v3.26.1
Segment Reporting (Notes)
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Reporting [Text Block]
16. SEGMENT REPORTING

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 (CODM) to assess the performance of the segment and make decisions regarding the allocation of resources to the segments. Our CODM is our Chief Executive Officer.

Our product offerings by segment are as follows:

•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
•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.

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.

For the three and six months ended June 30, 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.

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.

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 and six months ended June 30, 2025 have been recast to reflect this reorganization.
The following tables represent information by reportable segment for the three and six months ended June 30, 2026 and 2025 (in millions):
Three Months Ended June 30, 2026
DrivelineMetal FormingCorporate and EliminationsTotal
Sales$2,225.0 $861.7 $— $3,086.7 
Less: Intersegment sales3.4 127.7 — 131.1 
Net external sales$2,221.6 $734.0 $— $2,955.6 
Cost of goods sold (a) 1,819.1 609.1 — 2,428.2 
Selling, general and administrative expenses (b) 127.6 33.7 — 161.3 
Other segment expense (income), net (c)(14.8)(8.7)— (23.5)
Segment Adjusted EBITDA$289.7 $99.9 $— $389.6 
Depreciation and amortization$144.6 $70.8 $— $215.4 
Capital expenditures $66.0 $31.4 $0.9 $98.3 
(a) Cost of goods sold excludes depreciation and amortization, which was $133.1 million for Driveline and $54.8 million for Metal Forming for the three months ended June 30, 2026. Cost of goods sold also excludes loss on disposal of property, plant and equipment, which was $0.2 million for Driveline and $1.1 million for Metal Forming for the three months ended June 30, 2026.
(b) Selling, general and administrative expenses excludes depreciation, which was $4.7 million for Driveline and $0.9 million for Metal Forming for the three months ended June 30, 2026.
(c) Other segment expense (income), net primarily consists of the net impact of income from equity-method affiliates, interest income and foreign exchange gains and losses.

Three Months Ended June 30, 2025
DrivelineMetal FormingCorporate and EliminationsTotal
Sales$1,107.2 $545.0 $— $1,652.2 
Less: Intersegment sales1.8 114.2 — 116.0 
Net external sales$1,105.4 $430.8 $— $1,536.2 
Cost of goods sold (a)879.3 368.5 — 1,247.8 
Selling, general and administrative expenses (b)74.0 21.5 — 95.5 
Other segment expense (income), net (c)(3.3)(5.9)— (9.2)
Segment Adjusted EBITDA$155.4 $46.7 $— $202.1 
Depreciation and amortization$63.6 $49.9 $— $113.5 
Capital expenditures$35.0 $21.9 $0.4 $57.3 
(a) Cost of goods sold excludes depreciation and amortization, which was $54.5 million for Driveline and $33.3 million for Metal Forming for the three months ended June 30, 2025. Cost of goods sold also excludes loss (gain) on disposal of property, plant and equipment which was $0.3 million for Driveline and $(0.4) million for Metal Forming for the three months ended June 30, 2025.
(b) Selling, general and administrative expenses excludes depreciation, which was $4.5 million for Driveline and $0.8 million for Metal Forming for the three months ended June 30, 2025.
(c) Other segment expense (income), net primarily consists of the net impact of interest income and foreign exchange gains and losses.
Six Months Ended June 30, 2026
DrivelineMetal FormingCorporate and EliminationsTotal
Sales$3,994.1 $1,587.9 $— $5,582.0 
Less: Intersegment sales6.9 240.6 — 247.5 
Net external sales$3,987.2 $1,347.3 $— $5,334.5 
Cost of goods sold (a)3,268.0 1,118.9 — 4,386.9 
Selling, general and administrative expenses (b)220.6 72.3 — 292.9 
Other segment expense (income), net (c)(29.9)(13.5)— (43.4)
Segment Adjusted EBITDA$528.5 $169.6 $— $698.1 
Depreciation and amortization$263.3 $133.9 $— $397.2 
Capital expenditures$146.1 $54.1 $1.7 $201.9 
Total assets$7,651.5 $2,656.5 $742.0 $11,050.0 
(a) Cost of goods sold excludes depreciation and amortization, which was $240.2 million for Driveline and $101.1 million for Metal Forming for the six months ended June 30, 2026. Cost of goods sold also excludes loss on disposal of property, plant and equipment, which was $1.3 million for Driveline and $3.7 million for Metal Forming for the six months ended June 30, 2026, and excludes an acquisition-related fair value adjustment which was $28.8 million for Driveline and $8.9 million for Metal Forming for the six months ended June 30, 2026.
(b) Selling, general and administrative expenses excludes depreciation, which was $9.5 million for Driveline and $1.8 million for Metal Forming for the six months ended June 30, 2026.
(c) Other segment expense (income), net primarily consists of the net impact of income from equity-method affiliates, interest income and foreign exchange gains and losses.
Six Months Ended June 30, 2025
DrivelineMetal FormingCorporate and EliminationsTotal
Sales$2,094.2 $1,070.5 $— $3,164.7 
Less: Intersegment sales3.6 213.6 — 217.2 
Net external sales$2,090.6 $856.9 $— $2,947.5 
Cost of goods sold (a)1,664.1 734.2 — 2,398.3 
Selling, general and administrative expenses (b)141.2 40.1 — 181.3 
Other segment expense (income), net (c)(2.8)(9.1)— (11.9)
Segment Adjusted EBITDA$288.1 $91.7 $— $379.8 
Depreciation and amortization$126.6 $99.1 $— $225.7 
Capital expenditures$80.1 $45.5 $1.0 $126.6 
Total assets$2,694.4 $1,496.2 $1,083.0 $5,273.6 
(a) Cost of goods sold excludes depreciation and amortization, which was $108.6 million for Driveline and $65.7 million for Metal Forming for the six months ended June 30, 2025. Cost of goods sold also excludes loss (gain) on disposal of property, plant and equipment which was $0.4 million for Driveline and $(0.1) million for Metal Forming for the six months ended June 30, 2025.
(b) Selling, general and administrative expenses excludes depreciation, which was $8.7 million for Driveline and $1.7 million for Metal Forming for the six months ended June 30, 2025.
(c) Other segment expense (income), net primarily consists of the net impact of interest income and foreign exchange gains and losses.
The following table represents a reconciliation of Total Segment Adjusted EBITDA to consolidated income (loss) before income taxes for the three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
(in millions)
Total segment adjusted EBITDA(a)
$389.6 $202.1 $698.1 $379.8 
Interest expense(89.8)(43.1)(179.4)(86.0)
Depreciation and amortization(215.4)(113.5)(397.2)(225.7)
Restructuring and acquisition-related costs(49.8)(16.5)(148.7)(36.2)
Gain on Business Combination Derivative (Note 6)— 46.3 12.9 68.2 
Debt refinancing and redemption costs(0.9)— (3.9)(3.3)
Impairment charge (Note 2)— (8.0)— (8.0)
Unrealized foreign exchange loss on acquired U.S. Private Placement Notes(3.5)— (14.4)— 
Mark-to-market on nondesignated foreign exchange derivatives assumed as part of the Business Combination with Dowlais(4.5)— (20.1)— 
Gain (loss) on disposal of property, plant and equipment(1.3)0.1 (5.0)(0.3)
Interest income on debt held in escrow— — 4.6 — 
Amortization of acquisition intangible asset attributable to SDS (Note 15)(6.8)— (11.2)— 
Non-recurring items:
Acquisition-related fair value inventory adjustment— — (37.7)— 
Income (loss) before income taxes$17.6 $67.4 $(102.0)$88.5 
(a) The amounts in the table above are presented based on our revised definition of Total Segment Adjusted EBITDA and amounts that were reported under the previous definition have been recast. In connection with the Business Combination with Dowlais, the Company acquired long-term debt in the form of Dowlais' U.S. Private Placement Notes, as well as nondesignated foreign exchange derivatives, which result in unrealized foreign exchange gains and losses recognized in our condensed consolidated Statement of Operations. The Company adjusts for these gains and losses as they are not reflective of our core operating performance. In addition, our equity-method investment in SDS resulted in a basis difference that was attributed to an intangible asset and is amortized through equity-method income and losses. The Company adjusts for this non-cash amortization as it is not reflective of our proportionate share of earnings in SDS.