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 2025) and 6.25% Notes (due 2021) 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.



Condensed Consolidating Statements of Income

2017	Holdings		AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
	(in millions)
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 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, 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

2015	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated
Net sales
External	$	—		$	1,149.0		$	210.3		$	2,543.8		$	—		$	3,903.1
Intercompany	—			9.4			258.3			19.0			(286.7		)	—
Total net sales	—			1,158.4			468.6			2,562.8			(286.7		)	3,903.1
Cost of goods sold	—			1,114.5			385.2			2,054.7			(286.7		)	3,267.7
Gross profit	—			43.9			83.4			508.1			—			635.4
Selling, general and administrative expenses	—			207.4			0.1			66.6			—			274.1
Amortization of intangible assets	—			3.2			—			—			—			3.2
Operating income (loss)	—			(166.7		)	83.3			441.5			—			358.1
Non-operating income (expense), net	—			(99.3		)	10.1			3.8			—			(85.4		)
Income (loss) before income taxes	—			(266.0		)	93.4			445.3			—			272.7
Income tax expense	—			21.6			5.5			10.0			—			37.1
Earnings (loss) from equity in subsidiaries	235.6			262.3			(20.8		)	—			(477.1		)	—
Net income (loss) before royalties	235.6			(25.3		)	67.1			435.3			(477.1		)	235.6
Royalties	—			260.9			—			(260.9		)	—			—
Net income after royalties	235.6			235.6			67.1			174.4			(477.1		)	235.6
Net income attributable to noncontrolling interests	—			—			—			—			—			—
Net income attributable to AAM	$	235.6		$	235.6		$	67.1		$	174.4		$	(477.1	)	$	235.6
Other comprehensive loss, net of tax	(59.6		)	(59.6		)	(63.6		)	(68.4		)	191.6			(59.6		)
Comprehensive income	$	176.0		$	176.0		$	3.5		$	106.0		$	(285.5	)	$	176.0



Condensed Consolidating Balance Sheets
2017	Holdings		AAM Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elims			Consolidated
Assets	(in millions)
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
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

2016	Holdings		AAM Inc.		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Elims			Consolidated
Assets
Current assets
Cash and cash equivalents	$	—	$	84.3	$	1.6	$	395.3	$	—		$	481.2
Accounts receivable, net	—		126.7		21.9		411.4		—			560.0
Intercompany receivables	—		442.6		326.0		9.1		(777.7		)	—
Inventories, net	—		31.3		21.5		129.5		—			182.3
Other current assets	—		29.4		0.5		45.9		—			75.8
Total current assets	—		714.3		371.5		991.2		(777.7		)	1,299.3
Property, plant and equipment, net	—		213.7		102.9		777.1		—			1,093.7
Goodwill	—		—		147.8		6.2		—			154.0
Intangible assets, net	—		22.8		—		5.7		—			28.5
Intercompany notes and accounts receivable	—		343.9		242.2		—		(586.1		)	—
Other assets and deferred charges	—		644.9		39.8		162.1		—			846.8
Investment in subsidiaries	826.0		1,542.8		—		—		(2,368.8		)	—
Total assets	$	826.0	$	3,482.4	$	904.2	$	1,942.3	$	(3,732.6	)	$	3,422.3
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt	$	—	$	—	$	—	$	3.3	$	—		$	3.3
Accounts payable	—		80.6		35.8		265.9		—			382.3
Intercompany payables	—		324.8		153.4		299.5		(777.7		)	—
Other current liabilities	—		142.2		4.3		119.4		—			265.9
Total current liabilities	—		547.6		193.5		688.1		(777.7		)	651.5
Intercompany notes and accounts payable	321.8		14.6		7.5		242.2		(586.1		)	—
Long-term debt, net	—		1,339.7		4.1		57.1		—			1,400.9
Investment in subsidiaries obligation	—		—		124.7		—		(124.7		)	—
Other long-term liabilities	—		754.5		0.6		110.6		—			865.7
Total liabilities	321.8		2,656.4		330.4		1,098.0		(1,488.5		)	2,918.1
Total stockholders' equity	504.2		826.0		573.8		844.3		(2,244.1		)	504.2
Total liabilities and stockholders' equity	$	826.0	$	3,482.4	$	904.2	$	1,942.3	$	(3,732.6	)	$	3,422.3



Condensed Consolidating Statements of Cash Flows

2017	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims		Consolidated
	(in millions)
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 in cash and cash equivalents	—			7.6			(1.5		)	(110.5		)	—		(104.4		)
Cash and cash equivalents at beginning of period	—			84.3			1.6			395.3			—		481.2
Cash and cash equivalents 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		)
Proceeds from government grants	—			—			—			2.8			—		2.8
Final distribution of Reserve Yield Plus Fund	—			1.0			—			—			—		1.0
Acquisition of business, net of cash acquired	—			—			(5.6		)	—			—		(5.6		)
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 (decrease) in cash and cash equivalents	—			32.3			1.6			164.8			—		198.7
Cash and cash equivalents at beginning of period	—			52.0			—			230.5			—		282.5
Cash and cash equivalents at end of period	$	—		$	84.3		$	1.6		$	395.3		$	—	$	481.2



2015	Holdings			AAM Inc.			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Elims			Consolidated

Net cash provided by operating activities	$	—		$	163.7		$	68.1		$	145.8		$	—		$	377.6
Investing activities
Purchases of property, plant and equipment	—			(36.4		)	(12.8		)	(144.3		)	—			(193.5		)
Proceeds from sale of property, plant and equipment	—			0.1			0.1			0.1			—			0.3
Proceeds from government grants	—			—			—			5.1			—			5.1
Intercompany activity	—			—			(55.0		)	—			55.0			—
Net cash used in investing activities	—			(36.3		)	(67.7		)	(139.1		)	55.0			(188.1		)
Financing activities
Net debt activity	—			(142.8		)	(0.4		)	3.0			—			(140.2		)
Employee stock option exercises	—			0.8			—			—			—			0.8
Purchase of treasury stock	(3.1		)	—			—			—			—			(3.1		)
Purchase of noncontrolling interest	—			—			—			(1.1		)	—			(1.1		)
Intercompany activity	3.1			(3.1		)	—			55.0			(55.0		)	—
Net cash provided by (used in) financing activities	—			(145.1		)	(0.4		)	56.9			(55.0		)	(143.6		)
Effect of exchange rate changes on cash	—			—			—			(12.6		)	—			(12.6		)
Net increase in cash and cash equivalents	—			(17.7		)	—			51.0			—			33.3
Cash and cash equivalents at beginning of period	—			69.7			—			179.5			—			249.2
Cash and cash equivalents at end of period	$	—		$	52.0		$	—		$	230.5		$	—		$	282.5