AMERICAN AXLE & MANUFACTURING HOLDINGS INC
For the period ended Mar 31, 2025. Filed May 2, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 2, 2025
DCH$4.52+2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001062231-24-000094
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0001062231-25-000050
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 123 previous paragraphs and 98 current paragraphs.
33 unchanged; 50 reworded; 15 added; 31 removed; 9 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Pending Business Combination with Dowlais Group plc
Current report
On January 29, 2025, AAM announced that we reached agreement with the Board of Directors of Dowlais Group plc (Dowlais) on the terms of a recommended cash and share offer to be made by AAM to acquire the entire issued and to be issued ordinary share capital of Dowlais (the Business Combination). In connection with the Business Combination, on January 29, 2025, AAM and Dowlais entered into a Co-operation Agreement.
Current report
Pursuant to the Business Combination, Dowlais shareholders will be entitled to receive for each Dowlais ordinary share: 0.0863 shares of new AAM common stock and 42 pence per share in cash (approximately $0.54 per share as of March 31, 2025). The transaction has been unanimously approved by the Boards of Directors of AAM and Dowlais. Following the close of the transaction, the combined company will be headquartered in Detroit, Michigan and will be led by AAM's Chairman and CEO. The transaction is expected to close by the end of 2025, subject to approval by both sets of shareholders, receipt of regulatory approvals, and satisfaction of customary closing conditions.
Current report
Uncertainty Associated with Tariffs and Trade Relations
Current report
The U.S. government has recently announced the implementation of new tariffs, as well as increases in certain existing tariffs, on various products including assembled vehicles and automotive parts and components imported into the U.S., and there is considerable uncertainty around the extent, timing and duration of these tariffs. This has resulted in retaliatory tariffs against the U.S. by the governments of various countries, resulting in significant instability and uncertainty in U.S. trade relations with certain countries. Due to the uncertainty associated with the potential further implementation or expansion of tariffs, as well as retaliatory actions and other changes to existing trade agreements or changes in international trade relations, the ultimate impact on our net sales, results of operations and cash flows is unknown.
Current report
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $19.7 million for the three months ended March 31, 2025, as compared to $2.5 million for the three months ended March 31, 2024. The change in restructuring and acquisition-related costs was primarily related to acquisition-related costs incurred in connection with the Business Combination. Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred.
Current report
Interest income was $5.6 million in the first three months of 2025 as compared to $8.3 million in the first three months of 2024.
Current report
Unrealized Gain on Business Combination Derivative In the first three months of 2025, we recognized an unrealized gain on the Business Combination Derivative of $21.9 million. See Note 6 - Derivatives for additional detail on the Business Combination Derivative.
Current report
Income Tax Expense Income tax expense was $14.0 million for the three months ended March 31, 2025, as compared to $15.9 million for the three months ended March 31, 2024. Our effective income tax rate was 66.4% in the first three months of 2025 as compared to 43.7% in the first three months of 2024.
Current report
In accordance with the guidance in ASC 740 -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 the available evidence. Due to the uncertainty associated with the potential impact of geopolitical conflicts or events, as well as macroeconomic factors, including sustained or increased inflation, renegotiated trade agreements, and tariffs or import restrictions, we may experience lower than projected earnings in certain jurisdictions in future periods and, as a result, it is reasonably possible that changes in valuation allowances could be recognized in future periods and such changes could be material to our financial statements.
Current report
In the first quarter of 2025, we exited our 50% ownership of both Hefei AAM Automotive Driveline & Chassis System Co., Ltd. and Liuzhou AAM Automotive Driveline System Co., Ltd. As a result, we collected approximately $30.1 million in cash, which approximated the carrying value of our investments in these joint ventures at the time of disposition. We accounted for these Chinese joint ventures as equity method investments and, as such, their results of operations, cash flows and account balances were not consolidated in our financial statements.
Current report
In connection with the Business Combination, Dowlais shareholders will be entitled to receive 42 pence per share for each Dowlais ordinary share, which translated to $0.54 per share at the March 31, 2025 exchange rate. At this exchange rate, the cash consideration associated with the Business Combination would be approximately $735 million.
Current report
In January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract (the Business Combination Derivative) that is non-designated and will be recognized at fair value each reporting period up to, and including, the closing of the Business Combination with changes in fair value recognized in Other income (expense) in our Condensed Consolidated Statement of Income. The Business Combination Derivative was in an asset position of approximately $22 million at March 31, 2025. This derivative will not impact the cash consideration payable to Dowlais shareholders associated with the Business Combination, however, it does reduce the cash flow variability resulting from fluctuations in the foreign currency exchange rate between the U.S. dollar and Pound sterling for AAM on a net basis.
Current report
On February 24, 2025, Holdings and AAM, Inc. entered into the Second Amendment to the Amended and Restated Credit Facility and the Incremental Facility Agreement (the Second Amendment). The Second Amendment, among other things, a) increased the maximum under the Revolving Credit Facility from $925.0 million to $1,495.0 million, effective upon closing of the Business Combination, b) provided for an $843.0 million incremental Term Loan B Facility in connection with the Business Combination, and c) extended the maturity of the Revolving Credit Facility and Term Loan A Facility for five years from the date of the Second Amendment, resetting for another five years upon the closing of the Business Combination. In connection with the Second Amendment, we paid $11.6 million of debt issuance costs, and expensed $3.3 million of fees and a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of these borrowings. The maturity date of the Term Loan B Facility in the fourth quarter of 2029 remains unchanged.
Current report
On January 29, 2025, in connection with the announcement of the Business Combination, Holdings and AAM, Inc. entered into a credit agreement (the Backstop Credit Agreement), the First Lien Bridge Credit Agreement (the First Lien Bridge Facility), and a Second Lien Bridge Credit Agreement (the Second Lien Bridge Facility and together with the First Lien Bridge Facility, the Bridge Facilities). Following Holdings and AAM, Inc.'s entry into the Second Amendment, the Backstop Credit Agreement was terminated. Additionally, in connection with entry into the Second Amendment on February 24, 2025, Holdings and AAM, Inc. entered into a) an Amended and Restated First Lien Bridge Credit Agreement which will provide AAM with a $843.0 million interim loan facility in connection with the Business Combination (the Amended and Restated First Lien Bridge Credit Agreement), and b) an Amended and Restated Second Lien Bridge Credit Agreement which will provide AAM with a $500.0 million interim loan facility in connection with the Business Combination (the Amended and Restated Second Lien Bridge Credit Agreement, and together with the Amended and Restated First Lien Bridge Credit Agreement, the Amended and Restated Bridge Credit Agreements).
Removed paragraphs (31)
Previous report
SG&A as a percentage of net sales was 6.3% in the third quarter of 2024, as compared to 5.3% of net sales in the third quarter of 2023. Research and development (R&D) expense, net of customer engineering, design and development (ED&D) recoveries, was approximately $40.1 million in the third quarter of 2024, as compared to $35.8 million in the third quarter of 2023. In addition to the increase in R&D expense in the third quarter of 2024, as compared to the third quarter of 2023, the change in SG&A primarily reflects increased compensation-related expense.
Previous report
Impairment Charge As a result of the India Sale Agreement, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale as of September 30, 2024. Upon reclassification to held-for-sale in the third quarter of 2024, we recorded an impairment charge of $12 million to reduce the carrying value of this business to fair value less cost to sell. This impairment charge was primarily driven by approximately $30 million of accumulated currency translation adjustments that were included in the calculation of the carrying value of this business.
Previous report
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $2.2 million in the third quarter of 2024 and $3.5 million in the third quarter of 2023. See Note 12 - Restructuring and Acquisition-Related Costs for additional detail regarding our restructuring, acquisition and integration activity.
Previous report
Operating Income Operating income was $41.7 million in the third quarter of 2024, as compared to $23.9 million in the third quarter of 2023. Operating margin was 2.8% in the third quarter of 2024, as compared to 1.5% in the third quarter of 2023. The changes in operating income and operating margin were primarily due to factors discussed in Net Sales, Cost of Goods Sold, SG&A and Impairment Charge above.
Previous report
Interest income was $7.1 million in both the third quarter of 2024 and the third quarter of 2023.
Previous report
Debt Refinancing and Redemption Costs In the third quarter of 2024, we voluntarily redeemed a portion of our 6.25% Notes due 2026. This resulted in a principal payment of $50.0 million and $1.2 million in accrued interest. We also expensed approximately $0.2 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.
Previous report
In the third quarter of 2023, we expensed $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 our Term Loan A Facility and then-outstanding Term Loan B Facility as a result of voluntary prepayments made on these facilities.
Previous report
Income Tax Expense (Benefit)Income tax expense (benefit) was a benefit of $12.1 million for the three months ended September 30, 2024, as compared to a benefit of $2.0 million for the three months ended September 30, 2023. Our effective income tax rate was 576.2% in the third quarter of 2024, as compared to 10.3% in the third quarter of 2023.
Previous report
Net Income (Loss) and Earnings (Loss) Per Share (EPS) Net income was $10.0 million in the third quarter of 2024, as compared to a loss of $17.4 million in the third quarter of 2023. Diluted earnings per share was $0.08 per share in the third quarter of 2024, as compared to diluted loss per share of $0.15 in the third quarter of 2023. Net income and EPS for the third quarters of 2024 and 2023 were primarily impacted by the factors discussed above.
Previous report
RESULTS OF OPERATIONS –– NINE MONTHS ENDED SEPTEMBER 30, 2024 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2023
Previous report
Net Sales
Previous report
The increase in the first nine months of 2024, as compared to the first nine months of 2023, primarily reflects increased production volumes on certain vehicle programs that we support, including those associated with program launches in 2024 from our new and incremental business backlog. This increase was partially offset by a reduction of approximately $33 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Previous report
Cost of Goods Sold
Previous report
The change in cost of goods sold in the first nine months of 2024, as compared to the first nine months of 2023, primarily reflects increased production volumes on certain vehicle programs that we support, partially offset by a reduction of approximately $29 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, as well as a reduction of approximately $12 million in depreciation expense. Cost of goods sold for the nine months ended September 30, 2023 also reflects approximately $13 million of expense related to a field action with one of our largest customers for a die cast component included in transmission assemblies.
Previous report
Gross Profit
Previous report
Impairment Charge As a result of the India Sale Agreement, the assets and liabilities associated with this business have met the criteria to be classified as held-for-sale as of September 30, 2024. Upon reclassification to held-for-sale in the third quarter of 2024, we recorded an impairment charge of $12 million to reduce the carrying value of this business to fair value less cost to sell. This impairment charge was primarily driven by approximately $30 million of accumulated currency translation adjustments that were included in the calculation of the carrying value of this business. See Note 2 - Assets and Liabilities Held-For-Sale for more detail.
Previous report
Interest income was $21.5 million in the first nine months of 2024 as compared to $18.9 million in the first nine months of 2023.
Previous report
In the second quarter of 2024, we voluntarily redeemed a portion of our 6.25% Notes due 2026. This resulted in a principal payment of $30.0 million and $0.4 million in accrued interest. We also expensed approximately $0.1 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.
Previous report
In the third quarter of 2024, we voluntarily redeemed an additional portion of our 6.25% Notes due 2026. This resulted in a principal payment of $50.0 million and $1.2 million in accrued interest. We also expensed approximately $0.2 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.
Previous report
In the first nine months of 2023, we made voluntary prepayments of the outstanding principal on our Term Loan A Facility and the then-outstanding Term Loan B Facility and expensed $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 these borrowings.
Previous report
Income Tax Expense (Benefit)Income tax expense (benefit) was expense of $21.0 million for the nine months ended September 30, 2024, as compared to expense of $3.3 million for the nine months ended September 30, 2023. Our effective income tax rate was 30.1% in the first nine months of 2024 as compared to (29.5)% in the first nine months of 2023.
Previous report
During the nine months ended September 30, 2024 and 2023, in computing our estimated annual effective tax rate, we recorded a valuation allowance against substantially all of the deferred tax asset on the current year estimated disallowed interest expense in the U.S. During the nine months ended September 30, 2024, we recognized an income tax benefit of $7.9 million as the result of elections made as part of our 2023 income tax returns. During the nine months ended September 30, 2023, we recognized an income tax benefit of approximately $3.2 million related to the release of a valuation allowance in a foreign jurisdiction. In addition, we recorded a valuation allowance against a portion of the deferred tax asset on prior year disallowed interest expense in the U.S. and reduced our liability for unrecognized income tax benefits and related interest and penalties as a result of a change in estimate on previously recorded unrecognized tax benefits in certain jurisdictions, resulting in net tax expense of $3.4 million during the nine months ended September 30, 2023.
Previous report
The increase in Driveline sales for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, primarily reflects increased production volumes on certain vehicle programs that we support, including those associated with program launches in 2024 from our new and incremental business backlog. This was partially offset by a reduction of approximately $26 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Previous report
The increase in Metal Forming sales for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, was primarily the result of the timing of commercial recoveries for inflationary costs. This was partially offset by a reduction of approximately $7 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Previous report
Income taxes Income taxes paid, net was $31.7 million in the first nine months of 2024, as compared to $41.4 million in the first nine months of 2023. During the first nine months of 2023, we paid $10.1 million as a result of the Notice of Tax Due that was received from the Internal Revenue Service in the fourth quarter of 2022. See Note 13 - Income Taxes for additional detail regarding the Notice of Tax Due.
Previous report
In the first nine months of 2023, we received $17.0 million of cash reimbursements under our insurance policies associated with machinery and equipment that was damaged or destroyed as a result of the Malvern Fire that occurred in 2020. This cash received was classified as an investing cash flow based on the nature of the associated loss incurred.
Previous report
On May 16, 2024, Holdings and AAM, Inc. entered into a refinancing facility agreement (the Refinancing Facility Agreement), that established a new Term Loan B Facility of $648.0 million (the New Term Loan B Facility) and amended the Amended and Restated Credit Agreement to, among other things, update the applicable interest rate on the New Term Loan B Facility. The proceeds from the New Term Loan B Facility, together with $2.2 million cash on hand, were used to a) prepay the entire principal amount of the then-outstanding Term Loan B Facility, b) pay all accrued and unpaid interest due under the then-outstanding Term Loan B Facility and c) pay fees, costs and expenses payable in connection with the refinancing of the Term Loan B Facility. The New Term Loan B Facility will mature on December 13, 2029 (TLB Maturity), subject to a springing maturity that will apply if on any date prior to the TLB Maturity any of AAM's senior notes exceed $250 million outstanding within 91 days of the maturity date of such senior notes. In connection with the Refinancing Facility Agreement, we paid $1.7 million of debt refinancing costs and paid accrued interest of $0.5 million relating to the Term Loan B Facility. The terms of the Term Loan A Facility and the Revolving Credit Facility under the Amended and Restated Credit Agreement, including their respective interest rates and maturity dates in the first quarter of 2027, remain unchanged.
Previous report
On June 28, 2023, Holdings and AAM, Inc. entered into the First Amendment to the Amended and Restated Credit Agreement (the First Amendment), which, among other things, increased the maximum levels of the total net leverage ratio covenant and reduced the minimum levels of cash interest expense coverage ratio covenant for the period from June 28, 2023 through the filing of our second quarter 2024 results, subject to certain conditions (the Amendment Period), modified certain categories of the applicable margin (determined based on the total net leverage ratio of Holdings) for the duration of the Amendment Period with respect to interest rates under the Term Loan A Facility and the Revolving Credit Facility, and modified certain covenants restricting the ability of Holdings, AAM, Inc. and certain subsidiaries of Holdings to create, incur, assume, or permit to exist certain additional indebtedness and liens and to make or agree to pay or make certain restricted payments, voluntary payments and distributions. As of the date of the First Amendment, the terms of the then-outstanding Term Loan B Facility under the Amended and Restated Credit Agreement, including maturity dates, interest rates and their applicable margins, remained unchanged. We paid debt issuance costs of $3.2 million in the nine months ended September 30, 2023 related to the First Amendment. The Amendment Period is no longer in effect following the filing of our second quarter 2024 results in August 2024.
Previous report
In the first nine months of 2023, we made voluntary prepayments of the outstanding principal on our Term Loan A Facility and the then-outstanding Term Loan B Facility and expensed $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 these borrowings.
Previous report
Redemption of 6.25% Notes Due 2026 In the second quarter of 2024, we voluntarily redeemed a portion of our 6.25% Notes due 2026. This resulted in a principal payment of $30.0 million and $0.4 million in accrued interest. We also expensed approximately $0.1 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.
Previous report
Treasury stock Treasury stock increased by $2.8 million in the first nine months of 2024 to $235.7 million as compared to $232.9 million at year-end 2023, due to the withholding and repurchase of shares of AAM stock to satisfy employee tax withholding obligations due upon the vesting of stock-based compensation.
Reworded paragraphs (50)
Previous wording
As a leading global tier 1 automotive and mobility supplier, AAM designs, engineers and manufactures Driveline and Metal Forming technologies to support electric, hybrid, and internal combustion vehicles. Headquartered in Detroit with over 80 facilities in 18 countries, AAM is bringing the future faster for a safer and more sustainable tomorrow.
Current wording
As a leading global tier 1 automotive and mobility supplier, AAM designs, engineers and manufactures Driveline and Metal Forming technologies to support electric, hybrid, and internal combustion vehicles. Headquartered in Detroit, Michigan, with over 75 facilities in 16 countries, AAM is bringing the future faster for a safer and more sustainable tomorrow.
Previous wording
We are a primary supplier of driveline components to General Motors Company (GM) for its full-size rear-wheel drive (RWD) light trucks, sport utility vehicles (SUVs), and crossover vehicles manufactured in North America, supplying a significant portion of GM’s rear axle and four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 41% of our consolidated net sales for the first nine months of 2024 and 39% for both the first nine months of 2023 and the full year 2023.
Current wording
We are a primary supplier of driveline components to General Motors Company (GM) for its full-size rear-wheel drive (RWD) light trucks, sport utility vehicles (SUVs), and crossover vehicles manufactured in North America, supplying a significant portion of GM’s rear axle and four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 44% of our consolidated net sales for the first three months of 2025, 40% for the first three months of 2024 and 42% for the full year 2024.
Previous wording
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup trucks and its derivatives. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 14% of our consolidated net sales for the first nine months of 2024, 17% for the first nine months of 2023 and 16% for the full year 2023.
Current wording
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup trucks and its derivatives. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 11% of our consolidated net sales for the first three months of 2025, 14% for the first three months of 2024 and 13% for the full year 2024.
Previous wording
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Edge, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 13% of our consolidated net sales for the first nine months of 2024 and 12% for both the first nine months of 2023 and the full year 2023.
Current wording
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Edge, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 15% of our consolidated net sales for the first three months of 2025 and 13% for both the first three months of 2024 and the full year 2024.
Previous wording
In October 2024, we entered into a definitive agreement to sell our commercial vehicle axle business and related assets in India (AAM India Manufacturing Corporation Pvt., Ltd.) to Bharat Forge Limited for a sales price of $65 million, subject to certain customary adjustments at closing (the India Sale Agreement). The sale is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including the receipt of regulatory approvals.
Current wording
In October 2024, we entered into a definitive agreement to sell our commercial vehicle axle business and related assets in India (AAM India Manufacturing Corporation Pvt., Ltd.) to Bharat Forge Limited for a sales price of $65 million, subject to certain customary adjustments at closing (the India Sale Agreement). The sale is expected to close in the first half of 2025, subject to customary closing conditions.
Previous wording
The change in net sales in the third quarter of 2024, as compared to the third quarter of 2023, reflects a reduction of approximately $19 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.
Current wording
The change in net sales in the first three months of 2025, as compared to the first three months of 2024, reflects a reduction of approximately $28 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.
Previous wording
The decrease in cost of goods sold in the third quarter of 2024, as compared to the third quarter of 2023, reflects a reduction of approximately $26 million associated with the effect of metal market pass-through costs and the impact of foreign exchange related to translation adjustments. The remainder of the decrease in cost of goods sold is primarily attributable to lower production volumes on certain vehicle programs that we support, as well as the impact of improved operating performance and lower launch costs. In addition, cost of goods sold for the three months ended September 30, 2023 included approximately $13 million of expense related to a field action with one of our largest customers for a die cast component included in transmission assemblies. For the three months ended September 30, 2024, material costs were approximately 56% of total costs of goods sold, as compared to approximately 57% for the three months ended September 30, 2023.
Current wording
The decrease in cost of goods sold in the first three months of 2025, as compared to the first three months of 2024, reflects a reduction of approximately $32 million associated with the effect of metal market pass-through costs and the impact of foreign exchange related to translation adjustments. The remainder of the decrease in cost of goods sold is primarily attributable to lower production volumes on certain vehicle programs that we support and the impact of improved operating performance. For the three months ended March 31, 2025, material costs were approximately 55% of total cost of goods sold as compared to approximately 58% for the three months ended March 31, 2024. The reduction in material costs as a percentage of total cost of goods sold is primarily attributable to the lower cost of steel and other metallic materials in the first quarter of 2025 as compared to the first quarter of 2024.
Previous wording
Gross margin was 12.4% in the first nine months of 2024 as compared to 10.2% in the first nine months of 2023. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.
Current wording
Gross margin was 12.3% in the first three months of 2025 as compared to 12.4% in the first three months of 2024. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.
Previous wording
SG&A as a percentage of net sales was 6.3% in the first nine months of 2024 as compared to 5.9% in the first nine months of 2023. R&D expense, net of customer ED&D recoveries, was approximately $121.3 million in the first nine months of 2024, as compared to $115.7 million in the first nine months of 2023. In addition to the increase in R&D expense in the first nine months of 2024, as compared to the first nine months of 2023, the change in SG&A primarily reflects increased compensation-related expense.
Current wording
SG&A as a percentage of net sales was 6.4% in the first three months of 2025 as compared to 6.1% in the first three months of 2024. R&D expense, net of customer ED&D recoveries, was approximately $36.3 million in the first three months of 2025, as compared to $36.7 million in the first three months of 2024. The decrease in SG&A in the first three months of 2025, as compared to the first three months of 2024, primarily reflects lower compensation-related expense.
Previous wording
Amortization of Intangible Assets Amortization expense related to intangible assets was $62.1 million for the nine months ended September 30, 2024, as compared to $64.2 million for the nine months ended September 30, 2023.
Current wording
Amortization of Intangible Assets Amortization expense related to intangible assets was $20.6 million for the three months ended March 31, 2025, as compared to $20.7 million for the three months ended March 31, 2024.
Previous wording
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $9.7 million for the nine months ended September 30, 2024, as compared to $16.2 million for the nine months ended September 30, 2023. In 2024, we expect to incur approximately $10 million of total restructuring charges. In addition, we expect to incur up to $5 million of integration costs in 2024 associated with our acquisition of Tekfor. See Note 12 - Restructuring and Acquisition-Related Costs for additional detail regarding our restructuring, acquisition and integration activity.
Current wording
In 2025, we expect to incur approximately $20 million to $30 million of total restructuring charges. In addition, we expect to incur $60 million to $70 million of acquisition-related costs in 2025 associated with the Business Combination. See Note 12 - Restructuring and Acquisition-Related Costs for additional detail regarding our restructuring, acquisition and integration activity.
Previous wording
Operating Income Operating income was $205.2 million in the first nine months of 2024 as compared to $117.8 million in the first nine months of 2023. Operating margin was 4.3% in the first nine months of 2024, as compared to 2.6% in the first nine months of 2023. The changes in operating income and operating margin were due primarily to the factors discussed in Net Sales, Cost of Goods Sold and SG&A above.
Current wording
Operating Income Operating income was $42.7 million in the first three months of 2025 as compared to $77.0 million in the first three months of 2024. Operating margin was 3.0% in the first three months of 2025, as compared to 4.8% in the first three months of 2024. The changes in operating income and operating margin were due primarily to the factors discussed in Net Sales, Cost of Goods Sold, SG&A and Restructuring and Acquisition-Related Costs above.
Previous wording
Interest Expense and Interest Income Interest expense was $142.1 million in the first nine months of 2024 as compared to $151.5 million in the first nine months of 2023. The weighted-average interest rate of our long-term debt outstanding was 7.1% for the nine months ended September 30, 2024 and 6.7% for the nine months ended September 30, 2023. We expect our interest expense for the full year 2024 to be approximately $185 million to $195 million.
Current wording
Interest Expense and Interest Income Interest expense was $42.9 million in the first three months of 2025 as compared to $49.0 million in the first three months of 2024. The weighted-average interest rate of our long-term debt outstanding was 6.9% for the three months ended March 31, 2025 and 7.1% for the three months ended March 31, 2024. We expect our interest expense for the full year 2025 to be approximately $170 million to $180 million.
Previous wording
Debt Refinancing and Redemption Costs In the first nine months of 2024, we amended our existing Amended and Restated Credit Agreement and established the New Term Loan B Facility. See Note 5 - Long-Term Debt for further detail on the New Term Loan B Facility. As a result, we incurred approximately $0.2 million of debt refinancing and redemption costs during the first nine months of 2024.
Current wording
Debt Refinancing and Redemption Costs In the first three months of 2025, we expensed $3.3 million of fees and unamortized debt issuance costs in connection with the Second Amendment to the Amended and Restated Credit Facility. See Note 5 - Long-Term Debt for further detail on the Second Amendment to the Amended and Restated Credit Facility.
Previous wording
Loss on Equity Securities We had previously invested in the equity securities of REE Automotive, which were measured at fair value each reporting period with changes in fair value reported as a gain or loss within Other income (expense), net in our Condensed Consolidated Statement of Operations. During the nine months ended September 30, 2024, we sold all of our remaining equity securities of REE Automotive, resulting in a loss of $0.1 million. We recognized an unrealized loss on our investment in REE shares of $1.2 million for the nine months ended September 30, 2023.
Current wording
Gain on Equity Securities We had previously invested in the equity securities of REE Automotive, which were measured at fair value each reporting period with changes in fair value reported as a gain or loss within Other income (expense) in our Condensed Consolidated Statement of Income. We recognized an unrealized gain on our investment in REE shares of $0.1 million for the three months ended March 31, 2024.
Previous wording
Other Income (Expense), Net Other income (expense), net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost. Other income (expense), net was expense of $14.3 million in the first nine months of 2024, and was income of $5.1 million in the first nine months of 2023. The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the first nine months of 2024, as compared to the first nine months of 2023.
Current wording
Other Expense, Net Other expense, net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost. Other expense, net was $2.9 million in the first three months of 2025, and was de minimis in the first three months of 2024.
Previous wording
During the three months ended September 30, 2024 and 2023, in computing our estimated annual effective tax rate, we recorded a valuation allowance against substantially all of the deferred tax asset on the current year estimated disallowed interest expense in the U.S. During the three months ended September 30, 2024, we recognized an income tax benefit of $7.9 million as the result of elections made as part of our 2023 income tax returns.
Current wording
During the three months ended March 31, 2025 and March 31, 2024, in computing our estimated annual effective tax rate, we recorded a valuation allowance against the deferred tax asset on the current year estimated disallowed interest expense in the U.S. Our effective income tax rate for the three months ended March 31, 2025 varies from our effective income tax rate for the three months ended March 31, 2024 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete item noted above.
Previous wording
For the three months ended September 30, 2024, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact related to the disallowed interest expense deductions in the U.S. and tax expense related to global intangible low-taxed income (GILTI), the impact of certain foreign tax rates and the impact of tax credits. For the three months ended September 30, 2023, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact related to the disallowed interest expense deductions in the U.S., net of the impact of a reduction in unrecognized tax benefits, as well as favorable foreign tax rates and the impact of tax credits.
Current wording
For the three months ended March 31, 2025, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact of disallowed interest expense deductions in the U.S., as well as the mix of earnings on a jurisdictional basis, the impact of certain non-U.S. tax rates and non-U.S. withholding taxes, and the impact of global intangible low-taxed income (GILTI). In addition, the impact of tax expense from valuation allowances in certain non-U.S. jurisdictions also impacted our effective tax rate, as compared to the U.S. federal statutory rate, in the first quarter of 2025. These tax expenses were partially offset by the favorable impact of tax credits.
Previous wording
For the nine months ended September 30, 2024, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact related to the disallowed interest expense deductions in the U.S. and tax expense related to global intangible low-taxed income (GILTI), the impact of certain foreign tax rates and the impact of tax credits. For the nine months ended September 30, 2023, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact related to the disallowed interest expense deductions in the U.S., net of the impact of a reduction in unrecognized tax benefits, as well as favorable foreign tax rates and the impact of tax credits.
Current wording
For the three months ended March 31, 2024, our effective income tax rate varied from the U.S. federal statutory rate primarily due to the unfavorable impact of disallowed interest expense deductions in the U.S. and tax expense related to GILTI, net of the favorable impact of certain non-U.S. tax rates and the impact of tax credits.
Previous wording
Net Income (Loss) and Earnings (Loss) Per Share (EPS) Our net income was $48.7 million in the first nine months of 2024, as compared to a net loss of $14.5 million in the first nine months of 2023. Diluted earnings per share was $0.40 in the first nine months of 2024, as compared to a diluted loss per share of $0.12 in the first nine months of 2023. Net income and EPS for the first nine months of 2024 and 2023 were primarily impacted by the factors discussed above.
Current wording
Net Income and Earnings Per Share (EPS) Our net income was $7.1 million in the first three months of 2025, as compared to $20.5 million in the first three months of 2024. Diluted earnings per share was $0.06 in the first three months of 2025, as compared to $0.17 per share in the first three months of 2024. Net income and EPS for the first three months of 2025 and 2024 were primarily impacted by the factors discussed above.
Previous wording
The following table represents sales by reportable segment for the three and nine months ended September 30, 2024 and 2023(in millions):
Current wording
The following table represents sales by reportable segment for the three months ended March 31, 2025 and 2024(in millions):
Previous wording
The change in Driveline sales for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, reflects a reduction of approximately $12 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.
Current wording
The change in Driveline sales for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, reflects a reduction of approximately $15 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.
Previous wording
The change in Metal Forming sales for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, primarily reflects lower production volumes on certain vehicle programs that we support, and a reduction of approximately $7 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Current wording
The change in Metal Forming sales for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, reflects a reduction of approximately $13 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.
Previous wording
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. The amounts for Segment Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023 are as follows(in millions):
Current wording
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. The amounts for Segment Adjusted EBITDA for the three months ended March 31, 2025 and 2024 are as follows(in millions):
Previous wording
For the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, Segment Adjusted EBITDA for the Driveline segment reflects lower production volumes on certain vehicle programs that we support and an increase of approximately $4 million in R&D expense, offset by improved operating performance and lower launch costs. For the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, the increase in Segment Adjusted EBITDA for the Driveline segment primarily reflects approximately $23 million attributable to the impact of increased production volumes on certain vehicle programs that we support, as well as the impact of improved operating performance and lower launch costs. These increases were partially offset by approximately $6 million of higher R&D expense and approximately $6 million associated with the net effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Current wording
For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, Segment Adjusted EBITDA for the Driveline segment reflects the impact of lower production volumes on certain vehicle programs that we support.
Previous wording
For the three and nine months ended September 30, 2023, Segment Adjusted EBITDA for the Metal Forming segment was impacted by $13 million of expense related to a field action with one of our largest customers and there was no such expense for the three and nine months ended September 30, 2024. In addition, for the three months ended September 30, 2024, as compared to the three months ended September 30, 2023, the increase in Segment Adjusted EBITDA for the Metal Forming segment reflects improved operating performance. Additionally, for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023, Segment Adjusted EBITDA for the Metal Forming segment reflects the impact of the timing of commercial recoveries for inflationary costs, partially offset by increased manufacturing costs, primarily labor costs, as well as the impact of production inefficiencies at certain of our locations due, in part, to labor shortages.
Current wording
For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, the increase in Segment Adjusted EBITDA for the Metal Forming segment reflects improved operating performance partially offset by the impact of lower production volumes on certain vehicle programs that we support.
Previous wording
We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Total Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items. We believe that EBITDA and Total Segment Adjusted EBITDA are meaningful measures of performance as they are commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and the banking institutions routinely use EBITDA and Total Segment Adjusted EBITDA, together with other measures, to measure our operating performance relative to other Tier 1 automotive suppliers and to assess the relative mix of Adjusted EBITDA by segment. We also believe that Total Segment Adjusted EBITDA is a meaningful measure as it is used for operational planning and decision-making purposes. EBITDA and Total Segment Adjusted EBITDA are also key metrics used in our calculation of incentive compensation. These non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures as presented by AAM may not be comparable to similarly titled measures reported by other companies.
Current wording
We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Total Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gains or losses on the derivative associated with our Business Combination with Dowlais, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items. We believe that EBITDA and Total Segment Adjusted EBITDA are meaningful measures of performance as they are commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and the banking institutions routinely use EBITDA and Total Segment Adjusted EBITDA, together with other measures, to measure our operating performance relative to other Tier 1 automotive suppliers and to assess the relative mix of Adjusted EBITDA by segment. We also believe that Total Segment Adjusted EBITDA is a meaningful measure as it is used for operational planning and decision-making purposes. EBITDA and Total Segment Adjusted EBITDA are also key metrics used in our calculation of incentive compensation. These non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures as presented by AAM may not be comparable to similarly titled measures reported by other companies.
Previous wording
Our primary liquidity needs are to fund debt service obligations, capital expenditures, R&D spending, including further development of our electrification product portfolio, and working capital requirements, in addition to advancing our strategic initiatives. We believe that operating cash flow, available cash and cash equivalent balances and available borrowing capacity under our Senior Secured Credit Facilities and foreign credit facilities will be sufficient to meet these needs.
Current wording
Our primary liquidity needs are to fund debt service obligations, capital expenditures, R&D spending, and working capital requirements, in addition to advancing our strategic initiatives. We believe that operating cash flow, available cash and cash equivalent balances and available borrowing capacity under our Senior Secured Credit Facilities and non-U.S. credit facilities, as well as committed financing associated with the Business Combination, will be sufficient to meet these needs.
Previous wording
At September 30, 2024, we had over $1.5 billion of liquidity consisting of approximately $543 million of cash and cash equivalents, approximately $892 million of available borrowings under our Revolving Credit Facility and approximately $75 million of available borrowings under foreign credit facilities. We have no significant debt maturities before 2026.
Current wording
At March 31, 2025, we had over $1.5 billion of liquidity consisting of approximately $549 million of cash and cash equivalents, approximately $897 million of available borrowings under our Revolving Credit Facility and approximately $76 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2027.
Previous wording
Operating Activities In the first nine months of 2024, net cash provided by operating activities was $304.2 million as compared to $343.2 million in the first nine months of 2023. The following factors impacted cash from operating activities in the first nine months of 2024, as compared to the first nine months of 2023:
Current wording
Operating Activities In the first three months of 2025, net cash provided by operating activities was $55.9 million as compared to $17.8 million in the first three months of 2024. The following factors impacted cash from operating activities in the first three months of 2025, as compared to the first three months of 2024:
Previous wording
Accounts payable and accrued expenses For the nine months ended September 30, 2024, we experienced a decrease in cash flow from operating activities of approximately $79 million related to the change in our accounts payable and accrued expenses balance from December 31, 2023 to September 30, 2024, as compared to the change in our accounts payable and accrued expenses balance from December 31, 2022 to September 30, 2023. This change was primarily attributable to the timing of production and the associated purchases from suppliers within the applicable periods.
Current wording
Accounts receivable For the three months ended March 31, 2025, we experienced an increase in cash flow from operating activities of approximately $34 million related to the change in our accounts receivable balance from December 31, 2024 to March 31, 2025, as compared to the change in our accounts receivable balance from December 31, 2023 to March 31, 2024. This change was primarily the result of timing of collections on customer receivables.
Previous wording
Interest paid Interest paid was $138.2 million for the nine months ended September 30, 2024, as compared to $132.5 million for the nine months ended September 30, 2023. The change in interest paid was primarily the result of increased interest rates on our variable rate debt.
Current wording
Interest paid Interest paid was $36.2 million for the three months ended March 31, 2025, as compared to $47.8 million for the three months ended March 31, 2024. The decrease in interest paid was the result of lower interest rates on certain of our variable-rate debt, as well as lower outstanding indebtedness in the first quarter of 2025 as compared to the first quarter of 2024.
Previous wording
Restructuring and acquisition-related costs For the full year 2024, we expect restructuring and acquisition-related payments in cash flows from operating activities to be approximately $15 million and we expect the timing of cash payments to approximate the timing of charges incurred.
Current wording
Restructuring and acquisition-related costs For the full year 2025, we expect restructuring payments in cash flows from operating activities to be approximately $20 million to $30 million and we expect the timing of cash payments to approximate the timing of charges incurred. In addition, we expect acquisition-related payments in cash flows from operating activities to be approximately $60 million to $70 million in connection with the Business Combination, and we expect a significant portion of these cash payments to occur at closing of the transaction, which is currently expected in the fourth quarter of 2025.
Previous wording
Pension and other postretirement benefits Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions), we expect our regulatory pension funding requirements in 2024 to be less than $1 million. We expect our cash payments for other postretirement benefit obligations in 2024, net of GM cost sharing, to be approximately $11.0 million.
Current wording
Pension and other postretirement benefits Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions), we expect our regulatory pension funding requirements in 2025 to be approximately $1.1 million. We expect our cash payments for other postretirement benefit obligations in 2025, net of GM cost sharing, to be approximately $11.6 million.
Previous wording
Investing Activities In the first nine months of 2024, net cash used in investing activities was $174.2 million as compared to $126.7 million for the nine months ended September 30, 2023. Capital expenditures were $170.0 million in the first nine months of 2024 as compared to $138.6 million in the first nine months of 2023. We expect our capital spending in 2024 to be approximately 4% of sales.
Current wording
Investing Activities In the first three months of 2025, net cash used in investing activities was $40.2 million as compared to $48.2 million for the three months ended March 31, 2024. Capital expenditures were $69.3 million in the first three months of 2025 as compared to $48.0 million in the first three months of 2024. We expect our capital spending in 2025 to be approximately 5% of sales.
Previous wording
In October 2024, we entered into the India Sale Agreement and the transaction is expected to close in the fourth quarter of 2024, subject to customary closing conditions, including the receipt of regulatory approvals. Upon closing, we expect to collect the sales price of $65 million in cash, subject to certain customary adjustments at closing.
Current wording
In October 2024, we entered into the India Sale Agreement and the transaction is expected to close in the first half of 2025, subject to customary closing conditions. Upon closing, we expect to collect the sales price of $65 million in cash, subject to certain customary adjustments at closing.
Previous wording
Financing Activities In the first nine months of 2024, net cash used in financing activities was $106.0 million, as compared to $108.2 million in the first nine months of 2023. The following factors impacted cash from financing activities in the first nine months of 2024, as compared to the first nine months of 2023:
Current wording
Financing Activities In the first three months of 2025, net cash used in financing activities was $24.0 million, as compared to $16.0 million in the first three months of 2024. The following factors impacted cash from financing activities in the first three months of 2025, as compared to the first three months of 2024:
Previous wording
Senior Secured Credit Facilities American Axle & Manufacturing Holdings, Inc. (Holdings) and American Axle & Manufacturing, Inc. (AAM, Inc.) are parties to an amended and restated credit agreement that was entered into on March 11, 2022 and amended on December 13, 2022, June 28, 2023 and May 16, 2024 (as so amended, the Amended and Restated Credit Agreement) which provides for a term loan A facility (the Term Loan A Facility), term loan B facility (the Term Loan B Facility) and a 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).
Current wording
Senior Secured Credit Facilities American Axle & Manufacturing Holdings, Inc. (Holdings) and American Axle & Manufacturing, Inc. (AAM, Inc.) are parties to an amended and restated credit agreement that was entered into on March 11, 2022 and has been subsequently amended (as so amended, the Amended and Restated Credit Agreement) which provides for a term loan A facility (the Term Loan A Facility), term loan B facility (the Term Loan B Facility) and a 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).
Previous wording
At September 30, 2024, we had $892.2 million available under the Revolving Credit Facility. This availability reflects a reduction of $32.8 million primarily for standby letters of credit issued against the facility. In the nine months ended September 30, 2023, we repaid $25.0 million on our Revolving Credit Facility that had been drawn in the fourth quarter of 2022.
Current wording
At March 31, 2025, we had $897.1 million available under the Revolving Credit Facility. This availability reflects a reduction of $27.9 million primarily for standby letters of credit issued against the facility.
Previous wording
As of September 30, 2024, we have prepaid $6.5 million of the outstanding principal on our Term Loan A Facility and $15.2 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 through the end of 2024 and under the Term Loan B Facility through the end of 2026.
Current wording
As of March 31, 2025, we have prepaid $11.8 million of the outstanding principal on our Term Loan B Facility. These payments satisfy our obligation for principal payments under the Term Loan B Facility through the end of 2026.
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Previous report — wording carried elsewhere
Gross margin was 11.4% in the third quarter of 2024, as compared to 8.4% in the third quarter of 2023. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.
Previous report — wording carried elsewhere
Amortization of Intangible Assets Amortization expense related to intangible assets was $20.8 million for the three months ended September 30, 2024 and $21.4 million for the three months ended September 30, 2023.
Previous report — wording carried elsewhere
Interest Expense and Interest Income Interest expense was $45.2 million in the third quarter of 2024, as compared to $50.8 million in the third quarter of 2023. The weighted-average interest rate of our long-term debt outstanding was 7.2% in the third quarter of 2024 and 6.7% in the third quarter of 2023.
Previous report — wording carried elsewhere
Other Income (Expense), Net Other income (expense), net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost. Other income (expense), net was expense of $5.5 million in the third quarter of 2024, as compared to income of $1.9 million in the third quarter of 2023. The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the third quarter of 2024, as compared to the third quarter of 2023.
Previous report — wording carried elsewhere
Our effective income tax rate for the three months ended September 30, 2024 varies from our effective income tax rate for the three months ended September 30, 2023 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete items noted above.
Previous report — wording carried elsewhere
For both the nine months ended September 30, 2024 and September 30, 2023, material costs were approximately 57% of total cost of goods sold.
Previous report — wording carried elsewhere
Selling, General and Administrative Expenses (SG&A)
Previous report — wording carried elsewhere
Our effective income tax rate for the nine months ended September 30, 2024 varies from our effective income tax rate for the nine months ended September 30, 2023 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete items noted above.
Previous report — wording carried elsewhere
Accounts receivable For the nine months ended September 30, 2024, we experienced a decrease in cash flow from operating activities of approximately $39 million related to the change in our accounts receivable balance from December 31, 2023 to September 30, 2024, as compared to the change in our accounts receivable balance from December 31, 2022 to September 30, 2023. This change was primarily the result of timing of collections on customer receivables due, in part, to our participation in an early payment program offered by our largest customer, which allows us to sell certain of our North American receivables from this customer to a third party at our discretion. We utilize this program from time to time.