Investor Presentaiton
Supplemental Data
EBITDA and Adjusted EBITDA
We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA excluding the impact of restructuring and acquisition-related
costs, debt refinancing and redemption costs, and non-recurring items. We believe that EBITDA and 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 Adjusted EBITDA, together with other
measures, to measure our operating performance relative to other Tier 1 automotive suppliers. We also 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. EBITDA and Adjusted EBITDA should not be construed as income from operations, net income or cash flow from operating activities as
determined under GAAP. Other companies may calculate EBITDA and Adjusted EBITDA differently.
Other Non-recurring Items
Other non-recurring items reflect the impact of a non-cash pension settlement charge related to one of our foreign entities, the impact of a gain related to the change of our method of accounting for indirect
inventory and the interest expense for the debt drawdown period prior to acquisition funding requirement.
Free Cash Flow and Adjusted Free Cash Flow
We define free cash flow to be net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and from government grants. Adjusted free
cash flow is defined as free cash flow excluding the impact of cash payments for restructuring and acquisition-related costs, settlements of pre-existing accounts payable balances with acquired entities, and
interest payments upon the settlement of acquired company debt. We believe free cash flow and Adjusted free cash flow are meaningful measures as they are commonly utilized by management and investors
to assess our ability to generate cash flow from business operations to repay debt and return capital to our stockholders. Free cash flow and Adjusted free cash flow are also key metrics used in our
calculation of incentive compensation. Other companies may calculate free cash flow and Adjusted free cash flow differently.
Net Debt and Net Leverage Ratio
We define net debt to be total debt, net less cash and cash equivalents. We define Net Leverage Ratio to be net debt divided by the trailing 12 months of Adjusted EBITDA or pro forma Adjusted EBITDA,
where applicable. Pro forma Adjusted EBITDA includes AAM's Adjusted EBITDA and the pre-acquisition EBITDA of acquired entities. We believe that Net Leverage Ratio is a meaningful measure of
financial condition as it is commonly used by management, investors and creditors to assess capital structure risk. Other companies may calculate Net Leverage Ratio differently.
Liquidity
We define Liquidity as cash on hand plus amounts available on our revolving credit facility and foreign credit facilities.
US SAAR
We define US SAAR as the seasonally adjusted annual rate of light vehicle sales in the United States.
CAGR
We define CAGR to be the compound annual growth rate of sales.
AAM
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