{"url_path":"/sec/dch/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 Financial Statements","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1062231/0001062231-26-000126-index.html","accession_number":"0001062231-26-000126","cik":"0001062231","ticker":"DCH","issuer_name":"Dauch Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/1062231/0001062231-26-000126-index.html","primary_entity_key":"0001062231","primary_entity_name":"Dauch Corp"},"word_count":10760,"has_tables":true,"body_markdown":"Item 1.  Financial Statements\n\nDAUCH CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS\n\n(Unaudited)\n\n \n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n (in millions, except per share data)\n\n \n\nNet sales$2,378.9 $1,411.3 \n\n \n\nCost of goods sold2,153.5 1,237.4 \n\n \n\nGross profit225.4 173.9 \n\n \n\nSelling, general and administrative expenses137.3 90.9 \n\nAmortization of intangible assets22.9 20.6 \n\nRestructuring and acquisition-related costs98.9 19.7 \n\nOperating income (loss) (33.7)42.7 \n\n \n\nInterest expense(89.6)(42.9)\n\n \n\nInterest income12.1 5.6 \n\n \n\nOther income (expense)\n\nDebt refinancing and redemption costs(3.0)(3.3)\n\nGain on Business Combination Derivative (Note 6)12.9 21.9 \n\nIncome from equity-method affiliates10.3 0.1 \n\nOther expense, net(28.6)(3.0)\n\n \n\nIncome (loss) before income taxes(119.6)21.1 \n\n \n\nIncome tax expense (benefit) (19.6)14.0 \n\n \n\nNet income (loss)$(100.0)$7.1 \n\nNet income attributable to noncontrolling interests(0.3)— \n\nNet income (loss) attributable to Dauch$(100.3)$7.1 \n\n \n\nBasic earnings (loss) per share$(0.52)$0.06 \n\n \n\nDiluted earnings (loss) per share$(0.52)$0.06 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n2\n\nDAUCH CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)\n\n(Unaudited)\n\nThree Months Ended\n\nMarch 31,\n\n20262025\n\n(in millions)\n\nNet income (loss)$(100.0)$7.1 \n\nOther comprehensive income (loss)\n\nDefined benefit plans, net of tax (a)\n0.4 (0.3)\n\n     Foreign currency translation adjustments13.4 23.3 \n\n     Changes in hedges, net of tax (b)\n6.6 2.2 \n\nOther comprehensive income20.4 25.2 \n\nComprehensive income (loss)$(79.6)$32.3 \n\n     Net income attributable to noncontrolling interests(0.3)— \n\nComprehensive income (loss) attributable to Dauch$(79.9)$32.3 \n\n(a)\nAmounts are net of tax of $0.1 million for the three months ended March 31, 2026 and $0.1 million for the three months ended March 31, 2025.\n\n(b)\nAmounts are net of tax of $(1.8) million for the three months ended March 31, 2026 and $(0.9) million for the three months ended March 31, 2025.\n\nSee accompanying notes to condensed consolidated financial statements.\n\n3\n\nDAUCH CORPORATION\n\nCONDENSED CONSOLIDATED BALANCE SHEETS\n\n March 31, 2026December 31, 2025\n\n (Unaudited) \n\nAssets(in millions)\n\nCurrent assets \n\nCash and cash equivalents$1,008.2 $708.9 \n\nRestricted cash (Note 5) — 1,496.6 \n\nAccounts receivable, net1,535.1 733.0 \n\nInventories, net1,004.1 466.4 \n\nPrepaid expenses and other344.3 230.1 \n\nTotal current assets3,891.7 3,635.0 \n\nProperty, plant and equipment, net4,209.3 1,591.5 \n\nDeferred income taxes320.1 235.9 \n\nGoodwill648.8 174.4 \n\nOther intangible assets, net370.4 375.2 \n\nGM postretirement cost sharing asset117.7 116.0 \n\nOperating lease right-of-use assets183.5 122.3 \n\nInvestments in equity-method affiliates911.3 12.1 \n\nOther assets and deferred charges619.3 407.8 \n\nTotal assets$11,272.1 $6,670.2 \n\nLiabilities and Stockholders’ Equity  \n\nCurrent liabilities  \n\nCurrent portion of long-term debt$— $10.4 \n\nAccounts payable1,641.9 718.3 \n\nAccrued compensation and benefits548.7 254.9 \n\nDeferred revenue32.8 38.5 \n\nCurrent portion of operating lease liabilities39.7 24.7 \n\nAccrued expenses and other524.5 187.2 \n\nTotal current liabilities2,787.6 1,234.0 \n\nLong-term debt, net5,156.7 4,039.1 \n\nDeferred revenue42.1 33.9 \n\nDeferred income taxes224.5 9.1 \n\nLong-term portion of operating lease liabilities145.5 100.1 \n\nPostretirement benefits and other long-term liabilities1,412.1 614.0 \n\nTotal liabilities9,768.5 6,030.2 \n\nStockholders' equity  \n\nCommon stock, par value $0.01 per share; 375.0 million shares authorized as of March 31, 2026 and 150.0 million shares authorized as of December 31, 2025;\n\n248.9 million shares issued as of March 31, 2026 and 130.0 million shares issued as of December 31, 2025\n2.5 1.3 \n\nPaid-in capital2,354.4 1,411.2 \n\nAccumulated deficit(368.2)(267.9)\n\nTreasury stock at cost, 12.1 million shares as of March 31, 2026 and 11.3 million shares as of December 31, 2025\n(244.7)(238.5)\n\nAccumulated other comprehensive income (loss)\n\nDefined benefit plans, net of tax(163.9)(164.3)\n\nForeign currency translation adjustments(96.4)(109.8)\n\nUnrecognized gain on hedges, net of tax14.6 8.0 \n\nTotal Dauch stockholders' equity1,498.3 640.0 \n\nNoncontrolling interests in subsidiaries5.3 — \n\nTotal stockholders' equity1,503.6 640.0 \n\nTotal liabilities and stockholders' equity$11,272.1 $6,670.2 \n\n See accompanying notes to condensed consolidated financial statements. \n\n4\n\nDAUCH CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(Unaudited)\n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n(in millions)\n\nOperating activities  \n\nNet income (loss)$(100.0)$7.1 \n\nAdjustments to reconcile net income (loss) to net cash provided by (used in) operating activities\n\nDepreciation and amortization181.8 112.2 \n\nDeferred income taxes(67.6)(1.9)\n\nStock-based compensation11.0 3.9 \n\nPensions and other postretirement benefits, net of contributions0.4 (0.6)\n\nLoss on disposal of property, plant and equipment, net3.7 0.4 \n\nGain on Business Combination Derivative (Note 6) (12.9)(21.9)\n\nIncome from equity-method affiliates(10.3)(0.1)\n\nDebt refinancing and redemption costs3.0 3.3 \n\nChanges in operating assets and liabilities\n\nAccounts receivable(183.7)(113.0)\n\nInventories5.0 14.7 \n\nAccounts payable and accrued expenses108.6 46.5 \n\nDeferred revenue(10.7)15.5 \n\nOther assets and liabilities7.3 (10.2)\n\nNet cash provided by (used in) operating activities(64.4)55.9 \n\nInvesting activities  \n\nPurchases of property, plant and equipment(103.6)(69.3)\n\nProceeds from sale of property, plant and equipment0.9 0.6 \n\nProceeds from sale of business, net20.8 — \n\nProceeds from disposition of affiliates (Note 2) — 30.1 \n\nAcquisition of business, net of cash acquired(331.6)(0.6)\n\nSettlement of Business Combination Derivative (Note 6) 65.9 — \n\nOther investing activities0.1 (1.0)\n\nNet cash used in investing activities(347.5)(40.2)\n\nFinancing activities  \n\nProceeds from issuance of long-term debt835.0 1.3 \n\nPayments of long-term debt(1,525.1)(5.5)\n\nDebt issuance costs(71.2)(11.6)\n\nPurchase of treasury stock(6.2)(2.7)\n\nOther financing activities(8.0)(5.5)\n\nNet cash used in financing activities(775.5)(24.0)\n\nEffect of exchange rate changes on cash(9.9)4.6 \n\nNet decrease in cash, cash equivalents and restricted cash (1,197.3)(3.7)\n\nCash, cash equivalents and restricted cash at beginning of period2,205.5 552.9 \n\nCash and cash equivalents at end of period$1,008.2 $549.2 \n\nSupplemental cash flow information\n\n     Interest paid$43.6 $36.2 \n\n     Income taxes paid, net$27.6 $15.2 \n\nNon-cash investing activities: Dauch common shares issued for acquisition of Dowlais $933.4 $— \n\nSee accompanying notes to condensed consolidated financial statements.\n\n5\n\nDAUCH CORPORATION\n\nCONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY\n\n(Unaudited)\n\nCommon StockAccumulatedNoncontrolling\n\nSharesParPaid-inAccumulatedTreasuryOther ComprehensiveInterest\n\nOutstandingValueCapitalDeficitStockIncome (Loss)in Subsidiaries\n\n(in millions)\n\nBalance at January 1, 2025117.6 $1.3 $1,397.6 $(248.2)$(235.7)$(352.2)— \n\nNet income — — — 7.1 — — — \n\nVesting of stock-based compensation1.3 — — — — — — \n\nStock-based compensation— — 3.9 — — — — \n\nPurchase of treasury stock(0.6)— — — (2.7)— — \n\nChanges in hedges, net— — — — — 2.2 — \n\nForeign currency translation adjustments— — — — — 23.3 — \n\nDefined benefit plans, net— — — — — (0.3)— \n\nBalance at March 31, 2025118.3 $1.3 $1,401.5 $(241.1)$(238.4)$(327.0)— \n\nCommon StockAccumulatedNoncontrolling\n\nSharesParPaid-inAccumulatedTreasuryOther ComprehensiveInterest\n\nOutstandingValueCapitalDeficitStockIncome (Loss)in Subsidiaries\n\n(in millions)\n\nBalance at January 1, 2026118.7 $1.3 $1,411.2 $(267.9)$(238.5)$(266.1)— \n\nNet income (loss)— — — (100.3)— — 0.3 \n\nVesting of stock-based compensation1.9 — — — — — — \n\nStock-based compensation— — 11.0 — — — — \n\nPurchase of treasury stock(0.8)— — — (6.2)— — \n\nChanges in hedges, net — — — — — 6.6 — \n\nForeign currency translation adjustments— — — — — 13.4 — \n\nDefined benefit plans, net— — — — — 0.4 — \n\nAcquisition of Dowlais117.0 1.2 932.2 — — — 19.3 \n\nSale of business— — — — — — (14.3)\n\nBalance at March 31, 2026236.8 $2.5 $2,354.4 $(368.2)$(244.7)$(245.7)5.3 \n\nSee accompanying notes to condensed consolidated financial statements.\n\n6\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS\n\nMARCH 31, 2026\n\n(Unaudited)\n\n1. ORGANIZATION AND BASIS OF PRESENTATION\n\nOrganization Effective January 26, 2026, American Axle & Manufacturing Holdings, Inc. changed its name to Dauch Corporation. As used in this report, except as otherwise indicated in information incorporated by reference, references to “our Company,” \"we,\" \"our,\" \"us\" or “Dauch” mean Dauch Corporation and its subsidiaries and predecessors, collectively. On February 3, 2026, we completed our previously announced acquisition of Dowlais Group plc (name subsequently changed to Dowlais Group Limited) (Dowlais) whereby we acquired the entire issued share capital of Dowlais.\n\nDauch 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 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.\n\nBasis of Presentation We have prepared the accompanying interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934. These condensed consolidated financial statements are unaudited but include all normal recurring adjustments, which we consider necessary for a fair presentation of the information set forth herein. Results of operations for the periods presented are not necessarily indicative of the results for the full fiscal year.\n\nThe balance sheet at December 31, 2025 presented herein has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (GAAP) for complete consolidated financial statements.\n\n \n\nIn order to prepare the accompanying interim condensed consolidated financial statements, we are required to make estimates and assumptions that affect the reported amounts and disclosures in our interim condensed consolidated financial statements. These estimates and assumptions are impacted by risks and uncertainties, including those associated with tariffs and the significant instability in U.S. trade relations with certain non-U.S. countries in addition to the indirect impact of geopolitical conflicts contributing to supply chain constraints. While we have made estimates and assumptions based on the facts and circumstances as of the date of this report, the full impact of tariffs and potential changes in U.S. trade relations cannot be predicted, and actual results could differ materially from those estimates and assumptions.\n\nFor further information, refer to the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025.\n\nEffect of New Accounting Standards\n\nStandards Not Yet Adopted\n\nAccounting Standards Update 2024-03\n\nOn November 4, 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 expands existing annual and interim requirements for costs and expenses to include a footnote disclosure disaggregating expense captions on the face of the income statement by specific expense categories using a tabular presentation. ASU 2024-03 also requires a qualitative disclosure of the amounts remaining in relevant expense captions that are not separately disclosed as part of the specific expense categories, as well as disclosures about the entity's total selling expenses and in annual periods, a definition of selling expenses. This guidance becomes effective at the beginning of our 2027 fiscal year for annual requirements, and at the beginning of our 2028 fiscal year for interim requirements, using either a prospective or retrospective transition method. We will adopt this guidance on January 1, 2027 for the annual requirements and will adopt the interim requirements on January 1, 2028. We are currently assessing the impact that this standard will have on our consolidated financial statements.\n\n7\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nAccounting Standards Update 2025-09\n\nOn November 25, 2025, the FASB issued ASU 2025-09 - Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. ASU 2025-09 amends existing cash flow hedge accounting requirements, allowing for the aggregation of groups of individual forecasted transactions that share a similar risk exposure, rather than requiring a shared risk of exposure. This guidance becomes effective at the beginning of our 2027 fiscal year, and must be applied prospectively for all hedging relationships as of adoption. We will adopt this guidance January 1, 2027 and we are currently assessing the impact that this standard will have on our consolidated financial statements.\n\n8\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n2. ACQUISITIONS AND DISPOSITIONS\n\nBusiness Combination with Dowlais Group plc\n\nOn February 3, 2026, we completed our previously announced acquisition of Dowlais Group plc 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.\n\nDowlais is a global leader in the production of sideshafts, propshafts, all wheel drive (AWD) systems and advanced differentials, as well as sintered metal components and powdered metal and related additives. The Business Combination significantly contributes to the diversification of our global customer base and geographical footprint, and will allow us to achieve greater cost competitiveness through increased size and scale.\n\nThe aggregate cash consideration for the Business Combination was financed using (i) a portion of the net proceeds from the issuance in October 2025 by Dauch of $850 million of 6.375% senior secured notes due 2032 and $1,250 million of 7.75% senior unsecured notes due 2033 and (ii) borrowings by Dauch of $835 million on an incremental Tranche C term facility. See Note 5 - Long-Term Debt for additional detail regarding financing for the Business Combination.\n\nThe Business Combination was accounted for under the acquisition method under Accounting Standards Codification (ASC) Business Combinations (ASC 805) with the purchase price allocated to identifiable assets and liabilities of the acquired company based on the respective fair values of the assets and liabilities.\n\nThe following represents the preliminary fair values of the assets acquired and liabilities assumed resulting from the Business Combination, as well as the calculation of goodwill:\n\n(in millions) February 3, 2026\n\nCash consideration $791.3 \n\nShare consideration 933.4\n\nTotal consideration transferred $1,724.7 \n\nFair value of Dowlais noncontrolling interests 19.3\n\nTotal fair value of Dowlais $1,744.0 \n\nCash and cash equivalents $459.7 \n\nAccounts receivable653.8 \n\nInventories538.4 \n\nProperty, plant and equipment2,682.8 \n\nInvestments in equity-method affiliates883.7 \n\nPrepaid expenses and other long-term assets 589.6 \n\nTotal assets acquired $5,808.0 \n\nAccounts payable 783.8 \n\nAccrued expenses and other 796.4 \n\nDeferred income tax liabilities 297.4 \n\nLong-term debt1,876.9 \n\nPostretirement benefits and other long-term liabilities784.5 \n\nNet assets acquired $1,269.0 \n\nGoodwill $475.0 \n\n9\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nThe preliminary allocation of the purchase price to the assets acquired and liabilities assumed, including the residual amount recognized as goodwill, is based upon estimated information and is subject to change within the measurement period. Under the guidance of ASC 805, the measurement period is a period not to exceed one year from the acquisition date during which we may adjust estimated or provisional amounts recorded during purchase accounting if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities as of that date. Measurement period adjustments are recorded in the period identified with an offsetting entry to goodwill. Any adjustments to amounts recorded in purchase accounting that do not qualify as measurement period adjustments will be included in earnings in the period identified.\n\nThe primary areas of the preliminary purchase price allocation that are not finalized relate to the fair value of property, plant and equipment, as well as deferred income tax assets and liabilities, and contingent liabilities. The fair values of the assets acquired and liabilities assumed are based on our preliminary estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. While we believe that these preliminary estimates provide a reasonable basis for estimating the fair value of the assets acquired and liabilities assumed, we will continue to evaluate available information prior to finalization of amounts.\n\nGoodwill resulting from the Business Combination is attributable to the assembled workforce of Dowlais, anticipated synergies and economies of scale from which we expect to benefit as a combined entity, as well as the impact of net deferred tax liabilities established on the opening balance sheet. None of the goodwill is expected to be deductible for tax purposes.\n\nIncluded in net sales and net loss attributable to Dauch for the period from the Business Combination completion date on February 3, 2026 though March 31, 2026 were approximately $972 million and a loss of $67 million, respectively, attributable to Dowlais. The loss of $67 million includes approximately $30 million, net of tax, attributable to the step-up of Dowlais inventories to fair value in purchase accounting and the expense associated with the subsequent sale of these inventories during the quarter.\n\nUnaudited Pro Forma Financial Information\n\nUnaudited pro forma net sales for Dauch, on a combined basis with Dowlais for the three months ended March 31, 2026 and March 31, 2025, were $2,870.2 million and $2,793.3 million, respectively, excluding sales between Dauch and Dowlais during these periods. Unaudited pro forma net loss amounts for the three months ended March 31, 2026 and March 31, 2025 were a loss of approximately $33.4 million and a loss of approximately $171.2 million, respectively. These pro forma amounts have been calculated after applying Dauch's accounting policies and converting the historical financial statements of Dowlais from International Financial Reporting Standards (IFRS) to U.S. GAAP. The results primarily reflect depreciation adjustments relating to the fair value step-up of property, plant and equipment, incremental interest expense as a result of the financing associated with the Business Combination and the impact of the step-up of inventory to fair value.\n\nThe unaudited pro forma net income amounts for the three months ended March 31, 2026 and March 31, 2025 have been adjusted for approximately $38 million related to the pre-tax step-up of inventory to fair value as a result of the Business Combination, and approximately $54 million in pre-tax acquisition-related costs. This adjustment resulted in a reclassification of approximately $73 million, net of tax, from unaudited pro forma net income for the first three months of 2026 into pro forma net income for the first three months of 2025, as we are required to disclose the unaudited pro forma amounts as if the Business Combination had been completed on January 1, 2025.\n\nThe disclosure of unaudited pro forma net sales and earnings is for informational purposes only and does not purport to indicate the results that would actually have been obtained had the Business Combination had been completed on the assumed date for the periods presented, or which may be realized in the future.\n\nDisposition of Affiliates\n\nIn 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 $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.\n\n10\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n3. INVENTORIES\n\nWe state our inventories at the lower of cost or net realizable value. The cost of our inventories is determined using the first-in-first-out method. When we determine that our gross inventories exceed usage requirements, or if inventories become obsolete or otherwise not salable, we record a provision for such loss as a component of our inventory accounts.\n\nInventories consist of the following:\n\n March 31, 2026December 31, 2025\n\n (in millions)\n\n   \n\nRaw materials and work-in-progress$841.9 $383.5 \n\nFinished goods265.6 114.5 \n\nGross inventories1,107.5 498.0 \n\nInventory valuation reserves(103.4)(31.6)\n\nInventories, net$1,004.1 $466.4 \n\n11\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n4. GOODWILL AND OTHER INTANGIBLE ASSETS\n\nGoodwill The following table provides a reconciliation of changes in goodwill for the three months ended March 31, 2026:\n\nDrivelineMetal FormingConsolidated\n\n(in millions)\n\nBalance at December 31, 2025$174.4 $— $174.4 \n\nBusiness Combination with Dowlais425.0 50.0 475.0 \n\nForeign currency translation(0.6)— (0.6)\n\nBalance at March 31, 2026$598.8 $50.0 $648.8 \n\nWe conduct our annual goodwill impairment test in the fourth quarter of each year, as well as whenever adverse events or changes in circumstances indicate a possible impairment. In performing this test, we utilize a third-party valuation specialist to assist management in determining the fair value of our reporting units. Fair value of each reporting unit is estimated based on a combination of discounted cash flows and the use of pricing multiples derived from an analysis of comparable public companies multiplied against historical and/or anticipated financial metrics of each reporting unit. These calculations contain uncertainties as they require management to make assumptions including, but not limited to, market comparables, future cash flows of the reporting units, and appropriate discount and long-term growth rates. This fair value determination is categorized as Level 3 within the fair value hierarchy.\n\nOther Intangible Assets The following table provides a reconciliation of the gross carrying amount and associated accumulated amortization for our other intangible assets, which are all subject to amortization:\n\nMarch 31,December 31,\n\n20262025\n\nGross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount\n\n(in millions)\n\nCapitalized computer software$77.8 $(59.0)$18.8 $61.2 $(55.7)$5.5 \n\nCustomer platforms856.2 (569.3)286.9 856.2 (555.0)301.2 \n\nCustomer relationships53.0 (30.8)22.2 53.0 (29.9)23.1 \n\nTechnology and other149.5 (107.0)42.5 149.5 (104.1)45.4 \n\nTotal$1,136.5 $(766.1)$370.4 $1,119.9 $(744.7)$375.2 \n\nAmortization expense for our intangible assets was $22.9 million for the three months ended March 31, 2026 and $20.6 million for the three months ended March 31, 2025. Estimated amortization expense for the years 2026 through 2029 is expected to be in the range of approximately $80 million to $90 million per year, decreasing to approximately $50 million in 2030, as certain of the intangible assets identified as part of our 2017 acquisition of Metaldyne Performance Group, Inc. become fully amortized.\n\n12\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n5. LONG-TERM DEBT\n\nLong-term debt consists of the following:\n\n \n\n March 31, 2026December 31, 2025\n\n (in millions)\n\n   \n\nRevolving Credit Facility$— $— \n\nTerm Loan A Facility478.2 484.3 \n\nTerm Loan B Facility646.3 648.0 \n\nTranche C Term Facility 826.7 — \n\n7.75% Notes due 2033\n1,250.0 1,250.0 \n\n6.875% Notes due 2028\n250.0 250.0 \n\n6.375% Notes due 2032\n850.0 850.0 \n\n5.00% Notes due 2029\n600.0 600.0 \n\nU.S. Private Placement Notes349.0 — \n\nNon-U.S. credit facilities and other4.7 10.7 \n\nTotal debt5,254.9 4,093.0 \n\n    Less: Current portion of long-term debt— 10.4 \n\nLong-term debt5,254.9 4,082.6 \n\n    Less: Debt issuance costs98.2 43.5 \n\nLong-term debt, net$5,156.7 $4,039.1 \n\nSenior Secured Credit Facilities Dauch Corporation (Dauch) 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), incremental tranche C term facility (the Tranche C Term Facility) and a multi-currency revolving credit facility (the Revolving Credit Facility and together with the Term Loan A Facility, the Term Loan B Facility and Tranche C Term Facility, the Senior Secured Credit Facilities). The Senior Secured Credit Facilities 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 (including AAM, Inc.), subject to certain thresholds, exceptions and permitted liens.\n\nOn February 24, 2025, we entered into the Second Amendment to the Amended and Restated Credit Agreement 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 incremental $843.0 million Tranche C Term Facility in connection with the Business Combination, which was subsequently decreased by AAM, Inc. to $835.0 million 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 was not changed by the Second Amendment.\n\nAt March 31, 2026, we had $1,469.7 million available under the Revolving Credit Facility. This availability reflects a reduction of $25.3 million primarily for standby letters of credit issued against the facility.\n\nAs of March 31, 2026, we have prepaid $21.2 million of the outstanding principal on our Term Loan A Facility, Term Loan B Facility and Tranche C Term Facility. These payments satisfy our obligation for principal payments under the Term Loan A Facility, Term Loan B Facility and Tranche C Term Facility through the first quarter of 2027.\n\nThe 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.\n\n13\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nFinancing Related to the Business Combination, Redemption of the 6.50% Notes due 2027 and Partial Redemption of the 6.875% Notes due 2028 On October 3, 2025, AAM, Inc. issued $850 million of 6.375% senior secured notes due 2032 (the 6.375% Notes) and $1,250 million of 7.75% senior unsecured notes due 2033 (the 7.75% Notes, and together with the 6.375% Notes, the Notes). The 6.375% Notes are governed by an indenture that contains covenants, that, among other things, restrict with certain exceptions, our ability to incur additional debt, make restricted payments, incur debt secured by liens, dispose of assets and engage in consolidations and mergers or sell or transfer all or substantially all of our assets. The 7.75% Notes are governed by an indenture that contains covenants that, among other things, restrict, with certain exceptions, our ability to engage in consolidations and mergers or sell or transfer all or substantially all of our assets, incur debt secured by liens and engage in certain sale and leaseback transactions.\n\nIn 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.\n\nOn 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.\n\nOn January 29, 2025, in connection with the announcement of the Business Combination, we entered into a credit agreement (the Backstop Credit Agreement), the First Lien Bridge Credit Agreement (the First Lien Bridge Facility), and the Second Lien Bridge Credit Agreement (the Second Lien Bridge Facility and together with the First Lien Bridge Facility, the Bridge Facilities). Following our entry into the Second Amendment, the Backstop Credit Agreement was terminated. Additionally, in connection with entry into the Second Amendment on February 24, 2025, we entered into the Amended and Restated First Lien Bridge Credit Agreement (the Amended and Restated First Lien Bridge Facility), and the Amended and Restated Second Lien Bridge Credit Agreement (the Amended and Restated Second Lien Bridge Facility, and together with the Amended and Restated First Lien Bridge Facility, the Amended and Restated Bridge Facilities). Following the issuance of the Notes on October 3, 2025, the Amended and Restated Bridge Facilities were terminated.\n\nU.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.\n\nRepayment 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.\n\nRedemption 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.\n\n14\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nNon-U.S. Credit Facilities and Other We utilize local currency credit facilities to finance the operations of certain non-U.S. subsidiaries. At March 31, 2026, $4.7 million was outstanding under our non-U.S. credit facilities, as compared to $10.7 million at December 31, 2025. At March 31, 2026, an additional $99.5 million was available under our non-U.S. credit facilities.\n\nWeighted-Average Interest Rate The weighted-average interest rate of our long-term debt outstanding was 7.0% at March 31, 2026 and 6.8% at December 31, 2025.\n\n15\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n6. DERIVATIVES\n\nOur business and financial results are affected by fluctuations in global financial markets, including currency exchange rates and interest rates. Our hedging policy has been developed to manage these risks to an acceptable level based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We do not hold financial instruments for trading or speculative purposes.\n\nCurrency derivative contracts  From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies. As of March 31, 2026 and December 31, 2025, we had currency forward contracts outstanding with a total notional amount of $1,088.8 million and $216.2 million, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain working capital items into the third quarter of 2028.\n\nIn January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract (the Business Combination Derivative) to reduce the variability in cash flows as a result of fluctuations in the foreign currency exchange rate between the U.S. dollar and pound sterling. This foreign currency forward contract was nondesignated and recognized at fair value each reporting period through the closing of the Business Combination with changes in fair value recognized in Other expense, net in our Condensed Consolidated Statement of Operations. At December 31, 2025, we had a notional amount outstanding under the Business Combination Derivative of £571.0 million, which was equivalent to $769.2 million. Upon the closing of the Business Combination on February 3, 2026, the Business Combination Derivative was settled and we received net cash proceeds of $65.9 million.\n\nFixed-to-fixed cross-currency swaps In the second quarter of 2024, we entered into a fixed-to-fixed cross-currency swap that is designated as a fair value hedge. This fixed-to-fixed cross-currency swap reduces the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At March 31, 2026 and December 31, 2025, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $202.0 million and $205.5 million, respectively. The fixed-to-fixed cross-currency swap hedges our exposure to changes in exchange rates on the intercompany loans through the second quarter of 2027.\n\nIn the first quarter of 2026, we entered into additional fixed-to-fixed cross-currency swaps that are designated as fair value hedges. These fixed-to-fixed cross-currency swaps reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At March 31, 2026, we had a notional amount outstanding under the fixed-to-fixed cross-currency swaps of €200.0 million, which was equivalent to $230.9 million which hedges our exposure through the first quarter 2028, and €200.0 million, which was equivalent to $230.9 million which hedges our exposure through the first quarter of 2029.\n\nVariable-to-fixed interest rate swap As of March 31, 2026, we have $700.0 million notional amount hedged in relation to our variable-to-fixed interest rate swap into the second quarter of 2026, which subsequently increases to $1.0 billion through the fourth quarter of 2028, and decreases thereafter to $900.0 million through the fourth quarter of 2030 and to $500.0 million through the fourth quarter of 2031.\n\nThe following table summarizes the reclassification of pre-tax derivative gains and losses into net income from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow and fair value hedges under Accounting Standards Codification (ASC) 815 - Derivatives and Hedging:\n\n LocationGain (Loss) Reclassified DuringTotal of Financial Gain (Loss) Expected\n\n of Gain (Loss)Three Months EndedStatement to be Reclassified\n\n   Reclassified intoMarch 31,Line ItemDuring the\n\n   Net Income (Loss)202620252026Next 12 Months\n\n  (in millions)\n\nCurrency forward contractsCost of Goods Sold$2.5 $(4.1)$2,153.5 $8.5 \n\nFixed-to-fixed cross-currency swapOther Expense, net13.8 (8.0)(28.6)— \n\nVariable-to-fixed interest rate swapInterest Expense(0.3)1.0 (89.6)(0.3)\n\nSee Note 8 - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three months ended March 31, 2026 and 2025.\n\n16\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nThe following table summarizes the amount and location of gains and losses recognized in the Condensed Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:\n\n LocationGain (Loss) Recognized DuringTotal of Financial\n\n of Gain (Loss)Three Months EndedStatement\n\n  Recognized in March 31,Line Item\n\n   Net Income (Loss)202620252026\n\n  (in millions)\n\nCurrency forward contractsOther Expense, net$(10.2)$0.9 $(28.6)\n\nCurrency forward contractsGain on Business Combination Derivative12.9 21.9 12.9 \n\n17\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n7. FAIR VALUE\n\nASC 820 - Fair Value Measurement defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The definition is based on an exit price rather than an entry price, regardless of whether the entity plans to hold or sell the asset. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows:\n\n•Level 1:  Observable inputs such as quoted prices in active markets;\n\n•Level 2:  Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and\n\n•Level 3:  Unobservable inputs in which there is little or no market data, which require the reporting entity to develop\n\nits own assumptions.\n\nFinancial instruments   The estimated carrying value of our financial assets and liabilities that are recognized at fair value on a recurring basis, using available market information and other observable data, are as follows:\n\n \n\n Fair Value \n\nMarch 31, 2026December 31, 2025Input\n\n (in millions) \n\nBalance Sheet Classification   \n\nCash equivalents$188.7 $183.1 Level 1\n\nPrepaid expenses and other   \n\nCash flow hedges - currency forward contracts8.8 9.0 Level 2\n\nCash flow hedges - variable-to-fixed interest rate swap1.1 0.1 Level 2\n\nNondesignated - currency forward contracts37.3 53.7 Level 2\n\nOther assets and deferred charges\n\n     Cash flow hedges - currency forward contracts5.3 4.9 Level 2\n\nFair value hedges - fixed-to-fixed cross-currency swap12.6 — Level 2\n\n     Cash flow hedges - variable-to-fixed interest rate swap4.6 0.7 Level 2\n\nNondesignated - currency forward contracts5.3 — Level 2\n\nAccrued expenses and other\n\n     Cash flow hedges - currency forward contracts0.2 — Level 2\n\n     Nondesignated - currency forward contracts3.4 — Level 2\n\nPostretirement benefits and other long-term liabilities\n\n     Cash flow hedges - currency forward contracts0.1 — Level 2\n\nFair value hedges - fixed-to-fixed cross-currency swap17.0 21.5 Level 2\n\nNondesignated - currency forward contracts2.2 — Level 2\n\nThe carrying values of our cash, accounts receivable, accounts payable and accrued liabilities, and borrowings under non-U.S. credit facilities approximate their fair values due to the short-term maturities of these instruments. \n\n18\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nWe estimated the fair value of the amounts outstanding on our debt using available market information and other observable data, to be as follows:\n\n \n\n March 31, 2026December 31, 2025 \n\n Carrying  AmountFair ValueCarrying  AmountFair Value\n \n\nInput\n\n (in millions) \n\n     \n\nRevolving Credit Facility$— $— $— $— Level 2\n\nTerm Loan A Facility478.2 464.4 484.3 486.7 Level 2\n\nTerm Loan B Facility646.3 642.3 648.0 649.6 Level 2\n\nTranche C Term Facility826.7 820.5 — — Level 2\n\n7.75% Notes due 2033\n1,250.0 1,209.4 1,250.0 1,268.8 Level 2\n\n6.875% Notes due 2028\n250.0 250.0 250.0 249.8 Level 2\n\n6.375% Notes due 2032\n850.0 835.1 850.0 850.3 Level 2\n\n5.00% Notes due 2029\n600.0 571.2 600.0 576.0 Level 2\n\nU.S. Private Placement Notes349.0 349.0 — — Level 3\n\n19\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n8. RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (AOCI)\n\nReclassification adjustments and other activity impacting accumulated other comprehensive income (loss) during the three months ended March 31, 2026 and March 31, 2025 are as follows (in millions):\n\nDefined Benefit PlansForeign Currency Translation AdjustmentsUnrecognized Gain (Loss) on HedgesTotal\n\nBalance at December 31, 2025\n$(164.3)$(109.8)$8.0 $(266.1)\n\nOther comprehensive income before reclassifications— 13.4 24.4 37.8 \n\nIncome tax effect of other comprehensive income before reclassifications— — (5.1)(5.1)\n\nAmounts reclassified from accumulated other comprehensive income (loss)0.3 (a)— (16.0)(b)(15.7)\n\nIncome taxes reclassified into net loss0.1 — 3.3 3.4 \n\nNet change in accumulated other comprehensive income (loss)0.4 13.4 6.6 20.4 \n\nBalance at March 31, 2026\n$(163.9)$(96.4)$14.6 $(245.7)\n\nDefined Benefit PlansForeign Currency Translation AdjustmentsUnrecognized Gain (Loss) on HedgesTotal\n\nBalance at December 31, 2024\n$(157.2)$(187.0)$(8.0)$(352.2)\n\nOther comprehensive income (loss) before reclassifications— 16.9 (8.0)8.9 \n\nIncome tax effect of other comprehensive income (loss) before reclassifications— — 1.7 1.7 \n\nAmounts reclassified from accumulated other comprehensive loss(0.4)(a)6.4 (c)11.1 (b)17.1 \n\nIncome taxes reclassified into net income0.1 — (2.6)(2.5)\n\nNet change in accumulated other comprehensive loss(0.3)23.3 2.2 25.2 \n\nBalance at March 31, 2025\n$(157.5)$(163.7)$(5.8)$(327.0)\n\n(a)\nThese amounts were reclassified from AOCI to Other expense, net for the three months ended March 31, 2026 and March 31, 2025.\n\n(b)\nThe amounts reclassified from AOCI included $(2.5) million in cost of goods sold (COGS), $0.3 million in interest expense and $(13.8) million in Other expense, net for the three months ended March 31, 2026 and $4.1 million in COGS, $(1.0) million in interest expense and $8.0 million in Other expense, net for the three months ended March 31, 2025.\n\n(c)\nThe amount reclassified from AOCI for the three months ended March 31, 2025 reflects Dauch's 50% share of the cumulative translation adjustment associated with the two Chinese joint ventures that we exited in the first quarter of 2025. This amount was reclassified to Other expense, net. See Note 2 - Acquisitions and Dispositions for further details.\n\n​\n\n​\n\n20\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n9. EMPLOYEE BENEFIT PLANS\n\nThe components of net periodic benefit cost (credit) are as follows:\n\n Pension Benefits\n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n (in millions)\n\n  \n\nService cost$0.6 $0.1 \n\nInterest cost17.1 6.0 \n\nExpected asset return(15.2)(6.4)\n\nAmortized loss2.5 2.1 \n\nNet periodic benefit cost$5.0 $1.8 \n\n  \n\n Other Postretirement Benefits\n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n (in millions)\n\n   \n\nService cost$0.2 $— \n\nInterest cost2.5 2.3 \n\nAmortized gain(2.0)(2.3)\n\nAmortized prior service credit(0.2)(0.2)\n\nNet periodic benefit cost (credit)$0.5 $(0.2)\n\nIn connection with the Business Combination, we assumed various pension and other postretirement benefit plans of Dowlais, primarily in the U.S., United Kingdom and Germany. At the date of the Business Combination, the total projected benefit obligation of all plans assumed was approximately $1.4 billion and related assets were approximately $1.0 billion, resulting in a net liability of approximately $400 million.\n\nThe noncurrent liabilities associated with our pension and other postretirement benefit plans are classified as Postretirement benefits and other long-term liabilities on our Condensed Consolidated Balance Sheets. As of March 31, 2026 and December 31, 2025, we have a noncurrent pension liability of $499.5 million and $69.7 million, respectively. As of March 31, 2026 and December 31, 2025, we have a noncurrent other postretirement benefits liability of $310.4 million and $276.6 million, respectively.\n\nIn 2026, we expect pension funding requirements to be approximately $35.0 million and we expect cash payments for other postretirement benefit obligations, net of GM cost sharing, to be $16.1 million, including expected contributions to Dowlais plans assumed in the Business Combination.\n\n21\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n10. PRODUCT WARRANTIES\n\nWe record a liability for estimated warranty obligations at the dates our products are sold. These estimates are established using sales volumes and internal and external warranty data where there is no payment history and historical information about the average cost of warranty claims for customers with prior claims. We estimate our costs based on the contractual arrangements with our customers, existing customer warranty terms and internal and external warranty data, which includes a determination of our warranty claims and actions taken to improve product quality and minimize warranty claims. We continuously evaluate these estimates and our customers' administration of their warranty programs. We monitor actual warranty claim data and adjust the liability, as necessary, on a quarterly basis.\n\nThe following table provides a reconciliation of changes in the product warranty liability:\n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n (in millions)\n\n   \n\nBeginning balance$63.3 $60.6 \n\n     Accruals9.9 4.1 \n\n Payments(8.6)(2.5)\n\n     Adjustment to prior period accruals(0.1)— \n\n     Business Combination with Dowlais110.7 — \n\n     Foreign currency translation(1.4)0.4 \n\nEnding balance$173.8 $62.6 \n\n22\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n11. REVENUE FROM CONTRACTS WITH CUSTOMERS\n\nNet sales recognized from contracts with customers, disaggregated by segment and geographical location, are presented in the following table for the three months ended March 31, 2026 and 2025. Net sales are attributed to regions based on the location of production. Intersegment sales have been excluded from the table.\n\nIn 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 table below for the three months ended March 31, 2025 have been recast to reflect this reorganization.\n\nThree Months Ended March 31, 2026\n\n(in millions)\n\nDrivelineMetal FormingTotal\n\nNorth America$1,098.7 $348.3 $1,447.0 \n\nAsia223.5 31.4 254.9 \n\nEurope379.4 208.8 588.2 \n\nSouth America64.0 24.8 88.8 \n\nTotal$1,765.6 $613.3 $2,378.9 \n\nThree Months Ended March 31, 2025\n\n(in millions)\n\nDrivelineMetal FormingTotal\n\nNorth America$742.5 $290.5 $1,033.0 \n\nAsia137.7 3.4 141.1 \n\nEurope83.9 111.2 195.1 \n\nSouth America21.1 21.0 42.1 \n\nTotal$985.2 $426.1 $1,411.3 \n\nContract Assets and Liabilities\n\nThe following table summarizes our beginning and ending balances for accounts receivable and contract liabilities associated with our contracts with customers (in millions):\n\nAccounts Receivable, NetContract Liabilities (Current)Contract Liabilities (Long-term)\n\nDecember 31, 2025$733.0 $38.5 $33.9 \n\nMarch 31, 20261,535.1 32.8 42.1 \n\nIncrease/(decrease)$802.1 $(5.7)$8.2 \n\nContract liabilities relate to deferred revenue associated with various settlements and commercial agreements for which we have a future performance obligation to the customer. We recognize this deferred revenue into revenue over the life of the associated program as we satisfy our performance obligations to the customer. We do not have contract assets as defined in ASC 606. We amortized previously recorded contract liabilities into revenue as we satisfied performance obligations with our customers of approximately $9.5 million and $3.9 million for the three months ended March 31, 2026 and 2025, respectively.\n\n23\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n12. RESTRUCTURING AND ACQUISITION-RELATED COSTS\n\nIn 2022, we completed our acquisition of Tekfor Group (Tekfor) and in 2023 we initiated certain restructuring actions associated with the acquired entities. We expect to incur restructuring costs associated with the acquired entities through 2026. In the first quarter of 2024, we initiated a global restructuring program (the 2024 Program) focused on optimizing our cost structure, including the closure of certain of the Company's facilities. We expect to incur costs under the 2024 Program into 2029, due to the long-lead nature of these projects. In February 2026, we completed our acquisition of Dowlais, which had existing restructuring programs at the time of the acquisition.\n\nA summary of our restructuring activity for the first three months of 2026 and 2025 is shown below:\n\nSeverance ChargesImplementation CostsTotal\n\n(in millions)\n\nAccrual at December 31, 2024$0.8 $2.0 $2.8 \n\nCharges1.0 2.4 3.4 \n\nCash utilization(1.4)(1.2)(2.6)\n\nAccrual at March 31, 2025$0.4 $3.2 $3.6 \n\nAccrual at December 31, 2025$32.2 $5.8 $38.0 \n\nBusiness Combination with Dowlais48.4 11.9 60.3 \n\nCharges7.4 18.9 26.3 \n\nCash utilization(15.7)(20.1)(35.8)\n\nAccrual at March 31, 2026$72.3 $16.5 $88.8 \n\nAs part of our restructuring actions, we incurred total severance charges of approximately $7.4 million and $1.0 million during the three months ended March 31, 2026 and 2025, respectively. We also incurred total implementation costs of approximately $18.9 million and $2.4 million during the three months ended March 31, 2026 and 2025, respectively. Implementation costs consist primarily of plant exit costs.\n\nApproximately $17.7 million of our total restructuring costs for the three months ended March 31, 2026 related to Dowlais' existing restructuring programs, approximately $4.6 million were associated with the 2024 Program and approximately $4.0 million were associated with Tekfor. From inception of the 2024 Program, we have incurred $26.9 million of total restructuring costs under this program. We have incurred $45.6 million of total restructuring costs associated with Tekfor.\n\nApproximately $16.9 million and $6.7 million of our total restructuring costs for the three months ended March 31, 2026 related to our Driveline and Metal Forming segments, respectively, while the reminder were corporate costs. Approximately $1.0 million and $1.9 million of our total restructuring costs for the three months ended March 31, 2025 related to our Driveline and Metal Forming segments, respectively, while the remainder were corporate costs. We expect to incur approximately $100 million to $140 million of total restructuring charges in 2026.\n\nIn 2026, we incurred acquisition-related costs associated with the Business Combination and integration costs primarily related to our acquisition of Dowlais. Additionally, in 2025 we incurred acquisition-related costs associated with the Business Combination and integration costs primarily related to our previous acquisition of Tekfor. The following table represents a summary of charges incurred in 2026 and 2025 associated with acquisition and integration costs:\n\nAcquisition-Related CostsIntegration ExpensesTotal\n\n(in millions)\n\nCharges for the three months ended March 31, 2026\n$53.8 $18.8 $72.6 \n\nCharges for the three months ended March 31, 2025\n16.2 0.1 16.3 \n\nAcquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred. Integration expenses primarily reflect costs for professional fees incurred in conjunction with integration activities. Total restructuring charges and acquisition-related charges are presented on a separate line item titled Restructuring and acquisition-related costs in our Condensed Consolidated Statements of Operations and totaled $98.9 million and $19.7 million for the three months ended March 31, 2026 and March 31, 2025, respectively.\n\n24\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n13. INCOME TAXES\n\nWe adjust our effective tax rate each quarter based on our estimated annual effective tax rate. We also record the tax impact of certain discrete, unusual or infrequently occurring items, including changes in judgment about valuation allowances and the effects of changes in tax laws or rates on deferred tax balances, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings versus annual projections.\n\nOur income tax expense (benefit) and effective income tax rates for the three months ended March 31, 2026 and March 31, 2025 are as follows:\n\n Three Months Ended\n\nMarch 31,\n\n20262025\n\n (in millions)\n\n \n\nIncome tax expense (benefit)$(19.6)$14.0 \n\nEffective income tax rate16.4 %66.4 %\n\nFor 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.\n\nOur income tax expense and effective income tax rate for the three months ended March 31, 2026 varies 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.\n\nIn 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.\n\nOther Income Tax Matters\n\nPending Tax Litigation\n\nDuring their examination of our 2015 U.S. federal income tax return, the Internal Revenue Service (IRS) asserted that income earned by a Luxembourg subsidiary from its Mexican branch operations should be categorized as foreign base company sales income (FBCSI) under Section 954(d) of the Internal Revenue Code and recognized currently as taxable income on our 2015 U.S. federal income tax return. As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (NOPA). The Company disagreed with the NOPA, believes that the proposed adjustment is without merit and contested the matter through the IRS's administrative appeals process. No resolution was reached in the appeals process and, in September 2022, the IRS issued a Notice of Deficiency. The IRS subsequently issued a Notice of Tax Due in December 2022 and we paid the assessed tax and interest of $10.1 million in January 2023. We filed a claim for refund for the amount of tax and interest paid related to this matter for the 2015 tax year and, in December 2023, we filed suit in the U.S. Court of Federal Claims. We have a trial date set to begin court proceedings on this matter in 2026.\n\n25\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nWe believe, after consultation with tax and legal counsel, that it is more likely than not that our structure did not give rise to FBCSI, and it's likely that we will be successful in ultimately defending our position. As such, we have not recorded any impact of the IRS’s proposed adjustment in our condensed consolidated financial statements as of, and for the three months ended, March 31, 2026 and March 31, 2025, with the exception of the income tax receivable of $10.1 million that was paid by the Company to the IRS in 2023. As of March 31, 2026, in the event the Company is not successful in defending its position, the potential additional income tax expense, including estimated interest charges, related to tax years 2015 through 2023, is estimated to be in the range of approximately $335 million to $385 million.\n\nThe IRS has subsequently issued to the Company additional NOPAs for this matter for each of the tax years 2016 through 2022. The issuance of these NOPAs does not impact the aforementioned estimated range of potential income tax expense and interest charges and does not alter our belief that it is more likely than not that our structure did not give rise to FBCSI and that it’s likely that we will be successful in ultimately defending our position.\n\nNegative or unexpected outcomes of tax examinations and audits, and any related litigation, could have a material adverse impact on our results of operations, financial condition and cash flows. We will continue to monitor the progress and conclusions of all ongoing audits and other communications with tax authorities and will adjust our estimated liability as necessary. As of March 31, 2026 and December 31, 2025, we have recorded a liability for unrecognized income tax benefits and related interest and penalties of $217.3 million and $32.6 million, respectively. The increase in our liability for unrecognized income tax benefits as of March 31, 2026, as compared to December 31, 2025, is the result of liabilities associated with the Business Combination.\n\n26\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n14. EARNINGS (LOSS) PER SHARE (EPS)\n\nWe present EPS using the two-class method. This method allocates undistributed earnings between common shares and non-vested share-based payment awards that entitle the holder to non-forfeitable dividend rights. Our participating securities are our non-vested restricted stock units.\n\nThe following table sets forth the computation of our basic and diluted EPS available to shareholders of common stock (excluding participating securities):\n\n Three Months Ended\n\n March 31,\n\n 20262025\n\n (in millions, except per share data)\n\nNumerator  \n\nNet income (loss) attributable to Dauch $(100.3)$7.1 \n\n    Less: Net income attributable to participating securities— (0.3)\n\nNet income (loss) attributable to common shareholders - Basic and Dilutive$(100.3)$6.8 \n\nDenominators  \n\nBasic common shares outstanding -  \n\n   Weighted-average shares outstanding200.1 122.5 \n\n        Less: Weighted-average participating securities(6.8)(4.6)\n\n    Weighted-average common shares outstanding193.3 117.9 \n\nEffect of dilutive securities -  \n\n   Dilutive stock-based compensation— 0.1 \n\n \n\nDiluted shares outstanding -  \n\n   Adjusted weighted-average shares after assumed conversions193.3 118.0 \n\n   \n\nBasic EPS$(0.52)$0.06 \n\n   \n\nDiluted EPS$(0.52)$0.06 \n\nBasic and diluted loss per share are the same for the three months ended March 31, 2026 because the effect of potentially dilutive stock-based compensation would have been antidilutive. Excluded potentially dilutive shares were 0.3 million for the three months ended March 31, 2026.\n\nOn February 3, 2026, in connection with the completion of the Business Combination, we issued approximately 117 million shares and increased our authorized shares from 150 million to 375 million shares.\n\n27\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n15. INVESTMENTS IN EQUITY-METHOD AFFILIATES\n\nInvestments in Equity-Method Affiliates\n\nWe have investments in certain joint ventures and other entities whereby we are able to significantly influence the policies and operations of these entities. These entities are not consolidated in our operating results, but our share of the earnings or losses associated with these entities is included in our results of operations using the equity method of accounting.\n\nAs part of the Business Combination, we acquired a 50% interest in Shanghai GKN HUAYU Driveline Systems Co Limited (SDS). SDS is our only significant equity method investment. Our net share of income from SDS for the period from the closing date of the Business Combination on February 3, 2026 through March 31, 2026, as well as our investment in SDS at March 31, 2026, are as follows (in millions):\n\nCondensed Consolidated Statement of Operations Information\nThree Months Ended\n\nMarch 31, 2026\n\nProportionate share of income from SDS$13.8 \n\nAmortization of acquisition intangible asset attributable to SDS, net of tax(4.4)\n\nNet share of income from SDS$9.4 \n\nCondensed Consolidated Balance Sheet InformationMarch 31, 2026\n\nInvestment in SDS$869.5 \n\nOur net share of income from SDS is included within Income from equity-method affiliates, net in our Condensed Consolidated Statement of Operations. Our investment in SDS is included within Investments in equity-method affiliates in our Condensed Consolidated Balance Sheet. As of, and for the three months ended March 31, 2026, there were no significant related-party transactions or balances between Dauch and SDS. See Note 2 - Acquisitions and Dispositions for additional information about the Business Combination.\n\n28\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\n16. SEGMENT REPORTING\n\nOur 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.\n\nOur product offerings by segment are as follows:\n\n•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\n\n•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.\n\nWe 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.\n\nFor 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.\n\nWe 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.\n\nAdditionally, 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.\n\n29\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nThe following tables represent information by reportable segment for the three months ended March 31, 2026 and 2025 (in millions):\n\nThree Months Ended March 31, 2026\n\nDrivelineMetal FormingCorporate and EliminationsTotal\n\nSales$1,769.1 $726.2 $— $2,495.3 \n\nLess: Intersegment sales3.5 112.9 — 116.4 \n\nNet external sales$1,765.6 $613.3 $— $2,378.9 \n\nCost of goods sold (a) 1,448.9 509.8 — 1,958.7 \n\nSelling, general and administrative expenses (b) 93.0 38.6 — 131.6 \n\nOther segment expense (income), net (c)(15.1)(4.8)— (19.9)\n\nSegment Adjusted EBITDA$238.8 $69.7 $— $308.5 \n\nDepreciation and amortization$118.7 $63.1 $— $181.8 \n\nCapital expenditures $80.1 $22.7 $0.8 $103.6 \n\nTotal Assets$7,824.6 $2,693.0 $754.5 $11,272.1 \n\n(a) Cost of goods sold excludes depreciation and amortization, which was $107.1 million for Driveline and $46.3 million for Metal Forming for the three months ended March 31, 2026. Cost of goods sold also excludes loss on disposal of property, plant and equipment, which was $1.1 million for Driveline and $2.6 million for Metal Forming for the three months ended March 31, 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 three months ended March 31, 2026.\n\n(b) Selling, general and administrative expenses excludes depreciation, which was $4.8 million for Driveline and $0.9 million for Metal Forming for the three months ended March 31, 2026.\n\n(c) Other segment expense (income), net primarily consists of the net impact of interest income and foreign exchange gains and losses.\n\nThree Months Ended March 31, 2025\n\nDrivelineMetal FormingCorporate and EliminationsTotal\n\nSales$987.0 $525.5 $— $1,512.5 \n\nLess: Intersegment sales1.8 99.4 — 101.2 \n\nNet external sales$985.2 $426.1 $— $1,411.3 \n\nCost of goods sold (a)784.8 365.7 — 1,150.5 \n\nSelling, general and administrative expenses (b)67.2 18.6 — 85.8 \n\nOther segment expense (income), net (c)0.5 (3.2)— (2.7)\n\nSegment Adjusted EBITDA$132.7 $45.0 $— $177.7 \n\nDepreciation and amortization$63.0 $49.2 $— $112.2 \n\nCapital expenditures$45.1 $23.6 $0.6 $69.3 \n\nTotal Assets$2,608.4 $1,523.7 $1,007.3 $5,139.4 \n\n(a) Cost of goods sold excludes depreciation and amortization, which was $54.1 million for Driveline and $32.4 million for Metal Forming for the three months ended March 31, 2025. Cost of goods sold also excludes loss on disposal of property, plant and equipment which was $0.1 million for Driveline and $0.3 million for Metal Forming for the three months ended March 31, 2025.\n\n(b) Selling, general and administrative expenses excludes depreciation, which was $4.2 million for Driveline and $0.9 million for Metal Forming for the three months ended March 31, 2025.\n\n(c) Other segment expense (income), net primarily consists of the net impact of interest income and foreign exchange gains and losses.\n\n​\n\n30\n\nDAUCH CORPORATION\n\nNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)\n\nThe following table represents a reconciliation of Total Segment Adjusted EBITDA to consolidated income (loss) before income taxes for the three months ended March 31, 2026 and 2025:\n\nThree Months Ended March 31,\n\n20262025\n\n(in millions)\n\nTotal segment adjusted EBITDA(a)\n$308.5 $177.7 \n\nInterest expense(89.6)(42.9)\n\nDepreciation and amortization(181.8)(112.2)\n\nRestructuring and acquisition-related costs(98.9)(19.7)\n\nGain on Business Combination Derivative (Note 6)12.9 21.9 \n\nDebt refinancing and redemption costs(3.0)(3.3)\n\nUnrealized foreign exchange loss on acquired U.S. Private Placement Notes(10.9)— \n\nMark-to-market on nondesignated foreign exchange derivatives assumed as part of the Business Combination with Dowlais(15.6)— \n\nLoss on disposal of property, plant and equipment(3.7)(0.4)\n\nInterest income on debt held in escrow4.6 — \n\nAmortization of acquisition intangible asset attributable to SDS (Note 15)(4.4)— \n\nNon-recurring items:\n\nAcquisition-related fair value inventory adjustment(37.7)— \n\nIncome (loss) before income taxes$(119.6)$21.1 \n\n(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.\n\n31"}