related to the estimated future payment of interest and penalties at December 31, 2018 and 2017, respectively. The amount of the unrecognized income tax benefits, including interest and penalties, as of December 31, 2018 that, if recognized, would affect the effective tax rate is $42.4 million. 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 our legacy AAM business for the years 2014 and 2015, and are under a U.S. federal income tax examination for our legacy MPG business for 2015. U.S. federal income tax examinations for the years 2012 and 2013 were settled in January 2017, resulting in no cash payment or reduction in our liability for unrecognized income tax benefits. We are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years prior to 2012. During the next 12 months, we may finalize another 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. 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. 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. |
Earnings (Loss) Per Share (EPS) (Notes) |
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Earnings Per Share [Text Block] | 12. 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 nonforfeitable 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):
Basic and diluted loss per share are the same in 2018 because the effect of 0.8 million dilutive stock options and performance shares would have been antidilutive. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Text Block] | 13. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS Obligated purchase commitments for capital expenditures and related project expenses were approximately $287.2 million at December 31, 2018 and $356.4 million at December 31, 2017. LEGAL PROCEEDINGS 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 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 will continue to closely monitor our environmental conditions to ensure that we are in compliance with all laws, regulations and ordinances. We have made, and anticipate continuing to make, capital and other expenditures to comply with environmental requirements, including recurring administrative costs. Such expenditures were not significant during 2018, 2017 and 2016. ENVIRONMENTAL OBLIGATIONS Due to the nature of our manufacturing operations, we have legal obligations to perform asset retirement activities pursuant to federal, state, and local requirements. The process of estimating environmental liabilities is complex. Significant uncertainty may exist related to the timing and method of the settlement of these obligations. Therefore, these liabilities are not reasonably estimable until a triggering event occurs that allows us to estimate a range and assess the probabilities of potential settlement dates and the potential methods of settlement. In the future, we will update our estimated costs and potential settlement dates and methods and their associated probabilities based on available information. Any update may change our estimate and could result in a material adjustment to this liability. 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. During 2018 and 2017, we also made adjustments to our warranty accrual to reflect revised estimates regarding our projected future warranty obligations. The following table provides a reconciliation of changes in the product warranty liability:
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Reclassifications out of Accumulated Other Comprehensive Income |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reclassifications out of Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Reclassification Amount [Text Block] | 14. RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) Reclassification adjustments and other activity impacting accumulated other comprehensive income (loss) (AOCI) during the year ended December 31, 2018, December 31, 2017 and December 31, 2016 are as follows (in millions):
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Segment and Geographic Information |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segments, Geographical Areas [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | 15. SEGMENT AND GEOGRAPHIC INFORMATION Our business is organized into four business units, each representing a reportable segment under ASC 280 Segment Reporting. The four segments are Driveline, Metal Forming, Powertrain, and Casting. 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:
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 on the sale of a business, goodwill impairments and non-recurring items.
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, 2018, 2017 and 2016:
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. We have retrospectively reclassified 2017 and 2016 to present net sales based upon location of production as these amounts were previously presented based upon location of customer. Long-lived assets exclude deferred income taxes.
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Unaudited Quarterly Financial Data |
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Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information [Text Block] | 16. UNAUDITED QUARTERLY FINANCIAL DATA
(1) Full year basic and diluted EPS will not necessarily agree to the sum of the four quarters because each quarter is a separate calculation.
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Supplemental Guarantor Condensed Consolidating Financial Statements |
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Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Disclosure [Text Block] | 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 7.75% Notes, 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, MPG Inc., 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.
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Schedule II - Valuation and Qualifying Accounts |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II - VALUATION AND QUALIFYING ACCOUNTS
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Organization and Basis of Presentation (Policies) |
12 Months Ended |
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Dec. 31, 2018 | |
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 are obligated under our contracts with customers to manufacture and supply products for use in our customers’ operations. We satisfy these performance obligations at the point in time that the customer obtains control of the products, which is the point in time that the customer is able to direct the use of, and obtain substantially all of the remaining benefits from, the products. This typically occurs upon shipment to the customer in accordance with purchase orders and delivery releases issued by our customers. There is judgment involved in determining when the customer obtains control of the products and we have utilized the following indicators of control in our assessment: •We have the present right to payment for the asset; •The customer has legal title to the asset; •We have transferred physical possession of the asset; •The customer has the significant risks and rewards of ownership of the asset; and •The customer has accepted the asset. See Note 2 - Revenue from Contracts with Customers for more detail on our revenue. |
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 Statements of Operations. R&D spending was $146.2 million, $161.5 million and $139.8 million in 2018, 2017 and 2016, respectively. |
Cash and Cash Equivalents, Policy [Policy Text Block] | CASH AND CASH EQUIVALENTS Cash 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 terms stated within the contract. Trade accounts receivable for our customers are generally due within approximately 50 days from the date our customers receive our product. 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 $8.4 million and $7.0 million as of December 31, 2018 and 2017, 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 net realizable value. 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. |
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 $367.0 million, $301.6 million and $160.4 million in 2018, 2017 and 2016, respectively. |
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 is performed using management estimates. |
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 as of October 1, or more frequently if necessary, for impairment in accordance with the accounting guidance for goodwill and other indefinite-lived intangibles. See Note 5 - Goodwill and Other Intangible Assets, for more detail on our goodwill. |
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | OTHER INTANGIBLE ASSETS In connection with our acquisitions of USM Mexico Manufacturing LLC (USM Mexico) and MPG, we recognized $1,254.8 million of amortizable intangible assets for customer platforms, customer relationships, developed technology and licensing agreements. These intangible assets were assigned useful lives ranging from five to 17 years from the dates of the acquisitions. The intangible assets were valued using primarily the relief from royalty method or the multi-period excess earnings method, both of which utilize significant unobservable inputs. These inputs are defined in the fair value hierarchy as Level 3 inputs, which require management to make estimates and assumptions regarding certain financial measures using forecasted or projected information. See Note 5 - Goodwill and Other Intangible Assets, for more detail on our intangible assets. |
Debt, Policy [Policy Text Block] | DEBT ISSUANCE COSTS The 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, 2018 and December 31, 2017, our unamortized debt issuance costs were $80.7 million and $93.1 million, respectively. Debt issuance costs associated with our senior unsecured notes, as well as our Term Loan A Facility and Term Loan B Facility (as defined in Note 6 - Long-Term Debt and Lease Obligations), are recorded as a reduction to the related debt liability. Debt issuance costs of $13.6 million and $17.5 million related to our Revolving Credit Facility (also as defined in Note 6 - Long-Term Debt and Lease Obligations), are classified as Other assets and deferred charges on our Consolidated Balance Sheets as of December 31, 2018 and December 31, 2017, 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 Statements of Operations. |
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. Changes in the fair value of derivatives that do not qualify as hedges, are immediately recognized in earnings. See Note 7 - 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 net losses of $0.2 million and $7.3 million for the years 2018 and 2017, respectively, and a net gain of $5.8 million for 2016, 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 9 - 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 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 10 - 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 Our deferred 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 review the likelihood that we will realize the benefit of deferred tax assets and 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 determining the requirement for a valuation allowance, the historical results, projected future operating results based upon approved business plans, eligible carry forward periods, and tax planning opportunities are considered, along with other relevant positive and negative evidence. If, based upon available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. 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 11 - Income Taxes, for more detail on our accounting for income taxes. |
Earnings Per Share, Policy [Policy Text Block] | 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. See Note 12 - Earnings (Loss) Per Share (EPS), for more detail on our accounting for EPS. |
Authorized Share Repurchase Program [Policy Text Block] | SHARE REPURCHASE PROGRAM In 2016, AAM's Board of Directors authorized a share repurchase program of up to $100 million of AAM's common shares as part of AAM's overall capital allocation strategy. The program expired on December 31, 2018. We repurchased a total of $1.5 million of shares under the share repurchase program and there were no share repurchases under the program during 2018. |
Standard Product Warranty, Policy [Policy Text Block] | PRODUCT WARRANTY See Note 13 - Commitments and Contingencies, for 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 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 early adoption is permitted for financial statements which have not yet been issued. This guidance may be applied either retrospectively or prospectively 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. The guidance becomes effective at the beginning of our 2019 fiscal year, and we expect to record an adjustment to AOCI and Retained earnings of approximately $28 million associated with the adoption of this guidance. Accounting Standards Update 2017-12 On August 28, 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12 - Targeted Improvements to Accounting for Hedging Activities (Topic 815). ASU 2017-12 is intended to better align the risk management activities of a company with the company's financial reporting for hedging relationships. This guidance expands and refines several aspects of hedge accounting. The most applicable changes to AAM as a result of the new guidance are as follows: 1) the concept of risk component hedging is introduced in ASU 2017-12, which could allow us to hedge contractually specified components in a contract; 2) the guidance now allows entities to utilize a 31-day period in assessing whether the critical terms of a forecasted transaction match the maturity of the hedging derivative, which could allow for expanded use of hedging instruments for certain sales and purchases; and 3) we may now qualitatively assess hedge effectiveness on a quarterly basis when the facts and circumstances related to the hedging relationship have not changed significantly. This guidance becomes effective at the beginning of our 2019 fiscal year, however early adoption is permitted, and we have adopted this guidance effective January 1, 2018. The adoption of this guidance did not have any impact on the measurement or presentation of our existing hedging relationships. See Note 7 - Derivatives and Risk Management for additional detail on our hedging instruments. Accounting Standards Update 2017-07 On March 10, 2017, the FASB issued ASU 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The amendments in this update require that an employer disaggregate the service cost component from the other components of defined benefit pension cost and postretirement benefit cost (net benefit cost). Subsequent to the adoption of this guidance, only the service cost component of net benefit cost is included in the subtotal Operating income in our Consolidated Statements of Operations and only the service cost component is eligible for capitalization. This guidance became effective at the beginning of our 2018 fiscal year and required a retrospective transition method for the income statement classification of the net benefit cost components and a prospective transition method for the capitalization of the service cost component in assets. The adoption of this guidance did not have a material impact on our consolidated financial statements. Accounting Standards Update 2017-04 On January 26, 2017, the FASB issued ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination, or what is referred to under existing guidance as "Step 2." Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. This guidance becomes effective at the beginning of our 2020 fiscal year, however early adoption is permitted and we elected to early adopt this guidance in conjunction with our annual goodwill impairment test that was conducted in the fourth quarter of 2018. See Note 5 - Goodwill and Other Intangible Assets for further discussion regarding the results of our annual goodwill impairment test for 2018. Accounting Standards Update 2016-16 On October 24, 2016, the 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 accounting principles generally accepted in the United States of America (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 was effective January 1, 2018 and required a modified retrospective transition method. The adoption of this guidance did not have a significant impact on our consolidated financial statements. 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 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. 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. We are finalizing the inputs to our calculations and expect to record right-of-use assets and lease liabilities in the range of $85 million to $95 million as a result of implementing this guidance. We plan to elect the package of practical expedients that will allow us to 1) not reassess whether existing or expired contracts contain or contained a lease; 2) not reassess the classification (operating or financing) of our existing leases; and 3) not reassess initial direct costs for existing leases. We also plan to elect the optional transition method that will allow us to not retrospectively revise prior period balance sheets to include operating leases. We plan to also elect the practical expedient that will allow us to exclude recognition of a right-of-use asset and associated liability for lease terms of 12 months or less. Finally, we plan to elect the practical expedient to not separate lease and non-lease components in contracts that contain both, and will account for these types of contracts entirely as a single lease component. 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, 2016-20 - Revenue from Contracts with Customers (Topic 606): Technical Corrections and Improvements to Topic 606 and 2017-13 - Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840) and Leases (Topic 842) (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 became effective for AAM on January 1, 2018 and we have adopted this guidance using the modified retrospective approach. See Note 2 - Revenue from Contracts with Customers for more detail. |
Organization and Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] | Inventories consist of the following:
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Property, Plant and Equipment [Table Text Block] | Property, plant and equipment consists of the following:
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Revenue from Contracts with Customers (Tables) |
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Revenue from Contract with Customers [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Table Text Block] | 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 years ended December 31, 2018, December 31, 2017 and December 31, 2016. Net sales are attributed to regions based on the location of production. Intersegment sales have been excluded from the table.
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Contract with Customer, Asset and Liability [Table Text Block] | 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:
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Restructuring and Acquisition-Related Costs (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs [Table Text Block] | A summary of our restructuring activity for the years 2018, 2017 and 2016 is shown below:
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Business Combination, Separately Recognized Transactions [Table Text Block] | The following table represents a summary of charges incurred in 2018 related to these acquisitions:
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Business Combinations (Tables) |
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Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following represents the final fair values of the assets acquired and liabilities assumed resulting from the acquisition, as well as the calculation of goodwill:
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USM Mexico Manufacturing LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Business Acquisitions, by Acquisition [Table Text Block] | The following represents the final fair value of the assets acquired and liabilities assumed resulting from the acquisition, as well as the calculation of goodwill:
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Schedule of Goodwill (Tables) |
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Schedule of Goodwill [Table Text Block] | Goodwill The following table provides a reconciliation of changes in goodwill for the year ended December 31, 2018 and the year ended December 31, 2017:
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Schedule of Finite Lived Intangible Assets (Tables) |
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Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following table provides a reconciliation of the gross carrying amount and associated accumulated amortization for AAM's total intangible assets, which are all subject to amortization, as of December 31, 2018 and December 31, 2017:
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Long-Term Debt (Tables) |
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Schedule of Long-term Debt Instruments [Table Text Block] | Long-term debt, net consists of the following:
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Schedule of Maturities of Long-term Debt [Table Text Block] | DEBT MATURITIES Aggregate maturities of long-term debt are as follows (in millions):
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Gain (Loss) on Derivative Instruments (Tables) |
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Derivative Instruments, Gain (Loss) [Table Text Block] | The following table summarizes the reclassification of pre-tax derivative gains (losses) into net income (loss) from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow hedges under Accounting Standards Codification 815 - Derivatives and Hedging (ASC 815):
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Derivative Instruments, Gain (Loss) [Table Text Block] | The following table summarizes the amount and location of gains (losses) recognized in the Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:
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Fair Value (Tables) |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | FINANCIAL INSTRUMENTS The estimated fair values 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:
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Fair Value, by Balance Sheet Grouping [Table Text Block] | We estimated the fair value of our outstanding debt using available market information and other observable data to be as follows:
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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:
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Employee Benefit Plans (Tables) |
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assumptions Used [Table Text Block] |
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Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan [Table Text Block] | The following table summarizes the changes in projected benefit obligations and plan assets and reconciles the funded status of the benefit plans, which is the net benefit plan liability:
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Schedule of Amounts Recognized in Balance Sheet [Table Text Block] | Amounts recognized in our Consolidated Balance Sheets are as follows:
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Schedule of Pre-tax Amounts Recognized in Other Comprehensive Income (Loss) [Table Text Block] | Pre-tax amounts recorded in accumulated other comprehensive income (loss) (AOCI), not yet recognized in net periodic benefit cost (credit) as of December 31, 2018 and 2017, consists of:
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Schedule of Net Benefit Costs [Table Text Block] | The components of net periodic benefit cost (credit) are as follows:
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Schedule of Allocation of Plan Assets [Table Text Block] |
The primary objective of our pension plan assets is to provide a source of retirement income for participants and beneficiaries. Our primary financial objectives for the pension plan assets have been established in conjunction with a comprehensive review of our current and projected financial requirements. These objectives include having the ability to pay all future benefits and expenses when due, maintaining flexibility and minimizing volatility. These objectives are based on a long-term investment horizon. Defined Benefit Pension Plan Assets Investments in our defined benefit plans are stated at fair value. Level 1 assets are valued using quoted market prices that represent the asset value of the shares held by the trusts. The level 2 assets are investments in pooled funds, which are valued using a model to reflect the valuation of their underlying assets that are publicly traded with observable values. The fair values of our pension plan assets are as follows:
(a) In accordance with ASC 810-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets. |
Stock Based Compensation (Tables) |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The following table summarizes activity relating to our RSUs:
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Share-based Compensation, Performance Shares Award Outstanding Activity [Table Text Block] | The following table summarizes activity relating to our performance shares:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] | The components of income (loss) before income taxes are as follows:
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Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | The following is a summary of the components of our provision for income taxes:
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Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | The following is a reconciliation of income taxes calculated at the U.S. federal statutory income tax rate of 21% in 2018 and 35% in 2017 and 2016 to our provision for income taxes:
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Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | Deferred tax assets and liabilities recognized in our Consolidated Balance Sheets are as follows:
The approximate tax effect of each significant type of temporary difference and carryforward that results in a deferred tax asset or liability is as follows:
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Schedule of Unrecognized Income Tax Benefits [Table Text Block] | A reconciliation of the beginning and ending amounts of unrecognized income tax benefits is as follows:
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Earnings Per Share (EPS) (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
Basic and diluted loss per share are the same in 2018 because the effect of 0.8 million dilutive stock options and performance shares would have been antidilutive. |
Commitments and Contingencies (Tables) |
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Dec. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Product Warranty Liability [Table Text Block] | The following table provides a reconciliation of changes in the product warranty liability:
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Reclassifications out of Accumulated Other Comprehensive Income (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Reclassifications out of Accumulated Other Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | Reclassification adjustments and other activity impacting accumulated other comprehensive income (loss) (AOCI) during the year ended December 31, 2018, December 31, 2017 and December 31, 2016 are as follows (in millions):
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Segment and Geographic Information (Tables) |
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Segment Reporting Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
Assets included in the Corporate and Eliminations column of the tables above represent AAM corporate assets, as well as eliminations of intercompany assets. |
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Schedule of Disclosure on Geographic Areas, Revenue and Long-Lived Assets by Country [Table Text Block] | 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. We have retrospectively reclassified 2017 and 2016 to present net sales based upon location of production as these amounts were previously presented based upon location of customer. Long-lived assets exclude deferred income taxes.
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Reconciliation of Operating Profit Loss from Segments to Consolidated (Tables) |
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Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The following table represents a reconciliation of Segment Adjusted EBITDA to consolidated income (loss) before income taxes for the years ended December 31, 2018, 2017 and 2016:
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Unaudited Quarterly Financial Data (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information [Table Text Block] |
(1) Full year basic and diluted EPS will not necessarily agree to the sum of the four quarters because each quarter is a separate calculation.
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Supplemental Guarantor Condensed Consolidating Financial Statements Supplemental Guarantor Condensed Consolidating Financial Statements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Supplemental Guarantor Condensed Consolidating Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Guarantor Consolidating Income Statement [Table Text Block] | 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.
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Supplemental Guarantor Consolidating Balance Sheet [Table Text Block] |
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Supplemental Guarantor Consolidating Statement of Cash Flows [Table Text Block] |
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Schedule II - Valuation and Qualifying Accounts (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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SEC Schedule, 12-09, Schedule of Valuation and Qualifying Accounts Disclosure [Text Block] | Schedule II - VALUATION AND QUALIFYING ACCOUNTS
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Organization (Details) |
Dec. 31, 2018
Employees
Countries
Facilities
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Entity Number of Employees | Employees | 25,000 |
Number of Facilities | Facilities | 90 |
Number of Countries in which Entity Operates | Countries | 17 |
Research and Development (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
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Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Research and development expense | $ 146.2 | $ 161.5 | $ 139.8 |
Accounts Receivable (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Revenue, Performance Obligation, Description of Payment Terms | 50 days | |
Allowance for doubtful accounts receivable | $ 8.4 | $ 7.0 |
Inventories (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Inventory [Line Items] | ||
Raw materials and work-in-progress | $ 375.1 | $ 319.7 |
Finished goods | 99.0 | 89.6 |
Gross inventories | 474.1 | 409.3 |
Inventory valuation reserves | (14.4) | (17.3) |
Inventories, net | $ 459.7 | $ 392.0 |
Property, Plant, & Equipment (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Depreciation and tooling amortization | $ 367.0 | $ 301.6 | $ 160.4 |
Noncash or part noncash acquisition, fixed assets acquired | $ 84.1 | $ 103.0 | $ 19.0 |
Schedule of Property, Plant & Equipment (Details) - USD ($) $ in Millions |
12 Months Ended | |
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Dec. 31, 2018 |
Dec. 31, 2017 |
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Property, Plant and Equipment [Line Items] | ||
Land | $ 53.6 | $ 58.0 |
Land improvements | 22.0 | 20.8 |
Buildings and building improvements | 501.5 | 465.8 |
Machinery and equipment | 3,342.8 | 2,962.8 |
Construction in progress | 511.1 | 567.7 |
Property, plant and equipment, gross | 4,431.0 | 4,075.1 |
Accumulated depreciation and amortization | (1,916.6) | (1,672.2) |
Property, plant and equipment, net | $ 2,514.4 | $ 2,402.9 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | Indefinite | |
Land Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 10-15 | |
Building and Building Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 15-40 | |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Lives | 3-12 |
Intangible Assets (Narrative) (Details) $ in Millions |
12 Months Ended |
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Dec. 31, 2017
USD ($)
| |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 1,254.8 |
Metaldyne Performance Group and USM Mexico Manufacturing LLC [Domain] | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets acquired | $ 1,254.8 |
Debt Issuance Costs (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 80.7 | $ 93.1 |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ 13.6 | $ 17.5 |
Currency Translation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Foreign currency transaction gain (loss), before tax | $ (0.2) | $ (7.3) | $ 5.8 |
Share Repurchase Program (Narrative) (Details) - USD ($) $ in Millions |
32 Months Ended | |
---|---|---|
Dec. 31, 2018 |
May 05, 2016 |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Stock repurchase program, authorized amount | $ 100.0 | |
Stock Repurchase Program, Total Shares Repurchased | $ 1.5 |
Effect of New Accounting Standard - Tax (Narrative) (Details) $ in Millions |
Jan. 01, 2019
USD ($)
|
---|---|
Accounting Standard Update 2018-02 [Member] | Scenario, Forecast [Member] | |
New Accounting Pronouncement, Early Adoption [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 28 |
Effect of New Accounting Standard - Leasing (Details) - Scenario, Forecast [Member] - Accounting Standards Update 2016-02 [Member] $ in Millions |
Jan. 01, 2019
USD ($)
|
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Minimum [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 85 |
Maximum [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification | $ 95 |
Revenue from Contracts with Customers (Details) |
12 Months Ended |
---|---|
Dec. 31, 2018 | |
Revenue from Contract with Customers [Abstract] | |
Revenue, Performance Obligation, Description of Payment Terms | 50 days |
Contract Asset and Liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue from Contract with Customers [Abstract] | ||
Receivables, Net, Current | $ 966.5 | $ 1,035.9 |
Deferred revenue, current | 44.3 | 34.1 |
Deferred revenue, noncurrent | 77.6 | $ 78.8 |
Increase (Decrease) in Receivables | (69.4) | |
Contract Liability Increase (Decrease), Current | 10.2 | |
Contract Liabilities Increase (Decrease), Noncurrent, Net of Contract Liabilities Amortized into Revenue | (1.2) | |
Deferred revenue, additions | 56.9 | |
Contract with Customer, Liability, Revenue Recognized | $ 47.9 |
Restructuring Reserve (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and acquisition-related costs | $ 78.9 | $ 110.7 | $ 26.2 |
Restructuring charges | 44.2 | 17.4 | 15.3 |
Employee Severance [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 2.5 | 2.0 | 0.6 |
Other Restructuring [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 11.7 | 13.9 | 10.2 |
Facility Closing [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 30.0 | $ 1.5 | $ 4.5 |
Maximum [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected cost remaining | 35.0 | ||
Minimum [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring and related cost, expected cost remaining | $ 25.0 |
Business Combinations, Separately Recognized Transactions Table (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Business Acquisition [Line Items] | |||
Acquisition-Related Costs | $ 1.2 | $ 40.7 | $ 9.5 |
Severance Costs | 0.5 | 7.2 | |
Integration Expenses | 33.0 | 45.4 | 1.4 |
Total Acquisition-Related Charges | 34.7 | ||
Restructuring and acquisition-related costs | $ 78.9 | $ 110.7 | $ 26.2 |
Repayment of MPG Indebtedness (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Apr. 06, 2017 |
|
Debt Instrument [Line Items] | ||||
Interest Paid, Excluding Capitalized Interest, Operating Activities | $ 199.7 | $ 182.7 | $ 87.2 | |
Metaldyne Performance Group, Inc. [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt acquired | $ 1,918.7 | |||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 24.6 | |||
Write off of Deferred Debt Issuance Cost | $ 2.7 | |||
Metaldyne Performance Group, Inc. [Member] | Euro Denominated Term Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt acquired | 200.0 | |||
Metaldyne Performance Group, Inc. [Member] | U.S. Dollar Denominated Term Loan [Member] [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt acquired | 1,000.0 | |||
Metaldyne Performance Group, Inc. [Member] | MPG Bonds [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt acquired | $ 700.0 |
Leases (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 5.90% | 5.70% | 6.60% |
Gain on settlement of capital lease | $ 15.6 | $ 0.0 | $ 0.0 |
Operating leases, future minimum payments due, current | 32.6 | ||
Operating leases, future minimum payments, due in two years | 24.3 | ||
Operating leases, future minimum payments, due in three years | 16.2 | ||
Operating leases, future minimum payments, due in four years | 12.6 | ||
Operating leases, future minimum payments, due in five years | 7.5 | ||
Operating lease expense | 36.9 | 28.6 | $ 26.9 |
Capital Lease Obligations [Member] | |||
Capital leased assets, gross | 10.5 | 10.1 | |
Capital leases, balance sheet, assets by major class, net | $ 3.4 | $ 5.3 | |
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 7.90% | ||
Repayments of Debt and Capital Lease Obligations | $ 11.4 |
Foreign Credit Facilities (Narrative) (Details) - Foreign Credit Facilities [Member] - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Line of credit facility, amount outstanding | $ 127.1 | $ 53.2 |
Foreign Credit Facilities, Remaining Borrowing Capacity | $ 78.2 | $ 159.7 |
Long-term Debt Maturity Schedule (Details) $ in Millions |
Dec. 31, 2018
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
2019 | $ 152.2 |
2020 | 37.0 |
2021 | 91.5 |
2022 | 530.0 |
2023 | 15.5 |
Thereafter | 3,049.3 |
Debt | $ 3,875.5 |
Interest Expense and Investment Income (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Mar. 31, 2017 |
|
Debt Instrument [Line Items] | ||||
Interest Expense | $ 216.3 | $ 195.6 | $ 93.4 | |
Interest Costs Capitalized | $ 28.4 | $ 18.3 | $ 6.5 | |
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 5.90% | 5.70% | 6.60% | |
Investment Income, Interest | $ 2.0 | $ 2.9 | $ 2.9 | |
Unsecured Debt [Member] | 6.25% Notes due 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 700.0 | 700.0 | $ 700.0 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.25% | 6.25% | ||
Unsecured Debt [Member] | 6.50% Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 500.0 | $ 500.0 | $ 500.0 | |
Debt Instrument, Interest Rate, Stated Percentage | 6.50% | 6.50% |
Derivatives and Risk Management (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
May 31, 2023 |
May 31, 2022 |
May 31, 2021 |
May 31, 2020 |
May 31, 2019 |
Dec. 31, 2017 |
|
Foreign Currency Forward & Foreign Currency Option Contracts [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 185.8 | $ 162.2 | |||||
Debt [Member] | Interest Rate Swap [Member] | |||||||
Derivative [Line Items] | |||||||
Derivative, Notional Amount | $ 400.0 | $ 400.0 | $ 500.0 | $ 750.0 | $ 900.0 | ||
Derivative, Liquidation Proceeds, Monetary Amount | $ 5.6 |
Sales, Receivables and Postretirement Cost Sharing Asset by Major Customer (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Revenue, Major Customer [Line Items] | |||
Total GM postretirement cost sharing asset | $ 232.9 | $ 265.5 | |
General Motors [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-wide revenue, major customer, percentage | 41.00% | 47.00% | 67.00% |
Fair value, concentration of risk, accounts receivable | $ 353.7 | $ 466.8 | |
FCA [Member] | |||
Revenue, Major Customer [Line Items] | |||
Entity-wide revenue, major customer, percentage | 13.00% | 14.00% | 18.00% |
Fair value, concentration of risk, accounts receivable | $ 176.0 | $ 129.0 |
Fair Value Impairment of Long-Lived Assets (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Property, Plant and Equipment [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Long Lived Assets, Fair Value | $ 0.0 | $ 0.0 |
Impairment of Long-Lived Assets to be Disposed of | 28.8 | 1.5 |
Other Assets and Deferred Charges [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired Long Lived Assets, Fair Value | 0.0 | 0.0 |
Impairment of Long-Lived Assets to be Disposed of | $ 1.2 | $ 0.0 |
GM Cost Sharing (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||
Total GM postretirement cost sharing asset | $ 232.9 | $ 265.5 |
Current GM postretirement cost sharing asset | 13.5 | |
Noncurrent GM postretirement cost sharing asset | $ 219.4 | $ 252.2 |
Defined Benefit Plan, Assumptions Used (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Domestic Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.30% | 3.65% | 4.15% |
Expected return on plan assets | 7.50% | 7.45% | 7.50% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
Other Postretirement Benefits Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.35% | 3.65% | 4.20% |
Rate of compensation increase | 4.00% | 4.00% | 4.00% |
UNITED KINGDOM | Foreign Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 2.95% | 2.75% | 2.70% |
Expected return on plan assets | 5.10% | 5.10% | 5.00% |
Rate of compensation increase | 3.40% | 3.40% | 3.45% |
Accumulated Benefit Obligation and Underfunded Pension Plan Detail (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||
Defined benefit plan, accumulated benefit obligation | $ 732.5 | $ 807.9 |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Accumulated Benefit Obligation | 623.2 | |
Defined Benefit Plan, Pension Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Projected Benefit Obligation | 623.2 | |
Defined Benefit Plan, Plan with Accumulated Benefit Obligation in Excess of Plan Assets, Plan Assets | $ 488.1 |
Amounts Recognized in the Balance Sheet (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Pension Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Noncurrent assets | $ 26.4 | $ 18.9 |
Defined benefit pension plan liabilities, current | (6.5) | (6.0) |
Defined benefit pension plan, liabilities, noncurrent | (128.6) | (134.7) |
Defined benefit plan, amounts recognized in balance sheet | (108.7) | (121.8) |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Noncurrent assets | 0.0 | 0.0 |
Postemployment benefits liability, current | (30.8) | (30.3) |
Other postretirement defined benefit plan, liabilities, noncurrent | (506.5) | (583.0) |
Other postretirement defined benefit plan, liabilities | $ (537.3) | $ (613.3) |
Pre-tax Amounts Recorded in AOCI (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Pension Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial gain (loss) | $ (230.6) | $ (237.4) |
Net prior service credit | (1.2) | (0.1) |
Total amounts recorded | (231.8) | (237.5) |
Other Postretirement Benefits Plan [Member] | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Net actuarial gain (loss) | 31.3 | (13.5) |
Net prior service credit | 6.2 | 7.2 |
Total amounts recorded | $ 37.5 | $ (6.3) |
Defined Contribution Plans (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Annual Retirement Contribution (ARC) [Member] | |||
Defined contribution plans, ARC, maximum employee contribution percentage | 5.00% | ||
Defined contribution plan, employer matching contribution, percent | 3.00% | ||
Defined contribution plans, ARC, contributions made during period | $ 7.3 | $ 7.1 | $ 7.7 |
Salaried Savings Plan [Member] | |||
Defined contribution plans, maximum company match, salaried voluntary savings plan | 50.00% | ||
Defined contribution plans, ARC, maximum employee contribution percentage | 10.00% | ||
Defined contribution plans, salaried voluntary savings plan, matching contributions during the period | $ 12.4 | $ 10.0 | $ 5.6 |
Deferred Compensation Plan (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Deferred compensation distributions | $ 0.7 | $ 0.6 | $ 0.5 |
Deferred compensation arrangement with individuals, recorded liability | $ 5.8 | $ 6.0 |
Stock Based Compensation (Narrative) (Details) shares in Millions |
Dec. 31, 2018
shares
|
---|---|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based compensation arrangement by share-based payment award, number of shares available for grant | 5.3 |
Income Before Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
U.S. income (loss) | $ (549.4) | $ (37.1) | $ 90.0 |
Non - U.S. income | 435.5 | 377.1 | 209.0 |
Income (loss) before income taxes | $ (113.9) | $ 340.0 | $ 299.0 |
Components of Provision for Income Taxes (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Current | |||
Federal | $ (81.5) | $ 87.1 | $ 0.4 |
Other state and local | 3.2 | (0.7) | 0.0 |
Foreign | 46.5 | 62.4 | 27.5 |
Total current | (31.8) | 148.8 | 27.9 |
Deferred | |||
Federal | (5.1) | (122.3) | 31.2 |
Other state and local | (6.7) | (17.0) | 0.0 |
Foreign | (13.5) | (7.0) | (0.8) |
Total deferred | (25.3) | (146.3) | 30.4 |
Total income tax expense (benefit) | $ (57.1) | $ 2.5 | $ 58.3 |
Rate Reconciliation (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Disclosure [Abstract] | |||
Federal statutory | $ (23.9) | $ 119.0 | $ 104.7 |
Foreign income taxes | (39.7) | (96.3) | (61.3) |
Change in enacted tax rate | (8.3) | (107.6) | (0.7) |
Transition tax | 5.8 | 108.3 | 0.0 |
State and local | (12.8) | (6.3) | 0.0 |
Tax credits | (20.1) | (8.8) | (3.3) |
Valuation allowance | 12.9 | (6.1) | 1.1 |
Goodwill impairment | 21.6 | 0.0 | 0.0 |
Withholding taxes | 6.6 | 4.7 | 1.2 |
U.S. tax on unremitted foreign earnings | 4.1 | (18.6) | 0.6 |
Global intangible low-taxed income | 8.0 | 0.0 | 0.0 |
Uncertain tax positions | (9.8) | 13.5 | 1.6 |
Other | (1.5) | 0.7 | 14.4 |
Total income tax expense (benefit) | $ (57.1) | $ 2.5 | $ 58.3 |
Effective Income Tax Rate (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 22.9 | $ 3.7 | $ 1.2 | $ 17.3 |
Income tax benefit of goodwill impairment loss | 85.0 | |||
Foreign Tax Authority [Member] | ||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 20.0 |
Tax Cuts and Jobs Act (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Tax Cuts and Jobs Act [Line Items] | |||
Transition tax | $ 5.8 | $ 108.3 | $ 0.0 |
Change in enacted tax rate | 8.3 | 107.6 | $ 0.7 |
Net adjustment for provisional amounts recorded under Tax Cuts and Jobs Act | $ 2.5 | ||
Transition Tax [Domain] | |||
Tax Cuts and Jobs Act [Line Items] | |||
Other Tax Expense (Benefit) | 108.0 | ||
Tax Cuts and Jobs Act [Domain] | |||
Tax Cuts and Jobs Act [Line Items] | |||
Other Tax Expense (Benefit) | (20.0) | ||
Remeasurement of net deferred tax liabilities due to change in tax rate [Domain] | |||
Tax Cuts and Jobs Act [Line Items] | |||
Other Tax Expense (Benefit) | 110.0 | ||
Reduction of Deferred Tax Liability on Foreign Earnings [Domain] | |||
Tax Cuts and Jobs Act [Line Items] | |||
Other Tax Expense (Benefit) | $ 18.0 |
Refundable Income Taxes and Income Taxes Payable (Narrative) (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Refundable income taxes and income taxes payable [Line Items] | ||
Refundable income taxes | $ 30.0 | |
Prepaid Expenses and Other Current Assets [Member] | ||
Refundable income taxes and income taxes payable [Line Items] | ||
Refundable income taxes | $ 9.8 | 9.6 |
Other Assets and Deferred Charges [Domain] | ||
Refundable income taxes and income taxes payable [Line Items] | ||
Refundable income taxes | 20.4 | |
Accrued Liabilities [Member] | ||
Refundable income taxes and income taxes payable [Line Items] | ||
Taxes Payable, Current | $ 10.0 | $ 11.6 |
Deferred Income Tax Assets and Liabilities and Valuation Allowances (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2016 |
Dec. 31, 2017 |
|
Tax Credit Carryforward [Line Items] | |||
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards | $ 220.3 | $ 280.0 | |
Deferred Tax Assets, Operating Loss and Tax Credit Carryforwards, Not Subject to Expiration | 106.0 | ||
Valuation allowance, deferred tax asset, increase (decrease), amount | 16.0 | ||
Deferred Tax Assets, Valuation Allowance | 183.3 | $ 180.4 | |
France | |||
Tax Credit Carryforward [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 3.1 | ||
China | |||
Tax Credit Carryforward [Line Items] | |||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ (5.4) |
Other Tax Disclosure (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Contingency [Line Items] | |||||
Unrecognized Tax Benefits | $ 38.7 | $ 47.7 | $ 28.2 | $ 41.6 | |
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 22.9 | 3.7 | 1.2 | 17.3 | |
Total Payments to Taxing Authority Regarding Transfer Pricing Issues, Including Payments Which Decreased Unrecognized Tax Benefits | 28.0 | ||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Expense | (1.0) | (3.1) | 1.5 | ||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 6.9 | $ 7.5 | $ 2.5 | $ 6.9 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | $ 42.4 |
Earnings Per Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Numerator [Abstract] | |||
Net income (loss) attributable to AAM | $ (57.5) | $ 337.1 | $ 240.7 |
Less: Net income (loss) attributable to participating securities | 0.0 | (7.5) | (5.5) |
Net income (loss) attributable to common shareholders - Basic and Dilutive | $ (57.5) | $ 329.6 | $ 235.2 |
Denominator [Abstract] | |||
Weighted-average shares outstanding | 115.0 | 104.6 | 78.2 |
Less: Participating securities | (3.4) | (2.3) | (1.8) |
Weighted-average common shares outstanding | 111.6 | 102.3 | 76.4 |
Dilutive stock-based compensation | 0.0 | 0.5 | 0.5 |
Diluted shares outstanding - adjusted weighted-average shares after assumed conversions | 111.6 | 102.8 | 76.9 |
Basic earnings (loss) per share | $ (0.51) | $ 3.22 | $ 3.08 |
Diluted earnings (loss) per share | $ (0.51) | $ 3.21 | $ 3.06 |
Earnings Per Share (EPS) Antidilutive Shares (Details) shares in Millions |
12 Months Ended |
---|---|
Dec. 31, 2018
shares
| |
Earnings Per Share [Abstract] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.8 |
Purchase Obligations (Details) - USD ($) $ in Millions |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Obligated purchase commitments | $ 287.2 | $ 356.4 |
Product Liability (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Beginning balance | $ 49.5 | $ 42.9 |
Accruals | 19.1 | 20.6 |
Settlements | (10.7) | (5.6) |
Adjustments to prior period accruals | 0.4 | (9.2) |
Foreign currency translation | (0.6) | 0.8 |
Ending balance | $ 57.7 | $ 49.5 |
Reconciliation of Operating Profit Loss from Segments to Consolidated (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||
Segment Adjusted EBITDA | $ 1,183.9 | $ 1,102.7 | $ 619.4 |
Interest expense | (216.3) | (195.6) | (93.4) |
Depreciation and amortization | (528.8) | (428.5) | (201.8) |
Goodwill impairment | (485.5) | 0.0 | 0.0 |
Restructuring and acquisition-related costs | (78.9) | (110.7) | (26.2) |
Pension settlement | 0.0 | (3.2) | 0.0 |
Gain on sale of business | 15.5 | 0.0 | 0.0 |
Gain on settlement of capital lease | 15.6 | 0.0 | 0.0 |
Acquisition-related fair value inventory adjustment | 0.0 | (24.9) | 0.0 |
Impact of change in accounting principle | 0.0 | 3.7 | 0.0 |
Debt refinancing and redemption costs | (19.4) | (3.5) | 0.0 |
Other | 0.0 | 0.0 | 1.0 |
Income (loss) before income taxes | $ (113.9) | $ 340.0 | $ 299.0 |
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Net sales | $ 7,270.4 | $ 6,266.0 | $ 3,948.0 | ||||||||
Gross profit | 1,140.4 | 1,119.1 | 726.1 | ||||||||
Net Income (loss) | (56.8) | 337.5 | 240.7 | ||||||||
Net income (loss) attributable to AAM | $ (57.5) | $ 337.1 | $ 240.7 | ||||||||
Basic earnings (loss) per share | $ (0.51) | $ 3.22 | $ 3.08 | ||||||||
Diluted earnings (loss) per share | $ (0.51) | $ 3.21 | $ 3.06 | ||||||||
Goodwill, Impairment Loss, Net of Tax | $ 400.0 | ||||||||||
Quarterly Information [Member] | |||||||||||
Net sales | $ 1,694.1 | $ 1,817.0 | $ 1,900.9 | $ 1,858.4 | $ 1,733.9 | $ 1,724.4 | $ 1,757.8 | $ 1,049.9 | |||
Gross profit | 225.3 | 267.4 | 331.4 | 316.3 | 294.3 | 297.7 | 316.4 | 210.7 | |||
Net Income (loss) | (361.6) | 64.0 | 151.3 | 89.5 | 106.5 | 86.3 | 66.3 | 78.4 | |||
Net income (loss) attributable to AAM | $ (361.8) | $ 63.8 | $ 151.1 | $ 89.4 | $ 106.3 | $ 86.2 | $ 66.2 | $ 78.4 | |||
Basic earnings (loss) per share | $ (3.24) | $ 0.55 | $ 1.31 | $ 0.78 | $ 0.93 | $ 0.76 | $ 0.59 | $ 1.00 | |||
Diluted earnings (loss) per share | $ (3.24) | $ 0.55 | $ 1.30 | $ 0.78 | $ 0.93 | $ 0.75 | $ 0.59 | $ 0.99 |
Schedule II - Valuation and Qualifying Accounts (Parenthetical) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2018 |
Dec. 31, 2016 |
|
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ 16.0 | |
China | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Valuation allowance, deferred tax asset, increase (decrease), amount | $ (5.4) |
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