Certain
statements in this Annual Report on Form 10-K are forward-looking in nature
and
relate to trends and events that may affect our future financial position
and
operating results. Such statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. The
terms
“will,” “expect,” “anticipate,” “intend,” “project” and similar words or
expressions are intended to identify forward-looking statements. These
statements speak only as of the date of this Annual Report. The statements
are
based on our current expectations, are inherently uncertain, are subject
to
risks and should be viewed with caution. Actual results and experience
may
differ materially from the forward-looking statements as a result of many
factors, including, but not limited to:
· |
reduced
purchases of our products by General Motors Corporation, DaimlerChrysler
or other customers;
|
· |
reduced
demand for our customers’ products (particularly light trucks and sport
utility vehicles produced by General Motors Corporation and
DaimlerChrysler);
|
· |
our
ability and our suppliers’ ability to maintain satisfactory labor
relations and avoid work stoppages;
|
· |
our
customers’ and their suppliers’ ability to maintain satisfactory labor
relations and avoid work stoppages;
|
· |
our
ability to achieve cost reductions through ongoing restructuring
actions;
|
· |
additional
restructuring actions that may occur;
|
· |
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;
|
· |
our
ability and our customers’ and suppliers’ ability to successfully launch
new product programs on a timely basis;
|
· |
our
ability to attract new customers and programs for new
products;
|
· |
our
ability to develop and produce new products that reflect the market
demand;
|
· |
our
ability to respond to changes in technology or increased
competition;
|
· |
adverse
changes in laws, government regulations or market conditions including
increases in fuel prices affecting our products or our customers’ products
(including the Corporate Average Fuel Economy regulations);
|
· |
adverse
changes in the economic conditions or political stability of our
principal
markets (particularly North America, Europe, South America and
Asia);
|
· |
liabilities
arising from legal proceedings to which we are or may become a
party or
claims against us or our products;
|
· |
risks
of noncompliance with environmental regulations or risks of environmental
issues that could result in unforeseen costs at our
facilities;
|
· |
availability
of financing for working capital, capital expenditures, research
and
development or other general corporate purposes, including our
ability to
comply with financial covenants;
|
· |
our
ability to attract and retain key
associates;
|
· |
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.
(a) |
General
Development of Business
|
General
As
used
in this report, except as otherwise indicated in information incorporated
by
reference, references to “our Company,” "we," "our," "us" or “AAM” mean American
Axle & Manufacturing Holdings, Inc. (Holdings) and its subsidiaries and
predecessors, collectively.
We
are a
premier Tier I supplier to the automotive industry and a worldwide leader
in the
manufacture, engineering, design and validation of driveline and drivetrain
systems and related components and chassis modules for light trucks, sport
utility vehicles (SUVs), passenger cars and crossover vehicles. Driveline
and
drivetrain systems include components that transfer power from the transmission
and deliver it to the drive wheels. Our driveline, drivetrain and related
products include axles, chassis modules, driveshafts, power transfer units,
transfer cases, chassis and steering components, driving heads, crankshafts,
transmission parts and metal-formed products.
Holdings,
a Delaware corporation, is a successor to American Axle & Manufacturing of
Michigan, Inc., a Michigan
corporation,
pursuant to a migratory merger between these entities in 1999.
(b) |
Financial
Information About Segments
|
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report to Stockholders
(Annual Report), section entitled “Financials - Notes to Consolidated Financial
Statements, Note 12 - Segment and Geographic Information.”
(c)
|
Narrative
Description of
Business
|
Company
Overview
We
are
the principal supplier of driveline components to General Motors Corporation
(GM) for its rear-wheel drive (RWD) light trucks and SUVs manufactured
in North
America, supplying substantially all of GM’s rear axle and front four-wheel
drive/ all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms.
Sales to GM were approximately 76% of our next sales in 2006, 78% in 2005
and
80% in 2004.
We
are
the sole-source supplier to GM for certain axles and other driveline products
for the life of each GM vehicle program covered by a Lifetime Program Contract
(LPC). Substantially all of our sales to GM are made pursuant to the LPCs.
The
LPCs have terms equal to the lives of the relevant vehicle programs or
their
respective derivatives, which typically run 6 to 12 years, and require
us to
remain competitive with respect to technology, design and quality. We have
been
successful in competing, and we will continue to compete for future GM
business
upon the expiration of the LPCs.
We
are
also the principal supplier of driveline system products for the Chrysler
Group’s heavy-duty Dodge Ram full-size pickup trucks (Dodge Ram program) and
its
derivatives. As part of this program, we supply a fully integrated
computer-controlled chassis system for the Dodge Ram Power Wagon. Sales
to
DaimlerChrysler Corporation (DaimlerChrysler) were approximately 14% of
our
total net sales in 2006, 13% in 2005 and 11% in 2004.
In
addition to GM and DaimlerChrysler, we supply driveline systems and other
related components to PACCAR Inc., Ford Motor Company, SsangYong Motor
Company,
Harley-Davidson and other original equipment manufacturers (OEMs) and Tier
I
supplier companies such as Magna International, Inc. and The Timken Company.
Our
net sales to customers other than GM were $758.5 in 2006 as compared to
$754.4
million in 2005 and $728.0 million in 2004. This marked the fifth
consecutive year of growth in non-GM sales for AAM.
We
compete in a $27 billion global served market that consists of driveline,
drivetrain and related components and chassis modules for light trucks,
SUVs,
passenger cars and crossover vehicles.
The
following chart sets forth the percentage of total revenues attributable
to our
products for the periods indicated:
|
|
Year
ended December 31,
|
|
|
|
2006
|
|
2005
|
|
2004
|
|
Axles
and driveshafts
|
|
|
85.0
|
%
|
|
83.9
|
%
|
|
84.9
|
%
|
Chassis
components, forged products and other
|
|
|
15.0
|
%
|
|
16.1
|
%
|
|
15.7
|
%
|
Total
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Industry
Trends and Competition
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Industry Trends and
Competition.”
Productive
Materials
We
believe that we have adequate sources of supply of productive materials
and
components for our manufacturing needs. Most raw materials (such as steel)
and
semi-processed or finished items (such as castings) are available within
the
geographical regions of our operating facilities from qualified sources
in
quantities sufficient for our needs.
For
further information regarding productive materials, see Exhibit 13 to this
Form
10-K, Annual Report, section entitled “Financials - Management’s Discussion and
Analysis - Industry Trends and Competition.”
Research
and Development (R&D)
Since
March 1, 1994, we have spent approximately $600 million in R&D focusing on
new product and process development. We plan to continue to invest in the
development of new product, process and systems technologies to improve
efficiency and flexibility in our operations and continue to deliver innovative
new products, chassis modules and integrated driveline systems to our customers.
In
2006,
R&D spending in product, process and systems development increased 13.0%
to
$83.2 million as compared to $73.6 million in 2005 and $68.6 million in
2004.
The
focus of this increasing investment is to develop innovative driveline
and
drivetrain systems and components for passenger cars, light trucks and
SUVs in
the global marketplace. Product development in this area includes power
transfer
units, transfer cases, driveline and transmission differentials, multi-piece
driveshafts, independent rear drive axles and independent front drive axles.
We
continue to focus on electronic integration in our existing products. We
also
continue to support the development of hybrid vehicle systems. Our efforts
in
these areas have resulted in the development of prototypes and various
configurations of these driveline systems for several OEMs throughout the
world.
Backlog
We
typically enter into agreements with our customers to provide axles or
other
driveline or driveline products for the life of our customers’ vehicle programs.
Our new and incremental business backlog includes formally awarded programs
and
incremental content and volume including customer requested engineering
changes.
Our backlog may be impacted by various assumptions such as production volume
estimates, changes in program launch timing and fluctuation in foreign
currency
exchange rates.
Our
new
and incremental business backlog was approximately $1.1 billion at December
31,
2006. We expect to launch over half of our new and incremental business
backlog
in the 2007, 2008 and 2009 calendar years. The balance of the backlog is
planned
to launch between 2010 and 2012.
Patents
and Trademarks
We
maintain and have pending various U.S. and foreign patents and trademarks
and
other rights to intellectual property relating to our business, which we
believe
are appropriate to protect our interest in existing products, new inventions,
manufacturing processes and product developments. We do not believe that
any
single patent or trademark is material to our business nor would expiration
or
invalidity of any patent or trademark have a material adverse effect on
our
business or our ability to compete.
Cyclicality
and Seasonality
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Cyclicality and
Seasonality.”
Environmental
Matters
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Legal
Proceedings.”
Associates
As
of
December 31, 2006, we employed approximately 10,000 associates, approximately
7,000 of which are employed in the United States. Approximately 5,500 associates
are represented by the United Automobile, Aerospace and Agricultural Implement
Workers of America (UAW). Approximately 4,500 associates represented by
the UAW
at our master agreement facilities in Michigan and New York are subject
to a
collective bargaining agreement that expires February 25, 2008. An additional
1,000 associates at MSP and Colfor are also represented by the UAW under
collective bargaining agreements that expire April 17, 2009 and June 2,
2010,
respectively. Approximately 200 associates are represented by the International
Association of Machinists (IAM) under a collective bargaining agreement
which
runs through May 4, 2008. In addition, approximately 500 associates at
Albion,
approximately 2,100 associates at our Silao, Mexico facility (Guanajuato
Gear
& Axle and Guanajuato Forge) and approximately 400 associates at our
Brazilian majority-owned subsidiary are represented by labor unions that
are
subject to collective bargaining agreements. The collective bargaining
agreements at Albion, certain of which may be terminated upon six-month
notice,
expire in 2008 and the agreements in Mexico and Brazil expire annually.
Credit
and Working Capital Practices
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Liquidity and Capital
Resources.”
(d) |
Financial
Information About Geographic
Areas
|
International
operations are subject to certain additional risks inherent in conducting
business outside the United States, such as changes in currency exchange
rates,
price and currency exchange controls, import restrictions, nationalization,
expropriation and other governmental action.
For
further financial information regarding foreign and domestic sales and
export
sales, see Exhibit 13 to this Form 10-K, Annual Report, section entitled
“Financials - Notes to Consolidated Financial Statements, Note 12 - Segment
and
Geographic Information.”
The
following industry and market factors could have an adverse effect (which
could
be material) on our business, results of operations or financial condition
in
the future:
Our
business is significantly dependent on sales to GM and
DaimlerChrysler.
We
are
the principal supplier of driveline components to GM for its rear-wheel
drive
(RWD) light trucks and SUVs manufactured in North America, supplying
substantially all of GM’s rear axle and front 4WD/AWD axle requirements for
these vehicle platforms. We sell products to GM under LPCs, which have
terms
equal to the lives of the relevant vehicle programs or their respective
derivatives of typically 6 to 12 years. The LPCs establish pricing for
products
sold to GM and require us to remain competitive with respect to technology,
design and quality. Substantially all of our sales to GM are made pursuant
to
the LPCs. Sales to GM were approximately 76% of our total sales in 2006,
78% in
2005 and 80% in 2003. We will compete for future GM business upon the
termination of the LPCs with GM. There can be no assurance that we will
remain
competitive with respect to technology, design and quality to GM’s reasonable
satisfaction. Pricing negotiated with GM in future agreements may be more
or
less favorable than the LPCs and other currently applicable agreements.
A
significant reduction in our sales to GM or a significant reduction by
GM of its
production of RWD light trucks or SUVs could have a material adverse effect
on
our results of operations and financial condition. Disputes arising from
any
current or future agreements with GM could have a material adverse impact
on our
relations and our results of operations and financial condition.
We
are
also the principal supplier of driveline system products for the Chrysler
Group’s heavy-duty Dodge Ram full-size pick up trucks (Dodge Ram program) and
their derivatives. In total, sales to DaimlerChrysler accounted for
approximately 14% of our sales in 2006, 13% in 2005 and 11% in 2004. A
significant reduction in our sales to DaimlerChrysler or a significant
reduction
by DaimlerChrysler of its production of the Dodge Ram program could have
a
material adverse effect on our results of operations and financial
condition.
Our
business is dependent on the rear-wheel drive light truck and SUV market
segments in North America.
A
substantial portion of our revenue is derived from products supporting
RWD light
truck and SUV platforms in North America. Sales and production of light
trucks
and SUVs could be affected by many factors, including changes in consumer
demand; product mix shifts favoring other types of light vehicles, such
as
front-wheel drive based crossover vehicles and passenger cars; fuel prices;
and
government regulation, such as the Corporate Average Fuel Economy regulations
(CAFE). A reduction in this market segment could have a material adverse
impact
on our results of operations and financial condition.
Our
business could be adversely affected by work stoppages at GM or DaimlerChrysler.
A
substantial number of employees of our largest two customers, GM and
DaimlerChrysler, and their key suppliers are represented by trade unions,
including the United Automobile, Aerospace and Agricultural Implement Workers
of
America (UAW). GM and DaimlerChrysler each have agreements with the UAW
that
expire in September 2007. Because sales to GM and DaimlerChrysler account
for
approximately 90% of our sales, work stoppages at GM, DaimlerChrysler or
any of
their key suppliers could adversely affect our results of operations and
financial condition.
Our
business could be adversely affected if we fail to maintain satisfactory
labor
relations.
Substantially
all of our hourly associates worldwide are members of industrial trade
unions
employed under the terms of collective bargaining agreements. There can
be no
assurance that future negotiations with our labor unions will be resolved
favorably or that we will not experience a work stoppage that could have
a
material adverse impact on our results of operations and financial condition.
In
addition, there can be no assurance that such future negotiations will
not
result in labor cost increases or other terms and conditions that could
adversely affect our results of operations and financial condition or our
ability to compete for future business.
Our
business could be adversely affected if we fail to improve our U.S. cost
structure.
We
may
not be able to achieve the level of cost reductions required to sustain
global
cost competitiveness in our industry segment, particularly in the U.S.
A
significant portion of our U.S. operations have labor agreements that are
not
globally cost competitive. Substantially all of our hourly associates in
the
U.S. are represented by the UAW. Approximately 80% of our union represented
associates are covered by a national collective bargaining agreement with
the
UAW that expires in February 2008. This agreement provides guaranteed wage
and
benefit levels throughout its term and ensures significant income and employment
security for our UAW represented associates. This agreement limits our
ability
to close plants and divest businesses. This agreement may also limit our
ability
to change local work rules and practices to encourage flexible manufacturing
and
other efficiency-related improvements. Our ability to compete for future
business may be adversely impacted by this agreement with the UAW and we
may be
unsuccessful in other cost reduction efforts related to material costs,
health
care, energy and other cost drivers.
We
may incur additional special charges and asset impairment
charges.
We
incurred special charges and asset impairments totaling $377.9 million
in 2006.
We may incur additional special charges and asset impairments in the future
as a
result of our continued efforts to achieve cost reductions through restructuring
actions. See Exhibit 13 to this Form 10-K, Annual Report, section entitled
“Financials - Management’s Discussion and Analysis - Results of Operations”
incorporated by reference herein.
Our
business could be adversely affected by an increase in the price of raw
materials.
Worldwide
commodity market conditions have resulted in ongoing increases in the cost
of
steel and other metallic materials. Accordingly, the cost of such steel
and
metallic materials needed for our products may continue to increase. If
we are
unable to pass these cost increases on to our customers, it could have
a
material adverse effect on our results of operations and financial
condition.
Our
business could be adversely affected by disruptions in our supply
chain.
We
depend
on a limited number of suppliers for certain key components and materials
needed
for our products. We rely
upon, and expect to continue to rely upon, certain suppliers for critical
components and materials that are not readily available in sufficient volume
from other sources. These supply chain characteristics make us susceptible
to
supply shortages, price increases or work stoppages at a supplier. There
can be
no assurance that the suppliers of these materials will be able or willing
to
meet our future needs on a timely basis. A significant disruption in the
supply
of these materials could have a material adverse effect on our results
of
operations and financial condition.
Our
company and our customers may not be able to successfully launch new product
programs on a timely basis.
Certain
of our customers are preparing to launch new product programs for which
we will
supply newly developed driveline system products and related components.
Some of
these new product program launches have required, and will continue to
require,
substantial capital investment by AAM. We may not be able to install and
certify
the equipment needed to produce products for these new product programs
in time
for the start of production. There can be no assurance that we will successfully
complete the transition of our manufacturing facilities and resources to
support
these new product programs or any other future product programs. Accordingly,
the launch of new product programs may adversely affect production rates
or
other operational efficiency and profitability measures at our facilities.
In
addition, our customers may not successfully execute the launch of these
product
programs, or any additional future product program for which we will supply
products, on schedule.
Our
company may not realize all of the revenue expected from our new and incremental
business backlog.
The
realization of incremental revenues from awarded business is inherently
subject
to a number of risks and uncertainties, including the accuracy of customer
estimates relating to the number of vehicles to be produced in new and
existing
product programs and the timing of such production. It is also possible
that our
customers may choose to delay or cancel a product program for which we
have been
awarded new business. Our revenues, operating results, and financial position
could be adversely affected relative to our current financial plans if
we do not
realize substantially all the revenue from our new and incremental business
backlog.
We
are under continuing pressure from our customers to reduce our
prices.
Annual
price reductions are a common practice in the automotive industry. The
majority
of our products are sold under long-term contracts with prices scheduled
at the
time the contracts are established. Certain of our contracts require us
to
reduce our prices in subsequent years and most of our contracts allow us
to
adjust prices for engineering changes. If we must accommodate a customer’s
demand for higher annual price reductions and are unable to offset the
impact of
any such price reductions through continued technology improvements, cost
reductions and other productivity initiatives, our results of operations
and
financial condition could be adversely affected .
Our
business faces substantial competition.
The
automotive industry is highly competitive. Our competitors include the
driveline
component manufacturing facilities of certain existing original equipment
manufacturers (OEMs), as well as many other domestic and foreign companies
possessing the capability to produce some or all of the products we supply.
Some
of our competitors are affiliated with OEMs and others have economic advantages
as compared to our business, such as lower labor and benefit costs. Technology,
design, quality, delivery and cost are the primary elements of competition
in
our industry segment. As a result of these competitive pressures and other
industry trends, OEMs and suppliers are developing strategies to reduce
cost.
These strategies include supply base consolidation and global sourcing.
Our
business may be adversely affected by increased competition from suppliers
benefiting from OEM affiliate relationships or financial and other resources
that we do not have, including governmental assistance. Our business may
also be
adversely affected if we do not sustain our ability to meet customer
requirements relative to technology, design, quality, delivery and
cost.
Our
company’s global operations are subject to political and other economic risks
and uncertainties.
International
operations are subject to certain risks inherent in conducting business
outside
the U.S., such as changes in currency exchange rates, tax laws, price and
currency exchange controls, import restrictions, nationalization, expropriation
and other governmental action.
In
addition, the U.S. economy may also be adversely affected by political
events
and domestic or international terrorist events and hostilities. These
uncertainties could have a material adverse effect on the continuity of
our
business and our results of operations and financial condition. As we continue
to expand our business globally, our success will depend, in part, on our
ability to anticipate and effectively manage these and other risks.
Our
business could be adversely affected by the cyclical nature of the automotive
industry.
Our
operations are cyclical because they are directly related to worldwide
automotive production, which is itself cyclical and dependent on general
economic conditions and other factors, such as interest rates, fuel prices
and
consumer confidence. Our business may be adversely affected by an economic
decline that results in a reduction of automotive production and sales
by our
largest customers. Our business may also be adversely affected by reduced
demand
for the product programs we currently support, or if we fail to obtain
sales
orders for new or redesigned products that replace our current product
programs.
Our
company faces rising costs for pension and other postretirement benefit
obligations.
We
have
significant pension and other postretirement benefit obligations to our
employees and retirees. Our ability to satisfy these funding requirements
will
depend on our cash flow from operations and our ability to access credit
and the
capital markets. The funding requirement of these benefit plans, and the
related
expense reflected in our financial statements, is affected by several factors
that are subject to an inherent degree of uncertainty, including governmental
regulation. Key assumptions used to value these benefit obligations, funding
requirements and expense recognition include the discount rate, the expected
long-term rate of return on pension assets and the health care cost trend
rate.
If the actual trends in these factors are less favorable than our assumptions,
it could have an adverse affect on our results of operations and financial
condition.
We
may incur material losses and costs as a result of product liability and
warranty claims and litigation.
We
are
exposed to warranty and product liability claims in the event that our
products
fail to perform as expected, and we may be required to participate in a
recall
of such products. Our largest customer, GM, has recently extended their
warranty
protection for new and used vehicles to 5 years or 100,000 miles. Other
OEMs
have also similarly extended their warranty programs. This trend will put
additional pressure on the supply base to improve quality systems. This
trend
may also result in higher cost recovery claims by OEMs to suppliers whose
products incur a higher rate of warranty claims. Historically, we have
experienced negligible warranty-related expenditures due to contractual
agreements with our customers and ongoing improvements in the quality,
reliability and durability of our products. If our customers demand higher
warranty-related cost recoveries, or if our products fail to perform as
expected, it could have a material adverse impact on our results of operations
or financial condition.
We
are
also involved in various legal proceedings incidental to our business.
Although
we believe that none of these matters is likely to have a material adverse
effect on our results of operations or financial condition, there can be
no
assurance as to the ultimate outcome of any such legal proceeding or any
future
legal proceedings.
Our
business is subject to costs associated with environmental, health and
safety
regulations.
Our
operations are subject to various federal, state, local and foreign laws
and
regulations governing, among other things, emissions to air, discharge
to waters
and the generation, handling, storage, transportation, treatment and disposal
of
waste and other materials. We believe that our operations and facilities
have
been and are being operated in compliance, in all material respects, with
such
laws and regulations, many of which provide for substantial fines and criminal
sanctions for violations. The operation of automotive parts manufacturing
facilities entails risks in these areas, however, and there can be no assurance
that we will not incur material costs or liabilities. In addition, potentially
significant expenditures could be required in order to comply with evolving
environmental, health and safety laws, regulations or other pertinent
requirements that may be adopted or imposed in the future.
Our
company’s ability to operate effectively could be impaired if we lose key
personnel.
Our
success depends, in part, on the efforts of our executive officers and
other key
associates. In addition, our future success will depend on, among other
factors,
our ability to continue to attract and retain qualified personnel. The
loss of
the services of our executive officers or other key associates, or the
failure
to attract or retain associates, could have a material adverse effect on
our
results of operations and financial condition.
Our
business may be adversely affected by a violation of financial
covenants
Our
Revolving Credit Facility contains financial covenants which require us
to
comply with a leverage ratio and to maintain a minimum level of net worth.
A
violation of either of these covenants could result in a default under
this
facility, which would permit the lenders to accelerate the repayment of
any
borrowings outstanding at that time. A default or acceleration under the
Revolving Credit Facility may result in defaults under our other debt agreements
and may adversely affect our results of operations and financial
condition.
None
The
following is a summary of our principal facilities:
Name
|
|
Sq.
Feet
|
|
Type
of
Interest
|
|
Function
|
Detroit
Gear & Axle
Detroit,
MI
|
|
2,535,000
|
|
Owned
|
|
Rear
and front axles, forged products.
|
Guanajuato
Gear & Axle,
Guanajuato,
Mexico
|
|
1,394,000
|
|
Owned
|
|
Rear
axles and driveshafts, front axles and front auxiliary
driveshafts
|
Guanajuato
Forge
Guanajuato,
Mexico
|
|
111,000
|
|
Owned
|
|
Forged
products
|
Buffalo
Gear, Axle & Linkage
Buffalo,
NY
|
|
1,199,000
|
|
Owned
|
|
Rear
axles and steering linkages
|
Three
Rivers Driveline
Three
Rivers, MI
|
|
813,040
|
|
Owned
|
|
Rear
axles and driveshafts, front auxiliary driveshafts and universal
joints
|
Albion
Automotive
Glasgow,
Scotland
Lancashire,
England
|
|
464,000
135,000
|
|
Leased
Leased
|
|
Front
and rear axles for medium and heavy-duty
Crankshafts
and fabricated parts
|
Colfor
Manufacturing, Inc.
Malvern,
OH
Minerva,
OH
Salem,
OH
|
|
234,000
190,000
189,000
|
|
Owned
Owned
Owned
|
|
Forged
products
Forged
products
Forged
products
|
Tonawanda
Forge
Tonawanda,
NY
|
|
400,000
|
|
Owned
|
|
Forged
products
|
Cheektowaga
Plant
Cheektowaga,
NY
|
|
116,000
|
|
Owned
|
|
Machining
of forged products
|
AAM
do Brasil
Araucária,
Brazil
|
|
264,000
|
|
Owned
|
|
Machining
of forged and cast products
|
Corporate
Headquarters
Detroit,
MI
|
|
252,000
|
|
Owned
|
|
Executive
and administrative offices
|
Changshu
Gear & Axle
Changshu,
China
|
|
191,000
|
|
Owned
|
|
Rear
axles
|
MSP
- Industries
Oxford,
MI
|
|
125,000
|
|
Leased
|
|
Forged
products
|
Detroit
South Campus
Detroit,
MI
|
|
120,000
|
|
Owned
|
|
Quality
Engineering technical, process development and safety training
centers
|
Technical
Center
Rochester
Hills, MI
|
|
104,000
|
|
Owned
|
|
R&D,
design engineering, metallurgy, testing and validation
|
AAM
Europe
Bad
Homburg, Germany
|
|
24,000
|
|
Leased
|
|
European
headquarters and technical center
|
AAM
Poland
Olawa,
Poland
|
|
14,500
|
|
Owned
|
|
Transmission
differentials
|
AAM
India
Pune,
India
|
|
6,600
|
|
Leased
|
|
Engineering,
information technologies and support
services
|
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Legal
Proceedings.”
None
Executive
Officers of the Registrant
Name
__________
|
Age
|
Position
|
Richard
E. Dauch(3)…………………….
|
64
|
Co-Founder,
Chairman of the Board & Chief Executive Officer
|
Yogendra
N. Rahangdale………………
|
59
|
President
& Chief Operating Officer
|
David
C. Dauch ………………………..
|
42
|
Executive
Vice President - Commercial & Strategic Development
|
Richard
F. Dauch ……………………...
|
46
|
Executive
Vice President - Worldwide Manufacturing
|
John
J. Bellanti…………………………
|
52
|
Vice
President - Manufacturing Services, Capital Planning & Cost
Estimating
|
Marion
A. Cumo, Sr.…………………..
|
64
|
Vice
President - Special Projects
|
Thomas
O. Delanoy……………………
|
55
|
Vice
President - Materials Management & Logistics
|
Michael
C. Flynn………………………
|
49
|
Vice
President - Procurement
|
John
E. Jerge………………...…………
|
45
|
Vice
President - Human Resources
|
Patrick
S. Lancaster……………………
|
59
|
Vice
President, Chief Administrative Officer & Secretary
|
Allan
R. Monich ………………………
|
53
|
Vice
President - Quality Assurance & Customer
Satisfaction
|
Steven
J. Proctor…………………….…
|
50
|
Vice
President - Sales & Marketing
|
Alberto
L. Satine………………………
|
50
|
Vice
President - Strategic & Business Development
|
Abdallah
F. Shanti...…………………..
|
46
|
Vice
President - Information Technology, Electronic Product Integration
&
Chief Information Officer
|
|
|
Michael
K. Simonte…………………...
|
43
|
Vice
President - Finance & Chief Financial Officer
|
John
S. Sofia…………………………..
|
47
|
Vice
President - Engineering & Product Development
|
Patrick
J. Spohn……………………….
|
47
|
Vice
President & Controller
|
Richard
E. Dauch,
age
64, is
Co-Founder, Chairman of the Board & Chief Executive Officer of AAM, and is
also Chairman of the Executive Committee of the Board of Directors. He
has been
Chief Executive Officer and a member of the Board of Directors since the
Company
began operations in March 1994. In October 1997, he was named Chairman
of the
Board of Directors. He was also President of AAM from March 1994 through
December 2000. Prior to March 1994, he spent 12 years at Chrysler Corporation
where he established the just-in-time materials management system and the
three-shift manufacturing vehicle assembly process. He is a retired officer
from
the Chrysler Corporation. Mr. Dauch’s last position at Chrysler, in 1991 was
Executive Vice President of Worldwide Manufacturing. Mr. Dauch also served
as
Group Vice President of Volkswagen of America, where he established the
manufacturing facilities and organization for the successful launch of
the first
major automotive transplant in the United States. Mr. Dauch has more than
40
years of experience in the automotive industry. Mr. Dauch has been named
the
1996 Worldwide Automotive Industry Leader of the Year by the Automotive
Hall of
Fame, the 1997 Manufacturer of the Year by the Michigan Manufacturer’s
Association, and the 1999 Michiganian of the Year by The
Detroit News.
Mr.
Dauch also served as Chairman of the National Association of Manufacturers
(N.A.M.). He has lectured extensively on the subject of manufacturing and
authored the book, Passion
for Manufacturing,
which
is distributed in colleges and universities globally and in several languages.
Mr. Dauch is the father of David C. Dauch and Richard F. Dauch.
Yogendra
(Yogen) N. Rahangdale, age
59,
has been President & Chief Operating Officer since October 2005. Prior to
that, he served as Executive Vice President - Operations & Planning (since
May 2004); Executive Vice President & Chief Technology Officer (since
September 2003); Group Vice President & Chief Technology Officer (since
January 2001); Vice President, Manufacturing and Procurement Services (since
March 2000); Vice President, Manufacturing Services (since April 1999);
Executive Director, Manufacturing Services (since March 1998) and Director,
Corporate Manufacturing Planning (since joining our Company in August 1995).
Prior to joining our Company, Mr. Rahangdale spent 12 years with Chrysler
Corporation in a variety of positions including Manager, Paint & Energy
Management.
David
C. Dauch, age
42,
has been Executive Vice President - Commercial & Strategic Development since
January 2005. Prior to that, he served as Senior Vice President, Commercial
(since May 2004); Senior Vice President, Sales, Marketing & Driveline
Division (since September 2003); Vice President, Manufacturing - Driveline
Division (since January 2001); Vice President, Sales and Marketing (since
1998)
and Director of Sales, GM Full-Size Truck Programs (since May 1996). Mr.
Dauch
joined our Company in July 1995 as Manager, Sales Administration. Prior
to
joining our Company, Mr. Dauch held various positions at Collins & Aikman
Products Company, including Sales Manager. Mr. Dauch is a member of the
Board of
Directors of Collins & Aikman. David C. Dauch is a son of Richard E. Dauch.
Richard
F. Dauch,
age 46,
has been Executive Vice President - Worldwide Manufacturing since October
2005.
Prior to that, he served as President - Metal Formed Products Division
(since
January 2005); Vice President, Metal Formed Products Division (since May
2004);
Vice President, Investor Relations (since September 2003); Vice President,
Financial Planning (since September 2002); Vice President, Sales and Marketing
(since January 2002); Vice President, Sales (since January 2001); Vice
President, Manufacturing - Driveline Division (since July 1999); Vice President,
Manufacturing (since August 1998); Director, Strategic and Capacity Planning
(since February 1998) and Plant Manager, Detroit Gear & Axle Plant (since
May 1996). Mr. Dauch joined our Company in May 1995 as Corporate Manager,
Labor
Relations, and served in that position until May 1996. Prior to joining
our
Company, Mr. Dauch served as a Senior Business Manager and Business Unit
Manager
with United Technologies Corporation from July 1992. Prior to his automotive
career, Mr. Dauch served in the U.S. Army for eleven years, with assignments
including Platoon Leader and Company Commander. Richard F. Dauch is a son
of
Richard E. Dauch.
John
J. Bellanti,
age 52,
has been Vice President - Manufacturing Services, Capital Planning & Cost
Estimating since July 2006. Prior to that, he served as Vice President
-
Engineering & Chief Technology Officer (since May 2004); Vice President,
Engineering & Product Development (since September 2003); Executive
Director, Manufacturing Services (since March 2000); Director, Manufacturing
Engineering (since June 1998); Director Advanced Programs (since May 1996)
and
Plant Manager, Detroit Forge Plant (since joining our Company in March
1994).
Prior to joining our Company, Mr. Bellanti, worked 22 years at General
Motors in
various manufacturing and engineering positions, most recently serving
as
Production Manager. Mr. Bellanti was on the Board of Directors for the
North
American Forging Industry Association from 1999 through 2003, serving as
President of that Association in 2002.
Marion
A. Cumo, Sr., age
64,
has been Vice President - Special Projects since October 2005. Prior to
that, he
served as Vice President - Driveline Division (since May 2004); Vice President,
Program Management & Launch (since September 2002); Vice President,
Materials Management and Logistics (since May 1996) and Vice President,
Quality
Assurance and Customer Satisfaction (since joining our Company in March
1994).
Prior to joining our Company, Mr. Cumo spent 11 years working as a manufacturing
executive at Chrysler Corporation. His most recent title at Chrysler was
General
Plants Manager of Assembly Operations. After leaving Chrysler, Mr. Cumo
became
president of Tri-County Chrysler Products in Peebles/West Union, Ohio,
and also
worked as an automotive manufacturing consultant. Mr. Cumo began his career
at
General Motors and has over 39 years experience in the global automotive
industry including positions with General Motors, Volkswagen of America
and
Chrysler Corporation.
Thomas
O. Delanoy,
age 55,
has been Vice President - Materials Management & Logistics since October
2004. Prior to that, he served as Executive Director Production Control
and
Materials Management (since September 2002); Director, Materials Management
(since March 2000); Director of Business Integration (since December 1998);
Plant Manager, Detroit Forge Plant (since May 1996); Plant Manager, Detroit
Gear
& Axle Plant (since August 1994) and Production Manager (since joining our
Company in March 1994). Prior to joining our Company, Mr. Delanoy served
at
Chrysler Corporation in a variety of executive manufacturing
positions.
Michael
C. Flynn, age
49,
has been Vice President - Procurement since November 2005. Prior to that,
he
served as Executive Director, Sales (since June 2004); Director, Sales
(since
August 2002); Manager, Manufacturing (since June 2001); Director, Direct
Material Purchasing (since February 1998); Manager, Released Programs (since
July 1997); and Platform Manager (since July 1996) and Purchasing Agent
(since
joining our Company in March 1994). Prior to joining our Company, Mr. Flynn
served at General Motors for 11 years in a variety of manufacturing, purchasing
and engineering positions.
John
E. Jerge,
age 45,
has been Vice President - Human Resources since September 2004. Prior to
that,
he served as Executive Director, Labor Relations (since April 2004); Director,
Labor Relations (since January 2003); Plant Manager, Detroit Gear & Axle
Plant (since March 2000); Plant Manager, Buffalo Gear Axle & Linkage (since
November 1997); Manufacturing Manager, Buffalo Gear Axle & Linkage (since
March 1996); Area manager of Axles and Area Manager of Linkage (since joining
our Company in March 1994). Prior to joining our Company, Mr. Jerge began
his
automotive career at Chrysler Corporation in 1984 where he progressed through
a
variety of manufacturing, engineering and plant management
positions.
Patrick
S. Lancaster,
age 59,
has been Vice President, Chief Administrative Officer & Secretary since
September 2003. Prior to that, he served as Group Vice President, Chief
Administrative Officer & Secretary (since January 2001); Vice President
& Secretary (since March 2000); Vice President, General Counsel &
Secretary (since November 1997) and General Counsel & Secretary (since June
1994). Mr. Lancaster is a member of the State Bar of Michigan.
Allan
R. Monich,
age 53,
has been Vice President - Quality Assurance & Customer Satisfaction since
July 2006. Prior to that, he served as Vice President - Program Management
&
Capital Planning (since October 2005); Vice President - Program Management
&
Launch (since May 2004); Vice President, Manufacturing Forging Division
(since
October 2001); Vice President, Human Resources (since 1998); Vice President,
Personnel (since November 1997) and Plant Manager for the Buffalo Gear
&
Axle Plant in Buffalo, NY since the formation of our Company in March 1994.
Prior to joining our Company in March 1994, he worked for General Motors
for 22
years in the areas of manufacturing, quality assurance, sales and engineering,
including four years as a Plant Manager.
Steven
J. Proctor,
age 50,
has been Vice President - Sales & Marketing since June 2004. Prior to that,
he served as Executive Director, Driveline Sales & Marketing (since
September 2003); President and Chief Operating Officer of AAM do Brasil
(since
September 1999); Director, GMT-360, I-10/GMT-355 (since December 1998);
Director, Worldwide Programs (since February 1998); Director, Strategic
Planning
(since July 1996) and Director, General Motors Programs (since joining
our
Company in March 1994). Prior to joining our Company, Mr. Proctor worked
for
General Motors for 20 years in the areas of product and industrial engineering,
production, material management and sales.
Alberto
L. Satine,
age 50,
has been Vice President - Strategic & Business Development since November
2005. Prior to that, he served as Vice President - Procurement (since January
2005); Executive Director, Global Procurement Direct Materials (since January
2004); General Manager, Latin American Driveline Sales and Operations (since
August 2003) and General Manager of International Operations (since joining
our
Company in May 2001). Prior to joining our Company, Mr. Satine held several
management positions at Dana Corporation, including the position of President
of
Dana’s Andean Operations in South America from 1997 to 2000 and General Manager
of the Spicer Transmission Division in Toledo, Ohio from 1994 to
1997.
Abdallah
F. Shanti,
age 46,
has been Vice President - Information Technology, Electronic Product Integration
& Chief Information Officer since January 2005. Prior to that, he served
as
Vice President, Procurement, Information Technology & Chief Information
Officer (since September 2002) and Executive Director, Information Technology
& Chief Information Officer (since joining our Company in December 1999).
Prior to joining our Company, Mr. Shanti served as Vice President, Global
Information Technology at LucasVarity PLC. Mr. Shanti began his career
with
GM/Electronic Data Systems Corporation in 1984 where he served in a variety
of
information technology leadership roles providing services for automotive
and
manufacturing corporations. Mr. Shanti has over 22 years of experience
in the
global automotive industry including positions with General Motors, where
he
most recently served as General Director, Systems Engineering; LucasVarity
PLC;
Perot Systems Corporation and GM/Electronic Data Systems
Corporation.
Michael
K. Simonte,
age 43,
has been Vice President - Finance & Chief Financial Officer (CFO) since
January 2006. Simonte previously served as Vice President & Treasurer (since
May 2004); and Treasurer (since September 2002). Simonte joined AAM in
December
1998 as Director, Corporate Finance. In that role, he coordinated all of
the
financial accounting, planning and reporting activities of the company
until he
was appointed as Treasurer in September 2002. Prior to joining our Company,
Mr.
Simonte served as Senior Manager at the Detroit office of Ernst & Young LLP.
Mr. Simonte is a certified public accountant.
John
S. Sofia,
age 47,
has been Vice President - Engineering & Product Development since July 2006.
Prior to that, he served as Vice President - Quality Assurance & Customer
Satisfaction (since October 2004); Director, Advanced Quality Planning
(since
August 2002); Plant Manager, Detroit Forge (since April 2001); Director,
Product
Engineering (since June 2000); Manager of the Current Production & Process
Engineering Group (since September 1997) and Engineering Manager, (since
joining
our Company in May 1994). Prior to joining our Company, Mr. Sofia served
at
Chrysler Corporation in a variety of manufacturing and engineering
positions.
Patrick
J. Spohn, age
47,
has been Vice President & Controller since January 2006. Prior to that, he
served as Corporate Controller (since August 1999); Finance Manager, Detroit
Gear & Axle Plant (since November 1997) and Manager, Financial Planning
& Analysis (since January 1997). Mr. Spohn has over 25 years of experience
in the global automotive industry including 11 years at ITT Automotive
where he
most recently served as Division Controller, Switches and Controller of
Precision Die Castings.
Our
common stock, par value $0.01 per share, is listed for trading on the New
York
Stock Exchange under the symbol “AXL.”
Dividends
In
April
2004, we declared our first quarterly cash dividend of $0.15 per share.
On an
annualized basis, the dividend payout equates to $0.60 per share. We paid
$31.0
million, $30.4 million and $23.0 million to stockholders of record under
the
quarterly cash dividend program during 2006, 2005 and 2004, respectively.
Securities
Authorized for Issuance Under Equity Compensation Plans
The
information regarding our equity compensation plans is incorporated by
reference
from Item 12 of this Form 10-K “Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.”
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Five Year Financial Summary.”
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis.”
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section
entitled
“Financials - Management’s Discussion and Analysis - Market Risk.”
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, sections
entitled
“Financials - Consolidated Financial Statements” and “Financials - Notes to
Consolidated Financial Statements.”
None
Under
the
direction of our Chief Executive Officer and Chief Financial Officer, we
evaluated our disclosure controls and procedures and internal control over
financial reporting and concluded that (1) our disclosure controls and
procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”)) were
effective as of December 31, 2006, and (2) no change in internal control
over
financial reporting occurred during the fourth fiscal quarter ended
December 31, 2006 that has materially affected, or is reasonably likely
to
materially affect, our internal control over financial reporting.
Management’s
Report on Internal Control Over Financial Reporting and the Report of
Independent Registered Public Accounting Firm are incorporated by reference
from
Item 8 of this Form 10-K “Financial Statements and Supplementary
Data.”
There
has
been no change in our internal control over financial reporting during
the
fourth fiscal quarter ended December 31, 2006 that has materially affected,
or
is reasonably likely to materially affect, our internal control over financial
reporting.
None
Part
III
The
information required by Item 401(b), (d) (e) and (f) of Regulation S-K
about our
executive officers is furnished in Part I of this Form 10-K, Annual Report
under
the caption “Executive Officers of the Registrant.” All other information
required by Item 10 is incorporated herein by reference from our Proxy
Statement
which we expect to file on or about March 22, 2007.
We
have
adopted a code of ethics that applies to our Chief Executive Officer, Chief
Administrative Officer and Chief Financial Officer and the senior financial
executives who report directly to our Chief Financial Officer. This code
of
ethics is contained within our code of business conduct which is available
on
our website at www.aam.com.
We
will
post any amendment to or waiver from the provisions of the Code of Business
Conduct that applies to executive officers or directors of the
Company.
The
information required by Item 11 is incorporated by reference from our Proxy
Statement.
The
following table summarizes information as of December 31, 2006 relating
to our
equity compensation plans pursuant to which grants of stock options, restricted
stock, restricted stock units and other rights to acquire shares of our
common
stock may be made from time to time.
Equity
Compensation Plan Information
|
|
(a)
|
|
(b)
|
|
(c)
|
|
Plan
Category
|
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
|
Weighted
-average exercise price of outstanding options, warrants and
rights
|
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
Equity
compensation plans approved
by security holders
|
|
|
6,776,763
|
|
$
|
23.10
|
|
|
3,656,015
|
|
Equity
compensation plans not approved
by security holders
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Total
|
|
|
6,776,763
|
|
$
|
23.10
|
|
|
3,656,015
|
|
The
information required by Item 12 under Item 403 of Regulation S-K is incorporated
by reference from our Proxy Statement.
The
information required by Item 13 under Items 404 and 407(a) of Regulation
S-K is
incorporated by reference from our Proxy Statement.
The
information required by Item 9(e) of Schedule 14A is incorporated by reference
from our Proxy Statement.
The
following documents are filed as a part of this report:
1. |
All
Financial Statements
|
Management’s
Report on Internal Control Over Financial Reporting
Reports
of Independent Registered Public Accounting Firm
Consolidated
Statements of Operations
Consolidated
Balance Sheets
Consolidated
Statements of Cash Flows
Consolidated
Statements of Stockholders’ Equity
Notes
to
Consolidated Financial Statements
The
above
financial statements are filed as Exhibit 13 to this Form 10-K.
2. |
Financial
Statement Schedules
|
Schedule
II - Valuation and Qualifying Accounts and the report of Deloitte & Touche
LLP, Independent Registered Public Accounting Firm, on our consolidated
financial statement schedule (Schedule II) for the years ended December
31,
2006, 2005 and 2004 are filed as part of this form 10-K.
All
other
schedules have been omitted because they are not applicable or not
required.
The
following exhibits were previously filed unless otherwise
indicated:
Number
|
|
Description
of Exhibit
|
|
|
|
|
3.01
|
|
Amended
and Restated Certificate of Incorporation
|
|
|
|
(Incorporated
by reference to Exhibit 3.01 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
3.02
|
|
Bylaws
|
|
|
|
(Incorporated
by reference to Exhibit 3.01 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
4.01
|
|
Specimen
Certificate for shares of the Company's Common Stock
|
|
|
|
(Incorporated
by reference to Exhibit 4.01 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
4.02 |
|
5.25%
Senior Notes due 2014, Indenture, dated as of February 11, 2004,
among
AAM, Inc., as issuer, the Company, as guarantor, and BNY Midwest
Trust
Company, as trustee |
|
|
|
(Incorporated
by reference to Exhibit 4.02 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 31,
2003) |
|
|
|
|
4.03
|
|
Senior
Convertible Notes due 2024, Indenture, dated as of February 11, 2004,
among the Company, as issuer, AAM, Inc., as guarantor, and BNY Midwest
Trust Company, as trustee |
|
|
|
(Incorporated
by reference to Exhibit 4.03 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 31,
2003) |
|
|
|
10.01
|
|
Asset
Purchase Agreement, dated February 18, 1994, between AAM, Inc.
and GM, and
all amendments thereto
|
|
|
|
(Incorporated
by reference to Exhibit 10.01 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
++10.02
|
|
Component
Supply Agreement, dated February 28, 1994, between AAM, Inc.
and GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.02 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
10.03
|
|
Amendment
No. 1 to Component Supply Agreement, dated February 28, 1994,
between AAM,
Inc. and GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.02(a) filed with American Axle &
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
++10.04
|
|
Amendment
No. 2 to Component Supply Agreement, dated February 7, 1996,
between AAM,
Inc. and GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.02(b) filed with American Axle &
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
++10.05
|
|
Amended
and Restated Memorandum of Understanding (MOU), dated September
2, 1997,
between AAM, Inc. and GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.02(f) filed with American Axle &
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
10.06
|
|
MOU
Extension Agreement, dated September 22, 1997, between AAM,
Inc. and
GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.02(g) filed with American Axle &
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
++10.07
|
|
Agreement
dated February 17, 1997, between AAM, Inc. and GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.05 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
++10.08
|
|
Letter
dated December 13, 1996, by AAM, Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.05(a) filed with American Axle
&
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
10.09
|
|
The
Amended and Restated American Axle & Manufacturing of Michigan, Inc.
Management Stock Option Plan
|
|
|
|
(Incorporated
by reference to Exhibit 10.08 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
10.10
|
|
Nonqualified
Stock Option Agreement, dated October 30, 1997, between AAM,
Inc. and
Richard E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.09 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
Number
|
|
Description
of Exhibit |
|
|
|
10.11
|
|
Indemnification
Agreement, dated February 28, 1994, between AAM, Inc. and
GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.10 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
‡10.12
|
|
Employment
Agreement, dated November 6, 1997, by and between the Company
and Richard
E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.11 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
|
10.13
|
|
Letter
Agreement, dated August 18, 1997, between AAM Acquisition,
Inc. and
Richard E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.11(a) filed with American Axle
&
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
10.14
|
|
Recapitalization
Agreement, dated as of September 19, 1997, among AAM, Inc.,
the Company,
Jupiter Capital Corporation, Richard E. Dauch, Morton E.
Harris and AAM
Acquisition, Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.12 filed with American Axle & Manufacturing
Holdings, Inc. Registration Statement on Form S-1 (Registration
No.
333-53491))
|
|
|
|
10.15
|
|
Disposition
Agreement, dated as of December 10, 1998, between American
Axle &
Manufacturing of Michigan, Inc. and Richard E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.13(a) filed with American Axle
&
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
|
|
|
|
++10.16
|
|
Lifetime
Program Contract for New M-SUV Products, between GM and AAM,
Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.22(c) filed with American Axle
&
Manufacturing Holdings, Inc. Registration Statement on Form
S-1
(Registration No. 333-53491))
|
10.17
|
|
Letter
Agreement, dated as of December 15, 1998, as amended January
11, 2000,
between B.G. Mathis and the Company
|
|
|
|
(Incorporated
by reference to Exhibit 10.01 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended March
31,
2000)
|
++10.18
|
|
Settlement
Agreement dated as of July 28, 2000 by and between AAM, Inc.
and
GM
|
|
|
|
(Incorporated
by reference to Exhibit 10.01 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended September
30,
2000)
|
|
|
|
|
‡10.19
|
|
Amendment
dated December 20, 2000 to Employment Agreement dated as of
November 6,
1997 by and between the Company and Richard E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.07 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 31,
2000)
|
|
|
|
|
10.20
|
|
Lifetime
Program Contract between General Motors Corporation North American
Operations (Buyer) and AAM, Inc. (Seller)
|
|
|
|
(Incorporated
by reference to Exhibit 10.01 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended June
30,
2001)
|
|
|
|
|
10.21
|
|
Agreement
dated as of June 14, 2001 by and between GM and AAM,
Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.02 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended June
30,
2001)
|
Number
|
|
Description
of Exhibit |
++10.22
|
|
Agreement
dated as December 21, 2001 by and between GM and AAM,
Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.47 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 30,
2001)
|
|
|
|
|
‡10.23
|
|
Second
Amendment, dated as of December 10, 2001, to the Employment
Agreement,
dated as of November 6, 1997, by and between the Company, a
Delaware
corporation and Richard E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.49 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 30,
2001)
|
|
|
|
|
10.24
|
|
Lifetime
Program Contract for GMT-900 Products, between GM and AAM,
Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.51 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended June
30,
2003)
|
|
|
|
|
10.25
|
|
Continuity
Agreement dated as of September 29, 2003 between the Company
and Richard
E. Dauch
|
|
|
|
(Incorporated
by reference to Exhibit 10.52 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended September
30,
2003)
|
|
|
|
|
10.26
|
|
Continuity
Agreements dated as of September 29, 2003 between the Company
and certain
officers
|
|
|
|
(Incorporated
by reference to Exhibit 10.53 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended September
30,
2003)
|
|
|
|
|
10.27
|
|
Senior
Unsecured Revolving Credit Facility, dated as of January 9,
2004, among
the Company, AAM, Inc., the lenders named therein and JPMorgan
Chase Bank,
as Administrative Agent
|
|
|
|
(Incorporated
by reference to Exhibit 10.40 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 30,
2003)
|
10.28
|
|
Guarantee
Agreement, dated as of January 9, 2004, among the Company,
AAM, Inc., the
Subsidiary Guarantors and JPMorgan Chase Bank, as Administrative
Agent
|
|
|
|
(Incorporated
by reference to Exhibit 10.41 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 31,
2003)
|
|
|
|
|
++10.29
|
|
Sourcing
Letter Agreement dated as of February 26, 2004 by and between
GM and AAM,
Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.42 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended March
31,
2004)
|
|
|
|
|
++10.30
|
|
Letter
Agreement dated April 22, 2004 by and between DaimlerChrysler
Corporation
and AAM, Inc.
|
|
|
|
(Incorporated
by reference to Exhibit 10.43 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended June
30,
2004)
|
Number
|
|
Description
of Exhibit |
|
|
|
|
10.31
|
|
Forms
of Restricted Stock and Restricted Stock Unit Agreements
under 1999 Stock
Incentive Plan
|
|
|
|
(Incorporated
by reference to Exhibit 10.45 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended September
30,
2004)
|
|
|
|
|
10.32
|
|
Form
of
2002 Stock Option Agreement |
|
|
(Incorporated
by reference to Exhibit 10.2 of Current Report on
Form 8-K dated October 26, 2005.) |
|
|
|
|
|
Form
of
2003 Stock Option Agreement |
|
|
|
(Incorporated
by
reference to Exhibit 10.2 of Current Report on Form 8-K dated
October 26,
2005.) |
|
|
|
|
10.34
|
|
Form
of 2004 Stock Option Agreement |
|
|
|
(Incorporated
by
reference to Exhibit 10.3 of Current Report on Form 8-K dated
October 26,
2005.) |
|
|
|
|
10.35
|
|
Form
of 2005 Stock Option Agreement |
|
|
|
(Incorporated
by reference to Exhibit 10.4 of Current Report on Form 8-K
dated October
26, 2005.) |
|
|
|
|
10.36
|
|
Form
of Nonqualified Stock Option Agreement |
|
|
|
(Incorporated
by
reference to Exhibit 10.5 of Current Report on Form 8-K dated
October 26,
2005.) |
|
|
|
|
10.37
|
|
Employment
Agreement Extension between American Axle &
Manufacturing Holdings, Inc. and Richard E. Dauch dated November
3,
2005 |
|
|
|
(Incorporated
by reference to Exhibit 99.1 of Current Report on Form 8-K
dated November
3, 2005.) |
|
|
|
|
10.38
|
|
Restricted
Stock Award Agreement between American Axle & Manufacturing Holdings,
Inc. and Richard E. Dauch dated November 3, 2005 |
|
|
|
(Incorporated
by reference to Exhibit 99.2 of Current Report on Form 8-K
dated November
3, 2005.) |
|
|
|
|
10.39
|
|
Restricted
Stock Unit Award Agreement between American Axle &
Manufacturing Holdings, Inc. and Richard E. Dauch dated November
3,
2005 |
|
|
|
(Incorporated
by reference to Exhibit 99.3 of Current Report on Form 8-K
dated November
3, 2005.) |
|
|
|
|
10.40
|
|
Restated
1999 American Axle & Manufacturing Holdings, Inc. Stock Incentive
Compensation Plan |
|
|
|
(Incorporated
by reference to Exhibit 10.51 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-K for the year ended December 31,
2005) |
|
|
|
|
10.41
|
|
Form
of Restricted Stock Unit Award Agreement for Non-Employee
Directors |
|
|
|
(Incorporated
by reference to Exhibit 10.52 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended March
31,
2006) |
|
|
|
|
10.42
|
|
Credit
Agreement dated as of June 28, 2006, amended as of August 9,
2006, among
American Axle & Manufacturing, Inc., American Axle & Manufacturing
Holdings, Inc. and JP Morgan Chase Bank, N.A., and Bank of
America,
N.A. |
|
|
|
(Incorporated
by reference to Exhibit 10.53 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended September 30,
2006) |
|
|
|
|
10.43
|
|
Amendment
to Senior Unsecured Revolving Credit Facility, dated as of
January 9,
2004, amended as of December 11, 2006, among the Company, AAM,
Inc., the
lenders named therein and JPMorgan Chase Bank, as Administrative
Agent |
|
|
|
(Incorporated
by reference to Exhibit 99.1 of Current Report on Form 8-K
dated December
11, 2006.) |
|
|
|
|
10.44
|
|
Amended
and Restated American Axle & Manufacturing Holdings, Inc. Incentive
Compensation Plan for Executive Officers
|
|
|
|
(Incorporated
by reference to Exhibit 99.1 of Current Report on Form 8-K
dated February
2, 2007) |
|
|
|
|
*10.45
|
|
Employment
Agreement Amendment between American Axle & Manufacturing Holdings,
Inc. and Richard E. Dauch dated November 15, 2006 |
|
|
|
|
*10.46
|
|
Amended
and Restated American Axle & Manufacturing, Inc. Supplemental
Executive Retirement Program dated December 22, 2006 |
|
|
|
|
*12
|
|
Computation
of Ratio of Earnings to Fixed Charges
|
|
|
|
|
*13
|
|
Annual
Report to Stockholders for the year ended December 31, 2006,
sections
entitled “Financials – Management’s Discussion and Analysis,” “Financials
– Consolidated Financial Statements,” “Financials – Notes to Consolidated
Financial Statements” and “Five Year Financial Summary”
**
|
|
|
|
|
*21
|
|
Subsidiaries
of the Company
|
|
|
|
|
*23
|
|
Consent
of Deloitte & Touche
LLP
|
*31.1
|
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) of the
Securities Exchange Act
|
|
|
|
|
*31.2
|
|
Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) of the
Securities
Exchange Act
|
*32
|
|
Certifications
of Chief Executive Officer and Chief Financial Officer
Pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the
Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
(All
other exhibits are not
applicable.)
|
++ Confidentiality
Requests Approved by the SEC
‡ Reflects
Management or Compensatory Contract
* Filed
herewith
Pursuant
to the requirements of Section 13 or 15(d) 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.
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
(Registrant)
Date:
February 20,
2007
By:
/s/
Michael K. Simonte_________
Name:
Michael K. Simonte
Title:
Vice President - Finance
&
Chief Financial Officer
(Chief
Accounting
Officer)
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report
has been
signed below by the following persons on behalf of the registrant and in
the
capacities on the dates indicated.
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Richard E. Dauch
|
|
Co-Founder,
Chairman of the Board &
|
|
February
20, 2007
|
Richard E. Dauch
|
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
/s/ Michael
K. Simonte
|
|
Vice
President - Finance &
|
|
|
Michael K. Simonte
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
/s/
Elizabeth A. Chappell
|
|
Director
|
|
|
Elizabeth A. Chappell
|
|
|
|
|
|
|
|
|
|
/s/
Forest J. Farmer
|
|
Director
|
|
|
Forest J. Farmer
|
|
|
|
|
|
|
|
|
|
/s/
Richard C. Lappin
|
|
Director
|
|
|
Richard C. Lappin
|
|
|
|
|
|
|
|
|
|
/s/
B.G. Mathis
|
|
Director
|
|
|
B.G. Mathis
|
|
|
|
|
|
|
|
|
|
/s/
William P. Miller II
|
|
Director
|
|
|
William P. Miller II
|
|
|
|
|
|
|
|
|
|
/s/
Larry K. Switzer
|
|
Director
|
|
|
Larry K. Switzer
|
|
|
|
|
|
|
|
|
|
/s/
Thomas K. Walker
|
|
Director
|
|
|
Thomas K. Walker
|
|
|
|
|
|
|
|
|
|
/s/
Dr. Henry T. Yang
|
|
Director
|
|
|
Dr. Henry T. Yang
|
|
|
|
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
|
|
|
|
Additions
-
|
|
|
|
|
|
|
|
Balance
at
|
|
Charged
to
|
|
Deductions
-
|
|
Balance
|
|
|
|
Beginning
of
|
|
Costs
and
|
|
See
Notes
|
|
At
End of
|
|
|
|
Period
|
|
Expenses
|
|
Below
|
|
Period
|
|
|
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2004:
|
|
|
|
|
|
|
|
|
|
Allowance
for doubtful accounts
|
|
$
|
2.8
|
|
|
0.4
|
|
|
0.7
|
(1) |
$
|
2.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for deferred taxes
|
|
|
34.9
|
|
|
-
|
|
|
2.4
|
(2) |
|
32.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
valuation allowance
|
|
|
14.8
|
|
|
6.7
|
|
|
8.9
|
(3) |
|
12.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO
reserve
|
|
|
10.4
|
|
|
3.9
|
|
|
-
|
|
|
14.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2005:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for doubtful accounts
|
|
|
2.5
|
|
|
1.0
|
|
|
0.4
|
(1) |
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for deferred taxes
|
|
|
32.5
|
|
|
-
|
|
|
1.3
|
(2) |
|
31.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
valuation allowance
|
|
|
12.6
|
|
|
11.9
|
|
|
4.2
|
(3) |
|
20.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO
reserve
|
|
|
14.3
|
|
|
0.3
|
|
|
-
|
|
|
14.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended December 31, 2006:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for doubtful accounts
|
|
|
3.1
|
|
|
0.7
|
|
|
2.6
|
(1) |
|
1.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for deferred taxes
|
|
|
31.2
|
|
|
13.4
|
|
|
5.6
|
(2) |
|
39.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory
valuation allowance
|
|
|
20.3
|
|
|
20.0
|
|
|
5.6
|
(3) |
|
34.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO
reserve
|
|
|
14.6
|
|
|
-
|
|
|
0.8
|
|
|
13.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Uncollectible accounts charged off net of recoveries.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
Adjustments associated with our assessment of the uncertainty
of realizing
the full benefit of deferred tax assets (principally related
to acquired
foreign NOLs and capital allowance carryforwards).
|
(3)
Inventory adjustments for physical quantity discrepancies
and write-offs
of excess and obsolete inventories.
|
|
|
To
the
Board of Directors and Stockholders of
American
Axle & Manufacturing Holdings, Inc.:
We
have
audited the consolidated financial statements of American Axle &
Manufacturing Holdings, Inc. and subsidiaries (the Company) as of December
31,
2006 and 2005, and for each of the three years in the period ended December
31,
2006, management's assessment of the effectiveness of the Company's internal
control over financial reporting as of December 31, 2006, and the effectiveness
of the Company's internal control over financial reporting as of December
31,
2006, and have issued our reports thereon dated February 15, 2007 (which
report
expresses an unqualified opinion and includes an explanatory paragraph
relating
to the adoption of Statement of Financial Accounting Standards (SFAS) No.123
R -
Share
Based Payments
on
January 1, 2006 and the adoption of the balance sheet provisions of SFAS
No. 158
- Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans
on
December 31, 2006); such consolidated financial statements and reports
are
included in your 2006 Annual Report to Stockholders and are incorporated
herein
by reference. Our audits also included the consolidated financial statement
schedule of the Company listed in Item 15. This consolidated financial
statement
schedule is the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits. In our opinion, such consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in
all
material respects, the information set forth therein.
/s/
DELOITTE & TOUCHE LLP
Detroit,
Michigan
February
15, 2007