AAM Reports Fourth Quarter and Full Year 2013 Financial Results

       AAM Reports Fourth Quarter and Full Year 2013 Financial Results

Achieves record quarterly Non-GM sales of $280 million, up over 37% on a
year-over-year basis

PR Newswire

DETROIT, Feb. 7, 2014

DETROIT, Feb. 7, 2014 /PRNewswire/ -- American Axle & Manufacturing Holdings,
Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial
results for the fourth quarter and full year 2013.

Fourth Quarter 2013 Results

  oFourth quarter 2013 sales of $831.3 million, up approximately 13% on a
    year-over-year basis
  oNon-GM sales grew over 37.2% on a year-over-year basis to $280.1 million
  oGross profit of $126.9 million, or 15.3% of sales
  oNet income of $29.8 million, or $0.39 per share
  oAAM's quarterly results reflect the impact of $25.6 million (or $0.32 per
    share) of debt refinancing and redemption costs
  oAdjusted EBITDA (earnings before interest, taxes, depreciation and
    amortization, excluding the impact of debt refinancing and redemption
    costs) of $113.7 million, or 13.7% of sales
  oFree cash flow (net cash provided by operating activities less capital
    expenditures net of proceeds from the sale of property, plant and
    equipment and the sale-leaseback of equipment) of $50.9 million

Full Year 2013 Results

  oFull year 2013 sales of $3.21 billion, up approximately 9.4% on a
    year-over-year basis
  oNon-GM sales grew 16.9% on a year-over-year basis to $926.7 million
  oGross profit of $478.7 million, or 14.9% of sales
  oNet income of $94.5 million, or $1.23 per share
  oAAM's full year results reflect the impact of $36.8 million (or $0.46 per
    share) of debt refinancing and redemption costs and $5.8 million (or $0.07
    per share) of other special items
  oAdjusted EBITDA of $421.8 million, or 13.2% of sales
  oFree cash flow of $4.3 million

AAM's net income in the fourth quarter of 2013 was $29.8 million, or $0.39 per
share. In the fourth quarter of 2013, AAM's results reflect the impact of
$25.6 million (or $0.32 per share) of debt refinancing and redemption costs.
This compares to net income of $319.9 million, or $4.21 per share, in the
fourth quarter of 2012 which includes the favorable impact of a $337.5 million
benefit (or $4.44 per share) related to the reversal of our valuation
allowance against our net federal deferred tax assets for entities in the
United States.

In the fourth quarter of 2012, AAM's results reflect the impact of $9.7
million (or $0.13 per share) of debt refinancing and redemption costs and $6.2
million (or $0.08 per share) of restructuring costs related to the closure of
our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.

For the full year 2013, AAM's net income was of $94.5 million, or $1.23 per
share. This compares to net income of $367.7 million, or $4.87 per share in
2012.

On a full year basis in 2013, AAM incurred $36.8 million (or $0.46 per share)
of debt refinancing and redemption costs and $5.8 million (or $0.07 per share)
of other special items.

On a full year basis in 2012, AAM incurred $19.8 million (or $0.26 per share)
of debt refinancing and redemption costs and $40.6 million (or $0.54 per
share) of restructuring costs related to the closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility.

"In 2013, AAM's financial performance was highlighted by sales growth that
outpaced the industry and profitability that solidly rebounded versus our 2012
performance. AAM's foundational commitments to quality and operational
excellence paved the way for these improved results, while our focus on
technology leadership resulted in the expansion and diversification of our
customer base and product portfolio on a global basis," said AAM's Chairman,
President and Chief Executive Officer, David C. Dauch. "As we look to the
future, we remain focused on optimizing our profitable growth opportunities
through our global expansion, improving the diversification of our business,
and achieving solid financial performance by executing our aligned business
strategy. We are committed to achieving excellence in everything we do with
the ultimate goal of making AAM a leader in every key market that we serve."

Net sales in the fourth quarter of 2013 increased approximately 12.8% to
$831.3 million as compared to $736.7 million in the fourth quarter of 2012.
Non-GM sales grew 37.2% on a year-over-year basis to $280.1 million in the
fourth quarter of 2013 as compared to $204.1 million in the fourth quarter of
2012.

AAM's content-per-vehicle is measured by the dollar value of its product sales
supporting our customers' North American light truck and SUV programs. In the
fourth quarter of 2013, AAM's content-per-vehicle was $1,579 as compared to
$1,514 in the fourth quarter of 2012. For the full year 2013, AAM's
content-per-vehicle was $1,550 as compared to $1,473 in 2012.

Net sales for the full year 2013 increased by 9.4% to $3.21 billion as
compared to $2.93 billion in 2012. Non-GM sales grew 16.9% on a
year-over-year basis to $926.7 million in 2013 as compared to $792.6 million
in 2012.

AAM's gross profit in the fourth quarter of 2013 was $126.9 million, or 15.3%
of sales. For the full year 2013, AAM's gross profit was $478.7 million, or
14.9% of sales.

In the fourth quarter of 2013, AAM's operating income was $66.4 million, or
8.0% of sales. For the full year 2013, AAM's operating income was $240.3
million, or 7.5% of sales.

AAM's SG&A spending in the fourth quarter of 2013 was $60.5 million, or 7.3%
of sales, as compared to $65.4 million, or 8.9% of sales, in the fourth
quarter of 2012. AAM's R&D spending in the fourth quarter of 2013 was $24.0
million as compared to $33.1 million in the fourth quarter of 2012.

AAM's SG&A spending for the full year 2013 was $238.4 million, or 7.4% of
sales, as compared to $243.3 million, or 8.3% of sales, for the full year
2012. AAM's R&D spending for the full year 2013 was $103.4 million as
compared to $123.4 million in 2012.

In the fourth quarter of 2013, AAM's net income was $29.8 million, or 3.6% of
sales. Diluted earnings per share (EPS) were $0.39 per share in the fourth
quarter of 2013. For the full year 2013, AAM's net income was $94.5 million,
or 2.9% of sales. Diluted earnings per share (EPS) were $1.23 per share for
the full year 2013.

For 2013, AAM defines Adjusted EBITDA to be earnings before interest, taxes,
depreciation and amortization excluding the impact of debt refinancing and
redemption costs and other special charges and restructuring costs. In the
fourth quarter of 2013, AAM's Adjusted EBITDA was $113.7 million or 13.7% of
sales. For the full year 2013, AAM's Adjusted EBITDA was $421.8 million, or
13.2% of sales.

AAM defines free cash flow to be net cash provided by (or used in) operating
activities less capital expenditures net of proceeds from the sale of
property, plant and equipment and the sale-leaseback of equipment.

Net cash provided by operating activities for the full year 2013 was $223.0
million. Capital spending, net of proceeds from the sale of property, plant
and equipment and the sale-leaseback of equipment, for the full year 2013 was
$218.7 million. Reflecting the impact of this activity, AAM generated
positive free cash flow of $4.3 million for the full year 2013.

AAM's free cash flow for the full year 2013 reflects the impact of cash
payments for debt refinancing and redemption activities of approximately $36.8
million.

A conference call to review AAM's fourth quarter and full year 2013 results is
scheduled today at 10:00 AM ET. Interested participants may listen to the
live conference call by logging onto AAM's investor web site at
http://investor.aam.com or calling (877) 681-2072 from the United States or
(973) 200-3383 from outside the United States. A replay will be available
from 2:00 p.m. ET on February 7, 2014 until 5:00 p.m. ET February 14, 2014 by
dialing (855) 859-2056 from the United States or (404) 537-3406 from outside
the United States. When prompted, callers should enter conference reservation
number 34605135.

Non-GAAP Financial Information

In addition to the results reported in accordance with accounting principles
generally accepted in the United States of America (GAAP) included within this
press release, AAM has provided certain information, which includes non-GAAP
financial measures. Such information is reconciled to its closest GAAP
measure in accordance with Securities and Exchange Commission rules and is
included in the attached supplemental data.

Management believes that these non-GAAP financial measures are useful to both
management and its stockholders in their analysis of the Company's business
and operating performance. Management also uses this information for
operational planning and decision-making purposes.

Non-GAAP financial measures are not and should not be considered a substitute
for any GAAP measure. Additionally, non-GAAP financial measures as presented
by AAM may not be comparable to similarly titled measures reported by other
companies.

AAM is a world leader in the manufacture, engineering, design and validation
of driveline and drivetrain systems and related components and modules,
chassis systems and metal-formed products for light trucks, sport utility
vehicles, passenger cars, crossover vehicles and commercial vehicles. In
addition to locations in the United States (Michigan, Ohio, Pennsylvania and
Indiana), AAM also has offices or facilities in Brazil, China, Germany, India,
Japan, Luxembourg, Mexico, Poland, Scotland, South Korea, Sweden and Thailand.

In this earnings release, we make statements concerning our expectations,
beliefs, plans, objectives, goals, strategies, and future events or
performance. Such statements are "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and relate to
trends and events that may affect our future financial position and operating
results. The terms such as "will," "may," "could," "would," "plan," "believe,"
"expect," "anticipate," "intend," "project," and similar words or expressions,
as well as statements in future tense, are intended to identify
forward-looking statements. Forward-looking statements should not be read as
a guarantee of future performance or results, and will not necessarily be
accurate indications of the times at, or by, which such performance or results
will be achieved. Forward-looking statements are based on information
available at the time those statements are made and/or management's good faith
belief as of that time with respect to future events and are subject to risks
and may differ materially from those expressed in or suggested by the
forward-looking statements. Important factors that could cause such
differences include, but are not limited to: reduced purchases of our products
by General Motors Company (GM), Chrysler Group LLC (Chrysler) or other
customers; reduced demand for our customers' products (particularly light
trucks and sport utility vehicles (SUVs) produced by GM and Chrysler); our
ability or our customers' and suppliers' ability to successfully launch new
product programs on a timely basis; our ability to realize the expected
revenues from our new and incremental business backlog; our ability to develop
and produce new products that reflect market demand; lower-than-anticipated
market acceptance of new or existing products; our ability to attract new
customers and programs for new products; our ability to respond to changes in
technology, increased competition or pricing pressures; our ability to achieve
the level of cost reductions required to sustain global cost competitiveness;
supply shortages or price increases in raw materials, utilities or other
operating supplies for us or our customers as a result of natural disasters or
otherwise; global economic conditions, including the impact of the continued
market weakness in the Euro-zone; risks inherent in our international
operations (including adverse changes in political stability, taxes and other
law changes, potential disruptions of production and supply, and currency rate
fluctuations); liabilities arising from warranty claims, product recall or
field actions, product liability and legal proceedings to which we are or may
become a party; price volatility in, or reduced availability of, fuel; our
ability to successfully implement upgrades to our enterprise resource planning
systems; our ability to maintain satisfactory labor relations and avoid work
stoppages; our suppliers', our customers' and their suppliers' ability to
maintain satisfactory labor relations and avoid work stoppages; our ability to
attract and retain key associates; availability of financing for working
capital, capital expenditures, research and development (R&D) or other general
corporate purposes, including our ability to comply with financial covenants;
our customers' and suppliers' availability of financing for working capital,
capital expenditures, R&D or other general corporate purposes; changes in
liabilities arising from pension and other postretirement benefit obligations;
risks of noncompliance with environmental laws and regulations or risks of
environmental issues that could result in unforeseen costs at our facilities;
adverse changes in laws, government regulations or market conditions affecting
our products or our customers' products (such as the Corporate Average Fuel
Economy (CAFE) regulations); our ability to consummate and integrate
acquisitions and joint ventures; our ability or our customers' and suppliers'
ability to comply with the Dodd-Frank Act and other regulatory requirements
and the potential costs of such compliance; and other unanticipated events and
conditions that may hinder our ability to compete. It is not possible to
foresee or identify all such factors and we make no commitment to update any
forward-looking statement or to disclose any facts, events or circumstances
after the date hereof that may affect the accuracy of any forward-looking
statement.

For more information...

Christopher M. Son
Director, Investor Relations,
Corporate Communications & Marketing
chris.son@aam.com

Danielle Landolt
Manager, Marketing & Communications
(313) 758-4589
danielle.landolt@aam.com

Or visit the AAM website at www.aam.com.



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
                            Three months ended        Twelve months ended
                            December 31,              December 31,
                            2013          2012        2013          2012
                            (in millions, except per  (in millions, except per
                            share data)               share data)
Net sales                   $  831.3      $  736.7    $  3,207.3    $ 2,930.9
Cost of goods sold          704.4         652.7       2,728.6       2,531.2
Gross profit                126.9         84.0        478.7         399.7
Selling, general and        60.5          65.4        238.4         243.3
administrative expenses
Operating income            66.4          18.6        240.3         156.4
Interest expense            (28.0)        (28.9)      (115.9)       (101.6)
Investment income           0.2           —           0.6           0.6
Other income (expense)
Debt refinancing and        (25.6)        (9.7)       (36.8)        (19.8)
redemption costs
Other, net                  (0.5)         (0.1)       (1.9)         (4.1)
Income (loss) before income 12.5          (20.1)      86.3          31.5
taxes
Income tax expense          (17.3)        (340.0)     (8.2)         (335.2)
(benefit)
Net income                  29.8          319.9       94.5          366.7
Net loss attributable to    —             —           —             1.0
noncontrolling interests
Net income attributable to  $  29.8       $  319.9    $  94.5       $ 367.7
AAM
Diluted earnings per share  $  0.39       $  4.21     $  1.23       $ 4.87
Diluted shares outstanding  77.0          76.0        76.8          75.4



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)
                                       Three months ended  Twelve months ended
                                       December 31,        December 31,
                                       2013      2012      2013       2012
                                       (in millions)
Net income                             $  29.8   $ 319.9   $  94.5    $ 366.7
Other comprehensive income (loss), net
of tax
Defined benefit plans, net of tax      60.9      58.3      76.6       (58.9)
Foreign currency translation           (11.9)    (2.3)     (26.2)     (9.4)
adjustments
Change in derivatives                  0.2       0.2       (2.0)      7.8
Other comprehensive income (loss )     49.2      56.2      48.4       (60.5)
Comprehensive income                   79.0      376.1     142.9      306.2
Net loss attributable to               —         —         —          1.0
noncontrolling interests
Foreign currency translation
adjustments related to noncontrolling  —         0.1       —          0.3
interests
Comprehensive income attributable to   $  79.0   $ 376.0   $  142.9   $ 306.9
AAM



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)
                                                    December31,  December31,

                                                    2013          2012
                                                    (in millions)
ASSETS
Current Assets
Cash and cash equivalents                           $  154.0      $  62.4
Accounts receivable, net                            458.5         463.4
Inventories, net                                    261.8         224.3
Deferred income taxes                               36.4          34.9
Prepaid expenses and other current assets           87.1          87.1
Total current assets                                997.8         872.1
Property, plant and equipment, net                  1,058.5       1,009.7
Deferred income taxes                               341.8         366.1
Goodwill                                            156.4         156.4
GM postretirement cost sharing asset                242.0         259.7
Other assets and deferred charges                   232.5         202.0
Total assets                                        $  3,029.0    $  2,866.0
 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable                                    $  445.8      $  396.1
Accrued compensation and benefits                   110.1         84.9
Deferred revenue                                    17.0          17.2
Deferred income taxes                               0.1           1.4
Accrued expenses and other current liabilities      94.1          101.2
Total current liabilities                           667.1         600.8
Long-term debt                                      1,559.1       1,454.1
Deferred income taxes                               9.8           9.5
Deferred revenue                                    76.4          82.2
Postretirement benefits and other long-term         683.0         840.2
liabilities
Total liabilities                                   2,995.4       2,986.8
Total stockholders' equity (deficit)                33.6          (120.8)
Total liabilities and stockholders' equity          $  3,029.0    $  2,866.0
(deficit)



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)
                                       Three months ended  Twelve months ended
                                       December 31,        December 31,
                                       2013      2012      2013       2012
                                       (in millions)       (in millions)
Operating Activities
Net income                             $ 29.8    $ 319.9   $  94.5    $ 366.7
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities
 Asset impairments and related       —         5.8       —          5.8
indirect activity
 Depreciation and amortization       47.6      39.8      177.0      152.2
 Other                               43.3      (344.4)   (48.5)     (700.2)
Net cash provided by (used in)         120.7     21.1      223.0      (175.5)
operating activities
Investing Activities
Purchases of property, plant &         (73.7)    (63.9)    (251.9)    (207.6)
equipment
Proceeds from sale of property, plant  3.3       7.9       9.1        10.1
& equipment
Proceeds from sale-leaseback of        0.6       12.1      24.1       12.1
equipment
Net cash used in investing activities  (69.8)    (43.9)    (218.7)    (185.4)
Financing Activities
Net increase (decrease) in long-term   (11.0)    (123.1)   104.8      273.9
debt
Debt issuance costs                    (3.8)     (0.5)     (16.7)     (10.6)
Purchase of treasury stock             —         —         (0.4)      (5.9)
Purchase of noncontrolling interest    —         —         —          (4.0)
Employee stock option exercises        0.3       —         1.1        0.1
Net cash provided by (used in)         (14.5)    (123.6)   88.8       253.5
financing activities
Effect of exchange rate changes on     (1.0)     (0.2)     (1.5)      0.6
cash
Net increase (decrease) in cash and    35.4      (146.6)   91.6       (106.8)
cash equivalents
Cash and cash equivalents at           118.6     209.0     62.4       169.2
beginning of period
Cash and cash equivalents at end of    $ 154.0   $ 62.4    $  154.0   $ 62.4
period



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

SUPPLEMENTAL DATA

(Unaudited)
The supplemental data presented below is a reconciliation of certain financial
measures which is intended to facilitate analysis of American Axle &
Manufacturing Holdings, Inc. business and operating performance.
Earnings before interest expense, income taxes and depreciation and
amortization (EBITDA) and adjusted EBITDA^(a)
                     Three months ended             Twelve months ended
                     December 31,                   December 31,
                     2013             2012          2013           2012
                     (in millions)                  (in millions)
Net income           $   29.8         $  319.9      $   94.5       $  367.7
attributable to AAM
Interest expense     28.0             28.9          115.9          101.6
Income tax benefit   (17.3)           (340.0)       (8.2)          (335.2)
Depreciation and     47.6             39.8          177.0          152.2
amortization
EBITDA               88.1             48.6          379.2          286.3
Debt refinancing and 25.6             9.7           36.8           19.8
redemption costs
Other special
charges, curtailment
gains and            —                6.2           5.8            40.6
restructuring
costs^(b)
ADJUSTED EBITDA      $   113.7        $  64.5       $   421.8      $  346.7



Net debt^(c) to capital
                                        December31, 2013  December31, 2012
                                        (in millions, except percentages)
Total debt                              $   1,559.1        $   1,454.1
Less: cash and cash equivalents         154.0              62.4
Net debt at end of period               1,405.1            1,391.7
Stockholders' equity (deficit)          33.6               (120.8)
Total invested capital at end of period $   1,438.7        $   1,270.9
Net debt to capital^(d)                 97.7          %    109.5         %



AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

SUPPLEMENTAL DATA

(Unaudited)
The supplemental data presented below is a reconciliation of certain financial
measures which is intended to facilitate analysis of American Axle &
Manufacturing Holdings, Inc. business and operating performance.
Free Cash Flow^(e)
                     Three months ended            Twelve months ended
                     December 31,                  December 31,
                     2013           2012           2013          2012
                     (in millions)                 (in millions)
Net cash provided by
(used in) operating  $   120.7      $  21.1        $  223.0      $  (175.5)
activities
Less: Purchases of
property, plant &
equipment, net of
proceeds from sale   (69.8)         (43.9)         (218.7)       (185.4)
of property, plant &
equipment and
sale-leaseback of
equipment
Free cash flow       $   50.9       $  (22.8)      $  4.3        $  (360.9)



      We define EBITDA to be earnings before interest, taxes, depreciation and
      amortization. For 2013, Adjusted EBITDA is defined as EBITDA excluding
      the impact of debt refinancing and redemption costs and other special
      charges and restructuring costs. For 2012, Adjusted EBITDA is defined as
      EBITDA excluding the impact of curtailment gains, restructuring costs
      and special charges related to the closure of the Detroit Manufacturing
      Complex and Cheektowaga Manufacturing Facility, and debt refinancing and
      redemption costs. We believe that EBITDA and adjusted EBITDA are
(a) meaningful measures of performance as they are commonly utilized by
      management and investors to analyze operating performance and entity
      valuation. Our management, the investment community and the banking
      institutions routinely use EBITDA, together with other measures, to
      measure our operating performance relative to other Tier 1 automotive
      suppliers. EBITDA and adjusted EBITDA should not be construed as income
      from operations, net income or cash flow from operating activities as
      determined under GAAP. Other companies may calculate EBITDA and
      adjusted EBITDA differently.
      Special charges of $5.8 million for the twelve months ended December 31,
      2013 primarily relate to a net charge of $5.3 million related to the
      acceleration of expense for stock-based compensation and other benefits
      earned and vested due to the passing of our Co-Founder and Executive
      Chairman of the Board of Directors and $0.5 million for the settlement
      of a National Labor Relations Board proceeding related to the closure of
      our Detroit Manufacturing Complex and Cheektowaga Manufacturing
      Facility. Special charges and restructuring costs of $6.2 million for
      three months ended December 31, 2012 and $40.6 million for the twelve
(b) months ended December 31, 2012 primarily related to the closure of our
      Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
      This special charge activity included $28.7 million of expense related
      to pension and postretirement benefits to be provided to certain
      eligible UAW associates as a result of the Detroit Manufacturing Complex
      and Cheektowaga Manufacturing Facility plant closures, $33.7 million of
      expense primarily related to asset impairments, asset redeployment and
      other restructuring costs associated with the closures of Detroit
      Manufacturing Complex and Cheektowaga Manufacturing Facility and a $21.8
      million postretirement benefit curtailment gain recorded in the first
      quarter of 2012.
(c)  Net debt is equal to total debt less cash and cash equivalents.
      Net debt to capital is equal to net debt divided by the sum of
      stockholders' equity (deficit) and net debt. We believe that net debt
(d)  to capital is a meaningful measure of financial condition as it is
      commonly utilized by management, investors and creditors to assess
      relative capital structure risk. Other companies may calculate net debt
      to capital differently.
      We define free cash flow as net cash provided by (used in) operating
      activities less capital expenditures net of proceeds from the sale of
      property, plant and equipment and the sale-leaseback of equipment. For
      purposes of calculating free cash flow, AAM excludes the impact of
(e) purchase buyouts of leased equipment, if any. We believe free cash flow
      is a meaningful measure as it is commonly utilized by management and
      investors to assess our ability to generate cash flow from business
      operations to repay debt and return capital to our stockholders. Free
      cash flow is also a key metric used in our calculation of incentive
      compensation. Other companies may calculate free cash flow differently.





SOURCE American Axle & Manufacturing Holdings, Inc.

Website: http://www.aam.com
 
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