form10-k.htm
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 10-K
x ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
fiscal year ended December 31, 2007
or
o TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the
transition period from to
Commission file number
1-14303
AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
DELAWARE
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38-3161171
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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ONE DAUCH DRIVE, DETROIT,
MICHIGAN
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48211-1198
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(Address
of principal executive offices)
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(Zip
Code)
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313-758-2000
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Each Class
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Name
of Each Exchange on Which Registered
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COMMON STOCK, PAR VALUE $0.01
PER SHARE
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NEW YORK STOCK
EXCHANGE
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PREFERRED SHARE PURCHASE
RIGHTS, PAR VALUE $0.01 PER SHARE
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NEW YORK STOCK
EXCHANGE
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Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes x No o
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange
Act. Yes o No x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
definition of “accelerated filer," "large accelerated filer" and "smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check One).
Large
accelerated filer x Accelerated
filer o Non-accelerated filer o Smaller reporting company
o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No
x
The
closing price of the Common Stock on June 29, 2007 as reported on the New York
Stock Exchange was $29.62 per share and the aggregate market value of the
registrant’s Common Stock held by non-affiliates was approximately $1,344.9
million.
Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.
As of
February 18, 2008, the number of shares of the registrant’s Common Stock, $0.01
par value, outstanding was 53,502,317 shares.
Documents Incorporated By
Reference
Portions
of the registrant's Annual Report to Stockholders for the year ended December
31, 2007 and Proxy Statement for use in connection with its Annual Meeting of
Stockholders to be held on April 24, 2008, to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A not later than 120 days after
December 31, 2007, are incorporated by reference in Part I (Items 1, 1A, 1B, 2,
3 and 4), Part II (Items 5, 6, 7, 7A and 8, 9, 9A, 9B), Part III (Items 10, 11,
12, 13 and 14) and Part IV (Item 15) of this Report.
Internet Website Access to
Reports
The
website for American Axle & Manufacturing Holdings, Inc. is www.aam.com. Our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and amendments to those reports filed or furnished pursuant to section
13(a) or 15(d) of the Exchange Act are available free of charge through our
website as soon as reasonably practicable after they are electronically filed
with, or furnished to, the Securities and Exchange Commission. The Securities
and Exchange Commission also maintains a website at www.sec.gov that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.
Year Ended December 31,
2007
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Page
Number
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1
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Business
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2
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Item 1A |
Risk
Factors
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Item
1B |
Unresolved
Staff Comments
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Properties
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10
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Legal
Proceedings
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11
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Submission
of Matters to a Vote of Security Holders and Executive Officers of the
Registrant
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11
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Market
for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
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15
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Selected
Financial Data
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16
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operation
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16
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Quantitative
and Qualitative Disclosures About Market Risk
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16
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Financial
Statements and Supplementary Data
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16
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure
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16
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Controls
and Procedures
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16
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Other
Information
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16
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Directors
and Executive Officers and Corporate Governance
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17
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Executive
Compensation
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17
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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17
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Certain
Relationships and Related Transactions, and Director
Independence
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17
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Principal
Accounting Fees and Services
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17
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Exhibits
and Financial Statement Schedules
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18
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24
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Valuation
and Qualifying Accounts
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25
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26
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Exhibit 4.04 |
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7.875%
Senior Notes due 2017 Indenture, dated as of February 27, 2007, between
AAM, Inc., as issuer, the Company, as guarantor, and the Bank of New York
Trust Company, N.A., as trustee.
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Exhibit 10.50 |
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Amended
and Restated Continuity Agreement dated as of September 29, 2003, between
American Axle & Manufacturing Holdings, Inc. and Richard E.
Dauch
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Exhibit 10.51 |
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Form
of Amended and Restated Non-CEO Continuity Agreement between American Axle
& Manufacturing Holdings, Inc. and executive officers
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Exhibit 10.52 |
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Form
of 2008 Stock Option Award Agreement for executive officers of American
Axle & Manufacturing Holdings, Inc.
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Exhibit 10.53 |
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Form
of 2008 Restricted Stock Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings, Inc. (Ratable
Vesting)
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Exhibit 10.54 |
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Form
of Restricted Stock Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings, Inc. (Cliff
Vesting)
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Exhibit 10.55 |
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Form
of 2008 Performance Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings, Inc.
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Computation
of Ratio of Earnings to Fixed Charges
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Annual
Report to Stockholders
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Subsidiaries
of the Registrant
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Consent
of Independent Registered Public Accounting Firm
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Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a) of the
Securities Exchange Act
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Certification
of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities
Exchange Act
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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
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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:
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reduced
purchases of our products by General Motors Corporation, Chrysler LLC or
other customers;
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reduced
demand for our customers’ products (particularly light trucks and sport
utility vehicles produced by General Motors Corporation and Chrysler
LLC);
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our
ability and our suppliers’ ability to maintain satisfactory labor
relations and avoid work stoppages;
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our
ability to achieve cost reductions through ongoing restructuring
actions;
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our
ability to improve our U.S. labor cost
structure;
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additional
restructuring actions that may
occur;
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our
ability to achieve the level of cost reductions required to sustain global
cost competitiveness;
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our
ability to consummate and integrate
acquisitions;
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supply
shortages or price increases in raw materials, utilities or other
operating supplies;
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our
ability or our customers’ and suppliers’ ability to successfully
launch new product programs on a timely
basis;
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our
ability to realize the expected revenues from our new and incremental
business backlog;
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our
customers’ and their suppliers’ ability to maintain satisfactory labor
relations and avoid work stoppages;
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our
ability to attract new customers and programs for new
products;
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our
ability to develop and produce new products that reflect the market
demand;
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our
ability to respond to changes in technology, increased competition or
pricing pressures;
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adverse
changes in laws, government regulations or market conditions including
increases in fuel prices affecting our products or our
customers’ products (such as the Corporate Average Fuel Economy
regulations);
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adverse
changes in the economic conditions or political stability of our principal
markets (particularly North America, Europe, South America and
Asia);
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liabilities
arising from warranty claims, product liability and legal proceedings to
which we are or may become a party or claims against us or our
products;
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changes
in liabilities arising from pension and other postretirement benefit
obligations;
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risks
of noncompliance with environmental regulations or risks of environmental
issues that could result in unforeseen costs at our
facilities;
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availability
of financing for working capital, capital expenditures, research and
development or other general corporate purposes, including our ability to
comply with financial covenants;
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our
ability to attract and retain key
associates;
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other
unanticipated events and conditions that may hinder our ability to
compete.
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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
Tier I supplier to the automotive industry. We manufacture, engineer, design and
validate driveline and drivetrain systems and related components and chassis
modules for trucks, sport utility vehicles (SUVs), passenger cars and crossover
utility 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 11 – 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 and all-wheel drive (4WD/AWD) axle requirements for these vehicle
platforms. Sales to GM were approximately 78% of our total net sales
in 2007, 76% in 2006 and 78% in 2005.
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 10 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. Sales to Chrysler LLC (Chrysler) were approximately 12%
of our total net sales in 2007, 14% in 2006 and 13% in 2005.
In
addition to GM and Chrysler, we supply driveline systems and other related
components to PACCAR Inc., Ford Motor Company (Ford), SsangYong Motor Company,
Harley-Davidson and other original equipment manufacturers (OEMs) and Tier I
supplier companies such as The Timken Company, Jatco Ltd., Koyo Machine
Industries Co., Ltd. and Hino Motors, Ltd. Our net sales to customers
other than GM were $712.3 million in 2007 as compared to $758.5 million in 2006
and $754.4 million in 2005.
Our
principal served market of $27 billion is the global driveline market,
which 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:
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Year
ended December 31,
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2007
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2006
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2005
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Axles
and driveshafts
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84.4 |
% |
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85.0 |
% |
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83.9 |
% |
Chassis
components, forged products and other
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15.6 |
% |
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15.0 |
% |
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16.1 |
% |
Total
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100.0 |
% |
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100.0 |
% |
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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 $680 million in R&D focusing on
new product, process and system technology development. We plan to
continue to invest in the development of new products, processes and systems 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 2007,
R&D spending was $80.4 million as compared to $83.2 million in 2006 and
$73.6 million in 2005. The focus of this investment is to develop
innovative driveline and drivetrain systems and related components for trucks,
passenger cars, SUVs and crossover utility vehicles 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 drivetrain 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 $1.3 billion at December 31,
2007. We expect to launch over half of our new and incremental
business backlog in the 2008, 2009 and 2010 calendar years. The balance of the
backlog is planned to launch between 2011 and 2012. Our backlog
associated with GM as of December 31, 2007 was approximately $1.1
billion.
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, 2007, we employed approximately 9,800 associates, approximately
6,200 of which are employed in the U.S. Approximately 4,500
associates are represented by the United Automobile, Aerospace and Agricultural
Implement Workers of America (UAW). Approximately 3,650 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 900 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 110 associates are represented
by the International Association of Machinists (IAM) under a collective
bargaining agreement which runs through May 4, 2008. In addition,
approximately 250 associates at Albion, approximately 2,000 associates at our
Silao, Mexico facility (Guanajuato Gear & Axle and Guanajuato Forge) and
approximately 325 associates at our Brazilian majority-owned subsidiary are
represented by labor unions that are subject to collective bargaining
agreements. The collective bargaining agreement at Albion may be
terminated upon six-month notice and expires 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 U.S., 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 11 – Segment and
Geographic Information.”
The
following risk factors and other information included in this Annual Report on
Form 10-K should be considered. The risks and uncertainties described
below are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently deem immaterial also may impair
our business operations. If any of the following risks occur, our
business, financial condition, operating results and cash flows could be
materially adversely affected.
Our
business is significantly dependent on sales to GM and Chrysler.
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. Sales to GM were approximately 78% of our total
net sales in 2007, 76% in 2006 and 78% in 2005. 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.
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
its derivatives. Sales to Chrysler accounted for approximately 12% or
our net sales in 2007, 14% in 2006 and 13% in 2005. A significant
reduction in our sales to Chrysler or a significant reduction by Chrysler
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). In 2007, the U.S. Congress enacted legislation increasing the U.S.
fuel-economy standard industry average to 35 miles per gallon by year 2020. Our
customers are currently assessing the impact of these regulations including
consumer preferences and demand for vehicles which may have an adverse impact on
the programs we currently supply. 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 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. Substantially all of our hourly associates in the U.S.
are represented by the UAW. Approximately 3,650 of our union represented
associates are covered by a national agreement with the UAW that expires on
February 25, 2008. 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. labor cost
structure.
We may
not be able to achieve the level of labor cost reductions required to sustain
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 market cost competitive. Our current national agreement
with the UAW 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 in the U.S. may be adversely impacted if we are not successful
in reducing our cost structure through our new labor agreement with the
UAW.
We may undertake further restructuring actions.
We have
initiated certain restructuring actions in recent years in order to realign and
resize our production capacity and cost structure to meet current and projected
operational and market requirements. We may need to take further
actions and the charges related to these actions may have a material adverse
effect our results of operations and financial condition. 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.
We
may be unable to consummate and successfully integrate
acquisitions.
We may,
from time to time, consider engaging in acquisitions that involve potential
risks, including failure to successfully integrate and realize the expected
benefits of such acquisitions. Integrating acquired operations is a significant
challenge and there is no assurance that we will be able to manage the
integrations successfully. Failure to successfully integrate acquired operations
or to realize the expected benefits of such acquisitions may have an adverse
impact on our results of operations and financial condition.
Our
business could be adversely affected by an increase in the price of raw
materials.
Worldwide
commodity market conditions have resulted in increases in the cost of steel and
other metallic materials in recent years. Furthermore, 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. In 2007, more than 20 of our
direct material suppliers filed for bankruptcy protection. 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
business could be adversely affected by work stoppages at GM or
Chrysler.
A
substantial number of employees of our largest two customers, GM and Chrysler,
and their key suppliers are represented by trade unions, including the
UAW. Because sales to GM and Chrysler account for approximately 90%
of our sales, work stoppages at GM, Chrysler or any of their key suppliers could
adversely affect our results of operations and financial
condition.
Our company or 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. 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 controlled by 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 wage 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. 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 economic and political 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. Our global operations 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.
Changes
in the general economic conditions may have an adverse impact on our operating
performance and results of operations and may affect our ability to raise
capital.
Our
business is affected by general economic conditions in the U.S. and
globally. Weakness in the U.S. or global economy may result in a
reduction of automotive production and sales by our largest customers, which may
adversely affect our business, financial condition and results of
operations. Additionally, in a down-cycle economic environment, we
may experience the negative effects of increased competitive pricing pressure
and customer turnover.
In
addition, any sustained weakness in the general economic conditions and/or
financial markets in the U.S. or globally could adversely affect our ability to
raise capital on favorable terms. From time to time we have relied,
and may also rely in the future, on access to financial markets as a source of
liquidity for working capital requirements, acquisitions and general corporate
purpose not satisfied by cash-on-hand or operating cash flows. The
inability to raise capital on favorable terms, particularly during times of
uncertainty in the financial markets similar to that which is currently being
experienced in the financial markets, could impact our ability to sustain and
grow our businesses through acquisitions and would likely increase our capital
costs.
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 experience negative or unforeseen tax consequences.
We
periodically review the probability of the realization of our deferred tax
assets based on forecasts of taxable income in both the U.S. and numerous
foreign jurisdictions. In our review, we use historical results, projected
future operating results based upon approved business plans, eligible
carryforward periods, tax planning opportunities and other relevant
considerations. Adverse changes in the profitability and financial outlook in
both the U.S. and numerous foreign jurisdictions may require judgmental changes
in the valuation allowances to reduce our deferred tax assets and other tax
accruals. Such a reduction could result in material non-cash expenses in the
period in which the valuation allowance is adjusted and could have a material
adverse impact on our results of operations or 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 customers have recently extended their
warranty protection for their vehicles. 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
charges from our customers due to our contractual arrangements and
improvements in the quality, warranty, reliability and durability performance 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 increased capital
costs and 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
Manufacturing Complex
Detroit,
MI
|
|
2,455,000
|
|
Owned
|
|
Rear
and front axles, forged products and steering linkages
|
Guanajuato
Gear & Axle,
Guanajuato,
Mexico
|
|
1,532,000
|
|
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
|
|
Production
idled
|
Three
Rivers Driveline
Three
Rivers, MI
|
|
806,000
|
|
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 trucks and buses
Crankshafts
and fabricated parts
|
Colfor
Manufacturing, Inc.
Malvern,
OH
Minerva,
OH
Salem,
OH
|
|
235,000
190,000
175,000
|
|
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
|
Oxford
Forge
Oxford,
MI
|
|
60,000
|
|
Owned
|
|
Forged
products
|
Detroit
South Campus
Detroit,
MI
|
|
75,000
|
|
Owned
|
|
Quality
engineering technical, process development and safety training
centers
|
Technical
Center
Rochester
Hills, MI
|
|
109,000
|
|
Owned
|
|
R&D,
design engineering, metallurgy, testing and validation
|
European
Business Office
Bad
Homburg, Germany
|
|
24,000
|
|
Leased
|
|
European
headquarters and technical center
|
Poland
Olawa,
Poland
|
|
15,000
|
|
Owned
|
|
Transmission
differentials
|
India
Pune,
India
|
|
18,000
|
|
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.”
Item 4. Submission of Matters to a Vote of Security
Holders
None
Executive
Officers of the Registrant
Name
__________
|
Age
|
Position
|
Richard
E. Dauch .………………….….
|
65
|
Co-Founder,
Chairman of the Board & Chief Executive Officer
|
Yogendra
N. Rahangdale………….……
|
60
|
Vice
Chairman
|
David
C. Dauch ………………………..
|
43
|
Executive
Vice President & Chief Operating Officer
|
John
J. Bellanti…………………….……
|
53
|
Group
Vice President - Manufacturing Services, Capital Planning &
Cost Estimating
|
Michael
K. Simonte………………..…...
|
44
|
Group
Vice President - Finance & Chief Financial Officer
|
Michael
C. Flynn…………………..……
|
50
|
Vice
President - Global Procurement & Supply Chain
Management
|
Curt
S. Howell……………………..……
|
45
|
Vice
President - Global Driveline Operations
|
John
E. Jerge………………...…………
|
46
|
Vice
President - Human Resources
|
Patrick
S. Lancaster……………….……
|
60
|
Vice
President, Chief Administrative Officer &
Secretary
|
Allan
R. Monich ………………….……
|
54
|
Vice
President - Quality Assurance & Customer
Satisfaction
|
Steven
J. Proctor…………………….…
|
51
|
Vice
President - Sales & Marketing
|
Alberto
L. Satine…………………..……
|
51
|
Vice
President - Strategic & Business Development
|
Abdallah
F. Shanti...…………………....
|
47
|
Vice
President - Information Technology, Electronic Product Integration &
Chief Information Officer
|
Kevin
M. Smith………………………...
|
46
|
Vice
President - Mexico
|
John
S. Sofia………………………..…..
|
48
|
Vice
President - Product Engineering, Commercial Vehicle Operations & Chief
Technology Officer
|
Norman
Willemse………………….…..
|
51
|
Vice
President - Global Metal Formed Product
Operations
|
Richard E. Dauch, age
65, 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
42 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.
Yogendra (Yogen) N. Rahangdale,
age 60, has been Vice Chairman, a non-Board position since December 2007.
Prior to that, he served as President & Chief Operating Officer (since
October 2005); 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 43, has
been Executive Vice President & Chief Operating Officer since December 2007.
Prior to that, he served as Executive Vice President - Commercial &
Strategic Development (since January 2005); 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. David C. Dauch is the son of Richard E. Dauch.
John J. Bellanti, age 53, has
been Group Vice President – Manufacturing Services, Capital Planning & Cost
Estimating since December 2007. Prior to that, he served as Vice
President – Manufacturing Services, Capital Planning & Cost Estimating
(since July 2006); 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.
Michael K. Simonte, age 44,
has been Group Vice President – Finance & Chief Financial Officer since
December 2007. Simonte previously served as Vice President – Finance & Chief
Financial Officer (since January 2006); 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.
Michael C. Flynn, age 50, has been Vice President – Global Procurement
& Supply Chain Management since December 2007. Prior to that, he served as
Vice President - Procurement (since November 2005); 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.
Curt S. Howell, age 45, has
been Vice President – Global Driveline Operations since December 2007. Prior to
that, he served as General Manager, International Operations (since June 2007);
General Manager, Asia (since October 2005); General Manager, Latin/South America
Driveline Operations (since January 2004); Executive Director, Cost Estimating
(since January 2003); Executive Director, Worldwide Sales (since January 2001);
Managing Director, AAM De Mexico (since January 1998); Director, Worldwide
Programs (since joining our Company in April 1994). Prior to joining our
Company, Mr. Howell served at Chrysler Corporation for 7 years in a variety of
engineering, sales and service positions.
John E. Jerge, age 46, 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 60,
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 54, 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 51, 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 51, 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 47,
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.
Kevin M. Smith, age 46, has
been Vice President – Mexico since December 2007. Prior to that, he served as
Plant Manager, Guanajuato Gear & Axle (since February 2007); Executive
Director, Manufacturing Engineering (since July 2006); Executive Director, Axle
Engineering (since January 2006); Director, GMT 900 Program (since October
2001); Director, Manufacturing Engineering (since June 2001); Plant Manager,
Buffalo Gear, Axle & Linkage (since March 2000); Plant Manager, Three Rivers
(since February 1998); Manufacturing Manager, Detroit Gear & Axle Plant
(since February 1996) and Manufacturing Engineering Manager, Buffalo Gear, Axle
& Linkage (since joining our Company in March 1994). Prior to
joining our Company, Mr. Smith served at Chrysler Corporation in a variety of
manufacturing and engineering positions.
John S. Sofia, age 48, has
been Vice President – Product Engineering, Commercial Vehicle Operations &
Chief Technology Officer since December 2007. Prior to that, he served as Vice
President – Engineering & Product Development (since July 2006); 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.
Norman Willemse, age 51, has
been Vice President – Global Metal Formed Product Operations since December
2007. Prior to that, he served as General Manager – Metal Formed Products
Division (since July 2006) and Managing Director – Albion Automotive (since
joining our Company in August 2001). Prior to joining our Company, Mr. Willemse
served at ATSAS for 7 years as Executive Director Engineering & Commercial
and John Deere for over 17 years in various engineering positions of increasing
responsibility. Mr. Willemse is a professional certified mechanical
engineer.
Item 5. Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities
Market
Information
Our common stock, par value $0.01 per
share, is listed for trading on the New York Stock Exchange under the symbol
“AXL.”
Holders
and High and Low Sales Prices
2007
|
|
March
31
|
|
|
June
30
|
|
|
September
30
|
|
|
December
31
|
|
|
Full
Year
|
|
High
|
|
$ |
28.16 |
|
|
$ |
30.01 |
|
|
$ |
30.59 |
|
|
$ |
27.91 |
|
|
$ |
30.59 |
|
Low
|
|
$ |
17.38 |
|
|
$ |
26.76 |
|
|
$ |
21.55 |
|
|
$ |
18.62 |
|
|
$ |
17.38 |
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$ |
21.01 |
|
|
$ |
20.04 |
|
|
$ |
17.67 |
|
|
$ |
20.07 |
|
|
$ |
21.01 |
|
Low
|
|
$ |
15.33 |
|
|
$ |
15.80 |
|
|
$ |
14.77 |
|
|
$ |
16.94 |
|
|
$ |
14.77 |
|
Prices are the quarterly high and low closing sales prices for our common stock
as reported by the New York Stock Exchange (NYSE). We had
approximately 430 stockholders of record as of
February 18, 2008.
Dividends
We declared and paid quarterly cash
dividends of $0.15 in each of the last three fiscal years. We paid
$31.8 million, $31.0 million and $30.4 million to stockholders of record under
the quarterly cash dividend program during 2007, 2006 and 2005,
respectively.
Issuer
Purchases of Equity Securities
In the
fourth quarter of 2007, the Company withheld and repurchased shares to pay taxes
due upon the vesting of certain individuals’ restricted stock
grants. The following table provides information about our
equity security purchases during the quarter ended December 31,
2007:
Period
|
|
Total
Number of Shares (Or Units) Purchased
|
|
|
Average
Price Paid per Share (or Unit)
|
|
|
Total
Number of Shares (or Units) Purchased as Part of Publicly Announced Plans
or Programs
|
|
|
Maximum
Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be
Purchased Under the Plans or Programs
|
|
October
2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
November
2007
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
December
2007
|
|
|
2,326 |
|
|
$ |
23.12 |
|
|
|
- |
|
|
|
- |
|
Securities
Authorized for Issuance under Equity Compensation Plans
The information regarding our securities authorized for issuance under equity
compensation plans is
incorporated by reference from our Proxy Statement.
Item 6. Selected Financial Data
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled
“Five Year Financial Summary.”
Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operation
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled
“Financials – Management’s Discussion and Analysis.”
Item 7A. Quantitative and Qualitative Disclosures
about Market Risk
Incorporated
by reference from Exhibit 13 to this Form 10-K, Annual Report, section entitled
“Financials – Management’s Discussion and Analysis – Market Risk.”
Item 8. Financial Statements and Supplementary
Data
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.”
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure
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, 2007, and (2) no change in internal control over financial
reporting occurred during the fourth fiscal quarter ended December 31, 2007 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.”
None
Item 10. Directors, Executive Officers and Corporate
Governance
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 24, 2008.
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 available on our
website at www.aam.com.
We will post on our website any amendment to or waiver from the
provisions of the code of ethics or our 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.
Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters
The information required by Item
12 is incorporated by reference from our Proxy Statement.
Item 13. Certain Relationships and Related
Transactions, and Director Independence
The
information required by Item 13 under Items 404 and 407(a) of Regulation S-K is
incorporated by reference from our Proxy Statement.
Item 14. Principal Accounting Fees and
Services
The information required by Item 9(e)
of Schedule 14A is incorporated by reference from our Proxy
Statement.
Item 15. Exhibits and Financial Statement
Schedules
The
following documents are filed as a part of this report:
1.
|
All
Financial Statements
|
Management’s
Report on Internal Control over Financial Reporting
Report 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,
2007, 2006 and 2005 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))
(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)
|
*4.04
|
7.875%
Senior Notes due 2017, Indenture, dated as of February 27, 2007, between
AAM, Inc., as issuer, the Company, as guarantor, and Bank of New York
Trust Company, N.A., as trustee.
|
Number
|
Description
of Exhibit
|
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))
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))
|
Number
|
Description
of Exhibit
|
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
|
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)
|
‡10.18
|
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)
|
10.19
|
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)
|
10.20
|
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)
|
++10.21
|
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)
‡10.22
|
Second
Amendment, dated as of December 10, 2001, to the Employment Agreement,
dated as of November 6, 1997, by and between the Company 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)
|
10.23
|
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)
|
Number
|
Description
of Exhibit
|
10.24
|
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. on Form 10-K for the year ended December 30, 2003)
10.25
|
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)
++10.26
|
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)
++10.27
|
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)
10.28
|
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)
10.29
|
Form
of 2002 Stock Option Agreement
|
(Incorporated
by reference to Exhibit 10.2 of Current Report on Form 8-K dated October 26,
2005.)
10.30
|
Form
of 2003 Stock Option Agreement
|
(Incorporated
by reference to Exhibit 10.2 of Current Report on Form 8-K dated October 26,
2005.)
10.31
|
Form
of 2004 Stock Option Agreement
|
(Incorporated
by reference to Exhibit 10.3 of Current Report on Form 8-K dated October 26,
2005.)
10.32
|
Form
of 2005 Stock Option Agreement
|
(Incorporated
by reference to Exhibit 10.4 of Current Report on Form 8-K dated October 26,
2005.)
10.33
|
Form
of Nonqualified Stock Option
Agreement
|
(Incorporated
by reference to Exhibit 10.5 of Current Report on Form 8-K dated October 26,
2005.)
Number
|
Description
of Exhibit
|
10.34
|
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.)
10.35
|
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.)
10.36
|
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.)
10.37
|
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)
10.38
|
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)
10.39
|
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)
10.40
|
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.)
|
10.41
|
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 1,
2007.)
10.42
|
Employment
Agreement Amendment between American Axle & Manufacturing Holdings,
Inc. and Richard E. Dauch dated November 15,
2006
|
10.43
|
Amended
and Restated American Axle & Manufacturing, Inc. Supplemental
Executive Retirement Program dated as December 22,
2006
|
10.44
|
Agreement
between American Axle & Manufacturing, Inc. and Richard F. Dauch dated
May 14, 2007
|
(Incorporated
by reference to Exhibit 10.47 filed with American Axle & Manufacturing
Holdings, Inc. Form 10-Q for the quarterly period ended June 30,
2007)
Number
|
Description
of Exhibit
|
10.45
|
$250,000,000
Credit Agreement, dated as of June 14, 2007, by and among American Axle
& Manufacturing Holdings, Inc., American Axle & Manufacturing
Inc., the several Lenders parties thereto, Bank of America, N.A., as
Syndication Agent, JPMorgan Chase Bank, N.A., as Administrative Agent,
J.P. Morgan Securities Inc., and Banc of America Securities LLC, as Joint
Lead Arrangers and Joint
Bookrunners.
|
|
(Incorporated by
reference to Exhibit 99.1 of Current Report on Form 8-K dated June 14,
2007)
|
++10.46
|
Letter
Agreement, dated June 29, 2007, between AAM and
GM
|
|
(Incorporated by
reference to Exhibit 99.1 of Current Report on Form 8-K dated June 29,
2007)
|
10.47
|
Amendment
No. 1 dated as of July 25, 2007 to the Restricted Stock Unit Award
Agreements dated as of March 15, 2005, March 15, 2006 and March 14, 2007
between Richard E. Dauch and American Axle & Manufacturing Holdings,
Inc.
|
|
(Incorporated by
reference to Exhibit 99.1 of Current Report on Form 8-K dated July 25,
2007)
|
10.48
|
Form
of Restricted Stock Unit Award Agreement for Non-Employee Directors of
American Axle & Manufacturing Holdings,
Inc.
|
|
(Incorporated by
reference to Exhibit 10.1 of Current Report on Form 8-K dated February 1,
2008)
|
10.49
|
Amendment,
dated January 31, 2008, to Employment Agreement, dated November 6, 1997,
between American Axle & Manufacturing Holdings, Inc. and Richard E.
Dauch.
|
|
(Incorporated by
reference to Exhibit 10.2 of Current Report on Form 8-K dated February 1,
2008)
|
*10.50
|
Amended
and Restated Continuity Agreement dated as of September 29, 2003, between
American Axle & Manufacturing Holdings, Inc. and Richard E.
Dauch
|
*10.51
|
Form
of Amended and Restated Non-CEO Continuity Agreement between American Axle
& Manufacturing Holdings, Inc. and executive
officers
|
*10.52
|
Form
of 2008 Stock Option Award Agreement for executive officers of American
Axle & Manufacturing Holdings,
Inc.
|
*10.53
|
Form
of 2008 Restricted Stock Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings, Inc. (Ratable
Vesting)
|
*10.54
|
Form
of 2008 Restricted Stock Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings, Inc. (Cliff
Vesting)
|
*10.55
|
Form
of 2008 Performance Award Agreement for certain executive officers of
American Axle & Manufacturing Holdings,
Inc.
|
*12
|
Computation
of Ratio of Earnings to Fixed
Charges
|
*13
|
Annual
Report to Stockholders for the year ended December 31, 2007, 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 Independent Registered Public Accounting
Firm
|
*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
** Shown
only in the original filed with the Securities and Exchange
Commission
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, 2008
|
|
|
|
/s/ Michael
K. Simonte |
|
Michael
K. Simonte |
|
Group
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, 2008
|
Richard
E. Dauch
|
|
&
Chief Executive Officer |
|
|
|
|
|
|
|
/s/
Michael K. Simonte
|
|
Group
Vice President - Finance &
|
|
|
Michael
K. Simonte
|
|
Chief
Financial Officer |
|
|
|
|
|
|
|
/s/
John A. Casesa
|
|
Director
|
|
|
John
A. Casesa
|
|
|
|
|
|
|
|
|
|
/s/
Elizabeth A. Chappell
|
|
|
|
|
Elizabeth
A. Chappell
|
|
|
|
|
|
|
|
|
|
/s/
Forest J. Farmer
|
|
|
|
|
Forest
J. Farmer
|
|
|
|
|
|
|
|
|
|
/s/
Richard C. Lappin
|
|
|
|
|
Richard
C. Lappin
|
|
|
|
|
|
|
|
|
|
/s/
William P. Miller II
|
|
|
|
|
William
P. Miller II
|
|
|
|
|
|
|
|
|
|
/s/
Larry K. Switzer
|
|
|
|
|
Larry
K. Switzer
|
|
|
|
|
|
|
|
|
|
/s/
Thomas K. Walker
|
|
|
|
|
Thomas
K. Walker
|
|
|
|
|
|
|
|
|
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/s/
Dr. Henry T. Yang
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Dr.
Henry T. Yang
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AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC.
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Additions
-
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Balance
at
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Charged
to
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Deductions
-
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Balance
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Beginning
of
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Costs
and
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See
Notes
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At End
of
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Period
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Expenses
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Below
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Period
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(in
millions)
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Year Ended December 31,
2005:
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Allowance
for doubtful accounts
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$ |
2.5
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$ |
1.0
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$ |
0.4
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(1) |
$ |
3.1
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Allowance
for deferred taxes
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32.5
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-
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1.3
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(2) |
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31.2
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Inventory
valuation allowance
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12.6
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11.9
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4.2
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(3) |
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20.3
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LIFO
reserve
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14.3
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0.3
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-
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14.6
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Year Ended December 31,
2006:
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Allowance
for doubtful accounts
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3.1
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0.7
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2.6
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(1) |
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1.2
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Allowance
for deferred taxes
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31.2
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13.4
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5.6
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(2) |
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39.0
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Inventory
valuation allowance
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20.3
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20.0
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5.6
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(3) |
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34.7
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LIFO
reserve
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14.6
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-
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0.8
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13.8
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Year Ended December 31,
2007:
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Allowance
for doubtful accounts |
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1.2 |
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1.4 |
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0.4 |
(1) |
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2.2 |
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Allowance
for deferred taxes |
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39.0 |
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12.7 |
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9.4 |
(2) |
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42.3 |
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Inventory
valuation allowance |
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34.7 |
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12.7 |
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7.1 |
(3) |
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40.3 |
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LIFO
reserve |
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13.8 |
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- |
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- |
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13.8 |
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(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).
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(3) Inventory
adjustments for physical quantity discrepancies and write-offs of excess
and obsolete inventories.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
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,
2007 and 2006, and for each of the three years in the period ended December 31,
2007, and the Company’s internal control over financial reporting as of December
31, 2007, and have issued our report thereon dated February 20, 2008 (which
report expresses an unqualified opinion and includes an explanatory paragraph
relating to the adoption on January 1, 2006 of Statement of Financial
Accounting Standards (SFAS) No. 123(R) , Share-Based Payments, the
adoption on December 31, 2006 of the balance sheet provisions of SFAS No. 158,
Employers Accounting for
Defined Benefit Provision and Other Postretirement Plans and the adoption on
January 1, 2007 of FASB Interpretation No. 48, Accounting for Uncertainty
in Income Taxes and the measurement date provisions of SFAS
No. 158); such consolidated financial statements and report are included in your
2007 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.
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/s/ DELOITTE
& TOUCHE LLP |
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Detroit,
Michigan |
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February
20, 2008 |
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