Dauch Corp
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
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, 2026 · Filed May 8, 2026
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 2025-09-30; filed 2025-11-07.
0001062231-25-000097
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001062231-26-000126
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 134 previous paragraphs and 103 current paragraphs.
28 unchanged; 55 reworded; 20 added; 47 removed; 4 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 (20)
Current report
Effective January 26, 2026, American Axle & Manufacturing Holdings, Inc. changed its name to Dauch Corporation. As used in this report, except as the context otherwise requires, references to “our Company,” "we," "our," "us" or “Dauch” mean Dauch Corporation and its subsidiaries and predecessors, collectively.
Current report
Dauch Corporation is a premier Driveline and Metal Forming supplier serving the global automotive industry with a powertrain-agnostic product portfolio that supports electric, hybrid, and internal combustion vehicles. The company is headquartered in Detroit, Michigan, with operations that span 24 countries and more than 175 locations. Formed through the acquisition of Dowlais Group plc (name subsequently changed to Dowlais Group Limited) (Dowlais) and its subsidiaries - GKN Automotive and GKN Powder Metallurgy, Dauch unites deep engineering roots with global manufacturing capabilities and an entrepreneurial spirit to move mobility forward.
Current report
On February 3, 2026, we completed our previously announced acquisition of Dowlais whereby we acquired the entire issued share capital of Dowlais (the Business Combination). Pursuant to the Business Combination, Dowlais shareholders received for each Dowlais ordinary share: 0.0881 shares of new Dauch Corporation common stock and 43 pence per share in cash (approximately $0.59 per share as of the closing date), resulting in the issuance of approximately 117 million shares (and an increase in authorized shares from 150 million shares to 375 million shares) and a total purchase price of approximately $1.7 billion. Following the close of the transaction, the combined company is headquartered in Detroit, Michigan and led by the Company's Chairman and CEO.
Current report
During the first three months of 2026, geopolitical conflicts have indirectly impacted our operations and financial results primarily through supply chain disruptions. We continue to work with customers and suppliers in our effort to protect continuity of supply as we expect these challenges to continue in 2026. Due to the ongoing uncertainty associated with these supply chain constraints, the ultimate impact on our net sales, results of operations and cash flows is unknown.
Current report
In January of 2026, we reached a settlement agreement with the customer on this matter (the Electric Vehicle Cancellation Settlement). As a result, we received approximately $28 million in the first quarter of 2026 for the reimbursement of the Company's capitalized engineering, design and development costs.
Current report
SG&A as a percentage of net sales was 5.8% in the first three months of 2026 as compared to 6.4% in the first three months of 2025. R&D expense, net of customer ED&D recoveries, was approximately $51.6 million in the first three months of 2026, as compared to $36.3 million in the first three months of 2025. The change in SG&A in the first three months of 2026, as compared to the first three months of 2025, reflects an increase of approximately $39 million associated with the Business Combination. SG&A expense also reflects an increase in R&D spending in the first three months of 2026, as compared to the first three months of 2025, which was partially offset by the achievement of synergies as a result of the Business Combination.
Current report
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $98.9 million for the three months ended March 31, 2026, as compared to $19.7 million for the three months ended March 31, 2025.
Current report
Debt Refinancing and Redemption Costs Debt refinancing and redemption costs were $3.0 million in the first three months of 2026 as compared to $3.3 million in the first three months of 2025.
Current report
Income from Equity-Method Affiliates Income from equity-method affiliates represents our proportionate share of earnings from equity in unconsolidated subsidiaries. In the first three months of 2026, we recognized income from equity-method affiliates of $10.3 million, as compared to $0.1 million in the first three months of 2025, primarily driven by our net share of income from Shanghai GKN HUAYU Driveline Systems Co Limited (SDS). See Note 15 - Investments in Equity-Method Affiliates for more information on our equity-method affiliates.
Current report
For the three months ended March 31, 2026, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the release of $22.4 million of valuation allowance in a non-U.S. jurisdiction, partially offset by permanent adjustments associated with nondeductible transaction costs incurred in conjunction with the Business Combination, and net losses in certain jurisdictions with no corresponding tax benefit due to increases in our valuation allowance.
Current report
On February 3, 2026, we completed the Business Combination and we began consolidating the results of Dowlais on that date, which are reported in our Driveline and Metal Forming segments for the three months ended March 31, 2026. Additionally, in the first quarter of 2026, we moved certain plant locations that were previously reported under our Metal Forming segment to our Driveline segment in order to better align our product and process technologies. The amounts in the tables below for the three months ended March 31, 2025 have been recast to reflect this reorganization.
Current report
The increase in Metal Forming sales for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily reflects an increase of approximately $204 million associated with the impact of the Business Combination.
Current report
For the three months ended March 31, 2026, based in part on our recent Business Combination and to more effectively measure our global business profile, we revised our definition of Adjusted EBITDA to exclude the impact of unrealized foreign exchange gains and losses on acquired U.S. Private Placement Notes, mark-to-market on nondesignated foreign exchange derivatives assumed as part of the Business Combination with Dowlais, gains and losses on the disposal of property, plant and equipment, and amortization of the acquisition intangible asset attributable to our investment in Shanghai GKN HUAYU Driveline Systems Co Limited (SDS). We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. As revised, 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, interest income on debt held in escrow, gains or losses on equity securities, impairment charges, unrealized foreign exchange gains and losses on acquired U.S. Private Placement Notes, mark-to-market on nondesignated foreign exchange derivatives assumed as part of the Business Combination with Dowlais, gains and losses on the disposal of property, plant and equipment, amortization of the acquisition intangible asset attributable to our investment in SDS, net of tax, and non-recurring items.
Current report
On February 3, 2026, we completed our acquisition of Dowlais for a total purchase price of approximately $1.7 billion, of which approximately $332 million was paid in cash, net of Dowlais cash acquired. In January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract (the Business Combination Derivative). At the closing date of the acquisition, we settled the Business Combination Derivative and received net cash proceeds of approximately $66 million, which is presented separately from the cash paid to acquire Dowlais in our Condensed Consolidated Statement of Cash Flows. Additionally, in the first quarter of 2026, we received approximately $21 million from the proceeds of the sale of a former Dowlais subsidiary.
Current report
The Senior Secured Credit Facilities provide back-up liquidity for our non-U.S. 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 Condensed Consolidated Balance Sheet.
Current report
In the fourth quarter of 2025, we used a portion of the proceeds from the Notes to complete a redemption of all $500 million aggregate principal amount outstanding of 6.50% Notes due 2027 and a partial redemption of $150 million principal amount of 6.875% Notes due 2028. The remaining proceeds of the Notes, together with certain amounts of prefunded interest, were deposited into segregated escrow accounts which are presented as Restricted cash on our Condensed Consolidated Balance Sheet as of December 31, 2025.
Current report
On February 3, 2026, upon completion of the Business Combination, $1,450 million, together with certain interest, was released from escrow, and was used, together with borrowings under our Tranche C Term Facility and cash on hand, to (a) pay the cash consideration payable in connection with the Business Combination and related fees and expenses, (b) repay in full all outstanding borrowings under the credit facilities of Dowlais and to pay related fees, expenses and premiums, after which all the credit facilities of Dowlais were terminated and (c) fund a change of control offer for certain outstanding notes of Dowlais. We intend to use the remaining proceeds of the Notes for general corporate purposes, which may include, among other things, repayment of other outstanding indebtedness. The 6.375% Notes are secured by a first priority security interest in substantially all of the assets of AAM, Inc., Dauch and Dauch's wholly owned domestic subsidiaries (other than AAM, Inc.) that guarantee the Senior Secured Credit Facilities, subject to certain thresholds, exceptions and permitted liens.
Current report
U.S. Private Placement Notes As part of the Business Combination, Dauch assumed Dowlais' U.S. Private Placement Notes with the aggregate principal amount of $500 million (U.S. Private Placement Notes). Pursuant to the terms of the U.S. Private Placement Notes, the completion of the Business Combination resulted in a change of control, which required the Company to make an offer to redeem the U.S. Private Placement Notes at par, plus accrued and unpaid interest as of the redemption date. During the three months ended March 31, 2026, a change of control offer was made and completed, resulting in the redemption of $151 million of the U.S. Private Placement Notes. The U.S. Private Placement Notes that were not redeemed will remain outstanding, with remaining maturities ranging from approximately four to eleven years. The U.S. Private Placement Notes are unsecured and subject to covenants that, among other things, limit the ability of Dowlais and certain of its subsidiaries to enter into transactions with affiliates, consolidate, merge or transfer all of their assets, create or incur liens, incur additional indebtedness, or dispose of assets, and also require compliance with certain financial maintenance covenants. The U.S. Private Placement Notes contain customary events of default.
Current report
Repayment of Dowlais Indebtedness Upon the acquisition of Dowlais, we assumed $1,876.9 million of existing Dowlais indebtedness, which we repaid following the acquisition, with the exception of $349.0 million of U.S. Private Placement Notes, as described above, which remain outstanding as of March 31, 2026.
Current report
Redemption of 6.875% Notes Due 2028 Subsequent to March 31, 2026, we voluntarily redeemed a portion of our 6.875% Notes due 2028. In May 2026, this resulted in a principal payment of $125.0 million and $3.0 million in accrued interest. We also expensed approximately $0.6 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.
Removed paragraphs (47)
Previous report
Unless the context otherwise requires, references to "we," "our," "us" or "AAM" shall mean collectively (i) American Axle & Manufacturing Holdings, Inc. (Holdings), a Delaware corporation, (ii) American Axle & Manufacturing, Inc. (AAM, Inc.), a Delaware corporation, and its direct and indirect subsidiaries, and, (iii) Metaldyne Performance Group, Inc. (MPG) and its direct and indirect subsidiaries. AAM Inc. and MPG are wholly owned subsidiaries of Holdings.
Previous report
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 nearly 75 facilities in 15 countries, AAM is bringing the future faster for a safer and more sustainable tomorrow.
Previous report
In the first quarter of 2025, AAM announced that we reached an 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.
Previous report
Pursuant to the Business Combination, Dowlais shareholders will be entitled to receive for each Dowlais ordinary share: 0.0881 shares of new AAM common stock and 43 pence per share in cash (approximately $0.58 per share as of September 30, 2025). The transaction has been unanimously approved by the Boards of Directors of AAM and Dowlais and has also been approved by both sets of shareholders. 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 in the first quarter of 2026, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.
Previous report
Disposition of AAM India Manufacturing Corporation Pvt., Ltd.
Previous report
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 (BFL) for a sales price of $65 million (the India Sale Agreement). In July 2025, we completed the sale of AAM India Manufacturing Corporation Pvt., Ltd., and in October 2025, we reached agreement with BFL on the final settlement amount associated with the post-closing adjustments, including the final working capital true-up. As a result, total cash proceeds from the sale, net of cash divested, were approximately $64 million, of which we collected approximately $58 million in July 2025 and the remaining $6 million in the fourth quarter of 2025. For the nine months ended September 30, 2025 and 2024, we recorded impairment charges of $8 million and $12 million, respectively, to reduce the carrying value of this business to fair value less costs to sell.
Previous report
The change in net sales in the third quarter of 2025, as compared to the third quarter of 2024, primarily reflects an increase of approximately $25 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, offset by a reduction of approximately $30 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., which was completed on July 1, 2025.
Previous report
SG&A as a percentage of net sales was 6.6% in the third quarter of 2025, as compared to 6.3% in the third quarter of 2024. Research and development (R&D) expense, net of customer engineering, design and development (ED&D) recoveries, was approximately $37.4 million in the third quarter of 2025, as compared to $40.1 million in the third quarter of 2024. The change in SG&A in the third quarter of 2025, as compared to the third quarter of 2024, primarily reflects higher incentive compensation expense, partially offset by the reduction in net R&D expense.
Previous report
Impairment Charge In connection with the India Sale Agreement, we recorded an impairment charge in the three months ended September 30, 2024 of $12.0 million to reduce the carrying value of this business to fair value less costs to sell and there was no such charge for the three months ended September 30, 2025. See Note 2 - Acquisitions and Dispositions for additional detail regarding the India Sale Agreement.
Previous report
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $21.4 million in the third quarter of 2025 and $2.2 million in the third quarter of 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. 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 $48.4 million in the third quarter of 2025, as compared to $41.7 million in the third quarter of 2024. Operating margin was 3.2% in the third quarter of 2025, as compared to 2.8% in the third quarter of 2024. The changes in operating income and operating margin were primarily due to factors discussed in Net Sales, Cost of Goods Sold, Impairment Charge and Restructuring and Acquisition-Related Costs above.
Previous report
Interest Expense and Interest Income Interest expense was $42.7 million in the third quarter of 2025, as compared to $45.2 million in the third quarter of 2024. The weighted-average interest rate of our long-term debt outstanding was 6.7% in the third quarter of 2025 and 7.2% in the third quarter of 2024.
Previous report
Interest income was $7.0 million in the third quarter of 2025 and $7.1 million in the third quarter of 2024.
Previous report
Debt Refinancing and Redemption Costs In the third quarter of 2024, we voluntarily redeemed a portion of our then outstanding 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
Income Tax Expense (Benefit)Income tax was a benefit of $10.9 million for the three months ended September 30, 2025, as compared to a benefit of $12.1 million for the three months ended September 30, 2024. Our effective income tax rate was 641.2% in the third quarter of 2025, as compared to 576.2% in the third quarter of 2024.
Previous report
On July 4, 2025, H.R. 1 (the One Big Beautiful Bill or the Act) was enacted into law introducing a broad range of U.S. federal tax reform provisions, which included, among other items, extending and modifying certain key Tax Cuts & Jobs Act provisions and expanding certain Inflation Reduction Act incentives while accelerating the phase-out of other incentives. The most impactful provision of the Act for AAM is a permanent modification to the interest expense limitation rules under Internal Revenue Code (IRC) Section 163(j), including an amendment to the Adjusted Taxable Income (ATI) calculation required under IRC Section 163(j)(8)(A). Based on the provisions of the Act, ATI is now computed without regard to any deduction allowable for depreciation and amortization (based on EBITDA as the interest limitation base), which has reduced limitations on the deductibility of our business interest expense and resulted in the realization of additional deferred tax assets related to previously disallowed interest expense carryforwards. During the three months ended September 30, 2025 we recognized a discrete income tax benefit of $22.0 million as a result of the enactment of the One Big Beautiful Bill.
Previous report
During the three months ended September 30, 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. Additionally, 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 return.
Previous report
For the three months ended September 30, 2025, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the impact of the Act, as well as the mix of earnings on a jurisdictional basis, and the impact of certain non-U.S. tax rates and non-U.S. withholding taxes. 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, for the three months ended September 30, 2025. These tax expenses were partially offset by the favorable impact of tax credits.
Previous report
For the three months ended September 30, 2024, our effective income tax rate varied 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, the impact of certain foreign tax rates and the impact of tax credits.
Previous report
Net Income and Earnings Per Share (EPS) Net income was $9.2 million in the third quarter of 2025, as compared to $10.0 million in the third quarter of 2024. Diluted earnings per share was $0.07 per share in the third quarter of 2025, as compared to $0.08 in the third quarter of 2024. Net income and EPS for the third quarters of 2025 and 2024 were primarily impacted by the factors discussed above.
Previous report
RESULTS OF OPERATIONS –– NINE MONTHS ENDED SEPTEMBER 30, 2025 AS COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2024
Previous report
Net Sales
Previous report
Cost of Goods Sold
Previous report
The decrease in cost of goods sold in the first nine months of 2025, as compared to the first nine months of 2024, primarily reflects lower production volumes on certain vehicle programs that we support, as well as a reduction of approximately $28 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., and the impact of improved operating performance. For the nine months ended September 30, 2025, material costs were approximately 55% of total cost of goods sold as compared to approximately 57% for the nine months ended September 30, 2024.
Previous report
Gross Profit
Previous report
SG&A as a percentage of net sales was 6.5% in the first nine months of 2025 as compared to 6.3% in the first nine months of 2024. R&D expense, net of customer ED&D recoveries, was approximately $109.8 million in the first nine months of 2025, as compared to $121.3 million in the first nine months of 2024, and was the primary driver of the change in SG&A.
Previous report
Amortization of Intangible Assets Amortization expense related to intangible assets was $61.4 million for the nine months ended September 30, 2025, as compared to $62.1 million for the nine months ended September 30, 2024.
Previous report
Impairment Charges In connection with the India Sale Agreement, we recorded impairment charges of $8.0 million and $12.0 million in the nine months ended September 30, 2025 and September 30, 2024, respectively, to reduce the carrying value of this business to fair value less costs to sell. See Note 2 - Acquisitions and Dispositions for additional detail regarding the India Sale Agreement.
Previous report
Debt Refinancing and Redemption Costs In the first nine 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 report
In the first nine months of 2024, we amended our existing Amended and Restated Credit Agreement and established a 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. In addition, in the first nine months of 2024, we voluntarily redeemed a portion of our then outstanding 6.25% Notes due 2026. This resulted in a principal payments of $80.0 million and $1.6 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.
Previous report
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) in our Condensed Consolidated Statement of Income. 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.
Previous report
During the nine months ended September 30, 2025 we recognized a discrete income tax benefit of $22.0 million as a result of the enactment of the One Big Beautiful Bill. During the nine months ended September 30, 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. Additionally, 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 return.
Previous report
Our effective income tax rate for the nine months ended September 30, 2025 varies from our effective income tax rate for the nine months ended September 30, 2024 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete items noted above.
Previous report
For the nine months ended September 30, 2025, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the impact of the Act, as well as the mix of earnings on a jurisdictional basis, and the impact of certain non-U.S. tax rates and non-U.S. withholding taxes. 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, for the nine months ended September 30, 2025. These tax expenses were partially offset by the favorable impact of tax credits.
Previous report
For the nine months ended September 30, 2024, our effective income tax rate varied 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, the impact of certain foreign tax rates and the impact of tax credits.
Previous report
The change in Driveline sales for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, primarily reflects lower production volumes on certain vehicle programs that we support, as well as a reduction of approximately $30 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd. These decreases were partially offset by the impact of certain commercial pricing and other recoveries from customers and an increase 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
The change in Metal Forming sales for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, reflects lower production volumes on certain vehicle programs that we support, partially offset by an increase of approximately $10 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. The change in Metal Forming sales for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, reflects lower production volumes on certain vehicle programs that we support.
Previous report
For the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, Segment Adjusted EBITDA for the Driveline segment reflects improved operating performance and the impact of certain commercial pricing and other recoveries from customers. Segment Adjusted EBITDA for the Driveline segment also reflects approximately $5 million of favorability in other segment income primarily related to the change in foreign exchange gains and losses during the third quarter of 2025, as compared to the third quarter of 2024.
Previous report
Interest paid Interest paid was $117.6 million for the nine months ended September 30, 2025, as compared to $138.2 million for the nine months ended September 30, 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 nine months of 2025, as compared to the first nine months of 2024.
Previous report
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.
Showing the first 40 of 47 passages. Open the source sections for the rest.
Reworded paragraphs (55)
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 44% of our consolidated net sales for the first nine months of 2025, 41% for the first nine months of 2024 and 42% for the full year 2024.
Current wording
We are a primary supplier of driveline products 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 components from our Metal Forming segment. Sales to GM were approximately 31% of our consolidated net sales for the first three months of 2026, and 44% for both the first three months of 2025 and the full year 2025.
Previous wording
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup truck and its derivatives. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales for the first nine months of 2025, 14% for the first nine months of 2024 and 13% for the full year 2024.
Current wording
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup truck and its derivatives. In addition, we sell various components to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales for the first three months of 2026, 11% for the first three months of 2025 and 13% for the full year 2025.
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 15% of our consolidated net sales for the first nine months of 2025 and 13% for both the first nine months of 2024 and the full year 2024.
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, Escape and Lincoln Nautilus, and we also sell various components to Ford from our Metal Forming segment. Sales to Ford were approximately 11% of our consolidated net sales for the first three months of 2026 and 15% for both the first three months of 2025 and the full year 2025.
Previous wording
Pending Business Combination with Dowlais Group plc
Current wording
Business Combination with Dowlais Group plc
Previous wording
Uncertainty Associated with Tariffs and Trade Relations
Current wording
Uncertainty Associated with Tariffs and Trade Relations and Other Supply Chain Constraints
Previous wording
The U.S. government has 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.
Current wording
In 2025, the U.S. government implemented tariffs and increased 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. Additionally, the expected 2026 review of the United States-Mexico-Canada Agreement (USMCA) could further contribute to this instability and uncertainty in trade relations.
Previous wording
For the nine months ended September 30, 2025, the net impact on earnings related to the aforementioned tariffs was approximately $15 million and we expect a continuing impact from tariffs in future periods. We are implementing mitigation actions and pursuing recoveries from our customers for the cost increases resulting from the tariffs but have not reached final agreement with all customers and therefore the total amount and timing of such recoveries is unknown. For the full year 2025, we anticipate the impact on earnings of these tariffs to be approximately $10 million to $15 million after mitigation actions and estimated customer recoveries. However, due to uncertainty associated with the potential further implementation or expansion of tariffs, as well as the potential for additional retaliatory actions and other changes to existing trade agreements or changes in international trade relations, the actual impact on 2025 earnings could differ materially from this estimate.
Current wording
For the three months ended March 31, 2026, the net impact on earnings related to the aforementioned tariffs was approximately $30 million and we expect a continuing impact from tariffs in future periods. For the year ended December 31, 2025, the net impact on earnings related to the aforementioned tariffs was approximately $10 million. We are implementing mitigation actions and pursuing recoveries from our customers for the cost increases resulting from the tariffs but have not reached final agreement with all customers and therefore the total amount and timing of such recoveries is unknown. Further, certain of these recoveries may include government-issued credits and there is uncertainty about whether we will be able to effectively monetize such credits. For the full year 2026, we anticipate the impact on earnings of these tariffs to be approximately $10 million to $20 million after mitigation actions and estimated customer recoveries. However, due to uncertainty associated with the potential further implementation or expansion of tariffs, as well as the potential for additional retaliatory actions and other changes to existing trade agreements or changes in international trade relations, the actual impact on 2026 earnings could differ materially from this estimate.
Previous wording
In April 2024, one of our largest customers notified AAM that production purchase orders related to a previously announced contract to supply e-Beam axles for a future vehicle program were terminated. We believe that the termination of these purchase orders reflects, in part, the significant uncertainty currently underlying the electric vehicle environment, including volatility in estimated volumes and the timing of production. We have submitted a cancellation claim to recover certain costs incurred in connection with the terminated purchase orders. As of September 30, 2025, we have approximately $70 million of assets in our Condensed Consolidated Balance Sheet associated with this program, consisting of capitalized engineering, design and development costs and other commercial amounts. As of the date of this filing, we believe we are entitled to claim and recover the full amount. However, due to the nature of the cancellation claim process, and the need to reach final resolution with the customer, the ultimate amount to be recovered is not determinable and could differ materially from the amount included in our Condensed Consolidated Balance Sheet.
Current wording
In April 2024, one of our largest customers notified the Company that production purchase orders related to a previously announced contract to supply e-Beam axles for a future vehicle program were terminated. We believe that the termination of these purchase orders reflects, in part, the significant uncertainty currently underlying the electric vehicle environment, including volatility in estimated volumes and the timing of production.
Previous wording
The change in net sales in the first nine months of 2025, as compared to the first nine months of 2024, primarily reflects lower production volumes on certain vehicle programs that we support and a reduction of approximately $30 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., which was completed on July 1, 2025. These decreases were partially offset by an increase of approximately $8 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 impact of the Business Combination on net sales for the first three months of 2026 was approximately $972 million. Excluding the impact of the Business Combination, the change in net sales in the first three months of 2026, as compared to the first three months of 2025, primarily reflects lower production volumes on certain vehicle programs that we support and a reduction of approximately $35 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., which was completed on July 1, 2025. These decreases were partially offset by an increase of approximately $44 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Previous wording
The decrease in cost of goods sold in the third quarter of 2025, as compared to the third quarter of 2024, is primarily attributable to a reduction of approximately $28 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd, as well as the impact of improved operating performance. These decreases in cost of goods sold were partially offset by an increase of approximately $24 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. For the three months ended September 30, 2025, material costs were approximately 54% of total costs of goods sold, as compared to approximately 56% for the three months ended September 30, 2024.
Current wording
The impact on cost of goods sold of the Business Combination was approximately $927 million for the first three months of 2026, which includes approximately $38 million for the step-up of inventory to fair value as a result of purchase accounting. Excluding the impact of the Business Combination, the change in cost of goods sold in the first three months of 2026, as compared to the first three months of 2025, primarily reflects an increase of approximately $39 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, partially offset by a reduction of approximately $33 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., as well as the impact of improved operating performance. For the three months ended March 31, 2026, material costs were approximately 52% of total cost of goods sold as compared to approximately 55% for the three months ended March 31, 2025.
Previous wording
Gross margin was 12.7% in the first nine months of 2025, as compared to 12.4% in the first nine months of 2024. 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 9.5% in the first three months of 2026, as compared to 12.3% in the first three months of 2025. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.
Previous wording
Amortization of Intangible Assets Amortization expense related to intangible assets was $20.4 million for the three months ended September 30, 2025 and $20.8 million for the three months ended September 30, 2024.
Current wording
Amortization of Intangible Assets Amortization expense for the three months ended March 31, 2026 was $22.9 million, as compared to $20.6 million for the three months ended March 31, 2025.
Previous wording
Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $57.6 million for the nine months ended September 30, 2025, as compared to $9.7 million for the nine months ended September 30, 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 wording
On February 3, 2026, we completed the Business Combination. During the three months ended March 31, 2026, we incurred $53.8 million of acquisition-related costs and $18.8 million of integration expenses associated with the Business Combination. Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred. Integration expenses primarily reflect costs incurred for professional fees incurred in conjunction with integration activities.
Previous wording
In 2025, we expect to incur approximately $40 million to $50 million of total restructuring charges. In addition, we expect to incur $50 million to $60 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.
Current wording
In 2026, we expect to incur approximately $100 million to $140 million of total restructuring charges. In addition, we expect to incur $60 million to $70 million of acquisition-related costs and $100 million to $125 million of integration costs in 2026 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 $146.1 million in the first nine months of 2025 as compared to $205.2 million in the first nine months of 2024. Operating margin was 3.3% in the first nine months of 2025, as compared to 4.3% in the first nine 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.
Current wording
Operating Income (Loss) Operating loss was $33.7 million in the first three months of 2026 as compared to operating income of $42.7 million in the first three months of 2025. Operating margin was (1.4)% in the first three months of 2026, as compared to 3.0% in the first three months of 2025. The changes in operating income and operating margin were due primarily to the factors discussed in Net Sales, Cost of Goods Sold, SG&A, Amortization of Intangible Assets and Restructuring and Acquisition-Related Costs above.
Previous wording
Interest Expense and Interest Income Interest expense was $128.7 million in the first nine months of 2025 as compared to $142.1 million in the first nine months of 2024. The weighted-average interest rate of our long-term debt outstanding was 6.7% for the nine months ended September 30, 2025 and 7.1% for the nine months ended September 30, 2024. The reduction in interest expense in the first nine months of 2025, as compared to the first nine months of 2024, was attributable to lower outstanding indebtedness and the reduction in our weighted-average interest rate. We expect our interest expense for the full year 2025 to be approximately $205 million including interest expense to be incurred in connection with financing the Business Combination.
Current wording
Interest Expense and Interest Income Interest expense was $89.6 million in the first three months of 2026 as compared to $42.9 million in the first three months of 2025. The weighted-average interest rate of our long-term debt outstanding was 7.1% for the three months ended March 31, 2026 and 6.9% for the three months ended March 31, 2025. The increase in interest expense the first three months of 2026, as compared to the first three months of 2025, primarily reflects the issuance of new indebtedness in connection with the Business Combination. We expect our interest expense for the full year 2026 to be approximately $340 million to $360 million.
Previous wording
Interest income was $18.2 million in the first nine months of 2025 as compared to $21.5 million in the first nine months of 2024. In connection with the 6.375% senior secured notes due 2032 (the 6.375% Notes) and 7.75% senior unsecured notes due 2033 (the 7.75% Notes, and together with the 6.375% Notes, the Notes) issued by AAM, Inc. on October 3, 2025, we estimate approximately $16 million of interest income in the fourth quarter of 2025 on the proceeds from the Notes placed in segregated escrow accounts. See Note 5 - Long-Term Debt for further detail on the financing for the Business Combination and the funds in escrow.
Current wording
Interest income was $12.1 million in the first three months of 2026 as compared to $5.6 million in the first three months of 2025. In connection with the 6.375% senior secured notes due 2032 (the 6.375% Notes) and 7.75% senior unsecured notes due 2033 (the 7.75% Notes, and together with the 6.375% Notes, the Notes) issued by American Axle & Manufacturing, Inc. (AAM, Inc.) on October 3, 2025, we received approximately $4.6 million of interest income in the first quarter of 2026 on the proceeds from the Notes placed in segregated escrow accounts until the closing of the Business Combination on February 3, 2026. See Note 5 - Long-Term Debt for further detail on the financing for the Business Combination and the funds in escrow.
Previous wording
Gain (Loss) on Business Combination Derivative In the first nine months of 2025, we recognized an unrealized gain on the Business Combination Derivative of $52.2 million. See Note 6 - Derivatives for additional detail on the Business Combination Derivative.
Current wording
Gain on Business Combination Derivative In the first three months of 2026, we recognized a realized gain on the Business Combination Derivative of $12.9 million upon the completion of the Business Combination. 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.
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 income of $2.3 million in the first nine months of 2025, as compared to expense of $14.3 million in the first nine months of 2024. The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the nine months ended September 30 2025, as compared to the nine months ended September 30, 2024.
Current wording
Other Expense, Net Other expense, net includes the net effect of foreign exchange gains and losses and all components of net periodic pension and postretirement benefit costs other than service cost. Other expense, net was $28.6 million in the first three months of 2026, as compared to $3.0 million in the first three months of 2025. The change in Other expense, net was primarily driven by changes in foreign exchange gains and losses in the first three months of 2026, as compared to the first three months of 2025.
Previous wording
Income Tax Expense (Benefit)Income tax expense was $31.2 million for the nine months ended September 30, 2025, as compared to expense of $21.0 million for the nine months ended September 30, 2024. Our effective income tax rate was 35.9% in the first nine months of 2025 as compared to 30.1% in the first nine months of 2024.
Current wording
Income Tax Expense (Benefit)Income tax benefit was $19.6 million for the three months ended March 31, 2026, as compared to expense of $14.0 million for the three months ended March 31, 2025. Our effective income tax rate was 16.4% in the first three months of 2026 as compared to 66.4% in the first three months of 2025.
Previous wording
Our effective income tax rate for the three months ended September 30, 2025 varies from our effective income tax rate for the three months ended September 30, 2024 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete items noted above.
Current wording
Our income tax expense and effective income tax rate for the three months ended March 31, 2026 vary from our income tax expense and effective income tax rate for the three months ended March 31, 2025 primarily as a result of the release of a valuation allowance in a non-U.S. jurisdiction during the three months ended March 31, 2026.
Previous wording
Net Income and Earnings Per Share (EPS) Our net income was $55.6 million in the first nine months of 2025, as compared to $48.7 million in the first nine months of 2024. Diluted earnings per share was $0.45 in the first nine months of 2025, as compared to $0.40 per share in the first nine months of 2024. Net income and EPS for the first nine months of 2025 and 2024 were primarily impacted by the factors discussed above.
Current wording
Net Income (Loss) Attributable to Dauch and Earnings (Loss) Per Share (EPS) Net loss attributable to Dauch was $100.3 million in the first three months of 2026, as compared to income of $7.1 million in the first three months of 2025. Diluted loss per share was $0.52 in the first three months of 2026, as compared to diluted earnings per share of $0.06 per share in the first three months of 2025. Net income (loss) attributable to Dauch and EPS for the first three months of 2026 and 2025 were primarily impacted by the factors discussed above.
Previous wording
Our business is organized into Driveline and Metal Forming segments, with each representing a reportable segment under ASC 280 -Segment Reporting. 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.
Current wording
Our business is organized into two segments, Driveline and Metal Forming, with each representing a reportable segment under ASC 280 -Segment Reporting. 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.
Previous wording
•Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, SUVs, crossover vehicles, passenger cars and commercial vehicles; and
Current wording
•Driveline products consist primarily of front and rear axles, sideshafts, driveshafts, propshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles (SUVs), crossover vehicles, passenger cars and commercial vehicles; and
Previous wording
•Metal Forming products consist primarily of engine, transmission, driveline and safety-critical components for traditional internal combustion engine and electric vehicle architectures including light vehicles, commercial vehicles and off-highway vehicles, as well as products for industrial markets.
Current wording
•Metal Forming products consist primarily of engine, transmission, driveline and safety-critical components for traditional internal combustion engine and electric vehicle architectures including light vehicles, commercial vehicles and off-highway vehicles and products for industrial markets, filters and silencers, as well as powdered metal and related additives.
Previous wording
The following table represents sales by reportable segment for the three and nine months ended September 30, 2025 and 2024(in millions):
Current wording
The following table represents sales by reportable segment for the three months ended March 31, 2026 and 2025(in millions):
Previous wording
The increase in Driveline sales for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, primarily reflects an increase 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, as well as the impact of certain commercial pricing and other recoveries from customers. These increases were partially offset by a reduction of approximately $30 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd., which was completed on July 1, 2025.
Current wording
The increase in Driveline sales for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily reflects an increase of approximately $768 million associated with the impact of the Business Combination, as well as an increase associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments. These increases were partially offset by a reduction of approximately $35 million resulting from the sale of AAM India Manufacturing Corporation Pvt., Ltd., which was completed on July 1, 2025.
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, 2025 and 2024 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, 2026 and 2025 are as follows(in millions):
Previous wording
For the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, Segment Adjusted EBITDA for the Driveline segment reflects the impact of lower production volumes on certain vehicle programs that we support, partially offset by a reduction of SG&A expense of approximately $11 million, which was primarily the result of lower R&D expense, as well as the impact of certain commercial pricing and other recoveries from customers. Segment Adjusted EBITDA for the Driveline segment also reflects approximately $5 million of favorability in other segment income primarily related to the change in foreign exchange gains and losses during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
Current wording
For the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, the increase in Segment Adjusted EBITDA for the Driveline segment reflects the impact of the Business Combination.
Previous wording
For the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, the change in Segment Adjusted EBITDA for the Metal Forming segment reflects the impact of lower production volumes on certain vehicle programs that we support, offset by improved operating performance.
Current wording
For the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, the change in Segment Adjusted EBITDA for the Metal Forming segment reflects the impact of the Business Combination, as well as improved operating performance.
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 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 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 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 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 the Company may not be comparable to similarly titled measures reported by other companies. The amounts in the table below are presented based upon our revised definition of Segment Adjusted EBITDA and amounts that were reported under the previous definition have been recast.
Previous 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 cash held in escrow and committed financing associated with the Business Combination, 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 will be sufficient to meet these needs.
Previous wording
At September 30, 2025, we had approximately $1.7 billion of liquidity consisting of approximately $714 million of cash and cash equivalents, approximately $897 million of available borrowings under our Revolving Credit Facility and approximately $93 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2028, after considering the November 2025 redemption of the 6.50% Notes due 2027 described in Note 5 - Long-Term Debt that occurred subsequent to the balance sheet date.
Current wording
At March 31, 2026, we had approximately $2.6 billion of liquidity consisting of approximately $1.0 billion of cash and cash equivalents, approximately $1.5 billion of available borrowings under our Revolving Credit Facility and approximately $100 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2028.
Previous wording
Operating Activities In the first nine months of 2025, net cash provided by operating activities was $291.1 million as compared to $304.2 million in the first nine months of 2024. The following factors impacted cash from operating activities in the first nine months of 2025, as compared to the first nine months of 2024:
Current wording
Operating Activities In the first three months of 2026, net cash used in operating activities was $64.4 million as compared to net cash provided by operations of $55.9 million in the first three months of 2025. The following factors impacted cash from operating activities in the first three months of 2026, as compared to the first three months of 2025:
Previous wording
Accounts receivable For the nine months ended September 30, 2025, we experienced a decrease in cash flow from operating activities of approximately $34 million related to the change in our accounts receivable balance from December 31, 2024 to September 30, 2025, as compared to the change in our accounts receivable balance from December 31, 2023 to September 30, 2024. This change was primarily the result of timing of sales to customers in the applicable periods, as well as the timing of collections on customer receivables due, in part, to our participation in an early payment program offered by our largest customer. This program allows us to sell certain of our North American receivables from this customer to a third party at our discretion, and we utilize this program from time to time.
Current wording
Accounts receivable For the three months ended March 31, 2026, we experienced a decrease in cash flow from operating activities of approximately $71 million related to the change in our accounts receivable balance from December 31, 2025 to March 31, 2026, as compared to the change in our accounts receivable balance from December 31, 2024 to March 31, 2025. This change was primarily the result of timing of sales to customers in the applicable periods, as well as the timing of collections on customer receivables due, in part, to our participation in various receivable factoring programs, including an early payment program offered by our largest customer. These programs allow us to sell certain of our receivables to third parties at our discretion, and we utilize these programs from time to time.
Previous wording
Accounts payable and accrued expenses For the nine months ended September 30, 2025, we experienced an increase in cash flow from operating activities of approximately $89 million related to the change in our accounts payable and accrued expenses balance from December 31, 2024 to September 30, 2025, as compared to the change in our accounts payable and accrued expenses balance from December 31, 2023 to September 30, 2024. This change was primarily the result of the timing of payments to suppliers in the applicable periods. In addition, the change in accounts payable and accrued expenses for the nine months ended September 30, 2025 reflects the impact of accrued acquisition-related costs as of September 30, 2025 associated with the Business Combination.
Current wording
Accounts payable and accrued expenses For the three months ended March 31, 2026, we experienced an increase in cash flow from operating activities of approximately $62 million related to the change in our accounts payable and accrued expenses balance from December 31, 2025 to March 31, 2026, as compared to the change in our accounts payable and accrued expenses balance from December 31, 2024 to March 31, 2025. This change was primarily the result of the timing of payments to suppliers in the applicable periods.
Previous wording
Income taxes paid, net Income taxes paid, net was $39.6 million for the nine months ended September 30, 2025, as compared to $31.7 million for the nine months ended September 30, 2024. For the full year 2025, we estimate income taxes paid, net to be in the range of $60 million to $75 million.
Current wording
Income taxes paid, net Income taxes paid, net was $27.6 million for the three months ended March 31, 2026, as compared to $15.2 million for the three months ended March 31, 2025. The increase in income taxes paid, net was primarily attributable to the Business Combination. For the full year 2026, we estimate income taxes paid, net to be in the range of $160 million to $170 million.
Previous 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 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 $40 million to $50 million in connection with the Business Combination. The estimated range of acquisition-related payments in cash flows from operating activities for 2025 has been reduced from our original estimate of $60 million to $70 million as certain of these cash payments are expected to occur at or near closing of the transaction, which is now expected in the first quarter of 2026.
Current wording
Restructuring and acquisition-related costs For the full year 2026, we expect restructuring payments in cash flows from operating activities to be approximately $110 million to $150 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 $130 million to $150 million and we expect integration payments to be approximately $100 million to $125 million in connection with the Business Combination.
Previous wording
Investing Activities In the first nine months of 2025, net cash used in investing activities was $108.3 million as compared to $174.2 million for the nine months of 2024. Capital expenditures were $190.7 million in the first nine months of 2025 as compared to $170.0 million in the first nine months of 2024. We expect our capital spending in 2025 to be approximately 5% of sales.
Current wording
Investing Activities In the first three months of 2026, net cash used in investing activities was $347.5 million as compared to $40.2 million for the three months of 2025. Capital expenditures were $103.6 million in the first three months of 2026 as compared to $69.3 million in the first three months of 2025. We expect our capital spending in 2026 to be approximately 4.5% to 5% of sales.
Previous wording
In the first nine months 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 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 wording
In the first three months 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 million in cash, which approximated the carrying value of our investments in these joint ventures at the time of disposition.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Gross margin was 12.6% in the third quarter of 2025, as compared to 11.4% in the third quarter of 2024. 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
Gain (Loss) on Business Combination Derivative In the third quarter of 2025, we recognized an unrealized loss on the Business Combination Derivative of $16.0 million. See Note 6 - Derivatives for additional detail on the Business Combination Derivative.
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 income of $1.6 million in the third quarter of 2025, as compared to expense of $5.5 million in the third quarter of 2024. The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the third quarter of 2025, as compared to the third quarter of 2024.
Previous report — wording carried elsewhere
Selling, General and Administrative Expenses (SG&A)