American Axle & Manufacturing Reports Fourth Quarter and Full Year 2012 Financial Results
For Immediate Release
Fourth quarter sales increase by 22% on a year-over-year basis
Detroit, Michigan, February 8, 2013-- 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 2012.
Fourth Quarter 2012 Results
* Fourth quarter 2012 sales of $736.7 million, up 21.6% on a year-over-year
basis
* Non-GM sales grew by 16.6% on a year-over-year basis to $204.1 million
* Gross profit of $84.0 million, or 11.4% of sales
* Operating income of $18.6 million, or 2.5% of sales
* Net income of $319.9 million, or $4.21 per share, which includes the
favorable impact of a $337.5 million benefit related to the reversal of our
valuation allowance against our net federal deferred tax assets for entities
in the United States
* Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization excluding the impact of curtailments, asset impairments,
restructuring costs and special charges related to the closure of the
Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility, and
debt refinancing and redemption costs, to the extent applicable) of $64.5
million or approximately 9% of sales
* AAM's quarterly 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
Full Year 2012 Results
* Full year 2012 sales of $2.93 billion, up 13.4% on a year-over-year basis
* Non-GM sales grew 11.6% on a year-over-year basis to $792.6 million
* Gross profit of $399.7 million, or 13.6% of sales
* Operating income of $156.4 million, or 5.3% of sales
* Net income of $367.7 Â million, or $4.87 per share
* Adjusted EBITDA of $346.7 million, or approximately 12% of sales
* AAM's full year results reflect the impact of $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
AAM's net income in the fourth quarter of 2012 was $319.9 million, or $4.21 per
share, which includes the favorable impact of a $337.5 million benefit related
to the reversal of our valuation allowance against our net federal deferred tax
assets for entities in the United States. Â This compares to net income of $31.1
million, or $0.41 per share, in the fourth quarter of 2011.
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.
In the fourth quarter of 2011, AAM's results reflect the impact of $4.8 million
(or $0.06 per share) of special charges and restructuring costs primarily
related to the closure of our Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility.
For the full year 2012, AAM's net income was $367.7 million, or $4.87 per share.
 This compares to net income of $142.8 million, or $1.89 per share in 2011.
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.
On a full year basis in 2011, AAM incurred $15.0 million (or $0.20 per share) of
special charges, asset impairments and  restructuring costs primarily related to
the planned closure of our Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility. Â Also included in 2011 were special charges of $3.1
million related to debt redemption and refinancing costs and a $1.6 million
asset impairment recorded by our e-AAM joint venture related to the long-term
supply agreement with Saab Automobile AB.
"2012 was an eventful year for AAM, characterized by substantial growth and
diversification due to a high level of global launch activity. Â We made great
strides in executing our diversification initiatives while strengthening our
global footprint through our expanding customer and product base," said AAM's
President and Chief Executive Officer, David C. Dauch. Â "Financial performance
in 2012 was characterized by both successes and challenges. Â In the second half
of 2012, we experienced operational challenges and lower profitability,
principally associated with an increased level of launch activity. We are taking
necessary actions to correct these performance issues. As we move forward we do
so with a disciplined and forward-looking approach, reaffirming our commitment
to delivering quality, technology leadership and operational excellence."
Net sales in the fourth quarter of 2012 increased approximately 21.6% to $736.7
million as compared to $605.6 million in the fourth quarter of 2011. Â Non-GM
sales grew 16.6% on a year-over-year basis to $204.1 million in the fourth
quarter of 2012 as compared to $175.0 million in the fourth quarter of 2011.
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 2012, AAM's content-per-vehicle was $1,514 as compared to
$1,498 in the fourth quarter of 2011. Â For the full year 2012, AAM's content-
per-vehicle was $1,473 as compared to $1,487 in 2011.
Net sales for the full year 2012 increased by 13.4% to $2.9 billion as compared
to $2.6 billion in 2011. Â Non-GM sales grew 11.6% on a year-over-year basis to
$792.6 million in 2012 as compared to $710.0 million in 2011.
AAM's gross profit in the fourth quarter of 2012 was $84.0 million or 11.4% of
sales. Â For the full year 2012, AAM's gross profit was $399.7 million, or 13.6%
of sales.
AAM defines Adjusted EBITDA to be earnings before interest, taxes, depreciation
and amortization excluding the impact of curtailments, asset impairments,
restructuring costs and special charges related to the closure of the Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility, and debt
refinancing and redemption costs, to the extent applicable. Â In the fourth
quarter of 2012, AAM's Adjusted EBITDA was $64.5 million or 8.8% of sales. For
the full year 2012, AAM's Adjusted EBITDA was $346.7 million or 11.8% of sales.
AAM's SG&A spending in the fourth quarter of 2012 was $65.4 million, or 8.9% of
sales, as compared to $57.2 million, or 9.4% of sales, in the fourth quarter of
2011. Â AAM's R&D spending in the fourth quarter of 2012 was $33.1 million as
compared to $28.2 million in the fourth quarter of 2011.
AAM's SG&A spending for the full year 2012 was $243.3 million, or 8.3% of sales,
as compared to $231.7 million, or 9.0% of sales, for the full year 2011. Â AAM's
R&D spending for the full year 2012 was $123.4 million as compared to $113.6
million in 2011.
In the fourth quarter of 2012, AAM's operating income was $18.6 million or 2.5%
of sales. For the full year 2012, AAM's operating income was $156.4 million, or
5.3% of sales.
In the fourth quarter of 2012, AAM's net income was $319.9 million or 43.4% of
sales. Â Diluted earnings per share (EPS) were $4.21 per share in the fourth
quarter of 2012. Â For the full year 2012, AAM's net income was $367.7 million
or 12.5% of sales. Â Diluted earnings per share (EPS) were $4.87 per share for
the full year 2012. Â These results include the favorable impact of a $337.5
million benefit related to the reversal of our valuation allowance against our
net federal deferred tax assets for entities in the United States.
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 used in operating activities for the full year 2012 was $175.5 million.
 Capital spending, net of proceeds from the sale of property, plant and
equipment and the sale-leaseback of equipment, for the full year 2012 was $185.4
million. Â Reflecting the impact of this activity, AAM's free cash flow was a use
of $360.9 million for the full year 2012.
AAM's free cash flow for the full year 2012 reflects the impact of $225.4
million of contributions to our defined benefit pension plans. On September
27, 2012, AAM and the Pension Benefit Guaranty Corporation entered into an
agreement in connection with the closures of the Detroit Manufacturing Complex
and Cheektowaga Manufacturing Facility. As part of this agreement, in September
2012, we contributed $114.7 million in excess of our statutory minimums to our
U.S. hourly pension plan which is included in the contributions described above.
 AAM's free cash flow for the full year 2012 also reflects cash used for
restructuring activities of $37.9 million.
A conference call to review AAM's fourth quarter and full year 2012 results is
scheduled today at 10:00 AM ET. Â 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) 278-1452 from the United States or
(973) 200-3383 from outside the United States. Â A replay will be available from
5:00 p.m. ET on February 8, 2013 until 5:00 p.m. ET February 15, 2013 by dialing
(855) 859-2056 from the United States or (404) 537-3406 from outside the United
States. Â When prompted, callers should enter conference reservation number
86568260.
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. Â 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. Â 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. Â 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.
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:
global economic conditions, including the impact of the debt crisis in the Euro-
zone; reduced purchases of our products by GM, Chrysler or other customers;
reduced demand for our customers' products (particularly light trucks and 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 respond to changes in technology, increased competition
or pricing pressures; 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; liabilities arising from warranty claims,
product recall or field actions, product liability and legal proceedings to
which we are or may become a party; our ability to achieve the level of cost
reductions required to sustain global cost competitiveness; our ability to
attract new customers and programs for new products; price volatility in, or
reduced availability of, fuel; 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 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; 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); availability of financing for working
capital, capital expenditures, 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; 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);
changes in liabilities arising from pension and other postretirement benefit
obligations; our ability to attract and retain key associates; risks of
noncompliance with environmental laws and regulations or risks of environmental
issues that could result in unforeseen costs at our facilities; 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; our
ability to consummate and integrate acquisitions and joint ventures; 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.
# Â # Â #
For more information...
Christopher M. Son
Director, Investor Relations,
Corporate Communications and Marketing
(313) 758-4814
chris.son@aam.com
David Tworek
Manager, Communications
(313) 758-4883
david.tworek@aam.com
Or visit the AAM website at www.aam.com.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
-------------------------------------------------------------------------------
 Three months ended  Twelve months ended
 December 31,  December 31,
--------------------------- ----------------------------
 2012  2011  2012  2011
---------- ---------------- ------------ ---------------
(In millions, except per (In millions, except per
 share data)  share data)
Net sales  $ 736.7   $ 605.6   $ 2,930.9   $  2,585.0
Cost of goods sold  652.7  499.9  2,531.2  2,129.9
---------- ---------------- ------------ ---------------
Gross profit 84.0 Â 105.7 Â 399.7 Â Â 455.1
Selling, general and
administrative
expenses 65.4 Â 57.2 Â 243.3 Â 231.7
---------- ---------------- ------------ ---------------
Operating income 18.6 Â 48.5 Â 156.4 Â 223.4
Interest expense  (28.9)   (22.4)   (101.6)   (83.9)
Investment income - Â Â 0.3 Â 0.6 Â 1.2
Debt refinancing and
redemption costs  (9.7)  -    (19.8)   (3.1)
Other income
(expense), net  (0.1)  0.4   (4.1)  0.5
---------- ---------------- ------------ ---------------
Income (loss) before
income taxes  (20.1)  26.8  31.5  138.1
Income tax expense
(benefit) Â (340.0) Â Â (3.2) Â Â (335.2) Â 1.0
---------- ---------------- ------------ ---------------
Net income 319.9 Â 30.0 Â 366.7 Â 137.1
   Net loss
attributable to
 noncontrolling
interests - Â Â 1.1 Â 1.0 Â 5.7
---------- ---------------- ------------ ---------------
Net income
attributable to AAM Â $ 319.9 Â Â $ 31.1 Â Â $ 367.7 Â Â $ 142.8
---------- ---------------- ------------ ---------------
Diluted earnings per
share  $ 4.21   $ 0.41   $ 4.87   $ 1.89
---------- ---------------- ------------ ---------------
Diluted shares
outstanding 76.0 Â 75.3 Â 75.4 Â 75.4
---------- ---------------- ------------ ---------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
-------------------------------------------------------------------------------
 Three months ended  Twelve months ended
 December 31,  December 31,
---------------------- --------------------
 2012  2011  2012  2011
---------- ----------- ---------- ---------
 (In millions)  (In millions)
Net income  $ 319.9   $ 30.0   $ 366.7   $ 137.1
Other comprehensive income (loss),
net of tax
   Defined benefit plans 58.3   (67.4)   (58.9)   (63.5)
   Foreign currency translation  (2.3)   (10.6)  (9.4)   (27.3)
adjustments
   Change in derivatives 0.2  1.1  7.8   (6.8)
---------- ----------- ---------- ---------
Other comprehensive income (loss) 56.2 Â Â (76.9) Â Â (60.5) Â Â (97.6)
---------- ----------- ---------- ---------
Comprehensive income (loss) 376.1 Â Â (46.9) Â 306.2 Â 39.5
  Net loss attributable to -   1.1 1.0  5.7
noncontrolling interests
  Foreign currency translation
adjustments
   attributable to noncontrolling
interests 0.1 0.1 Â 0.3 0.2
---------- ----------- ---------- ---------
Comprehensive income (loss) Â $ 376.0 Â Â $ (45.9) Â $ 306.9 Â Â $ 45.0
attributable to AAM
---------- ----------- ---------- ---------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
-------------------------------------------------------------------------------
 December 31,  December 31,
 2012  2011
------------------------- ---------------------
 (In millions)
ASSETS
Current assets
   Cash and cash equivalents  $         62.4   $      169.2
   Accounts receivable, net          463.4         333.3
   Inventories, net          224.3         177.2
   Deferred income taxes           34.9          11.3
   Prepaid expenses and other           87.1          72.1
------------------------- ---------------------
Total current assets          872.1         763.1
Property, plant and equipment,
net        1,009.7         971.2
Deferred income taxes          366.1          20.1
Goodwill          156.4         155.9
GM postretirement cost sharing
asset          259.7         260.2
Other assets and deferred
charges          202.0         158.2
------------------------- ---------------------
Total assets  $      2,866.0   $     2,328.7
------------------------- ---------------------
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities
   Accounts payable  $        396.1   $      337.1
   Accrued compensation and
benefits           84.9         110.6
   Deferred revenue           17.2          32.9
   Deferred income taxes           1.4           9.9
   Other accrued expenses          101.2          85.6
------------------------- ---------------------
Total current liabilities          600.8         576.1
Long-term debt        1,454.1        1,180.2
Deferred income taxes           9.5           7.7
Deferred revenue           82.2          88.2
Postretirement benefits and
other long-term liabilities          840.2         896.1
------------------------- ---------------------
Total liabilities        2,986.8        2,748.3
Stockholders' deficit         (120.8)        (419.6)
------------------------- ---------------------
Total liabilities and
stockholders' deficit  $      2,866.0   $     2,328.7
------------------------- ---------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------------------------------------------------------------------------
  Three months ended  Twelve months ended
  December 31,  December 31,
----------------------------- --------------------
  2012  2011  2012  2011
------------------ ---------- ---------- ---------
  (In millions)  (In millions)
Operating activities
Net income   $ 319.9   $ 30.0   $ 366.7   $137.1
Adjustments to reconcile
net income to net cash
provided by (used in)
operating activities
  Asset impairments and
related indirect
  inventory obsolescence   5.8  -   5.8  8.7
  Depreciation and
amortization  39.8  35.6  152.2  139.4
  Other   (344.4)   (56.5)   (700.2)   (341.5)
------------------ ---------- ---------- ---------
Net cash provided by (used
in) operating activities  21.1  9.1   (175.5)   (56.3)
Investing Activities
 Purchases of property,
plant & equipment   (63.9)   (52.1)   (207.6)   (163.1)
 Proceeds from sale of
property, plant &
equipment  7.9  1.0  10.1  8.9
 Proceeds from sale-
leaseback of equipment  12.1  -   12.1  -
 Purchase buyouts of
leased equipment  -    (13.4)  -    (13.4)
 Acquisition, net  -    (16.5)  -    (16.5)
------------------ ---------- ---------- ---------
Net cash used in investing
activities   (43.9)   (81.0)   (185.4)   (184.1)
Financing Activities
 Net increase (decrease)
in long-term debt   (123.1)  133.0  273.9  173.6
 Debt issuance costs   (0.5)   (5.2)   (10.6)   (10.9)
 Purchase of
noncontrolling interest  -   -    (4.0)  -
 Employee stock option
exercises  -   -   0.1  4.6
 Purchase of treasury
stock                 -  -    (5.9)   (0.1)
------------------ ---------- ---------- ---------
Net cash provided by (used
in) financing activities   (123.6)  127.8  253.5  167.2
Effect of exchange rate
changes on cash   (0.2)   (1.1)  0.6   (2.2)
------------------ ---------- ---------- ---------
Net increase (decrease) in
cash and cash equivalents   (146.6)  54.8   (106.8)   (75.4)
Cash and cash equivalents
at beginning of period  209.0  114.4  169.2  244.6
------------------ ---------- ---------- ---------
Cash and cash equivalents
at end of period   $ 62.4   $ 169.2   $ 62.4   $ 169.2
------------------ ---------- ---------- ---------
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,
----------------------- ------------------------------
 2012  2011  2012  2011
----------- ----------- -------------- ---------------
 (In millions)  (In millions)
Net income attributable
to AAM Â $ 319.9 Â Â $ 31.1 Â Â $ 367.7 Â Â $142.8
Interest expense 28.9 Â 22.4 Â 101.6 Â 83.9
Income tax expense
(benefit) Â (340.0) Â Â (3.2) Â Â (335.2) Â 1.0
Depreciation and
amortization 39.8 Â 35.6 Â 152.2 Â 139.4
----------- ----------- -------------- ---------------
EBITDA Â $ 48.6 Â Â $ 85.9 Â Â $ 286.3 Â Â $ 367.1
Debt refinancing and
redemption costs 9.7 Â - Â Â 19.8 Â 3.1
Other special charges,
asset impairments,
curtailments and
restructuring
costs((e))Â 6.2 Â 4.8 Â 40.6 Â 16.1
----------- ----------- -------------- ---------------
ADJUSTED EBITDA Â $ 64.5 Â Â $ 90.7 Â Â $ 346.7 Â Â $ 386.3
----------- ----------- -------------- ---------------
Net debt((b)) to capital
     December 31,  December 31,
     2012  2011
-------------- ---------------
(In millions, except
     percentages)
Total debt      $ 1,454.1   $ 1,180.2
Less: cash and cash
equivalents     62.4  169.2
-------------- ---------------
Net debt at end of
period     1,391.7  1,011.0
Stockholders' deficit      (120.8)   (419.6)
-------------- ---------------
Total invested capital
at end of period      $ 1,270.9   $ 591.4
-------------- ---------------
Net debt to capital((c)) Â Â Â Â 109.5% Â 171.0%
-------------- ---------------
Free Cash Flow((d))
 Three months ended  Twelve months ended
 December 31,  December 31,
----------------------- ------------------------------
 2012  2011  2012  2011
----------- ----------- -------------- ---------------
 (In millions)  (In millions)
Net cash provided by
(used in) operating
activities  $ 21.1   $  9.1   $ (175.5)   $ (56.3)
Add: Portion of lease
buyouts included in Net
cash provided by (used
in) operating activities - Â Â 5.2 Â Â - Â Â Â 5.2
----------- ----------- -------------- ---------------
Adjusted Net cash
provided by (used in)
operating activities  $ 21.1   $ 14.3   $ (175.5)   $ (51.1)
Less: Purchases of
property, plant &
equipment, net of
proceeds from sale of
property, plant &
equipment and sale-
leaseback of equipment  (43.9) (51.1)  (185.4)  (154.2)
----------- ----------- -------------- ---------------
Free cash flow  $ (22.8)   $ (36.8)   $ (360.9)   $ (205.3)
----------- ----------- -------------- ---------------
-------------------------------------------------------------------------------
Notes to Supplemental Data
a. We define EBITDA to be earnings before interest, taxes, depreciation and
amortization. Â Adjusted EBITDA is defined as EBITDA excluding the impact of
curtailments, asset impairments, restructuring costs and special charges
related to the closure of the Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility, and debt refinancing and redemption costs, to the
extent applicable. Â We believe that EBITDA and adjusted EBITDA are
meaningful measures of performance as they are commonly utilized by
management and investors to analyze operating performance and entity
valuation. Â 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.
b. Net debt is equal to total debt less cash and cash equivalents.
c. Net debt to capital is equal to net debt divided by the sum of stockholders'
deficit and net debt. Â We believe that net debt 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. Â Other
companies may calculate net debt to capital differently.
d. We define 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. For
purposes of calculating free cash flow, AAM excludes the impact of 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. Â Free cash flow is also a key
metric used in our calculation of incentive compensation. Â Other companies
may calculate free cash flow differently.
e. Special charges and restructuring costs of $6.2 million for three months
ended December 31, 2012 and $40.6 million for the twelve months ended
December 31, 2012 primarily relate to the closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility. Â This special
charge activity includes $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.
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originality of the information contained therein.
Source: American Axle & Manufacturing Holdings, Inc via Thomson Reuters ONE
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