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Segment Reporting | 9 Months Ended
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Sep. 30, 2017
Segment Reporting [Abstract] |
Segment Reporting Disclosure [Text Block] |
14. | SEGMENT REPORTING
Prior to the acquisition of MPG on April 6, 2017, we operated in one reportable segment: the manufacture, engineer, design and validation of driveline systems and related components and chassis modules for light trucks, sport utility vehicles (SUVs), crossover vehicles, passenger cars and commercial vehicles. Subsequent to the acquisition of MPG, our business was 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:
• | Driveline products consist primarily of axles, driveshafts, power transfer units, rear drive modules, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles;
• | Metal Forming products consist primarily of axle shafts, ring and pinion gears, differential gears, transmission gears and shafts and suspension components for OEMs 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 OEMs and Tier I automotive suppliers; and
• | The Casting segment produces both thin wall castings and high strength ductile iron castings, as well as differential cases, steering knuckles, control arms, and turbo charger housings for the global light, commercial and industrial markets.
We use Segment Adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. Segment Adjusted EBITDA is defined as earnings before interest expense, income taxes, depreciation and amortization for our reportable segments, excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs and non-recurring items. The following tables represent information by reportable segment for the three months ended September 30, 2017 and 2016:
|  | Three Months Ended September 30, 2017
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Total
Sales |  | $ | 1,007.9 |  |  | $ | 368.2 |  |  | $ | 260.9 |  |  | $ | 226.6 |  |  | $ | 1,863.6 |
Less: intersegment sales |  | 0.2 |  |  | 106.8 |  |  | 3.8 |  |  | 28.4 |  |  | 139.2 |
Net external sales |  | $ | 1,007.7 |  |  | $ | 261.4 |  |  | $ | 257.1 |  |  | $ | 198.2 |  |  | $ | 1,724.4 |
Segment Adjusted EBITDA |  | $ | 181.4 |  |  | $ | 70.7 |  |  | $ | 36.8 |  |  | $ | 8.8 |  |  | $ | 297.7 |
|  | Three Months Ended September 30, 2016
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Total
Sales |  | $ | 956.1 |  |  | $ | 137.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,093.3 |
Less: intersegment sales |  | 0.1 |  |  | 86.3 |  |  | — |  |  | — |  |  | 86.4 |
Net external sales |  | $ | 956.0 |  |  | $ | 50.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,006.9 |
Segment Adjusted EBITDA |  | $ | 134.4 |  |  | $ | 22.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 156.7 |
The following tables represent information by reportable segment for the nine months ended September 30, 2017 and 2016:
|  | Nine Months Ended September 30, 2017
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Total
Sales |  | $ | 3,028.7 |  |  | $ | 887.5 |  |  | $ | 544.5 |  |  | $ | 452.2 |  |  | $ | 4,912.9 |
Less: intersegment sales |  | 1.1 |  |  | 315.1 |  |  | 6.0 |  |  | 58.6 |  |  | 380.8 |
Net external sales |  | $ | 3,027.6 |  |  | $ | 572.4 |  |  | $ | 538.5 |  |  | $ | 393.6 |  |  | $ | 4,532.1 |
Segment Adjusted EBITDA |  | $ | 513.5 |  |  | $ | 170.5 |  |  | $ | 88.7 |  |  | $ | 34.3 |  |  | $ | 807.0 |
|  | Nine Months Ended September 30, 2016
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Total
Sales |  | $ | 2,840.4 |  |  | $ | 414.4 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,254.8 |
Less: intersegment sales |  | 3.8 |  |  | 249.5 |  |  | — |  |  | — |  |  | 253.3 |
Net external sales |  | $ | 2,836.6 |  |  | $ | 164.9 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,001.5 |
Segment Adjusted EBITDA |  | $ | 391.9 |  |  | $ | 79.4 |  |  | $ | — |  |  | $ | — |  |  | $ | 471.3 |
Total assets by reportable segment as of September 30, 2017 and December 31, 2016 were as follows:
|  | September 30, 2017
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Corporate and Eliminations |  | Total
Total assets |  | $ | 2,362.7 |  |  | $ | 2,155.8 |  |  | $ | 1,825.1 |  |  | $ | 1,018.0 |  |  | $ | 696.7 |  |  | $ | 8,058.3 |
|  | December 31, 2016
|  | Driveline |  | Metal Forming |  | Powertrain |  | Casting |  | Corporate and Eliminations |  | Total
Total assets |  | $ | 2,183.9 |  |  | $ | 410.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 829.7 |  |  | $ | 3,423.9 |
Assets included in the Corporate and Eliminations column in the table 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 before income taxes for the three and nine months ended September 30, 2017 and 2016.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
Segment Adjusted EBITDA | $ | 297.7 |  |  | $ | 156.7 |  |  | $ | 807.0 |  |  | $ | 471.3 |
Interest expense | (57.5 | ) |  | (23.2 | ) |  | (139.9 | ) |  | (70.2 | )
Depreciation and amortization | (122.6 | ) |  | (49.9 | ) |  | (303.4 | ) |  | (150.4 | )
Restructuring and acquisition-related costs | (22.8 | ) |  | — |  |  | (90.5 | ) |  | — |
Pension settlement | (2.9 | ) |  | — |  |  | (2.9 | ) |  | — |
Acquisition-related fair value inventory adjustment | — |  |  | — |  |  | (24.9 | ) |  | — |
Impact of change in accounting principle | — |  |  | — |  |  | 3.7 |  |  | — |
Debt refinancing and redemption costs | — |  |  | — |  |  | (2.7 | ) |  | — |
Asset impairment charge | — |  |  | (3.4 | ) |  | — |  |  | (3.4 | )
Investment gain related to the final distribution of the Reserve Yield Plus Fund | — |  |  | — |  |  | — |  |  | 1.0 |
Other | 0.1 |  |  | (0.7 | ) |  | 0.2 |  |  | (0.7 | )
Income before income taxes | $ | 92.0 |  |  | $ | 79.5 |  |  | $ | 246.6 |  |  | $ | 247.6 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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