Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 25, 2019,~~May 1, 2020, there were ~~64,504,357 million~~64,647,128 outstanding shares of the registrant’s common stock, $0.001 par value per share.

	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
	(Unaudited)						(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	153.6		$	169.0		$	326.9		$	167.3
Trade receivables, less allowance for doubtful accounts of $5.5 and $5.6 million at June 30, 2019 and December 31, 2018, respectively		269.6			259.8
Trade receivables, less allowance for credit losses of $5.3 and $5.1 million at March 31, 2020 and December 31, 2019, respectively								242.9			243.2
Inventories		237.5			231.2			229.4			222.5
Income tax receivable		15.0			10.2			4.6			5.2
Prepaid expenses and other current assets		34.6			33.1			32.3			29.1
Assets held for sale		—			0.7
Total current assets		710.3			704.0			836.1			667.3
Property, plant and equipment, net		360.8			364.4			343.4			354.4
Goodwill								1,528.3			1,694.9
Intangible assets, net		1,546.5			1,585.7			1,457.7			1,502.4
Goodwill		1,686.1			1,662.3
Deferred income taxes		0.9			4.9			1.0			3.0
Other non-current assets		12.8			15.9			9.5			25.1
Operating lease right of use assets		40.4			—			40.2			36.6
Total assets	$	4,357.8		$	4,337.2		$	4,216.2		$	4,283.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	156.5		$	175.8		$	154.4		$	154.7
Accrued payroll		54.5			57.0			49.4			58.3
Accruals and other current liabilities		80.5			79.6			85.3			82.0
Income tax payable		9.4			7.5			18.5			13.2
Current portion of long-term debt		19.2			17.2			17.2			18.0
Operating lease liabilities		14.3			—			12.8			13.5
Total current liabilities		334.4			337.1			337.6			339.7
Long-term debt - less current portion		1,642.5			1,690.9			1,658.5			1,563.8
Deferred income taxes		401.2			393.2			357.4			369.1
Pension liabilities		32.9			32.0			30.1			30.8
Long-term taxes payable		4.5			5.4			2.7			4.5
Other long-term liabilities		30.2			30.4			43.8			28.8
Operating lease liabilities, net of current portion		27.7			—			29.0			24.7
Commitments and Contingencies (Note 18)
Commitments and Contingencies (Note 16)
Stockholders’ equity:
Common stock ($0.001 par value per share, 120.0 million shares authorized, 64.3 and 64.2 million shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively)		0.1			0.1
Common stock ($0.001 par value per share, 120,000,000 shares authorized, 64,564,526 and 64,222,603 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively)								0.1			0.1
Additional paid-in capital		1,691.8			1,687.1			1,698.1			1,696.7
Retained earnings		274.5			232.6			187.7			315.4
Accumulated other comprehensive loss		(82.0	)		(71.6	)		(128.8	)		(89.9	)
Total stockholders’ equity		1,884.4			1,848.2			1,757.1			1,922.3
Total liabilities and stockholders’ equity	$	4,357.8		$	4,337.2		$	4,216.2		$	4,283.7

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

	Quarter Ended					Year to Date Ended					Quarter Ended
	June 30, 2019		June 30, 2018			June 30, 2019		June 30, 2018			March 31, 2020			March 31, 2019
	(Unaudited)		(Unaudited)			(Unaudited)		(Unaudited)			(Unaudited)			(Unaudited)
Net sales	$	466.5	$	237.3		$	949.3	$	477.7		$	434.2		$	482.8
Cost of sales		299.5		159.1			607.4		325.2			281.2			307.9
Gross profit		167.0		78.2			341.9		152.5			153.0			174.9
Operating expenses:
Selling, general and administrative expenses		92.0		43.4			182.9		90.5			87.1			90.9
Impairment of goodwill and intangible asset												147.5			—
Research and development expenses		14.7		6.2			30.0		12.7			14.8			15.3
Restructuring costs		3.2		0.6			5.5		1.5			1.6			2.3
		109.9		50.2			218.4		104.7			251.0			108.5
Income from operations		57.1		28.0			123.5		47.8
(Loss)/Income from operations												(98.0	)		66.4
Other non-operating income and expense:
Loss on settlement of pension plan		—		—			—		5.1
Interest expense, net		18.6		2.1			38.4		3.9			17.4			19.8
Other non-operating expense/(income), net		0.4		(0.3	)		1.5		(0.4	)
Other non-operating (income)/expense, net												(1.5	)		1.1
		19.0		1.8			39.9		8.6			15.9			20.9
Income before income taxes		38.1		26.2			83.6		39.2
(Loss)/Income before income taxes												(113.9	)		45.5
Provision for income taxes		9.1		7.2			19.4		11.2			2.7			10.3
Net income	$	29.0	$	19.0		$	64.2	$	28.0
Net (loss)/income											$	(116.6	)	$	35.2
Weighted average shares, basic		64.3		29.0			64.3		29.1			64.5			64.2
Weighted average shares, diluted		64.5		29.1			64.5		29.2		64.5			64.4
Net income per share:
Net (loss)/income per share:
Basic	$	0.45	$	0.66		$	1.00	$	0.96		$	(1.81	)	$	0.55
Diluted	$	0.45	$	0.65		$	1.00	$	0.96		$	(1.81	)	$	0.55
Cash dividend declared per share	$	0.17	$	0.17		$	0.34	$	0.34		$	0.17		$	0.17

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Quarter Ended

Year to Date Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Net Income

$
29.0

$
19.0

$
64.2

$
28.0

Other Comprehensive income:

Foreign currency translation adjustment

4.9

(16.2
)

(7.6
)

(8.5
)
Reclassification adjustment from loss on
partial settlement of pension plan, net of tax

—

—

—

3.8

Change in pension liability adjustment, net of tax

—

—

(0.3
)

0.6

Change in fair value of derivative financial instruments,
net of tax

(14.0
)

0.7

(2.5
)

1.1

Total other comprehensive (loss) income:

(9.1
)

(15.5
)

(10.4
)

(3.0
)
Comprehensive income

$
19.9

$
3.5

$
53.8

$
25.0

	Quarter Ended
	March 31, 2020			March 31, 2019
	(Unaudited)			(Unaudited)
Net (Loss)/Income	$	(116.6	)	$	35.2
Other Comprehensive income:
Foreign currency translation adjustment		(58.4	)		(12.5	)
Change in pension liability adjustment		(0.1	)		(0.3	)
Change in fair value of derivative financial instruments, net of tax		19.6			11.5
Total other comprehensive loss:		(38.9	)		(1.3	)
Comprehensive (loss)/income	$	(155.5	)	$	33.9

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

	Year to Date Ended						Year to Date Ended
	June 30, 2019			June 30, 2018			March 31, 2020			March 31, 2019
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Cash flows from operating activities
Net income	$	64.2		$	28.0
Net (loss)/income							$	(116.6	)	$	35.2
Adjustments to reconcile net income to net operating cash flows:
Depreciation		28.9			13.8			14.6			14.3
Amortization of intangible assets		35.4			4.9			17.5			17.8
Amortization of deferred financing costs		2.3			0.3			1.1			1.1
Loss on foreign currency, net		0.8			—
Loss on partial settlement of pension plan		—			5.1
Impairment of goodwill and intangible asset								147.5			—
(Gain)/Loss on foreign currency, net								(2.0	)		1.0
Loss on disposal, impairment and other		0.2			0.3			—			0.3
Stock-based compensation		7.0			2.7			3.3			3.5
Changes in assets and liabilities, net of assets acquired:
Changes in assets and liabilities:
Trade receivables		(10.2	)		(13.0	)		(4.7	)		(22.5	)
Inventories		(6.3	)		(5.5	)		(11.8	)		(10.6	)
Accounts payable, accrued payroll, accruals and current liabilities		(20.2	)		2.0			(0.9	)		(4.9	)
Other current assets and liabilities		(4.5	)		(3.9	)		(10.8	)		18.5
Other operating assets and liabilities		(1.5	)		(5.6	)		(2.3	)		(14.4	)
Net cash provided by operating activities		96.1			29.1			34.9			39.3
Cash flows from investing activities
Purchase of property, plant and equipment		(24.1	)		(14.9	)		(8.2	)		(14.0	)
A&S acquisition purchase price adjustment		(13.5	)		—			—			(13.5	)
Acquisition of Aluminium Die Casting, S.r.L.		—			(2.7	)
Proceeds from sale of building		0.3			—			—			0.3
Net cash used in investing activities		(37.3	)		(17.6	)
Proceeds from cross currency interest rate swap settlement								56.2			—
Net cash provided by (used in) investing activities								48.0			(27.2	)
Cash flows from financing activities
Payments on 2015 Revolving Credit Facility		—			(24.4	)
Payments on Term Loan Facility		(50.0	)		—			(6.0	)		(15.0	)
Dividend payments		(22.0	)		(10.0	)		(11.3	)		(11.1	)
Borrowing under 2015 Revolving Credit Facility		—			11.0
Payments of equipment, working capital notes, mortgages and other debts		(0.5	)		(0.6	)
Proceeds from issuance of China debt		2.4			—
Net payments of financing leases, mortgages, and other obligations								(0.1	)		(0.2	)
Net (payments)/proceeds from China debt								(0.6	)		1.2
Shares surrendered for tax withholding		(2.3	)		(1.5	)		(1.9	)		(2.1	)
Net cash used in financing activities		(72.4	)		(25.5	)
Additional borrowing under revolver								100.0			—
Net cash provided by (used in) financing activities								80.1			(27.2	)
Effect of exchange rate changes on cash and cash equivalents		(1.8	)		0.1			(3.4	)		(1.5	)
Net change in cash and cash equivalents		(15.4	)		(13.9	)		159.6			(16.6	)
Cash and cash equivalents at beginning of period		169.0			52.0			167.3			169.0
Cash and cash equivalents at end of period	$	153.6		$	38.1		$	326.9		$	152.4
Cash paid during the period for:
Interest paid on borrowings	$	35.3		$	3.6		$	12.5		$	11.4
Income taxes paid		24.4			8.1		$	9.6		$	7.9

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

	Common Stock		Shares		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total			Common Stock		Shares		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at January 1, 2018	$	0.0		29.1	$	223.3	$	223.2		$	(49.9	)	$	396.7
Balance at January 1, 2020																$	0.1		64.2	$	1,696.7	$	315.4		$	(89.9	)	$	1,922.3
Stock-based compensation and vesting of restricted stock, net of withholdings		—		—		1.2		—			—			1.2			—		0.4		1.4		—			—			1.4
Net income		—		—		—		28.0			—			28.0
Dividends declared, $0.34 per share		—		—		—		(10.0	)		—			(10.0	)
Change in fair value of derivative financial instruments, net of tax		—		—		—		—			1.1			1.1
Minimum pension adjustment, net of tax		—		—		—		—			4.4			4.4
Cumulative foreign currency translation adjustment		—		—		—		—			(8.5	)		(8.5	)
Balance at June 30, 2018	$	0.0		29.1	$	224.5	$	241.2		$	(52.9	)	$	412.9

Balance at March 31, 2018	$	0.0		29.1	$	223.2	$	227.2		$	(37.4	)	$	413.0
Stock-based compensation and vesting of restricted stock, net of withholdings		—		—		1.3		—			—			1.3
Net income		—		—		—		19.0			—			19.0
Net loss																	—		—		—		(116.6	)		—			(116.6	)
Dividends declared, $0.17 per share		—		—		—		(5.0	)		—			(5.0	)		—		—		—		(11.1	)		—			(11.1	)
Change in fair value of derivative financial instruments, net of tax		—		—		—		—			0.7			0.7			—		—		—		—			19.6			19.6
Minimum pension adjustment, net of tax		—		—		—		—			—			—			—		—		—		—			(0.1	)		(0.1	)
Cumulative foreign currency translation adjustment		—		—		—		—			(16.2	)		(16.2	)		—		—		—		—			(58.4	)		(58.4	)
Balance at June 30, 2018	$	0.0		29.1	$	224.5	$	241.2		$	(52.9	)	$	412.9
Balance at March 31, 2020																$	0.1		64.6	$	1,698.1	$	187.7		$	(128.8	)	$	1,757.1

															Common Stock		Shares		Additional Paid in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance at January 1, 2019	$	0.1	64.2	$	1,687.1	$	232.6		$	(71.6	)	$	1,848.2		$	0.1		64.2	$	1,687.1	$	232.6		$	(71.6	)	$	1,848.2
Stock-based compensation and vesting of restricted stock, net of withholdings		—	0.1		4.7		—			—			4.7			—		0.1		1.4		—			—			1.4
Net income		—	—		—		64.2			—			64.2			—		—		—		35.2			—			35.2
Dividends declared, $0.34 per share		—	—		—		(22.3	)		—			(22.3	)
Dividends declared, $0.17 per share																—		—		—		(11.1	)		—			(11.1	)
Change in fair value of derivative financial instruments, net of tax		—	—		—		—			(2.5	)		(2.5	)		—		—		—		—			11.5			11.5
Minimum pension adjustment, net of tax		—	—		—		—			(0.3	)		(0.3	)		—		—		—		—			(0.3	)		(0.3	)
Cumulative foreign currency translation adjustment		—	—		—		—			(7.6	)		(7.6	)		—		—		—		—			(12.5	)		(12.5	)
Balance at June 30, 2019	$	0.1	64.3	$	1,691.8	$	274.5		$	(82.0	)	$	1,884.4

Balance at March 31, 2019	$	0.1	64.3	$	1,688.5	$	256.7		$	(72.9	)	$	1,872.4		$	0.1		64.3	$	1,688.5	$	256.7		$	(72.9	)	$	1,872.4
Stock-based compensation and vesting of restricted stock, net of withholdings		—	—		3.3		—			—			3.3
Net income		—	—		—		29.0			—			29.0
Dividends declared, $0.17 per share		—	—		—		(11.2	)		—			(11.2	)
Change in fair value of Derivative Financial Instruments, net of tax		—	—		—		—			(14.0	)		(14.0	)
Minimum pension adjustment, net of tax		—	—		—		—			—			—
Cumulative foreign currency translation adjustment		—	—		—		—			4.9			4.9
Balance at June 30, 2019	$	0.1	64.3	$	1,691.8	$	274.5		$	(82.0	)	$	1,884.4

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

Headquartered in Braintree, Massachusetts, Altra Industrial Motion Corp. (the “Company,” “Altra,” “we,” or “our”) is a leading global designer, producer and marketer of a wide range of electro-mechanical power transmission and motion control ~~(“PTMC”)~~ products. The Company brings together strong brands with production facilities in ~~seventeen~~17 countries. Altra’s leading brands include Ameridrives Couplings, Bauer Gear Motor, Bibby Turboflex, Boston Gear, Delroyd Worm Gear, Formsprag Clutch, Guardian Couplings, Huco, Industrial Clutch, Inertia Dynamics, Jacobs Vehicle Systems, Kilian Manufacturing, Kollmorgen, Lamiflex Couplings, Marland Clutch, Matrix, Nuttall Gear, Portescap, Stieber Clutch, Stromag, Svendborg Brakes, TB Wood’s, Thomson, Twiflex, Warner Electric, Warner Linear, and Wichita Clutch.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures required by generally accepted accounting principles in the United States, or GAAP. These statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the U.S. Securities and Exchange Commission (the “SEC”) on ~~March 1, 2019, as amended on March 29, 2019 and July 2, 2019~~February 27, 2020 (the ~~“2018~~“2019 Annual Report on Form 10-K”). In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, necessary to present fairly the Company’s financial position and cash flows for the interim periods presented. The results are not necessarily indicative of future results. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. ~~Certain prior year numbers have been adjusted to conform to the current year rounding convention of reporting financial data in millions of dollars, except as otherwise noted.~~

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which ~~amends~~requires the use of the current expected credit loss impairment model ~~by requiring entities to use a forward looking approach, based on expected losses,~~ to estimate credit losses on certain ~~type~~types of financial instruments, including trade receivables. The model requires an estimate of expected credit losses, measured over the contractual life of an asset, that considers information about past events, current conditions and a forecast of future economic conditions. The Company adopted the standard ~~is effective for the Company beginning~~on January 1, ~~2020, with early~~2020. The adoption ~~permitted. The Company is currently evaluating the impact~~ of the standard did not have a material impact on our ~~Consolidated Financial Statements.~~consolidated financial statements.

OnAs a result of the adoption of ASU 2016-13, the Company has updated its significant accounting policy related to trade account receivables and allowances for credit losses as of March 31, 2020 from what was previously disclosed in our audited financial statements for the year ended December 31, 2019 as follows:

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The amendments in ASU 2018-13 modify the disclosure requirements on fair value measurements. The Company adopted the standard on January 1, ~~2019 the Company adopted ASU 2016-02,~~ ~~Leases~~ (Topic 842) (“ASU 2016-02”) using the modified retrospective approach for all lease arrangements at the beginning period of adoption. Results for the reporting period beginning January 1, 2019 are presented under ASU 2016-02, which required, among other items, lessees to recognize a right-of-use asset (“ROU assets”) and lease liability for most leases. As permitted by the new lease standard, the Company elected (i) not to reevaluate land easements if they were not previously accounted for as leases, (ii) not to reassess prior conclusions about lease identification, lease classification and initial direct costs (iii) not to apply the recognition requirements to short-term leases, and (iv) not to separate non-lease components from associated lease components, for all classes of underlying assets. Upon2020. The adoption of the ~~new lease~~ standard ~~the Company recorded right of use assets of $46.7 million and lease liabilities of $48.2 million in connection with its operating leases.~~ ~~See Note 5 for additional information regarding~~did not have a material impact on our ~~commitments under various lease obligations.~~consolidated financial statements.

On October 1, 2018, the Company and Fortive Corporation (“Fortive”) consummated the previously announced combination (the “Fortive Transaction”) of Altra with four operating companies from Fortive’s Automation & Specialty platform (the “A&S Business”), and as a result, the consolidated financial statements reflect the A&S Business’s results of operations from October 1, 2018 onward.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). This ASU provides relief from certain accounting consequences that could result from the global markets’ anticipated transition away from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The ~~A&S Business, consisting~~relief provided by this ASU is elective and applies to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of ~~four key brands, Kollmorgen, Portescap, Thomson and Jacobs Vehicle Systems, designs, manufactures, markets and sells electromechanical and electronic motion control products, including~~reference rate reform. The optional amendments are effective as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the effect of the adoption of this standard and custom motors, drives and controls; linear motion systems, ball screws, linear bearings, clutches/brakes, linear actuators and mechanical components; and through Jacobs Vehicle Systems, supplemental braking systems for commercial vehicles.to the Company.

As ~~of June 30, 2019, the allocation of the purchase price of the A&S Business is provisional. The fair value of all~~ the acquired identifiable assets and liabilities is provisional pending finalization of the Company’s acquisition accounting, including the finalization of the valuation of the intangible assets acquired, identification and measurement of the inventory and property, plant and equipment, the measurement of tax basis in certain jurisdictions and the resulting deferred taxes that might arise from book and tax basis differences, as well as identification and measurement of uncertain tax positions, if any. The Company believes that such preliminary allocations provide a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company is waiting for additional information necessary to finalize fair value. The Company recorded certain measurement period adjustments for the year to date period ended June 30, 2019 in the amount of $29.1 million, which includes $2.9 million recorded in the quarter to date period ended June 30, 2019. The preliminary purchase price allocation below includes such adjustments.

At Acquisition
Date

Measurement
Period
Adjustments

At Acquisition
Date (As
Adjusted)

Consideration transferred:

Total cash consideration

$
1,003.4

$
—

$
1,003.4

Total equity consideration

1,458.7

—

1,458.7

A&S acquisition purchase price adjustment

—

13.5

13.5

Fair value of consideration transferred

$
2,462.1

$
13.5

$
2,475.6

Recognized identifiable assets acquired and liabilities
assumed:

Less: cash on A&S balance sheet at 10/1/2018

54.1

(0.5
)

53.6

Receivables

129.7

(0.8
)

128.9

Inventory

89.1

(2.1
)

87.0

Prepaids and other current assets

6.9

(0.2
)

6.7

Property, plant and equipment

178.3

(1.0
)

177.3

Intangibles

1,454.0

—

1,454.0

Other non-current assets

7.9

(0.4
)

7.5

Accounts payable

(98.9
)

0.8

(98.1
)
Accrued payroll

(15.2
)

0.5

(14.7
)
Accrued expenses and other current liabilities

(33.7
)

0.1

(33.6
)
Pension liability and other post employment
benefits

(12.0
)

—

(12.0
)
Deferred tax liability

(355.7
)

(11.7
)

(367.4
)
Other long term liability

(2.6
)

(0.3
)

(2.9
)
Senior unsecured notes assumed

(400.0
)

—

(400.0
)
Total identifiable net assets assumed

1,001.9

(15.6
)

986.3

Goodwill

$
1,460.2

$
29.1

$
1,489.3

The excess of the purchase price over the fair value of the net assets acquired was recorded as goodwill, which is not deductible for income tax purposes. The goodwill in this acquisition is attributable to the Company’s expectation to achieve synergies, such as facility consolidations, global procurement efficiencies, the ability to cross-sell product, and the ability to penetrate certain geographic areas.

Customer relationships and technology are subject to amortization, and will be recognized on a straight-line basis over the estimated useful lives of 20 years and 7-10 years, respectively, which represents the anticipated period over which the Company estimates it will benefit from the acquired assets. The tradenames and trademarks are considered to have an indefinite life and will not be amortized.

The major acquired technology IPR&D relates to the next generation of valvetrain technologies, which focus on improving engine brake performance, improving fuel efficiency and meeting future worldwide emissions regulations. The IPR&D projects are not currently amortized and will be reviewed for impairment at least annually and amortization will commence when the ~~assets are placed into service. There was no evidence of impairment to IPR&D as of June 30, 2019.~~

The Company recorded net sales from the A&S Business of $233.3 and $482.4 million for the three and six months ended June 30, 2019. The Company recorded net income from the A&S Business of $21.1 and $53.2 million for the three and six months ended June 30, 2019. Net income includes amortization expense from the A&S Business of $15.3 and $30.8 million for the three and six months ended June 30, 2019.

~~The following table sets forth the unaudited pro forma~~ results of operations of the Company for the quarter and year to date period ended June 30, 2018, as if the Company had acquired the A&S Business on January 1, 2018. The pro forma information contains the actual operating results of the Company and the A&S Business, adjusted to include the pro forma impact of (i) additional depreciation expense as a result of estimated depreciation based on the fair value of fixed assets; (ii) additional expense as a result of the estimated amortization of identifiable intangible assets and (iii) additional interest expense for borrowings associated with the A&S Acquisition. These pro forma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisition occurred at the beginning of the period or that may be obtained in the future.

~~On January 1, 2019 the Company adopted ASU 2016-02,~~ ~~Leases~~ (Topic 842) (“ASU 2016-02”) using the modified retrospective approach for all lease arrangements at the beginning period of adoption. Leases existing for the reporting period beginning January 1, 2019 are presented under ASU 2016-02. We lease property and equipment under finance and operating leases. At June 30, 2019, the Company’s right-of-use (“ROU”) assets and lease liabilities for operating and finance leases totaled approximately $40.9 and $42.5 million, respectively. Finance lease ROU assets are included in non-current other assets and finance lease liabilities are included in current and non-current other liabilities on the Company’s condensed consolidated balance sheets. The impact of adopting the new lease standard was not material to the Company’s condensed consolidated statement of operations for the periods presented.

As previously disclosed in our 2018 Annual Report on Form 10-K and under Topic 840, future minimum lease payments for operating leases having initial or remaining noncancelable lease terms in excess of one year were as follows:

Arrangements that are determined to be leases at inception are recognized in long-term ROU assets, current lease liabilities, and long-term lease liabilities in the condensed consolidated balance sheet at lease commencement. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future fixed lease payments over the lease term at commencement date. As most of the Company’s leases do not provide an implicit rate, the Company applies its incremental borrowing rate based on the economic environment at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease prepayments made and initial direct costs incurred and is reduced by lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases are recognized on a straight-line basis over the lease term.

We sell our products ~~through three~~through3 primary commercial channels: original equipment manufacturers (OEMs), industrial distributors and direct to end users. Each of our segments sells similar products, which are balanced across end-user industries including, without limitation, energy, food processing, general industrial, material handling, mining, transportation, industrial automation, robotics, medical devices, and turf & garden.

As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment from the Company’s manufacturing site or delivery to the customer’s named location. In determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. In certain circumstances, the Company manufactures customized product without alternative use for its customers, which would generally result in the transfer of control over time. The Company has evaluated the amount of revenue subject to recognition over time and concluded that it is immaterial.

The following table disaggregates our revenue for each reportable segment. The Company believes that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Quarter Ended					Year to Date Ended					Quarter Ended
	June 30, 2019			June 30, 2018		June 30, 2019			June 30, 2018		March 31, 2020			March 31, 2019
Net Sales:
Power Transmission Technologies	$	234.9		$	237.3	$	469.8		$	477.7	$	216.7		$	234.9
Automation & Specialty		233.3			—		482.4			—		218.6			249.1
Inter-segment eliminations		(1.7	)		—		(2.9	)		—		(1.1	)		(1.2	)
Net sales	$	466.5		$	237.3	$	949.3		$	477.7	$	434.2		$	482.8

Net sales by geographic region based on point of shipment origin are as follows:

	Net Sales								Net Sales
	Quarter Ended				Year to Date Ended				Quarter Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018		March 31, 2020		March 31, 2019
North America (primarily U.S.)	$	269.8	$	119.0	$	542.8	$	244.7	$	245.3	$	273.0
Europe excluding Germany		79.9		42.5		161.7		86.6		74.8		81.7
Germany		56.8		48.8		119.0		98.2		52.5		62.2
Asia and other		60.0		27.0		125.8		48.2		61.6		65.9
Total	$	466.5	$	237.3	$	949.3	$	477.7	$	434.2	$	482.8

The payment terms and conditions in our customer contracts vary. In some cases, customers will partially prepay for their goods; in other cases, after appropriate credit evaluations, payment will be due in arrears. In addition, there are constraints that cause variability in the ultimate consideration to be recognized. These constraints typically include early payment discounts, volume rebates, rights of return, surcharges, and other customer ~~consolidation.~~considerations.

A contract asset is created when the Company satisfies a performance obligation by transferring a promised good to the customer. Contract assets may represent conditional or unconditional rights to consideration. ~~The~~A right is conditional, and recorded as a contract asset, if for example the Company must first satisfy another performance obligation in the contract before it is entitled to payment from the customer. Contract assets are transferred to ~~billed receivables~~accounts receivable once the right becomes unconditional. ~~If the Company has the unconditional right to receive consideration from the customer, the contract asset is accounted for as a billed receivable and presented separately from other contract assets.~~ A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. If the Company receives a customer payment prior to satisfying a performance obligation or in excess of estimates of what the Company expects to be entitled to, the payment is recorded as a contract liability. Contracts with payment in arrears are recognized as receivables.

The opening and closing balances of the Company’s contract liability and ~~receivables~~accounts receivable as of the year to date period ended ~~June 30, 2019~~March 31, 2020 are as follows:

In The revenue recognized during the ~~three and six month~~three-month periods ended ~~June 30,~~March 31, 2020 and 2019 ~~the Company recognized $1.6 and $3.7 million of revenue related to our~~that was included in contract liabilities at ~~January 1, 2019,~~the beginning of the period amounted to $2.2 million, and $2.1 million, respectively.

Fair value is determined based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy, as follows:

The Company considers all highly liquid investments purchased with a remaining maturity of three months or less to be cash equivalents and are classified as Level 1.

The Company determines the fair value of financial instruments using quoted market prices whenever available. When quoted market prices are not available for various types of financial instruments (such as forwards, options and swaps), the Company uses standard models with market-based inputs, which take into account the present value of estimated future cash flows and the ability of the Company or the financial counterparty to perform. For interest rate and cross currency swaps, the significant inputs to these models are interest rate curves for discounting future cash flows and are adjusted for credit risk. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows and exchange rate curves of the foreign currency for translating future cash flows. See additional discussion of the Company’s use of financial instruments including cross-currency swaps and interest rate swaps included in Note ~~17.~~15.

The carrying values of financial instruments, including accounts receivable, cash equivalents, accounts payable, and other accrued liabilities are carried at cost, which approximates fair value. Debt under the Altra Credit Agreement (as defined herein) is comprised of ~~$1,270.0~~the Altra Term Loan Facility and the Altra Revolving Credit Facility (both as defined herein). The carrying amount of the Altra Term Loan Facility was $1,184.0 million and the estimated fair value of the Altra Term Loan Facility was $1,002.0 million at March 31, 2020. Debt under the Altra Credit Facility of $100.0 million approximates the fair value due to the variable interest rate. Further, the ~~agreement~~Altra Credit Agreement was negotiated in October 2018 and there have not been any significant changes in our credit rating. The carrying amount of the Notes (as defined herein) was $400 million and the estimated fair value of the Notes was ~~$420.0~~$394.5 million at ~~June 30, 2019.~~March 31, 2020.

8.6. Changes in Accumulated Other Comprehensive ~~Loss~~Income/(Loss) by Component

The following is a reconciliation of changes in accumulated other comprehensive ~~loss~~income/(loss) by component for the periods presented:

Gains and
Losses on
Cash Flow
Hedges

Defined
Benefit
Pension
Plans

Cumulative
Foreign
Currency
Translation
Adjustment

Total

Accumulated Other Comprehensive Loss by
Component, January 1, 2019

$
(12.9
)

$
(0.2
)

$
(58.5
)

$
(71.6
)
Net current-period Other Comprehensive Loss

(2.5
)

(0.3
)

(7.6
)

(10.4
)
Accumulated Other Comprehensive Loss by
Component, June 30, 2019

$
(15.4
)

$
(0.5
)

$
(66.1
)

$
(82.0
)

	Gains and (Losses) on Cash Flow Hedges			Defined Benefit Pension Plans			Cumulative Foreign Currency Translation Adjustment			Total
Accumulated Other Comprehensive (Loss) by Component, January 1, 2020	$	(3.0	)	$	(1.5	)	$	(85.4	)	$	(89.9	)
Net current-period Other Comprehensive Income (Loss)		19.6			(0.1	)		(58.4	)		(38.9	)
Accumulated Other Comprehensive Income (Loss) by component, March 31, 2020	$	16.6		$	(1.6	)	$	(143.8	)	$	(128.8	)

Gains and
Losses on
Cash Flow
Hedges

Defined
Benefit
Pension
Plans

Cumulative
Foreign
Currency
Translation
Adjustment

Total

Accumulated Other Comprehensive Loss by
   Component, January 1, 2018

$
(0.5
)

$
(3.7
)

$
(45.7
)

$
(49.9
)
Net current-period Other Comprehensive Income
   Gain/(Loss)

1.1

0.6

(8.5
)

(6.8
)
Reclassification adjustment from loss on partial
   settlement of pension plan, net of tax

—

3.8

—

3.8

Accumulated Other Comprehensive Gain/(Loss)
   by Component, June 30, 2018

$
0.6

$
0.7

$
(54.2
)

$
(52.9
)

	Gains and (Losses) on Cash Flow Hedges			Defined Benefit Pension Plans			Cumulative Foreign Currency Translation Adjustment			Total
Accumulated Other Comprehensive (Loss) by Component, January 1, 2019	$	(12.9	)	$	(0.2	)	$	(58.5	)	$	(71.6	)
Net current-period Other Comprehensive Income (Loss)		11.5			(0.3	)		(12.5	)		(1.3	)
Accumulated Other Comprehensive (Loss) by Component, March 31, 2019	$	(1.4	)	$	(0.5	)	$	(71.0	)	$	(72.9	)

Basic earnings per share is based on the weighted average number of shares of common stock outstanding, and diluted earnings per share is based on the weighted average number of shares of common stock outstanding and all potentially dilutive common stock equivalents outstanding. Common stock equivalents are included in the per share calculations when the effect of their inclusion is dilutive.

Quarter Ended

Year to Date Ended

June 30, 2019

June 30, 2018

June 30, 2019

June 30, 2018

Net income

$
29.0

$
19.0

$
64.2

$
28.0

Shares used in net income per common share
   - basic

64.3

29.0

64.3

29.1

Incremental shares of unvested restricted
   common stock

0.2

0.1

0.2

0.1

Shares used in net income per common share
  - diluted

64.5

29.1

64.5

29.2

Earnings per share:

Basic net income

$
0.45

$
0.66

$
1.00

$
0.96

Diluted net income

$
0.45

$
0.65

$
1.00

$
0.96

	Quarter Ended
	March 31, 2020			March 31, 2019
Net income	$	(116.6	)	$	35.2
Shares used in net income per common share - basic		64.5			64.2
Incremental shares of unvested restricted common stock		—			0.2
Shares used in net income per common share - diluted		64.5			64.4
Shares excluded as their inclusion would be anti-dilutive	0.1				—
(Loss)/Earnings per share:
Basic net income	$	(1.81	)	$	0.55
Diluted net income	$	(1.81	)	$	0.55

~~On October 1, 2018, upon consummation of the Fortive Transaction, the Company issued 35.0 million shares of Altra common stock~~ pursuant to that certain Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), dated March 7, 2018, among Altra, Fortive, McHale Acquisition Corp, and Stevens Holding Company, Inc. (“Stevens Holding”), and that certain Separation and Distribution Agreement, dated March 7, 2018, among Altra, Fortive and Stevens Holding (the “Distribution Agreement”). As a result, following the consummation of the Fortive Transaction, the total amount of issued and outstanding common stock was approximately 64.2 million.

Inventories at ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 consisted of the following:

	June 30, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Raw materials	$	115.1	$	103.0	$	109.3	$	104.2
Work in process		26.5		23.5		23.6		22.4
Finished goods		95.9		104.7		96.5		95.9
	$	237.5	$	231.2	$	229.4	$	222.5

The Company conducts an annual impairment review of goodwill and indefinite-lived intangible assets in October of each year, unless events occur which trigger the need for an interim impairment review. The 2019 annual goodwill impairment review indicated that the JVS reporting unit’s fair value exceeded its carrying value by less than 10%. All other reporting units had fair values that exceeded their carrying value by 10% or more.

The Company considered the recent economic impact of the COVID-19 pandemic to be a triggering event for the JVS business unit and, as a result, the Company performed an interim impairment review. As a result of both the COVID-19 related economic downturn and its impact on JVS’s anticipated financial results, the Company concluded that it is more likely than not that the JVS reporting unit’s carrying value exceeds its fair value and performed an interim impairment review for both JVS’s goodwill and tradename intangible asset. As a result of the interim impairment testing performed, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for indefinite-lived intangible assets and goodwill, respectively.

The Company estimated the fair value of the JVS reporting unit using both the discounted cash flow model and the market approach. The Company estimated the value of JVS’s indefinite-lived tradename intangible asset using a discounted cash flow model. The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate.

Key assumptions developed by management and used in the interim quantitative analysis included the following:

Depending on its duration and the severity of its economic impact, the COVID-19 pandemic may trigger additional interim impairment reviews in future periods.

Changes in goodwill from January 1, ~~2019~~2020 through ~~June 30, 2019~~March 31, 2020 were as follows:

Power
Transmission
Technologies

Automation
& Specialty

Total

Net goodwill balance January 1, 2019

$
410.2

$
1,252.1

$
1,662.3

Measurement period adjustment related to acquisition of A&S

—

29.1

29.1

Impact of changes in foreign currency

(0.4
)

(4.9
)

(5.3
)
Net goodwill balance June 30, 2019

$
409.8

$
1,276.3

$
1,686.1

	Power Transmission Technologies			Automation & Specialty			Total
Net goodwill balance January 1, 2020	$	410.1		$	1,284.8		$	1,694.9
Goodwill impairment charge		—			(139.1	)		(139.1	)
Impact of changes in foreign currency		(3.4	)		(24.1	)		(27.5	)
Net goodwill balance March 31, 2020	$	406.7		$	1,121.6		$	1,528.3

Other intangible assets as of March 31, 2020 and December 31, 2019 consisted of the following:

	March 31, 2020						December 31, 2019
	Cost		Accumulated Amortization		Net		Cost		Accumulated Amortization		Net
Other intangible assets
Intangible assets not subject to amortization:
Tradenames and trademarks (1)	$	247.7	$	—	$	247.7	$	260.0	$	—	$	260.0
In-process research and development		16.0		—		16.0		16.0		—		16.0
Intangible assets subject to amortization:
Customer relationships		1,171.0		147.9		1,023.1		1,187.7		137.8		1,049.9
Product technology and patents		209.6		38.7		170.9		210.0		33.5		176.5
Total intangible assets	$	1,644.3	$	186.6	$	1,457.7	$	1,673.7	$	171.3	$	1,502.4

The Company recorded $17.5 million and $17.8 million of amortization expense in the quarters ended March 31, 2020 and 2019, respectively.

The estimated amortization expense for intangible assets is approximately $52.6 million for the remainder of 2020, $70.7 million in each of the next four years and then $858.6 million thereafter.

~~Other intangible assets as of June 30, 2019 and December 31, 2018 consisted of the following:~~

June 30, 2019

December 31, 2018

Cost

Accumulated
Amortization

Net

Cost

Accumulated
Amortization

Net

Other intangible assets

Intangible assets not subject to amortization:

Tradenames and trademarks

$
261.6

$
—

$
261.6

$
262.0

$
—

$
262.0

In-process research and development

16.0

—

16.0

16.0

—

16.0

Intangible assets subject to amortization:

Customer relationships

1,195.6

113.6

1,082.0

1,196.4

91.0

1,105.4

Product technology and patents

210.1

23.2

186.9

212.9

10.6

202.3

Total intangible assets

$
1,683.3

$
136.8

$
1,546.5

$
1,687.3

$
101.6

$
1,585.7

The Company recorded $17.6 million and $2.4 million of amortization expense in the quarters ended June 30, 2019 and 2018, respectively; and, recorded $35.4 million and $4.9 million of amortization expense in the year to date periods ended June 30, 2019 and 2018.

~~The estimated amortization expense for intangible assets is approximately $35.4 million for the remainder of 2019, $70.7 million in each of the next four years and then $950.7 million thereafter.~~

The contractual warranty period of the Company's products generally ranges from three months to two years with certain warranties extending for longer periods. Estimated expenses related to product warranties are accrued at the time products are sold to customers and are recorded in accruals and other current liabilities on the unaudited condensed consolidated balance sheets. Estimates are established using historical information as to the nature, frequency and average costs of warranty claims.

Changes in the carrying amount of accrued product warranty costs for each of the quarters ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ are as follows:

	June 30, 2019			June 30, 2018			March 31, 2020			March 31, 2019
Balance at beginning of period	$	9.4		$	7.5		$	10.0		$	9.4
Accrued current period warranty expense		2.0			0.5			1.0			1.0
Payments and adjustments		(1.2	)		(1.4	)		(1.4	)		(1.7	)
Balance at end of period	$	10.2		$	6.6		$	9.6		$	8.7

Outstanding debt obligations at ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018~~2019 were as follows.

	June 30, 2019			December 31, 2018			March 31, 2020			December 31, 2019
Debt:
Term loan	$	1,270.0		$	1,320.0		$	1,184.0		$	1,190.0
Revolving Credit Facility								100.0			—
Notes		400.0			400.0			400.0			400.0
Mortgages and other		15.2			13.5			12.6			13.5
Finance leases		0.5			0.5			0.4			0.5
Total gross debt		1,685.7			1,734.0			1,697.0			1,604.0
Less: debt discount and deferred financing costs		(24.0	)		(25.9	)		(21.3	)		(22.2	)
Total debt, net of deferred financing costs		1,661.7			1,708.1
Total debt, net of debt discount and deferred financing costs								1,675.7			1,581.8
Less: current portion of long-term debt		(19.2	)		(17.2	)		(17.2	)		(18.0	)
Total long-term debt, net of unaccreted discount	$	1,642.5		$	1,690.9		$	1,658.5		$	1,563.8

On October 1, 2018 (the “A&S Closing Date”), upon the closing of the combination (the “Fortive Transaction”) of Altra with 4 operating companies from Fortive ~~Transaction~~Corporation’s (“Fortive”) Automation & Specialty platform (the “A&S Business”), the Company assumed $400 million aggregate principal amount of 6.125% senior notes due 2026 (the “Notes”). The Notes will mature on October 1, 2026. Interest on the Notes accrues from October 1, 2018, and the ~~next~~first interest payment date on the Notes ~~will be due July~~was on April 1, 2019. The Notes may be redeemed at the option of the issuer on or after October 1, 2023. The Notes are guaranteed on a senior unsecured basis by the Company and certain of its domestic subsidiaries.

On the A&S Closing Date, the Company entered into a new Credit Agreement (the “Altra Credit Agreement”). The Altra Credit Agreement provides for a seven-year senior secured term loan in an aggregate principal amount of $1,340.0 million (the “Altra Term Loan Facility”) and a five-year senior secured revolving credit facility in an aggregate committed principal amount of $300.0 million (the “Altra Revolving Credit Facility” and together with the Altra Term Loan Facility, the “Altra Credit Facilities”). The proceeds of the Altra Term Loan Facility were used to (i) consummate Fortive’s transfer of certain non-U.S assets, liabilities and entities constituting a portion of the A&S Business to certain subsidiaries of Altra, and the Altra subsidiaries’ assumption of substantially all of the liabilities associated with the transferred assets (the “Direct Sales”), (ii) repay in full and extinguish all outstanding indebtedness for borrowed money under the 2015 Credit Agreement (as defined herein) and (iii) pay certain fees, costs, and expenses in connection with the consummation of the Fortive Transaction. The proceeds of the Altra Revolving Credit Facility will be used for working capital and general corporate purposes.

The Altra Credit Facilities are guaranteed on a senior secured basis by the Company and certain of its domestic subsidiaries, subject to certain customary exceptions.

Borrowings under the Altra Term Loan Facility will bear interest at a per annum rate equal to a “Eurocurrency Rate” plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a “Base Rate” plus 1.00%, in the case of Base Rate borrowings. Borrowings under the Altra Revolving Credit Facility will initially bear interest at a per annum rate equal to a Eurocurrency Rate plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a Base Rate plus 1.00%, in the case of Base Rate borrowings, and thereafter will bear interest at a per annum rate equal to a Eurocurrency Rate or Base Rate, as applicable, plus an interest rate spread determined by reference to a pricing grid based on the Company’s senior secured net leverage ratio. In addition, the Company will be required to pay fees that will fluctuate between 0.250% per annum to 0.375% per annum on the unused amount of the Altra Revolving Credit Facility, based upon the Company’s senior secured net leverage ratio. The interest rate on the Term Loan Facility ~~and the Revolving Credit Facility~~ was ~~4.40%~~3.603% at ~~June 30, 2019.~~March 31, 2020.

The Altra Credit Agreement contains usual and customary representations and warranties, and usual and customary affirmative and negative covenants, including limitations on liens, investments, restricted payments, additional indebtedness and asset sales and mergers. In addition, the Altra Credit Agreement requires that Altra maintain a specified maximum senior secured leverage ratio and a specified minimum interest coverage ratio. The obligations of the borrowers of the Altra Credit Facilities under the Altra Credit Agreement may be accelerated upon customary events of default, including non-payment of principal, interest, fees and other amounts, inaccuracy of representation and warranties, violation of covenants, cross default and cross acceleration, voluntary and involuntary bankruptcy or insolvency proceedings, inability to pay debts as they become due, material ~~judgements,~~judgments, ERISA events, actual or asserted invalidity of security documents or guarantees and change in control.

The Company incurred $29.9 million in issuance costs, which are amortized over the term of the debt as an adjustment to the effective interest rate on the outstanding borrowings.

The Company provided notice to the administrative agent of the Altra Credit Agreement on March 9, 2020 and March 16, 2020 to draw down $50 million, and $50 million, respectively, with interest rates of 2.811% and 2.750%, respectively, under the Altra Revolving Credit Facility. As of ~~June~~quarter end March 31, 2020, a total of $100 million was outstanding under the Altra Revolving Credit Facility. Borrowings under the Altra Revolving Credit Facility are scheduled to mature on September 30, ~~2019,~~2023, and the Company may repay amounts borrowed any time without penalty. The Company increased its borrowings under the Altra Revolving Credit Facility as a precautionary action in order to increase its cash position and enhance its financial flexibility during this period of uncertainty in the global markets resulting from COVID-19. The draw-down proceeds from the Altra Revolving Credit Facility are currently being held on the Company’s balance sheet in cash and cash equivalents and may be used for general corporate purposes.

As of March 31, 2020, the Company had ~~$1,270.0~~$1,284.0 million outstanding on the Altra Credit Agreement. As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, the Company had ~~$4.4~~$4.7 million and ~~$4.2~~$4.4 million in letters of credit outstanding, respectively. The Company had ~~$295.6~~$195.3 million available to borrow under the Altra Credit Facilities at ~~June 30, 2019.~~

Prior to the Altra Credit Facilities, the Company maintained a revolving credit facility, in the amount of $425 million pursuant to the Second Amended and Restated Credit Agreement by and among the Company, Altra Industrial Motion Netherlands, B.V., one of the Company’s foreign subsidiaries, the lenders party thereto from time to time, J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, and KeyBanc Capital Markets, Inc., as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent (the “2015 Credit Agreement”).

On October 1, 2018, in connection with the Fortive Transaction and upon entering into the Altra Credit Agreement, the 2015 Credit Agreement, was terminated and all outstanding indebtedness for borrowed money thereunder was repaid in full.March 31, 2020.

The Company’s subsidiaries in Europe have entered into certain long-term fixed rate term loans that are generally secured by ~~the~~ local property, plant and equipment. The debt has interest rates that range from 1.79% to 2.5%, with various quarterly and monthly installments through 2028. ~~During the year~~

Notes to ~~date period ended June 30, 2019, one of the Company’s subsidiaries~~Unaudited Condensed Consolidated Interim Financial Statements

Amounts in ~~China opened a new line of credit for approximately $7.5 million with a term life of one year. As of June 30, 2019 the Company had approximately $2.4 million outstanding on the line of credit.~~ millions, unless otherwise noted

The Company leases certain equipment under finance lease arrangements, whose obligations are included in both short-term and long-term debt. Finance lease obligations amounted to approximately ~~$0.5~~$0.4 million and $0.5 million at ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, respectively. ~~ROU~~Finance lease right of use assets are included in property, plant and equipment with the related amortization recorded as depreciation expense.

Effective October 1, 2018, the Company amended its Articles of Incorporation to increase the number of authorized shares of Altra common stock from 90.0 million shares to 120.0 million shares. As of ~~June 30, 2019~~March 31, 2020 and December 31, ~~2018,~~2019, there were ~~64.3 million~~64,564,526 and ~~64.2 million~~64,222,603 shares of common stock issued and outstanding, respectively.

On December 20, 2006, the Company amended and restated its certificate of incorporation authorizing 10.0 million shares of undesignated Preferred Stock (“Preferred Stock”). The Preferred Stock may be issued from time to time in one or more classes or series, the shares of each class or series to have such designations and powers, preferences, rights, qualifications, limitations and restrictions as determined by the Company’s Board of Directors. There was no0 Preferred Stock issued or outstanding at ~~June 30, 2019 and~~March 31, 2020 or December 31, ~~2018.~~2019.

The 2014 Omnibus Incentive Plan (the “2014 Plan”) was approved by the Company’s stockholders at the Company’s 2014 Annual Meeting of Stockholders. The 2014 Plan provides for various forms of ~~stock based~~stock-based compensation to our directors, executive personnel and other key employees and consultants. Under the 2014 Plan, the remaining total number of shares of common stock available for delivery pursuant to the grant of awards (“Awards”) was ~~1.7~~1.5 million as of ~~June 30, 2019.~~March 31, 2020.

The restricted shares and restricted stock units issued pursuant to the 2014 Plan generally vest ratably over a period ranging from immediately to five years from the date of grant, provided, that the vesting of the restricted shares or restricted stock units may accelerate upon the occurrence of certain events. Common stock awarded under the 2014 Plan is generally subject to restrictions on transfer, repurchase rights, and other limitations and rights as set forth in the applicable award agreements. The fair value of the shares repurchased are measured based on the share price on the date of grant.

The 2014 Plan permits the Company to grant, among other things, restricted stock, restricted stock units, and performance share awards to key employees. Certain awards include vesting based upon achievement of specified ~~market conditions.~~performance criteria. Compensation expense recorded (in selling, general and administrative expense) during the quarters ended ~~June 30,~~March 31, 2020 and 2019 ~~and 2018~~ was ~~$3.5~~$3.3 million and ~~$1.4 million, respectively. Compensation expense recorded (in selling, general and administrative expense) during the year to date periods ended June 30, 2019 and 2018 was $7.0 million and $2.7~~$3.5 million, respectively. The Company recognizes stock-based compensation expense on a straight-line basis for the shares vesting ratably under the plan and uses the graded-vesting method of recognizing stock-based compensation expense for the performance share awards based on the probability of the specific performance metrics being achieved over the requisite service period.

The following tables set forth the activity of the Company’s restricted stock grants and stock options to date:

Total remaining unrecognized compensation cost is approximately $26.5 million as of June 30, 2019, and will be recognized over a weighted average remaining period of three years. The intrinsic value of these awards, as of June 30, 2019, was $34.7 million. Grant date fair value is based on the quoted price of the stock on the date of grant.

In October 2018, the Company issued 536,030 shares of restricted stock to certain Automation and Specialty employees as a result of the acquisition and in accordance with the terms of the Employee Matters Agreement, dated March 7, 2018, among Altra, Fortive and Stevens Holding. The aggregate fair value of these awards totaled $21 million. Based upon the vesting provisions of these awards, $3.1 million of the fair value was attributed to preacquisition services of the A&S employees and was recognized as purchase price consideration. The remaining compensation will be recognized over the remaining service period.

~~On October 19, 2016, our board~~Total remaining unrecognized compensation cost is approximately $29.7 million as of ~~directors approved~~March 31, 2020, and will be recognized over a ~~share repurchase program authorizing~~weighted average remaining period of three years. The intrinsic value of these awards, as of March 31, 2020, was $16.8 million. Grant date fair value is based on the ~~buyback of up to $30.0 million~~quoted price of the ~~Company's common~~ stock ~~through December 31, 2019. The Company expects to purchase shares~~ on the ~~open market, through block trades, in privately negotiated transactions, in compliance with SEC Rule 10b-18 (including through Rule 10b5-1 plans), or in any other appropriate manner. The timing~~date of the shares repurchased will be at the discretion of management and will depend on a number of factors, including price, market conditions and regulatory requirements. Shares acquired through the repurchase program will be retired. The Company retains the right to limit, terminate or extend the share repurchase program at any time without prior notice. The Company expects to fund any further repurchases of its common stock through a combination of cash on hand and cash generated by operations.

~~The Company did not repurchase any shares during the year to date periods ended June 30, 2019 and 2018.~~grant.

From time to time, the Company has initiated various restructuring programs and incurred severance and other restructuring costs.

During 2015, the Company commenced a restructuring plan (“2015 Altra Plan”) as a result of weak demand in Europe and to make certain adjustments to improve business effectiveness, reduce the number of facilities and streamline the Company's cost structure. The actions taken pursuant to the 2015 Altra Plan included reducing headcount, facility consolidations, and limiting discretionary spending to improve profitability. For the quarter ended June 30, 2019, the Company didn’t record any expense related to the 2015 Altra Plan. The Company does not expect to incur any additional material restructuring expenses related to the 2015 Altra Plan.

~~During~~ 2017, the Company commenced a restructuring plan (“2017 Altra Plan”) as a result of the Company’s purchase of Stromag ~~acquisition~~ and to rationalize its global renewable energy business. The actions taken pursuant to the 2017 Altra Plan included reducing headcount, facility consolidations and the elimination of certain costs. The ~~amounts~~expenses for the ~~year to date period~~quarter ended ~~June 30, 2019~~March 31, 2020 were comprised of approximately ~~$1.2~~$0.2 million in severance, ~~$0.6 million in~~ consolidation ~~costs, $0.1 million in relocation costs,~~ and $0.9 million in other restructuring costs, and are classified in the accompanying unaudited condensed consolidated statement of income as restructuring costs. The amounts for the quarter ended June 30, 2019 were comprised of approximately $0.7 million in severance, $0.3 million in consolidation costs, $0.1 million in relocation costs, and $0.7 million in other restructuring costs. The Company ~~expects~~does not expect to incur anany additional ~~amount~~material costs as a result of ~~approximately $1.0 to $3.0 million in expense under~~ the 2017 Altra ~~Plan through 2019.~~Plan.

During 2019, the Company commenced a restructuring plan (“2019 Altra Plan”) to drive efficiencies, reduce the number of facilities and optimize its operating margin. The Company expects expenses related to workforce reductions, lease termination costs and other facility rationalization costs. The Company expects to incur approximately $15 - ~~$25~~$20 million in restructuring expenses under the 2019 Altra Plan over the next ~~four~~three years, primarily related to plant consolidation and headcount reductions. For the ~~year to date period~~quarter ended ~~June 30, 2019,~~March 31, 2020, the Company recorded ~~approximately $2.3 million in severance, $0.1 million in relocation costs~~$1.1million, and $0.3 million in other restructuring costs, respectively, under the 2019 Altra Plan, which are classified in the accompanying unaudited condensed consolidated statement of income as restructuring costs. For the quarter ended June 30, 2019, the Company recorded $1.2 million in severance and ~~$0.2 million in other restructuring costs.~~consolidation costs, respectively.

The following is a reconciliation of the accrued restructuring costs between January 1, 2020 and March 31, 2020.

The following is a reconcilation of the accrued restructuring costs between January 1, 2019 and ~~June 30,~~March 31, 2019.

	2017 Altra Plan			2019 Altra Plan			Total All Plans			2017 Altra Plan			2019 Altra Plan			Total All Plans
Balance at January 1, 2019	$	2.0		$	—		$	2.0		$	2.0		$	—		$	2.0
Restructuring expense incurred		1.0			1.3			2.3			1.0			1.3			2.3
Cash payments		(1.5	)		(0.5	)		(2.0	)		(1.5	)		(0.5	)		(2.0	)
Balance at March 31, 2019		1.5			0.8			2.3			1.5			0.8			2.3
Restructuring expense incurred		1.8			1.4			3.2
Cash payments		(2.0	)		(0.7	)		(2.7	)
Balance at June 30, 2019	$	1.3		$	1.5		$	2.8

~~The following is a reconcilation of the accrued restructuring costs between January 1, 2018 and June 30, 2018.~~

2015 Altra
Plan

2017 Altra
Plan

2019 Altra
Plan

Total All
Plans

Balance at January 1, 2018

$
0.8

$
0.2

$
—

$
1.0

Restructuring expense incurred

—

0.9

—

0.9

Cash payments

(0.1
)

(0.4
)

—

(0.5
)
Balance at March 31, 2018

0.7

0.7

—

1.4

Restructuring expense incurred

—

0.6

—

0.6

Cash payments

(0.2
)

(0.9
)

—

(1.1
)
Balance at June 30, 2018

$
0.5

$
0.4

$
—

$
0.9

The following is a reconciliation of restructuring expense by segment for the year to date period ended ~~June 30, 2019.~~March 31, 2020.

	2017 Altra Plan		2019 Altra Plan		Total All Plans		2017 Altra Plan		2019 Altra Plan		Total All Plans
Power Transmission Technologies	$	2.8	$	0.1	$	2.9	$	0.2	$	0.4	$	0.6
Automation & Specialty		—		2.6		2.6		—		1.0		1.0
Balance at June 30, 2019	$	2.8	$	2.7	$	5.5
Balance at March 31, 2020							$	0.2	$	1.4	$	1.6

The total accrued restructuring reserve as of ~~June 30, 2019~~March 31, 2020 relates primarily to consolidation and severance costs ~~to be paid to former employees~~ under the ~~2017Altra~~2017 Altra Plan and 2019 Altra Plan and is recorded in accruals and other liabilities on the accompanying unaudited condensed consolidated balance sheet.

The internal reporting structure used by our Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources determines the basis for our reportable operating segments. Our CODM is our Chief Executive Officer, and he evaluates operations and allocates resources based on a measure of income from operations. Our operations are organized in ~~two~~2 reporting segments that are aligned with key product types and end markets served, Power Transmission Technologies (“PTT”) and Automation & Specialty (“A&S”):

~~The segment information presented below for the prior periods has been reclassified~~

Notes to conform to the new presentation of our two reporting segments. The prior year reporting segments consisted of Couplings, Clutches & Brakes; Electromagnetic, Clutches, & Brakes; and Gearing and were aggregated into the PTT segment.Unaudited Condensed Consolidated Interim Financial Statements

Segment financial information and a reconciliation of segment results to unaudited condensed consolidated results are as follows:

	Quarters Ended						Year to Date Ended						Quarters Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018			March 31, 2020			March 31, 2019
Net Sales:
Power Transmission Technologies	$	234.9		$	237.3		$	469.8		$	477.7		$	216.7		$	234.9
Automation & Specialty		233.3			—			482.4			—			218.6			249.1
Inter-segment eliminations		(1.7	)		—			(2.9	)		—			(1.1	)		(1.2	)
Net sales	$	466.5		$	237.3		$	949.3		$	477.7		$	434.2		$	482.8
Income from operations:
Segment earnings:
Power Transmission Technologies	$	31.9		$	33.2		$	60.8		$	61.5		$	25.7		$	28.9
Automation & Specialty		31.8			—			72.4			—			(118.7	)		40.6
Corporate expenses (1)		(3.4	)		(4.6	)		(4.2	)		(12.2	)		(3.4	)		(0.8	)
Restructuring costs		(3.2	)		(0.6	)		(5.5	)		(1.5	)		(1.6	)		(2.3	)
Income from operations	$	57.1		$	28.0		$	123.5		$	47.8		$	(98.0	)	$	66.4
Other non-operating (income) expense:
Loss on settlement of pension plan		—			—			—			5.1
Net interest expense		18.6			2.1			38.4			3.9			17.4			19.8
Other non-operating (income), net		0.4			(0.3	)		1.5			(0.4	)		(1.5	)		1.1
Total non-operating (income) expense	$	19.0		$	1.8		$	39.9		$	8.6		$	15.9		$	20.9
Income before income taxes		38.1			26.2			83.6			39.2			(113.9	)		45.5
Provision for income taxes		9.1			7.2			19.4			11.2			2.7			10.3
Net income	$	29.0		$	19.0		$	64.2		$	28.0
Net (loss)/income													$	(116.6	)	$	35.2

	Quarter Ended				Year to Date Ended				Quarter Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018		March 31, 2020		March 31, 2019
Depreciation and amortization:
Power Transmission Technologies	$	8.3	$	8.4	$	16.7	$	17.0	$	8.2	$	8.4
Automation & Specialty		23.2		—		46.2		—		23.3		23.0
Corporate		0.7		0.9		1.4		1.7		0.6		0.7
Total depreciation and amortization	$	32.2	$	9.3	$	64.3	$	18.7	$	32.1	$	32.1

					June 30, 2019		June 30, 2018		March 31, 2020		March 31, 2019
Total assets:
Power Transmission Technologies					$	1,089.2	$	884.0	$	1,047.4	$	1,091.4
Automation & Specialty						3,170.3		—		2,928.2		3,191.2
Corporate(2)						98.3		22.6		240.6		97.7
Total assets					$	4,357.8	$	906.6	$	4,216.2	$	4,380.3

	Net Sales								Net Sales
	Quarter Ended				Year to Date Ended				Quarter Ended
	June 30, 2019		June 30, 2018		June 30, 2019		June 30, 2018		March 31, 2020		March 31, 2019
North America (primarily U.S.)	$	269.8	$	119.0	$	542.8	$	244.7	$	245.3	$	273.0
Europe excluding Germany		79.9		42.5		161.7		86.6		74.8		81.7
Germany		56.8		48.8		119.0		98.2		52.5		62.2
Asia and other		60.0		27.0		125.8		48.2		61.6		65.9
Total	$	466.5	$	237.3	$	949.3	$	477.7	$	434.2	$	482.8

Net sales to third parties are attributed to the geographic regions based on the country in which the shipment originates. Amounts attributed to the geographic regions for property, plant and equipment are based on the location of the entity, which holds such assets.

The Company ~~enters into derivative arrangements to manage~~manages changes in market conditions related to interest on debt obligations and foreign currency exposures ~~and occasionally on commodity prices. Derivative~~by entering into derivative instruments, ~~utilized during the period include~~including interest rate and foreign currency swap agreements. All derivative instruments are recognized as either assets or liabilities on the balance sheet at fair value at the end of each period. The ~~counterparties to~~Company determines the ~~Company's contractual derivative agreements~~fair value of financial instruments using quoted market prices whenever available. When quoted market prices are ~~all major global~~not available for various types of financial ~~institutions. The~~instruments (such as forwards, options and swaps), the Company ~~is exposed to credit loss in~~uses standard models with market-based inputs, which take into account the ~~event~~present value of ~~nonperformance by these counterparties. The Company continually monitors its positions~~estimated future cash flows and the ability of Altra or the financial counterparty to perform. For interest rate swaps, the significant inputs to these models are interest rate curves for discounting future cash flows that are adjusted for credit ~~ratings~~risk. For forward foreign currency contracts, the significant inputs are interest rate curves for discounting future cash flows, and exchange rate curves of ~~its counterparties, and does not anticipate nonperformance by~~ the ~~counterparties.~~foreign currency for translating future cash flows. For designated hedging relationships, the Company formally documents the hedging relationship ~~and its risk management objective and strategy for undertaking~~consistent with the ~~hedge,~~requirements of ASC 815, Derivatives

The following table summarizes outstanding swaps that the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively. The Company ~~also formally assesses, both~~has recorded at ~~the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.~~

In December 2018, the Company entered into cross-currency swap agreements to hedge its net investment in Euro-denominated assets against future volatility in the exchange rate between the U.S. dollar and the Euro. By doing so, the Company synthetically converted a portion of its U.S. dollar-based long-term debt into Euro-denominated long-term debt. The agreements ~~have~~originally had a five-year maturity at notional amounts declining from $600.0 million to $360.0 million over the contract period. ~~Under the~~The terms of the swap agreements provided for the Company is to receive net interest payments at a fixed rate of 4.8255% and pay Euros at rates ranging from 2.19% to 2.315%. At inception, the cross-currency swaps were designated as net investment hedges.

For ~~a fixed-fixed cross currency swap at final maturity, (i)~~net investment hedges, changes in the ~~total change in~~ fair value of the ~~swap will be the realized accruals~~effective portion of the ~~pay and receive legs~~derivatives’ gains or losses are reported as foreign currency translation gains or losses in accumulated other comprehensive income (loss) (“AOCIL”). The gains or losses on derivative instruments reported in AOCIL are reclassified to earnings in the period in which earnings are affected by the underlying item, such as a disposal or substantial liquidations of the ~~swap recorded in earnings and (ii)~~entities being hedged.

During the ~~final cash settlement~~first quarter of 2020, the principal at maturity recorded in cumulative translation adjustments (“CTA”). The accruals of the pay and receive legs of the swap represent the forward points or “carry” on the swap and the final cash settlement of the principal at maturity will be equalglobal economy declined substantially due to the spot-to-spot change over its life. On a mark-to-market basis during its life, there will be three components to the change in fair value of the swap. The spot-to-spot change in fair value of the swap, non-discounted, based on the swap’s principal amount, will be recorded in CTA each period. The accrual of the pay and receive legs of the swap each period, representing the amortization in systematic fashion of the impact of ~~changes~~COVID-19. This decline resulted in ~~fair value of the swap from all other factors, will be recorded~~a significant increase in earnings. The difference between the change in fair value of the excluded component of the cross currency swap and the amount recognized in earnings represented by accrual of the pay and receive legs of the swap will be recorded in CTA each period. This amount includes the change in fair value of the future interest payments and the impact of changes in discount factors as it impacts the value of the ~~final principal exchange. As~~U.S. dollar. The appreciation of the ~~year to date periods ended June 30, 2019 and December 31, 2018,~~U.S. dollar resulted in the Company recorded $11.2 million and $8.4 million to CTA, respectively, and recognized approximately $7.7 million and $0.8 million in interest income, net of the pay and receive legs of the swap, respectively.

~~The Company has historically utilized its~~Company’s cross currency interest rate swaps ~~to mitigate foreign currency~~being substantially in-the-money. Given the increased cash value of the hedges and ~~interest rate cash flow exposure related to its non-functional currency long-term debt held at~~ the Company’s ~~wholly owned Dutch subsidiary. The currency adjustments related~~overall desire to this loan were recorded in Other non-operating (income) expense, net. The offsetting gains and losses on the related derivative contracts were recorded in other non-operating (income) expense, net. In December of 2016strengthen its cash position, the Company ~~entered into a cross-currency interest rate swap that converted $100.0 million of U.S. dollar denominated floating interest payments to functional currency (euro) fixed interest payments during~~terminated the life of the hedging instrument. The Company designated the $100.0 million swap as a cash flow hedge, with the effective portion of the gain or loss on the derivative reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction impacts earnings. In addition, the Company entered into two cross-currency interest rate swaps that converted an additional $70.0 million of the U.S. dollar denominated floating interest payments (one for $40 million and the other for $30 million) to functional currency (euro) floating interest payments during the ~~life~~first quarter of 2020. The Company received the ~~hedging instruments. The effective period of one~~cash value of the cross-currency interest rate swaps of approximately $56.2 million upon termination. In addition, the Company paid the interest owed and received the interest due, resulting in the ~~amount~~recognition of ~~$30~~approximately $3.3 million ~~expired as~~in net interest income and paid termination fees of ~~December 31, 2017. On October 2, 2018,~~approximately $0.9 million. As a result of the ~~Company terminated both~~termination of the ~~$100 million and the $40 million~~ cross-currency interest rate swap, ~~agreements~~the Company recorded a gain in AOCIL of approximately $31.3 million, net of $9.9 million of tax, compared to $19.8 million, net of $3.6 million of tax, during the quarter ended March 31, 2020, and ~~paid approximately $14.0 million~~year to ~~settle the swap agreements.~~date period ended December 31, 2019, respectively.

In January 2017, the Company entered into an interest rate swap agreement to fix the variable interest rate payable on a portion of its outstanding borrowings. This interest rate swap matured on January 31, 2020.

In December 2018, the Company entered into an interest rate swap agreement ~~designed~~ to manage the cash flow risk caused by interest rate changes on the forecasted interest payments expected to occur related to a portion of its outstanding borrowings under the Altra Credit Agreement for a notional value of $600 million at 4.8255%. The Company recognized $1.0 million in interest expense as of the year to date period ended June 30, 2019. The effective period of the swap was December 4, 2018, and the maturity date is September 29, 2023.

~~In January 2017, the Company entered into an~~The interest rate swap agreement designed to fix the variable interest rate payable on a portion of its outstanding borrowings for a notional value of $50.0 million, at 1.625%. The effective date was January 31, 2017 and the maturity date is ~~January 31, 2020.~~

~~These interest rate swap agreements are~~ designed to manage exposure to interest rates on the Company’s variable rate ~~indebtedness. The Company recognizes all derivatives~~indebtedness and is recognized on ~~its~~the balance sheet at fair value. The Company has designated ~~these~~this interest rate swap ~~agreements~~agreement as a cash flow ~~hedges.~~hedge. Changes in the fair value of the swap will be recognized in other comprehensive income until the hedged items are recognized in earnings.

~~Notes~~ The Company recorded a loss in AOCIL of approximately $11.7 million, net of a $3.7 million tax benefit, and $9.8 million, net of a $1.7 million tax benefit, during the quarter ended March 31, 2020, and year to ~~Unaudited Condensed Consolidated Interim Financial Statements~~date period ended December 31, 2019, respectively.

~~The following table summarizes outstanding swaps that the Company has recorded at June 30, 2019.~~

Initial US$

Date

Derivative

Notional

Entered

Financial

Amount

Fixed Rate

Floating Leg

Fixed Rate

Floating Leg

Settlement

Effective
into

Instrument

(millions)

(swap counterparty)

(swap counterparty)

(Company)

(Company)

Dates

Period of Swap
12/10/2018

Cross currency
interest rate
swap

$
240.0

4.8255%

N/A

2.315%

N/A

Quarterly on the
   last day of each
   December,
   March, June, and
   September

12/10/2018 - 9/29/2023
12/10/2018

Cross currency
interest rate
swap

$
192.0

4.8255%

N/A

2.235%

N/A

Quarterly on the
   last day of each
   December,
   March, June, and
   September

12/10/2018 - 9/29/2023
12/10/2018

Cross currency
interest rate
swap

$
108.0

4.8255%

N/A

2.190%

N/A

Quarterly on the
   last day of each
   December,
   March, June, and
   September

12/10/2018 - 9/29/2023
12/10/2018

Cross currency
interest rate
swap

$
60.0

4.8255%

N/A

2.290%

N/A

Quarterly on the
   last day of each
   December,
   March, June, and
   September

12/10/2018 - 9/29/2023
12/4/2018

Interest rate
swap

$
600.0

4.8255%

Variable rate 1-
month USD
LIBOR plus 2%

N/A

1 Month
USD-
LIBOR-
BBA
plus 2%

Monthly on the
   last business day
   of each month
   commencing
   with
   December 31,
   2018 in
   accordance with
   Modified
   Following
   Business Day
   Convention

12/4/2018 - 9/29/2023
1/31/2017

Interest rate
swap

$
50.0

N/A

Variable rate 1-
month USD
LIBOR

1.625% USD

N/A

Monthly on the
   last banking day
   of each month
   commencing
   February 28,
   2017

1/31/2017 - 1/31/2020

The following table summarizes the location and fair value, using Level 2 inputs (see Note 76 for a description of the fair value levels), of the Company's derivatives designated and not designated as hedging instruments in the unaudited condensed consolidated balance sheets (in millions).


	Balance Sheet Location	June 30, 2019			December 31, 2018			Balance Sheet Location	March 31, 2020		December 31, 2019
Designated as hedging instruments:
Cross currency swap agreements	Other long-term (assets)/liabilities	$	(2.9	)	$	8.4		Other long-term (assets)/liabilities	$	—	$	(15.0	)
Interest rate swap agreement	Other long-term (assets)		(0.1	)		(0.5	)	Other long-term (assets)		—		(0.0	)
Interest rate swap agreement	Other long-term liabilities		21.2			7.9		Other long-term liabilities		34.4		19.0
		$	18.2		$	15.8			$	34.4	$	4.0

The Company is involved in various pending legal proceedings arising out of the ordinary course of business. These proceedings primarily involve commercial claims, product liability claims, personal injury claims, and workers’ compensation claims. With respect to these proceedings, management believes that the Company will prevail, has adequate insurance coverage or has established appropriate reserves to cover potential liabilities. Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adversely to the Company, there could be a material adverse effect on the results of operations, cash flows, or financial condition of the Company. We have established loss provisions for matters in which losses are probable and can be reasonably estimated. For matters where a reserve has not been established and for which we believe a loss is reasonably possible, as well as for matters where a reserve has been recorded but for which an exposure to loss in excess of the amount accrued is reasonably possible, we believe that such losses, individually and in the aggregate, will not have a material effect on our unaudited condensed consolidated financial statements.

Our estimates regarding potential losses and materiality are based on our judgment and assessment of the claims utilizing currently available information. Although we will continue to reassess our reserves and estimates based on future developments, our objective assessment of the legal merits of such claims may not always be predictive of the outcome and actual results may vary from our current estimates. We will continue to consider the applicable guidance in ASC 450-20, based on the facts known at the time of our future filings, as it relates to legal contingencies, and will adjust our disclosures as may be required under the guidance.

There were no0 material amounts accrued in the accompanying unaudited condensed consolidated balance sheets for potential litigation as of ~~June 30, 2019 and~~March 31, 2020 or December 31, ~~2018.~~2019.

The Company also risks exposure to product liability claims in connection with products it has sold and those sold by businesses that the Company acquired. Although in some cases third parties have retained responsibility for product liability claims relating to products manufactured or sold prior to the acquisition of the relevant business and in other cases the persons from whom the Company has acquired a business may be required to indemnify the Company for certain product liability claims subject to certain caps or limitations on indemnification, the Company cannot assure that those third parties will in fact satisfy their obligations with respect to liabilities retained by them or their indemnification obligations. If those third parties become unable to or otherwise do not comply with their respective obligations including indemnity obligations, or if certain product liability claims for which the Company is obligated were not retained by third parties or are not subject to these indemnities, the Company could become subject to significant liabilities or other adverse consequences. Moreover, even in cases where third parties retain responsibility for product liability claims or are required to indemnify the Company, significant claims arising from products that have been acquired could have a material adverse effect on the Company’s ability to realize the benefits from an acquisition, could result in the reduction of the value of goodwill that the Company recorded in connection with an acquisition, or could otherwise have a material adverse effect on the Company’s business, financial condition, or operations.

There is contamination at some of the Company’s current facilities, primarily related to historical operations at those sites, for which the Company could be liable for the investigation and remediation under certain environmental laws. The potential for contamination also exists at other of the Company’s current or former sites, based on historical uses of those sites. The Company currently is not undertaking any material remediation or investigations and the costs or liability in connection with potential contamination conditions at these facilities cannot be predicted at this time because the potential existence of contamination has not been investigated or not enough is known about the environmental conditions or likely remedial requirements. Currently, other parties with contractual liability are addressing or have plans or obligations to address those contamination conditions that may pose a material risk to human health, safety or the environment. In addition, while the Company attempts to evaluate the risk of liability associated with these facilities at the time the Company acquired them, there may be environmental conditions currently unknown to the Company relating to prior, existing or future sites or operations or those of predecessor companies whose liabilities the Company may have assumed or acquired which could have a material adverse effect on the Company’s business.

The Company is being indemnified, or expects to be indemnified, by third parties subject to certain caps or limitations on the indemnification, for certain environmental costs and liabilities associated with certain owned or operated sites. Accordingly, based on the indemnification and the experience with similar sites of the environmental consultants who the Company has hired, the Company does not expect such costs and liabilities to have a material adverse effect on its business, operations or earnings. The Company cannot assure you, however, that those third parties will in fact satisfy their indemnification obligations. If those third parties become unable to, or otherwise do not, comply with their respective indemnity obligations, or if certain contamination or other liability for which the Company is obligated is not subject to these indemnities, the Company could become subject to significant liabilities.

From time to time, the Company is notified that it is a potentially responsible party and may have liability in connection with off-site disposal facilities. To date, the Company has generally resolved matters involving off-site disposal facilities for a nominal sum but there can be no assurance that the Company will be able to resolve pending or future matters in a similar fashion.

The Company commenced its plan to terminate the Altra Industrial Motion, Inc. Retirement Plan (the “Plan”), its frozen U.S. defined benefit pension plan in June 2017 and distributed a portion of the Plan assets during the fourth quarter of 2017 as a partial plan settlement. See Note 8, Pension and Other Employee Benefits, to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. During the first quarter of 2018, the Company completed the Plan termination and made a final contribution of $1.1 million to fully fund the benefit obligation prior to settlement. The Company settled the remaining benefit obligation of approximately $18.7 million by transferring the remaining Plan assets and liability obligations to a third party. The Company recorded an additional settlement loss of $5.1 million related to the Plan in the quarter ended March 31, 2018.

On April 14, 2020, the Company provided notice to the administrative agent of the Altra Credit Agreement to repay $50 million outstanding under the Altra Revolving Credit Facility. The Company previously disclosed in its 8-K filed with the SEC on March 19, 2020 that it had provided notice to the administrative agent of the Altra Credit Agreement on March 9, 2020 and March 16, 2020 to draw down $50 million and $50 million, respectively, under the Altra Revolving Credit Facility. At that time, the Company had increased its borrowings under the Altra Revolving Credit Facility as a precautionary action in order to increase its cash position and enhance its financial flexibility during this period of uncertainty in the global markets resulting from COVID-19. As of April 16, 2020, $50 million remains outstanding under the Altra Revolving Credit Facility and is currently being held on the Company’s balance sheet and may be used for general corporate purposes. The Company could make further borrowings and had $245.6 million available to borrow under the Altra Revolving Credit Facility as of April 16, 2020.

On ~~July 22, 2019,~~April 29, 2020 the Company declared a dividend of ~~$0.17~~$0.04 per share for the quarter ended ~~September~~June 30, ~~2019,~~2020, payable on ~~October 2, 2019~~July 6, 2020 to stockholders of record as of ~~September~~June 18, ~~2019.~~2020.

On May 4, 2020 the Company terminated its interest rate swap agreement by paying $34.9 million which represented the estimated fair value of the swap and a termination fee of approximately $0.1 million. The Company had entered into this interest rate swap agreement in December 2018 in order to manage the cash flow risk caused by interest rate changes on the forecasted interest payments expected to occur related to a portion of its outstanding borrowings under the Altra Credit Agreement for an initial notional value of $600 million at 4.8255%. The swap agreement was designated as a cash flow hedge and was recognized at fair value in other long-term liabilities in the unaudited condensed consolidated balance sheets.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect ~~our~~the Company’s current estimates, expectations and projections about ~~our~~the Company’s future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning ~~our~~the Company’s possible future results of operations including revenue, costs of goods sold, gross margin, future profitability, future economic improvement, business and growth strategies, financing plans, ~~our~~expected leverage levels, the Company’s competitive position and the effects of competition, the projected growth of the industries in which we operate, and ~~our~~the Company’s ability to consummate strategic acquisitions and other transactions. Forward-looking statements include statements that are not historical facts and can ~~often~~ be identified by forward-looking words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” ~~“forecast,”~~ “intend,” ~~“may,~~“plan,”” ~~“plan,~~may,” “project,” “should,” “will,” “would,” and similar expressions or variations. These forward-looking statements are based upon information currently available to the Company and are subject to a number of risks, uncertainties, and other factors that could cause ~~our~~the Company’s actual results, performance, prospects, or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements.

Important factors that could cause ~~our~~the Company’s actual results to differ materially from the results referred to in the forward-looking statements ~~we make~~the Company makes in this ~~Quarterly Report on Form 10-Q~~report include:

~~YOU SHOULD NOT RELY UPON FORWARD-LOOKING STATEMENTS AS PREDICTIONS OF FUTURE EVENTS.~~ ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS REPORT. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT ANY EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS REPORT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR ANY PERSON ACTING ON THE COMPANY’S BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED OR REFERRED TO IN THIS SECTION AND IN OUR RISK FACTORS SET FORTH (1) IN THE SECTION TITLED “RISK FACTORS,” SET FORTH IN PART II, ITEM 1A OF THIS QUARTERLY REPORT ON FORM 10-Q; (2) IN PART I, ITEM 1A OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, ~~2018,~~2019, FILED WITH THE SEC ON ~~MARCH 1, 2019, AS AMENDED;~~FEBRUARY 27, 2020; AND (3) IN THE COMPANY’S OTHER SEC FILINGS.

The following discussion ~~and analysis~~ of the financial condition and results of operations of Altra Industrial Motion Corp. and its subsidiaries should be read together with (1) the unaudited condensed consolidated financial statements of Altra Industrial Motion Corp. and its subsidiaries and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and (2) the audited consolidated financial statements of Altra Industrial Motion Corp. and its subsidiaries and the related notes and management’s discussion and analysis of financial conditions and results of operations included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018, as amended.~~2019. The following discussion includes forward-looking statements. For a discussion of important factors that could cause actual results to differ materially from the results referred to in the forward-looking statements, see “Forward-Looking Statements” and “Risk Factors” in this Quarterly Report on Form 10-Q and “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Unless the context requires otherwise, the terms “Altra,” “Altra Industrial Motion Corp.,” “the Company,” “we,” “us,” and “our” refer to Altra Industrial Motion Corp. and its subsidiaries.

We are a leading global designer, producer and marketer of a wide range of electromechanical power transmission motion control ~~(“PTMC”)~~ products. Our technologies are used in various motion related applications and across a wide variety of high-volume manufacturing and non-manufacturing processes in which reliability and precision are critical to avoid costly down time and enhance the overall efficiency of operations.

We market our products under well recognized and established brands, which have been in existence for an average of over 85 years. We serve a diversified group of customers comprised of over 1,000 direct original equipment manufacturers (“OEMs”) including GE, Honeywell and Siemens, and also benefit from established, long-term relationships with leading industrial distributors, including Applied Industrial Technologies, Grainger, Kaman Corporation and Motion Industries. Many of our customers operate globally across a large number of industries, ranging from transportation, turf and agriculture, energy and mining to factory automation, medical and robotics. Our relationships with these customers often span multiple decades, which we believe reflects the high level of performance, quality and service we deliver, supplemented by the breadth of our offering, vast geographic footprint and our ability to rapidly develop custom solutions for complex customer requirements.

On October 1, 2018, Altra consummated the Fortive Transaction and acquired the A&S Business for an aggregate purchase price of approximately $2,855.7 million, subject to certain post-closing adjustments, which consisted of $1,400.0 million of cash and debt instruments transferred to Fortive and shares of Altra common stock received by Fortive shareholders valued at approximately $1,455.7 million. As of June 30, 2019, the initial accounting for the Fortive Transaction (including the allocation of the purchase price to acquired assets and liabilities) is provisional.

Our website is www.altramotion.com. By following the link “Investor Relations” and then “SEC Filings” on our website, you can access our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which we make available free of charge, as soon as reasonably practicable after such forms are filed with or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Quarterly Report on Form 10-Q.

Our future financial performance depends, in large part, on conditions in the markets that we serve and on conditions in the U.S., European, and global economies in general. Since completing the Fortive Transaction on October 1, 2018, our focus has been on the integration of the A&S Business and we have substantially completed the tactical components of that integration. InDuring the quarter ended ~~June 30, 2019,~~March 31, 2020, the impact of the COVID-19 pandemic affected our results of operations as we experienced ~~mixed business conditions~~temporary facility shutdowns, lower factory utilization rates, and some secondary impacts on customer demand. For example, during the February to April period, 13 of Altra’s 53 global manufacturing facilities were temporarily shut down for varying lengths of time as a result of the pandemic and local government mandates. The vast majority of the affected manufacturing facilities are now open and operational again. In the first quarter, Altra formed a Pandemic Response Team to identify and assess risks and developed countermeasures following guidance from national, state and local governmental and health authorities. We also formed a Business Continuity Task Force charged with ensuring continuity of supply for our customers. In addition, we ~~are accelerating cost reductions~~also have taken several proactive measures to protect the Company’s balance sheet and ~~other margin improvement initiatives~~strengthen its liquidity position, including:

The COVID-19 pandemic and its effects on the economic environment remain extremely fluid and it is difficult to ~~better align~~predict with certainty what unforeseen circumstances may develop as we progress through the remainder of the year. As a result, we will continue to proceed cautiously by managing our cost structure ~~with~~and cash flows and prioritizing debt reduction. In addition, we are implementing strategic plans to best position Altra to adapt to these market dynamics Looking forward, our strategic priorities are to continue to execute on initiatives to achieve our synergy target by leveraging sales collaborations, advancing our supply chain optimization efforts and continuing to integrate our world class business systems across the combined organization; to continue to capitalize on our strong cash generation to de-lever our balance sheet;changing conditions and to continue to ~~focus on initiatives to achieve~~serve our ~~margin improvement target.~~

The preparation of our unaudited condensed consolidated financial statements and related disclosures in conformity with generally accepted accounting principles in the United States (“GAAP”) requires management to make judgments, assumptions and estimates that affect our reported amounts of assets, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We base our estimates on past experiences and other assumptions we believe to be appropriate, and we evaluate these estimates on an on-going basis. See the discussion of critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, ~~2018. There~~2019. Except as otherwise noted below, there have been no changes in the identification or application of the Company’s critical accounting policies during the quarter ended ~~June 30,~~March 31, 2020.

The Company conducts an annual impairment review of goodwill and indefinite-lived intangible assets in October of each year, unless events occur which trigger the need for an interim impairment review. The 2019 ~~except~~annual goodwill impairment review indicated that the JVS reporting unit’s fair value exceeded its carrying value by less than 10%. All other reporting units had fair values that exceeded their carrying value by 10% or more.

The Company considered the recent economic impact of the COVID-19 pandemic to be a triggering event for the ~~adoption~~JVS business unit and, as a result, the Company performed an interim impairment review. As a result of ~~ASC 842.~~

~~Goodwill, Intangibles~~both the COVID-19 related economic downturn and ~~other long-lived assets.~~ ~~The~~its impact on JVS’s anticipated financial results, the Company ~~assesses goodwill for impairment on an annual basis as of December 31, or when events or changes in the business environment would~~concluded that it is more likely than not ~~reduce~~that the JVS reporting unit’s carrying value exceeds its fair value and performed an interim impairment review for both JVS’s goodwill and tradename intangible asset. As a result, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for goodwill and indefinite-lived intangible assets, respectively.

The Company estimated the fair value of a reporting unit below its carrying value. The Company conducted the annual impairment test of goodwill for all reporting units as of December 31, 2018 and determined that no adjustment to the carrying value of goodwill for any reporting unit was necessary because the fair values of the reporting units exceeded their respective carrying values.

~~During the first six months of fiscal 2019~~ the JVS reporting unit ~~has experienced lower than~~using both the discounted cash flow model and the market approach. The Company estimated the value of JVS’s indefinite-lived tradename intangible asset using a discounted cash flow model. The determination of the fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (EBITDA) multiples. The Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate.

Key assumptions developed by management and used in the interim quantitative analysis included the following:

The Company considered the recent economic impact of the COVID-19 pandemic to be a triggering event for the JVS business unit and, as a result, the Company performed an interim impairment review. As a result of both the COVID-19 related economic downturn and its impact on JVS’s anticipated financial results, ~~primarily due~~the Company concluded that it is more likely than not that the JVS reporting unit’s carrying value exceeds its fair value and performed an interim impairment review for both JVS’s goodwill and

tradename intangible asset. As a result of the interim impairment testing performed, the Company recorded non-cash impairment charges of $8.4 million and $139.1 million for indefinite-lived intangible assets and goodwill, respectively.

The Company estimated the fair value of the JVS reporting unit using both the discounted cash flow model and the market approach. The Company estimated the value of JVS’s indefinite-lived tradename intangible asset using a discounted cash flow model. The determination of the fair value using the discounted cash flow model requires management to ~~accelerating revenue pressures~~make significant estimates and assumptions related to forecasts of future revenues, profit margins, and discount rates. The determination of the fair value using the market approach requires management to make significant assumptions related to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. The Company estimates future cash flows based upon historical results and current market projections, discounted at a market comparable rate.

Key assumptions developed by management and used in the interim quantitative analysis included the following:

Depending on its duration and the severity of its economic impact, the COVID-19 pandemic may trigger additional interim impairment reviews in future periods.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in the U.S. to provide certain relief as a result of the ~~heavy-duty truck market cyclicality. The financial performance~~COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of ~~this reporting unit, which~~tax relief measures in response to the economic conditions in the wake of COVID-19. Altra has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions had a ~~goodwill balance of approximately $116.7 million at June 30, 2019, is affected by fluctuations in~~significant impact on the ~~heavy-duty truck market.~~Company’s unaudited condensed consolidated financial statements for the quarter-ended March 31, 2020.

Significant judgments are inherent in the annual impairment tests performed and include assumptions about the amount and timing of expected future cash flows, growth rates, and the determination of appropriate discount rates. The Company believes that the assumptions used in its annual impairment analysis are reasonable, but variations in anyAs a result of the ~~assumptions may result~~adoption of ASU 2016-13, the Company has updated its significant accounting policy related to trade account receivables and allowances for credit losses as of March 31, 2020 from what was previously disclosed in ~~different calculations of fair values that could result in a material impairment charge. The annual impairment tests performed as of~~our audited financial statements for the year ended December 31, 2019 ~~utilized future annual budgeted amounts and discount rate assumptions~~as follows:

All trade account receivables are reported net of allowances for credit losses. The allowances for credit losses represent management’s best estimate of the credit losses expected from our trade account receivables over the life of the underlying assets. Assets with similar risk characteristics are pooled together for determination of their current expected credit losses. We regularly perform detailed reviews of our pooled assets to evaluate the collectability of receivables based on ~~an assessment~~a combination of past, current, and future financial and qualitative factors that may affect customers’ ability to pay. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the ~~Company’s weighted average cost of capital as well as other significant assumptions believed~~recognized receivable to the amount reasonably expected to be reasonable at that time. During the interim periods of fiscal year 2019, the Company has considered whether (i) actual results compared to the Company’s expectations (ii) general economic and industry conditions, and (iii) reporting unit specific factors would more likely than not reduce the estimated fair values of its reporting units, including its JVS reporting unit, below their carrying values. The Company has not performed an interim test for impairment of goodwill for any of its reporting units as it does not believe the factors impacting the performance of those reporting units, including its JVS reporting unit, through June 30, 2019 would more likely than not reduce the fair value below carrying value. The performance of the JVS reporting unit will continue to be monitored. If the JVS reporting unit does not achieve the financial performance that the Company expects, it is possible that a goodwill impairment charge may be result. There can be no assurance that future events will not results in an impairment of goodwill.collected.

See Part 1, Notes to Unaudited Condensed Consolidated Interim Financial Statements, Note 3 – Recent Accounting Standards.

	Quarter Ended						Year to Date Ended						Quarter Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018			March 31, 2020			March 31, 2019
Net sales	$	466.5		$	237.3		$	949.3		$	477.7		$	434.2		$	482.8
Cost of sales		299.5			159.1			607.4			325.2			281.2			307.9
Gross profit		167.0			78.2			341.9			152.5			153.0			174.9
Gross profit percentage		35.8	%		33.0	%		36.0	%		31.9	%		35.2	%		36.2	%
Selling, general and administrative expenses		92.0			43.4			182.9			90.5			87.1			90.9
Impairment of Goodwill and Intangible Asset														147.5
Research and development expenses		14.7			6.2			30.0			12.7			14.8			15.3
Restructuring costs		3.2			0.6			5.5			1.5			1.6			2.3
Income from operations		57.1			28.0			123.5			47.8			(98.0	)		66.4
Loss on settlement of pension plan		—			—			—			5.1
Interest expense, net		18.6			2.1			38.4			3.9			17.4			19.8
Other non-operating expense (income), net		0.4			(0.3	)		1.5			(0.4	)		(1.5	)		1.1
Income before income taxes		38.1			26.2			83.6			39.2			(113.9	)		45.5
Provision for income taxes		9.1			7.2			19.4			11.2			2.7			10.3
Net income	$	29.0		$	19.0		$	64.2		$	28.0
Net (loss)/income													$	(116.6	)	$	35.2

Quarter Ended ~~June 30, 2019~~March 31, 2020 compared with Quarter Ended ~~June 30, 2018~~March 31, 2019

Amounts in millions, except percentage data	Quarter Ended									Quarter Ended
	June 30, 2019		June 30, 2018		Change		%			March 31, 2020		March 31, 2019		Change			%
Net sales	$	466.5	$	237.3	$	229.2		96.6	%	$	434.2	$	482.8	$	(48.6	)		(10.1	)%

Net SalesThe ~~increase~~decrease in net sales during the quarter ended ~~June 30, 2019~~March 31, 2020 is primarily due to ~~increased~~the decline in sales ~~resulting from~~at our JVS business unit due to the ~~addition~~decline in the class 8 truck market, the decline in sales in our oil and gas end market as a result of the ~~A&S Business~~decline in oil prices globally, and the ~~amount of $233.3 million. Excluding the impact of net sales from the A&S Business, net sales decreased $4.1 million compared~~overall economic decline due to the ~~prior year period.~~effects of the COVID-19 pandemic. Changes in foreign exchange had an unfavorable impact on net sales of ~~$6.6~~$7.0 million, primarily driven by the Euro. This was partially offset by price which had a favorable impact of ~~$5.4~~$3.1 million for the quarter ended ~~June 30, 2019.~~March 31, 2020.

Amounts in millions, except percentage data	Quarter Ended											Quarter Ended
	June 30, 2019			June 30, 2018			Change		%			March 31, 2020			March 31, 2019			Change			%
Gross profit	$	167.0		$	78.2		$	88.8		113.6	%	$	153.0		$	174.9		$	(21.9	)		(12.5	)%
Gross profit as a percent of sales		35.8	%		33.0	%							35.2	%		36.2	%

Gross ProfitGross profit as a percentage of net sales ~~increased~~decreased during the quarter ended ~~June 30, 2019,~~March 31, 2020, primarily due to the ~~inclusion~~economic impact of the ~~higher margin A&S Business~~COVID-19 pandemic including a decrease in ~~the amount~~sales levels, costs associated with shutdowns of ~~approximately $92.1 million. The increase is partially offset by a $2.3 million~~our manufacturing facilities and shutdowns of operations of our customers and suppliers. Changes in foreign exchange had an unfavorable impact on gross profit of ~~foreign exchange,~~$2.7 million, primarily driven by the Euro. We have taken actions to reduce our expenses and maximize near-term profitability; however, we expect our 2020 gross profit as a percentage of sales to decrease when compared to 2019.

Amounts in millions, except percentage data	Quarter Ended											Quarter Ended
	June 30, 2019			June 30, 2018			Change		%			March 31, 2020			March 31, 2019			Change			%
Selling, general and administrative expense (“SG&A”)	$	92.0		$	43.4		$	48.6		112.0	%	$	87.1		$	90.9		$	(3.8	)		(4.2	)%
SG&A as a percent of sales		19.7	%		18.3	%							20.1	%		18.8	%

Selling, general and administrative expensesFor the quarter ended ~~June 30, 2019,~~March 31, 2020, the ~~increase~~decrease in SG&A was primarily ~~driven by~~due to cost reduction actions which began during the ~~inclusion~~quarter. Our cost reduction efforts were focused on compensation reductions, and the

elimination of ~~approximately $51.2 million of~~non-critical expenses, including travel, which decreased our overall SG&A ~~related~~costs. However, due to the ~~A&S Business, including $15.2 million~~decrease in sales, SG&A as a percent of ~~amortization expense.~~sales increased despite our cost reductions. During the remainder of 2020 we expect to continue to reduce our SG&A costs, however, if we experience decreased sales levels in future periods this could result in SG&A as a percentage of sales to increase.

Amounts in millions, except percentage data	Quarter Ended									Quarter Ended
	June 30, 2019		June 30, 2018		Change		%			March 31, 2020		March 31, 2019		Change			%
Research and development expenses (“R&D”)	$	14.7	$	6.2	$	8.5		137.1	%	$	14.8	$	15.3	$	(0.5	)		(3.3	)%

Research and development expenseResearch and development expenses ~~increased due to the inclusion of R&D expenses from the A&S Business~~slightly decreased for the quarter ended ~~June 30, 2019 in~~March 31, 2020 when compared to the ~~amount~~quarter ended March 31, 2019. The slight decrease is mainly due to the impact of ~~approximately $9.1 million.~~foreign exchange of $0.2 million, primarily driven by the Euro. We expect R&D costs to be approximately 2.5% - 3.5% of sales in future ~~periods~~periods.

Amounts in millions, except percentage data	Quarter Ended									Quarter Ended
	June 30, 2019		June 30, 2018		Change		%			March 31, 2020		March 31, 2019		Change			%
Restructuring costs	$	3.2	$	0.6	$	2.6		433.3	%	$	1.6	$	2.3	$	(0.7	)		(30.4	)%

Restructuring ~~costs.~~ costsDuring 2015 we adopted the 2015 Altra Plan in response to weak demand in Europe and to make certain adjustments to improve business effectiveness, reduce the number of facilities and streamline our cost structure. The actions taken pursuant to the 2015 Altra Plan included reducing headcount, facility consolidations and related asset impairments and limiting discretionary spending to improve profitability. We do not expect to incur any additional material costs as a result of the 2015 Altra Plan.

. During the quarter ended September 30, 2017, we commenced a restructuring plan (“2017 Altra Plan”) as a result of the Stromag ~~acquisition~~Acquisition and to rationalize our global renewable energy business. The actions taken pursuant to the 2017 Altra Plan ~~include~~included reducing headcount, facility consolidations and the elimination of certain costs. ~~We expect to incur approximately $1.0 to $3.0 million in additional expense through 2019 related to the 2017 Altra Plan.~~ The total 2017 Altra Plan savings are in line with our expectations. We do not expect to incur any additional material costs as a result of the 2017 Altra Plan.

During 2019, we commenced a restructuring plan (“2019 Altra Plan”) to drive efficiencies, reduce the number of facilities and optimize our operating margin. We expect expenses related to workforce reductions, lease termination costs and other facility rationalization costs. We expect to incur $15 - ~~$25~~$20 million in restructuring expenses under the 2019 Plan over the next four years, primarily related to plant consolidation and headcount reductions. We have achieved savings of ~~$1.0~~$0.3 million during the quarter ended ~~June 30, 2019~~March 31, 2020 under the 2019 Altra Plan and estimate additional future savings during ~~2019~~2020 to be approximately ~~$2.3~~$2.0 million. The cost savings for the quarter ended ~~June 30, 2019~~March 31, 2020 were recognized as improvements in SG&A and Cost of Sales of approximately ~~$0.8~~$0.1 million and $0.2 million, respectively.

Amounts in millions, except percentage data	Quarter Ended									Quarter Ended
	June 30, 2019		June 30, 2018		Change		%			March 31, 2020		March 31, 2019		Change			%
Interest expense, net	$	18.6	$	2.1	$	16.5		785.7	%	$	17.4	$	19.8	$	(2.4	)		(12.1	)%

Interest expense ~~increased~~Interest expense decreased for the quarter ended ~~June 30, 2019~~March 31, 2020 compared to the prior year period primarily due to debt paydowns of approximately $136.0 million since the ~~debt incurred and assumed~~fourth quarter of 2018. We expect our interest expense in ~~connection with the Fortive Transaction~~2020 to decrease as a result of additional principal payments resulting in ~~October 2018.~~lower average outstanding borrowings.

Amounts in millions, except percentage data	Quarter Ended										Quarter Ended
	June 30, 2019		June 30, 2018			Change		%			March 31, 2020			March 31, 2019		Change			%
Other non-operating expense/(income), net	$	0.4	$	(0.3	)	$	0.7		233.3	%
Other non-operating (income)/expense, net											$	(1.5	)	$	1.1	$	(2.6	)		236.4	%

Other non-operating incomeOther non-operating income in each period in the ~~chart~~table above primarily relates to transaction gains and losses arising from the changes in foreign currency exchange rates related primarily to the Euro and British ~~Pound,~~Pound. In addition, the company terminated its cross-currency interest rate swap and ~~Chinese Renminbi.~~paid termination fees of $0.9 million for the quarter ended March 31, 2020.

Amounts in millions, except percentage data	Quarter Ended											Quarter Ended
	June 30, 2019			June 30, 2018			Change		%			March 31, 2020			March 31, 2019			Change			%
Provision for income taxes	$	9.1		$	7.2		$	1.9		26.4	%	$	2.7		$	10.3		$	(7.6	)		(73.8	)%
Provision for income taxes as a percent of income before income taxes		23.9	%		27.5	%							(2.4	)%		22.6	%

~~The provision~~Provision for income tax as a percentage of income before income taxes during the year to date period ended June 30, 2019 was lower than that of 2018. The decrease in the 2019 provision for income tax as a percent of income before income taxes is due to an increased R&D tax credit in the U.S. as a result of the A&S Business acquisition. Additionally, the 2018 provision for income tax as a percent of income before income taxes was impacted by certain non-deductible acquisition expenses.

~~Year to Date Ended June 30, 2019 compared with Year to Date Ended June 30, 2018~~

The increase in net sales during the year to date period ended June 30, 2019 is primarily due to increased sales resulting from the acquisition of the A&S Business in the amount of $482.4 million. Excluding the impact of A&S sales, net sales decreased $10.8 million compared to the prior year. Changes in foreign exchange had an unfavorable impact on net sales of $15.2 million compared to the prior year, primarily driven by the Euro. This was offset by price which had a favorable impact of $9.9 million for the year to date period ended June 30, 2019.

Gross profit as a percentage of net sales increased during the year to date ended June 30, 2019 primarily due to the inclusion of the higher margin A&S Business in the amount $194.3 million. This increase was partially offset by the unfavorable impact of foreign exchange in the amount of $5.2 million, primarily the Euro.

For the year to date period ended June 30, 2019, the increase in SG&A was primarily driven by the inclusion of $103.5 million of SG&A related to the A&S Business including $30.7 million of amortization expense.

Research and development expenses increased due to the inclusion of R&D expenses for the A&S Business for the year to date period ended June 30, 2019 in the amount of approximately $18.3 million. We expect research and development costs to approximate 2.5% - 3.5% of sales in future periods.

During 2015 we adopted the 2015 Altra Plan in response to weak demand in Europe and to make certain adjustments to improve business effectiveness, reduce the number of facilities and streamline our cost structure. The actions taken pursuant to the 2015 Altra Plan included reducing headcount, facility consolidations and related asset impairments and limiting discretionary spending to improve profitability. We do not expect to incur any additional material costs as a result of the 2015 Altra Plan. The total 2015 Plan savings are in line with our expectations.

During quarter ended September 30, 2017, the we commenced a restructuring plan (“2017 Altra Plan”) as a result of the Stromag acquisition and to rationalize its global renewable energy business. The actions taken pursuant to the 2017 Altra Plan include reducing headcount, facility consolidations and the elimination of certain costs. We expect to incur approximately $1.0 to $3.0 million in additional expense through 2019 related to the 2017 Altra Plan. The total 2017 Altra Plan savings are in line with our expectations.

During 2019, the we commenced a restructuring plan (“2019 Plan”) to drive efficiencies, reduce the number of facilities and optimize our operating margin. We expect expenses related to workforce reductions, lease termination costs and other facility rationalization costs. We expect to incur $15 - $25 million in restructuring expenses under the 2019 Altra Plan over the next 4 years, primarily related to plant consolidation and headcount reductions. We have achieved savings of $1.0 million during the year to date period ended June 30, 2019 under the 2019 Altra Plan and estimate additional future savings during 2019 to be approximately $2.3 million. The cost savings for the year to date period ended June 30, 2019 were recognized as improvements in SG&A and Cost of Sales of approximately $0.8 million and $0.2 million, respectively.

Interest expense increased for the year to date period ended June 30, 2019 compared to the prior year period due to the debt incurred and assumed in connection with the Fortive Transaction in October 2018. The increase is primarily driven by the interest paid on the senior secured term loan of approximately $29.1 million. In addition we paid approximately $1.2 million in interest expense on our derivative instruments for the year to date period ended June 30, 2019.

Other non-operating income in each period in the chart above primarily relates to transaction gains and losses arising from the changes in foreign currency exchange rates related primarily to the Euro, British Pound, and Chinese Renminbi.

Income TaxesThe provision for income tax as a percentage of income before income taxes decreased for the ~~year to date period~~quarter ended ~~June 30, 2019~~March 31, 2020 as compared to the ~~year to date period~~quarter ended ~~June 30, 2018.~~March 31, 2019. The decrease in the ~~2019 provision for income tax as a percent~~

~~of income before income taxes is due to an increased R&D tax credit in the U.S. as a result of the A&S Business acquisition. Additionally, the 2018~~2020 provision for income tax as a percent of income before income taxes is due to the impact of the $139.1 million non-cash impairment charge recorded at the JVS reporting unit in the United States and China. This was ~~impacted~~partially offset by ~~certain non-deductible acquisition expenses.~~the impact of a $2.8 million discrete item related to changes in tax rates for the JVS reporting unit in China. We expect our provision for income taxes as a percent of income before income taxes to be approximately 21% to 23% for the full year 2020.

	Quarter Ended						Year to Date Ended						Quarter Ended
	June 30, 2019			June 30, 2018			June 30, 2019			June 30, 2018			March 31, 2020			March 31, 2019
Net Sales:
Power Transmission Technologies	$	234.9		$	237.3		$	469.8		$	477.7		$	216.7		$	234.9
Automation & Specialty		233.3			—			482.4			—			218.6			249.1
Inter-segment eliminations		(1.7	)		—			(2.9	)		—			(1.1	)		(1.2	)
Net sales	$	466.5		$	237.3		$	949.3		$	477.7		$	434.2		$	482.8
Income from operations:
(Loss)/Income from operations:
Segment earnings:
Power Transmission Technologies	$	31.9		$	33.2		$	60.8		$	61.5		$	25.7		$	28.9
Automation & Specialty		31.8			—			72.4			—			(118.7	)		40.6
Corporate expenses (1)		(3.4	)		(4.6	)		(4.2	)		(12.2	)		(3.4	)		(0.8	)
Restructuring costs		(3.2	)		(0.6	)		(5.5	)		(1.5	)		(1.6	)		(2.3	)
Income from operations	$	57.1		$	28.0		$	123.5		$	47.8
(Loss)/Income from operations													$	(98.0	)	$	66.4

Net sales in the Power Transmission Technologies segment were ~~$469.8~~$216.7 million in the ~~year to date period~~quarter ended ~~June 30, 2019,~~March 31, 2020, a decrease of approximately ~~$7.9~~$18.2 million or ~~1.7%~~8%, from the ~~year to date period~~quarter ended ~~June 30, 2018.~~March 31, 2019. The decrease is primarily due to the overall economic decline as a result of the COVID-19 pandemic. In addition, changes in foreign exchange had an unfavorable impact on net sales of ~~foreign exchange rates at $15.2~~$3.4 million, ~~offset~~primarily driven by the ~~recovery of~~Euro. The decrease in the turf and garden, agricultural, and oil and gas end markets was primarily due to the COVID-19 impact on discretionary spending as well as global industry trade tensions. Income from operations was $25.7 million which was primarily driven by modest growth in certain end ~~markets.~~markets such as wind, and aerospace and defense.

Net sales in the Automation and Specialty segment were ~~$482.4~~$218.6 million in the ~~year to date period~~quarter ended ~~June 30, 2019,~~March 31, 2020, a decrease of approximately ~~$24.4~~$30.5 million, or ~~4.8%,~~12.2%. The decrease is primarily due to the overall economic decline which has impacted almost all of our end markets as a result of COVID-19. In addition, changes in foreign exchange had an unfavorable impact on net sales of $3.5 million, primarily driven by the Euro. The Automation & Specialty segment had a loss from operations during the quarter ended ~~June 30, 2018. The decrease is~~March 31, 2020 primarily due to the ~~unfavorable~~non-cash impairment charge recorded at the JVS reporting unit. As a result of both the COVID-19 related economic downturn and its impact ~~of foreign exchange rates and~~on the ~~decline in certain of our~~JVS reporting units anticipated financial results, the Company concluded that it is more ~~profitable end markets. Note~~likely than not that the ~~Automation~~JVS reporting unit’s carrying value exceeds its fair value and ~~Specialty segment financial information~~performed an interim impairment review for both JVS’s goodwill and tradename intangible asset. As a result, the ~~prior year quarter has been derived~~Company recorded non-cash impairment charges of $8.4 million and $139.1 million for goodwill and indefinite-lived intangible assets, respectively. The loss was partially offset by income from operations of $28.8 million which was primarily driven by modest growth in the ~~interim unaudited combined condensed financial statements of the A&S Business, which are included in Amendment No. 1 to the Company’s Registration Statement on Form S-4 filed on June 21, 2018.~~factory automation end market.

We finance our capital and working capital requirements through a combination of cash flows from operating activities and borrowings under the Altra Revolving Credit ~~Facility (as defined herein).~~Facility. At ~~June 30, 2019,~~March 31, 2020, we ~~have~~had the ability under the Altra Revolving Credit Facility (as defined herein) to borrow an additional ~~$295.6~~$195.3 million subject to satisfying customary conditions. We expect that our primary ongoing requirements for cash will be for working capital, debt service, capital expenditures, acquisitions, pensions, dividends and share repurchases.

On October 1, 2018 (the “A&S Closing Date”), we consummated the Fortive Transaction. The aggregate purchase price for the A&S Business was approximately $2,855.7 million, subject to certain post-closing adjustments, and consisted of (i) $1,400.0 million of cash transferred to Fortive and (ii) shares of Altra common stock received by Fortive shareholders valued at approximately $1,455.7 million. The value

of the common stock was based on the closing stock price on the A&S Closing Date of $41.59. We financed the cash portion of the Fortive Transaction with the Altra Credit Facilities (as defined herein).

We believe, based on current and projected levels of cash flows from operating activities, together with our ability to borrow under the Altra Revolving Credit Facility (as defined herein), we have sufficient liquidity to ~~meet our short-term and long-term needs to~~ make required payments of interest on our debt, to make amortization payments under the Altra Credit Facilities (as defined herein), to fund our operating needs, to fund working capital and capital expenditure requirements and to comply with the financial ratios in our debt agreements. However, it is difficult to predict the severity and duration of the economic decline due to the impact of the COVID-19 pandemic but we have taken several proactive measures to protect our balance sheet and strengthen our liquidity position, as discussed above under “Business Outlook.”

In the event additional funds are needed for operations, we could attempt to obtain new debt and/or refinance existing debt, or attempt to raise capital in the equity markets. There can be no assurance however that additional debt or equity financing will be available on commercially acceptable terms, if at all.

On September 26, 2018, Stevens Holding Company, Inc., a wholly owned subsidiary of the Company (“Stevens Holding”), announced the pricing of $400.0 million aggregate principal amount of Stevens Holding’s 6.125% senior notes due 2026 (the “Notes”) in a private debt offering pursuant to Rule 144A and Regulation S under the Securities Act of 1933 (the “Private Placement”). On October 1, 2018, the Private Placement closed, and Stevens Holding sold $150.0 million aggregate principal amount of the Notes (the “Primary Notes”) and an unaffiliated selling securityholder sold $250.0 million aggregate principal amount of the Notes (the “Selling Securityholder Notes”). The Notes will mature on October 1, 2026. Interest on the Notes accrues from October 1, 2018, and the first interest payment date on the Notes ~~will be~~was April 1, 2019. The Notes may be redeemed at the option of Stevens Holding on or after October 1, 2023, in the manner and at the redemption prices specified in the indenture governing the Notes, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of redemption. The Notes are guaranteed on a senior unsecured basis by Altra and certain of its domestic subsidiaries.

The unaffiliated selling securityholder received the Selling Securityholder Notes from Fortive prior to the closing of the Private Placement in exchange for certain outstanding Fortive debt held or acquired by the unaffiliated selling securityholder. Stevens Holding used the net proceeds of the Primary Notes to fund a dividend payment to Fortive prior to the consummation of the Merger, and Stevens Holding did not receive any proceeds from the sale of the Selling Securityholder Notes.

On the A&S Closing Date, Altra entered into ~~a new~~the Altra Credit Agreement ~~(the “Altra Credit Agreement”)~~ with certain subsidiaries of Altra, JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and a syndicate of lenders. The Altra Credit Agreement provides for a seven-year senior secured term loan to Altra in an aggregate principal amount of $1,340.0 million (the “Altra Term Loan Facility”) and a five-year senior secured revolving credit facility provided to Altra and certain of its subsidiaries in an aggregate committed principal amount of $300.0 million (the “Altra Revolving Credit Facility” and together with the Altra Term Loan Facility, the “Altra Credit Facilities”). The proceeds of the Altra Term Loan Facility were used to (i) consummate the Direct Sales, (ii) repay in full and extinguish all outstanding indebtedness for borrowed money under the 2015 Credit Agreement and (iii) pay certain fees, costs, and expenses in connection with the consummation of the Fortive Transaction. Any proceeds of the Altra Term Loan Facility not so used may be used for general corporate purposes. The proceeds of the Altra Revolving Credit Facility will be used for working capital and general corporate purposes.

The Altra Credit Facilities are guaranteed on a senior secured basis by Altra and by each direct or indirect wholly owned domestic subsidiary of Altra, subject to certain customary exceptions.

Borrowings under the Altra Term Loan Facility will bear interest at a per annum rate equal to a “Eurocurrency Rate” plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a “Base Rate” plus 1.00%, in the case of Base Rate borrowings. Borrowings under the Altra Revolving Credit Facility will initially bear interest at a per annum rate equal to a Eurocurrency Rate plus 2.00%, in the case of Eurocurrency Rate borrowings, or equal to a Base Rate plus 1.00%, in the case of Base Rate borrowings, and thereafter will bear interest at a per annum rate equal to a Eurocurrency Rate or Base Rate, as applicable, plus an interest rate spread determined by reference to a pricing grid based on Altra’s senior secured net leverage ratio. In addition, Altra will be required to pay fees that will fluctuate between 0.250% per annum to 0.375% per annum on the unused amount of the Altra Revolving Credit Facility, based upon Altra’s senior secured net leverage ratio. The interest rate on the Altra Term Loan Facility was 3.603% at March 31, 2020.

The Company provided notice to the administrative agent of the Altra Credit Agreement on March 9, 2020 and March 16, 2020 to draw down $50 million, and $50 million, respectively, with interest rates of 2.811% and 2.750%, respectively, under the Altra Revolving Credit Facility. As of March 17, 2020, a total of $100 million was outstanding under the Altra Revolving Credit Facility, $50 million of which was ~~4.40%~~subsequently paid back after the close of the quarter. Borrowings under the Altra Revolving Credit Facility are scheduled to mature on September 30, 2023, and the Company may repay amounts borrowed any time without penalty. The Company increased its borrowings under the Altra Revolving Credit Facility as a precautionary action in order to increase its cash position and enhance its financial flexibility during this period of uncertainty in the global markets resulting from the COVID-19 pandemic. The draw-down proceeds from the Altra Revolving Credit Facility are currently being held on the Company’s balance sheet and may be used for general corporate purposes.

As of March 31, 2020, the Company had $1,284.0 million outstanding on the Altra Credit Agreement. As of March 31, 2020 and December 31, 2019, the Company had $4.7 million and $4.4 million in letters of credit outstanding, respectively. The Company had $195.3 million available to borrow under the Altra Credit Facilities at ~~June 30, 2019.~~ March 31, 2020.

Revolving borrowings and issuances of letters of credit under the Altra Revolving Credit Facility are subject to the satisfaction of customary conditions, including the accuracy of representations and warranties and the absence of defaults.

On October 22, 2015, the Company entered into a Second Amended and Restated Credit Agreement by and among the Company, Altra Industrial Motion Netherlands, B.V., one of the Company’s foreign subsidiaries (collectively with the Company, the “Borrowers”), the lenders party to the Second Amended and Restated Credit Agreement from time to time (collectively, the “Lenders”), J.P, Morgan Securities LLC, Wells Fargo Securities, LLC, and KeyBanc Capital Markets, Inc., as joint lead arrangers and joint bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), to be guaranteed and secured by certain domestic subsidiaries of the Company, and which may be amended from time to time (the “2015 Credit Agreement”).

Under the 2015 Credit Agreement, the amount of the Company’s revolving credit facility was $350.0 million (the “2015 Revolving Credit Facility”). Prior to October 2018, the amounts available under the 2015 Revolving Credit Facility were used for general corporate purposes, including acquisitions, and to repay existing indebtedness.

Prior to October 2018, the amounts available under the 2015 Revolving Credit Facility could be drawn upon in accordance with the terms of the 2015 Credit Agreement. All amounts outstanding under the 2015 Revolving Credit Facility were due on the stated maturity or such earlier time, if any, required under the 2015 Credit Agreement. The amounts owed under the 2015 Revolving Credit Facility could be prepaid at any time, subject to usual notification and breakage payment provisions. Interest on the amounts outstanding under the 2015 Revolving Credit Facility was calculated using either an ABR Rate or Eurodollar Rate, plus the applicable margin. A portion of the 2015 Revolving Credit Facility could also be used for the issuance of letters of credit, and a portion of the amount of the 2015 Revolving Credit Facility was available for borrowings in certain agreed upon foreign currencies.

The 2015 Credit Agreement contained various affirmative and negative covenants and restrictions, which among other things, required the Borrowers to provide certain financial reports to the Lenders, required the Company to maintain certain financial covenants relating to consolidated leverage and interest coverage, limited maximum annual capital expenditures, and limited the ability of the Company and its subsidiaries to incur or guarantee additional indebtedness, pay dividends or make other equity distributions, purchase or redeem capital stock or debt, make certain investments, sell assets, engage in certain transactions, and effect a consolidation or merger. The 2015 Credit Agreement also contained customary events of default.

On October 21, 2016, the Company entered into an agreement to amend the 2015 Credit Agreement (the “October 2016 Amendment”). The October 2016 Amendment, which became effective upon the December 30, 2016 closing of Altra’s purchase of Stromag (the “Stromag Acquisition”), increased the 2015 Revolving Credit Facility by $75.0 million to $425.0 million. The Company borrowed additional funds under the increased 2015 Revolving Credit Facility to finance the Stromag Acquisition. The October 2016 Amendment also reset the possible expansion of up to $150.0 million of additional future loan commitments. In addition, the October 2016 Amendment increased the multicurrency sublimit to $250.0 million and adjusted certain financial covenants.

On October 1, 2018, in connection with the Fortive Transaction and the entering into the Altra Credit Agreement, the 2015 Credit Agreement was terminated and all outstanding indebtedness for borrowed money thereunder was repaid in full.

~~During the year to date period ended June 30, 2019, one of our subsidiaries in China opened a new line of credit for approximately $7.5 million with a term of 1 year.~~

The following is a summary of our borrowings as of ~~June 30,~~March 31, 2020 and March 31, 2019, ~~and June 30, 2018,~~ respectively:

	Amounts in millions				Amounts in millions
	June 30, 2019		June 30, 2018		March 31, 2020		March 31, 2019
Debt:
Term loan	$	1,270.0	$	—	$	1,184.0	$	1,305.0
Revolving credit facility		—		249.2
Revolving Credit Facility						100.0	$	—
Notes		400.0		—		400.0		400.0
Mortgages and other		15.2		12.0		12.6		14.3
Finance leases		0.5		0.2		0.4		0.5
Total debt	$	1,685.7	$	261.4	$	1,697.0	$	1,719.8

The following is a summary of our cash balances and cash flows (in millions) as of and for the year to date periods ended ~~June 30,~~March 31, 2020 and March 31, 2019, ~~and June 30, 2018,~~ respectively:

	June 30, 2019			June 30, 2018			Change			March 31, 2020			March 31, 2019			Change
Cash and cash equivalents at the beginning of the period	$	169.0		$	52.0		$	117.0		$	167.3		$	169.0		$	(1.7	)
Cash flows provided from operating activities		96.1			29.1			67.0			34.9			39.3			(4.4	)
Cash flows used in investing activities		(37.3	)		(17.6	)		(19.7	)
Cash flows used in financing activities		(72.4	)		(25.5	)		(46.9	)
Cash flows provided by (used in) investing activities											48.0			(27.2	)		75.2
Cash flows provided by (used in) financing activities											80.1			(27.2	)		107.3
Effect of exchange rate changes on cash and cash equivalents		(1.8	)		0.1			(1.9	)		(3.4	)		(1.5	)		(1.9	)
Cash and cash equivalents at the end of the period	$	153.6		$	38.1		$	115.5		$	326.9		$	152.4		$	174.5

Net cash provided ~~from~~by operating activities was approximately ~~$96.1~~$34.9 million for the period ended ~~June 30, 2019.~~March 31, 2020. This was generated by the net ~~income~~loss of ~~$64.2~~($116.6) million and the net impact of the add-back of certain items including non-cash depreciation, amortization of intangible assets, stock-based compensation, amortization of deferred financing costs, ~~loss on disposal of fixed assets, and~~ non-cash loss on foreign currency, and the non-cash impairment charge to goodwill and intangible assets which totaled approximately ~~$74.6~~$182.0 million. This was ~~mostly~~partially offset by a use in cash from a net decrease in assets and liabilities of approximately ~~$42.7~~$30.5 million.

Net cash ~~used in~~provided by investing activities for the period ended ~~June 30, 2019~~March 31, 2020 increased approximately ~~$19.7~~$75.2 million compared to the period ended ~~June 30, 2018,~~March 31, 2019, primarily ~~as a result~~due to the cross currency interest rate swap settlement proceeds of approximately $56.2 million received during the ~~impact of the Fortive Transaction.~~quarter.

Net cash ~~used in~~provided by financing activities in the period ended ~~June 30, 2019~~March 31, 2020 as compared to the period ended ~~June 30, 2018~~March 31, 2019 increased by ~~$46.9~~$107.3 million, primarily as a result of the ~~impact~~$100.0 million borrowing under the Revolving Credit Facility. This was partially offset by the first quarter dividend payment and payments on the Altra Term Loan Facility of ~~the Fortive Transaction.~~approximately $11.3 million and $6.0 million, respectively.

We intend to use our remaining cash and cash equivalents and cash flow from operations to provide for our working capital needs, to ~~fund potential future acquisitions, to~~ service our debt, including principal payments, for capital expenditures, for pension funding, ~~for share repurchases,~~ and to pay dividends to our stockholders. As of ~~June 30, 2019~~March 31, 2020 we have approximately ~~$88.8~~$114.4 million of cash and cash equivalents held by foreign subsidiaries. We believe, based on current and projected levels of cash flows from operating activities, together with our ability to borrow under the Altra Revolving Credit Facility, we have sufficient liquidity to ~~meet our short-term and long-term needs to~~ make required payments of interest on our debt, to make amortization payments under the Altra Credit Facilities, to fund our operating needs, to fund working capital and capital expenditure requirements and to comply with the financial ratios in our debt agreements. However, it is difficult to predict the severity and duration of the economic decline due to the impact of the COVID-19 pandemic and any potential resulting impact to our cash flows.

There were no material changes in our contractual obligations during the period ended ~~June 30, 2019.~~March 31, 2020, other than the $100.0 million increase in the borrowings under the Revolving Credit Facility discussed above.

We are exposed to various market risk factors such as fluctuating interest rates, changes in foreign currency rates, and changes in commodity prices. During the reporting period, there have been no material changes to the quantitative and qualitative disclosures regarding our market risk set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

As of ~~June 30, 2019,~~March 31, 2020, our management, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, such as this Quarterly Report on Form 10-Q, is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of ~~June 30, 2019,~~March 31, 2020, our disclosure controls and procedures were effective at a reasonable assurance level.

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our fiscal quarter ended ~~June 30, 2019,~~March 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We are, from time to time, party to various legal proceedings arising out of our business. During the reporting period, there have been no material changes to the description of legal proceedings set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

The reader should carefully consider the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the Securities and Exchange Commission. Those risk factors described elsewhere in this report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 are not the only ones we face, but are considered to be the most material. These risk factors could cause our actual results to differ materially from those stated in forward looking statements contained in this Form 10-Q and elsewhere. All risk factors stated in our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 are incorporated herein by reference.

During the reporting period, except as noted below, there were no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

We expect the novel Coronavirus (COVID-19) pandemic to have an adverse effect on our results of operations. In addition, it has resulted in significant financial market volatility, and its impact on the global economy appears to be significant. A continuation or worsening of the pandemic will have a material adverse impact on our business, results of operations and financial condition and on the market price of our common stock.

On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States, many EU countries, Canada and China, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. Significant uncertainty remains as to the potential impact of the COVID-19 pandemic on our operations and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. The COVID-19 pandemic has resulted in significant financial market volatility and uncertainty. A continuation or worsening of the levels of market disruption and volatility seen in the recent past could have an adverse effect on our ability to access capital, on our business, results of operations and financial condition, and on the market price of our common stock. We expect that our results of operations will reflect a negative impact from, among other things, the global pandemic. Depending upon the duration and severity of the pandemic, the continuing effect on our results over the long term is uncertain.

~~The following table summarizes our share repurchase activity by month for the quarter ended June 30, 2019.~~None.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Delaware		61-1478870
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

300 Granite Street, Suite 201, Braintree, MA		02184
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	AIMC	NASDAQ Global Market

		Page #
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statement of Operations	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Cash Flows	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Notes to Unaudited Condensed Consolidated Interim Financial Statements	76
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2722
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3932
Item 4.	Controls and Procedures	3933

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	4034
Item 1A.	Risk Factors	4034
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4034
Item 3.	Defaults Upon Senior Securities	4034
Item 4.	Mine Safety Disclosures	4134
Item 5.	Other Information	4135
Item 6.	Exhibits	4135

SIGNATURES		4236

Intangible assets acquired consist of:
Customer relationships	$	1,025.0
Trade names and trademarks		209.0
Technology		204.0
In-process research and development ("IPR&D")		16.0
Total intangible assets	$	1,454.0

	Pro forma (unaudited)
	Quarter Ended June 30,		Year To Date Ended June 30,
	2018		2018
Total revenues	$	493.5	$	984.5
Net income		37.1		63.3
Basic earnings per share	$	0.58	$	0.99
Diluted earnings per share	$	0.58	$	0.98

	At Acquisition Date			Measurement Period Adjustments			At Acquisition Date (As Adjusted)
Consideration transferred:
Total cash consideration	$	1,003.4		$	—		$	1,003.4
Total equity consideration		1,458.7			—			1,458.7
A&S acquisition purchase price adjustment		—			13.5			13.5
Fair value of consideration transferred	$	2,462.1		$	13.5		$	2,475.6

Recognized identifiable assets acquired and liabilities assumed:
Less: cash on A&S balance sheet at 10/1/2018		54.1			(0.5	)		53.6
Receivables		129.7			(0.8	)		128.9
Inventory		89.1			(2.1	)		87.0
Prepaids and other current assets		6.9			(0.2	)		6.7
Property, plant and equipment		178.3			(1.0	)		177.3
Intangibles		1,454.0			—			1,454.0
Other non-current assets		7.9			(0.4	)		7.5
Accounts payable		(98.9	)		0.8			(98.1	)
Accrued payroll		(15.2	)		0.5			(14.7	)
Accrued expenses and other current liabilities		(33.7	)		0.1			(33.6	)
Pension liability and other post employment benefits		(12.0	)		—			(12.0	)
Deferred tax liability		(355.7	)		(11.7	)		(367.4	)
Other long term liability		(2.6	)		(0.3	)		(2.9	)
Senior unsecured notes assumed		(400.0	)		—			(400.0	)
Total identifiable net assets assumed		1,001.9			(15.6	)		986.3
Goodwill	$	1,460.2		$	29.1		$	1,489.3

	Year To Date Ended June 30, 2019
Lease cost⁽¹⁾:
Operating lease cost		8.4
Short-term lease cost		0.2
Total lease cost	$	8.6

Maturities of Lease Liabilities	Operating Leases			Finance Leases
2019	$	8.2		$	0.1
2020		13.5			0.2
2021		8.2			0.2
2022		6.4			0.1
2023		4.4			—
After 2023		4.9			—
Total lease payments		45.6			0.6
Less interest		(3.6	)		(0.1	)
Present value of lease liabilities	$	42.0		$	0.5

Other Information:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases	$	0.0
Operating cash flows from operating leases	$	8.5
Financing cash flows from finance leases	$	0.0
Weighted average remaining lease term - finance leases (in years)		3.30
Weighted average remaining lease term - operating leases (in years)		4.26
Average discount rate - finance leases		5.50	%
Average discount rate - operating leases		3.46	%

Year ending December 31:	Operating Leases		Capital Leases
2019	$	15.3	$	0.2
2020		11.2		0.2
2021		7.8		0.2
2022		6.1		0.1
2023		4.4		—
After 2023		5.1		—
Total lease obligations		49.9		0.7
Less amounts representing interest		—		(0.1	)
Present value of minimum capital lease obligations	$	49.9	$	0.6

	Deferred Revenue (Current)		Accounts Receivable
Beginning - January 1, 2019	$	7.4	$	259.8
Closing - June 30, 2019		8.1		269.6
Increase/(Decrease)	$	0.7	$	9.8

	Deferred Revenue (Current)		Accounts Receivable
Beginning - January 1, 2020	$	8.4	$	243.2
Closing - March 31, 2020		11.1		242.9
Increase/(Decrease)	$	2.7	$	(0.3	)

	Gains and Losses on Cash Flow Hedges			Defined Benefit Pension Plans			Cumulative Foreign Currency Translation Adjustment			Total
Accumulated Other Comprehensive Loss by Component, January 1, 2019	$	(12.9	)	$	(0.2	)	$	(58.5	)	$	(71.6	)
Net current-period Other Comprehensive Loss		(2.5	)		(0.3	)		(7.6	)		(10.4	)
Accumulated Other Comprehensive Loss by Component, June 30, 2019	$	(15.4	)	$	(0.5	)	$	(66.1	)	$	(82.0	)

	Shares			Weighted- average fair value
Shares unvested January 1, 2019		823.6		$	36.69
Shares granted		402.0			31.12
Shares for which restrictions lapsed		(225.3	)		30.50
Shares unvested June 30, 2019		1,000.3		$	35.59

	Shares		Weighted- average fair value
Options unvested January 1, 2019		—	$	—
Options granted		271.7		30.65
Options exercised		—		—
Options outstanding June 30, 2019		271.7	$	30.65

	Shares			Weighted- average fair value
Shares unvested January 1, 2020		786.3		$	35.69
Shares granted		322.0			34.58
Shares for which restrictions lapsed		(148.0	)		37.96
Shares unvested March 31, 2020		960.3		$	34.96

	Shares		Weighted- average fair value
Options unvested January 1, 2020		271.7	$	30.65
Options granted		214.5		34.78
Options exercised		—		—
Options outstanding March 31, 2020		486.2	$	32.47
Quantity ending exercisable balance		66.4	$	30.65

	2015 Altra Plan			2017 Altra Plan			2019 Altra Plan		Total All Plans
Balance at January 1, 2018	$	0.8		$	0.2		$	—	$	1.0
Restructuring expense incurred		—			0.9			—		0.9
Cash payments		(0.1	)		(0.4	)		—		(0.5	)
Balance at March 31, 2018		0.7			0.7			—		1.4
Restructuring expense incurred		—			0.6			—		0.6
Cash payments		(0.2	)		(0.9	)		—		(1.1	)
Balance at June 30, 2018	$	0.5		$	0.4		$	—	$	0.9


	March 31, 2020		December 31, 2019
Description (in millions)	Gain/(Loss) Recognized in AOCI
Cross currency swap agreements, net of tax	$	31.3	$	19.8

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Approximate Dollar Value of Shares That May Yet be Purchased Under The Plans or Programs
April 1, 2019 to April 30, 2019		—	$	—		—	$	30,000,000
May 1, 2019 to May 31, 2019		—	$	—		—	$	—
June 1, 2019 to June 30, 2019		—	$	—		—	$	—

Exhibit Number		Description

~~2.1(1)~~		~~Agreement and Plan of Merger and Reorganization, dated as of March 7, 2018, among Fortive Corporation, Stevens Holding Company, Inc., Altra Industrial Motion Corp. and McHale Acquisition Corp.~~

~~3.1(2)~~3.1(1)		Certificate of Amendment to the Second Amended and Restated Articles of Incorporation of Altra industrial Motion Corp., as filed with the Secretary of State of the State of Delaware.

~~3.2(3)~~3.2(2)		Second Amended and Restated Certificate of Incorporation of the Registrant

~~3.3(4)~~3.3(3)		Second Amended and Restated Bylaws of the Registrant

31.1*		Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2019,~~March 31, 2020, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Operations, (ii) the Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss), (iii) the Unaudited Condensed Consolidated Balance Sheet, (iv) the Unaudited Condensed Consolidated Statement of Cash Flows, (v) the Unaudited Consolidated Statement of Stockholders’ Equity and (vi) Notes to Unaudited Condensed Consolidated Interim Financial Statements.

104		The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in iXBRL and contained in Exhibit 101.

		ALTRA INDUSTRIAL MOTION CORP.

~~July 26, 2019~~ May 6, 2020	By:	/s/ Carl R. Christenson
	Name:	Carl R. Christenson
	Title	Chairman and Chief Executive Officer
		(Principal Executive Officer)
~~July 26, 2019~~May 6, 2020	By:	/s/ Christian Storch
	Name:	Christian Storch
	Title:	Vice President and Chief Financial Officer
		(Principal Financial Officer)
~~July 26, 2019~~May 6, 2020	By:	/s/ Todd B. Patriacca
	Name:	Todd B. Patriacca
	Title:	Vice President of Finance, Corporate Controller and Treasurer
		(Principal Accounting Officer)

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