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What changed in AMERICAN AXLE & MANUFACTURING HOLDINGS INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAN AXLE & MANUFACTURING HOLDINGS INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+391 added−392 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-14)

Top changes in AMERICAN AXLE & MANUFACTURING HOLDINGS INC's 2025 10-K

391 paragraphs added · 392 removed · 285 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+15 added−9 removed21 unchanged
Biggest changeMaintaining our high quality standards, which are the foundation of our product durability and reliability. • AAM's Q 4 internal quality assurance system drives continuous improvement to meet and exceed the growing expectations of our OEM customers. • In 2024, five of our global facilities received the GM Supplier Quality Excellence Award for outstanding quality performance during the 2023 performance year. • AAM was also recognized in 2024 for quality by several other customers including the Paccar 10 PPM Quality Award at our Hausach, Germany facility, the Ashok Leyland Certificate of Appreciation for Consistent Quality Performance at our Chennai, India facility and Pune, India facility, the Chery Excellent Supplier Award at our Changshu, China facility and the Jaguar Land Rover Quality Award at our Eisenach, Germany facility. • For the 2024 performance year, AAM was recognized by Ford with the Q1 Quality Award at our Bluffton, Indiana facility and our Pyeongtaek, South Korea facility. 3 Achieving technology leadership by delivering innovative products that enhance our product portfolio while increasing our total global served market.
Biggest changeMaintaining our high quality standards, which are the foundation of our product durability and reliability. • Our Q 4 internal quality assurance system drives continuous improvement to meet and exceed the growing expectations of our OEM customers. • In 2025, four of our global facilities received the GM Supplier Quality Excellence Award for outstanding quality performance during the 2024 performance year.
Although the outcome of these matters cannot be predicted with certainty, at this time we do not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows.
Although the outcome of these matters cannot be predicted with certainty, at this time we do not believe that any of these matters, individually or in the aggregate, will have a material adverse effect on our results of operations, financial condition or cash flows.
Negative or unexpected outcomes of these examinations and audits, and any related litigation, could have a material adverse impact on our results of operations, financial condition and cash flows. See Note 13 - Income Taxes for additional discussion regarding examinations and audits of our tax returns and pending tax litigation.
Negative or unexpected outcomes of these examinations and audits, and any related litigation, could have a material adverse impact on our results of operations, financial condition and cash flows. See Note 13 - Income Taxes for additional discussion regarding examinations and audits of our tax returns and pending litigation.
Dauch Institute in Mexico is focused on identifying ways to improve productivity while implementing manufacturing solutions, as well as educating our associates on process optimization and technology advances. • AAM's investment in R&D has resulted in the development of advanced technology products designed to assist our customers in meeting the market demands for vehicle electrification; advanced and sophisticated electronic controls; lower emissions; enhanced power density; improved ride and handling performance; and enhanced reliability and durability. 4 • AAM's electric drive technology is designed, engineered and manufactured to provide a diverse and scalable product portfolio of hybrid and electric driveline systems to our customers that range from low-cost value-oriented offerings to high-performance solutions.
Dauch Institute in Mexico is focused on identifying ways to improve productivity while implementing manufacturing solutions, as well as educating our associates on process optimization and technology advances. • Our investment in R&D has resulted in the development of advanced technology products designed to assist our customers in meeting the market demands for vehicle electrification; advanced and sophisticated electronic controls; lower emissions; enhanced power density; improved ride and handling performance; and enhanced reliability and durability. 4 • Our electric drive technology is designed, engineered and manufactured to provide a diverse and scalable product portfolio of hybrid and electric driveline systems to our customers that range from low-cost value-oriented offerings to high-performance solutions.
No other customer represented 10% or more of consolidated net sales during these periods. Business Strategy We have aligned our business strategy to build value for our key stakeholders. We accomplish our strategic objectives by capitalizing on our competitive strengths and continuing to diversify our customer, product and geographic sales mix, while providing exceptional value to our customers.
No other customer represented 10% or more of consolidated net sales during these periods. 2 Business Strategy We have aligned our business strategy to build value for our key stakeholders. We accomplish our strategic objectives by capitalizing on our competitive strengths and continuing to diversify our customer, product and geographic sales mix, while providing exceptional value to our customers.
Prior to that, he served as Chief Operating Officer (since December 2022), President - Driveline (since November 2021), Vice President - Finance & Controller (since February 2017), Vice President - Driveline Business Performance & Cost Management (since May 2015); Vice President - Finance & Controller (since September 2012); Executive Director & Controller (since October 2008); Director - Commercial Analysis (since July 2006); Director - Finance, Driveline Americas (since March 2006); Director - Investment & Commercial Analysis (since November 2005); Director - Finance, Driveline (since October 2005); Director - Finance Operations, U.S.
Prior to that, he served as President & Chief Operating Officer (since March 2023), Chief Operating Officer (since December 2022), President - Driveline (since November 2021), Vice President - Finance & Controller (since February 2017), Vice President - Driveline Business Performance & Cost Management (since May 2015); Vice President - Finance & Controller (since September 2012); Executive Director & Controller (since October 2008); Director - Commercial Analysis (since July 2006); Director - Finance, Driveline Americas (since March 2006); Director - Investment & Commercial Analysis (since November 2005); Director - Finance, Driveline (since October 2005); Director - Finance Operations, U.S.
We use this system to focus on customer satisfaction, lean production and efficient cost management, which allows us to improve quality, eliminate waste, and reduce lead time and total costs globally. • We maintain a cost competitive, operationally flexible global manufacturing, engineering and sourcing footprint to compete in global growth markets, support global product development initiatives and maintain regional cost competitiveness. • Our business is vertically integrated to reduce cost and mitigate risk.
We use our operating system to focus on customer satisfaction, lean production and efficient cost management, which allows us to improve quality, eliminate waste, and reduce lead time and total costs globally. • We maintain a cost competitive, operationally flexible global manufacturing, engineering and sourcing footprint to compete in global growth markets, support global product development initiatives and maintain regional cost competitiveness. • Our business is vertically integrated to reduce cost and mitigate risk.
In 2024, we continued to focus on supporting an inclusive culture though our five strategic pillars: 1) enhancing inclusion skills, 2) maintaining a safe and inclusive environment, 3) providing equitable talent management and inclusive benefits and policies, 4) supporting stakeholder engagement, and 5) reinforcing leadership ownership and accountability, as our focus moved from awareness of this area to inclusive actions to support organic growth across our organization.
In 2025, we continued to focus on supporting an inclusive culture though our five strategic pillars: 1) enhancing inclusion skills, 2) maintaining a safe and inclusive environment, 3) providing equitable talent management and inclusive benefits and policies, 4) supporting stakeholder engagement, and 5) reinforcing leadership ownership and accountability, as our focus moved from awareness of this area to inclusive actions to support organic growth across our organization.
A significant portion of our hourly associates worldwide are members of industrial trade unions employed under the terms of collective bargaining agreements. We partner with local union representatives to continue to improve upon our associate's safety conditions and personal development. Developing Associates We have established sustainable and adaptable talent management programs focused on the training and development of our associates.
A significant portion of our hourly associates worldwide are members of industrial trade unions employed under the terms of collective bargaining agreements. We partner with local union representatives to continue to improve upon our associates' safety conditions and personal development. Developing Associates We have established sustainable and adaptable talent management programs focused on the training and development of our associates.
We are subject to risks of environmental issues, including impacts of climate-related events, that could result in unforeseen disruptions or costs to our operations. We did not experience any climate-related events in 2024, 2023 or 2022 that we believe had, or could have, a material adverse impact on our results of operations, financial condition and cash flows.
We are subject to risks of environmental issues, including impacts of climate-related events, that could result in unforeseen disruptions or costs to our operations. We did not experience any climate-related events in 2025, 2024 or 2023 that we believe had, or could have, a material adverse impact on our results of operations, financial condition and cash flows.
The primary goal of S 4 is to achieve compliance with all internal and external requirements and regulations while driving behavioral changes to maintain a safe and environmentally friendly workplace. At AAM, we believe safety performance is a journey where each facility strives to achieve S 4 by moving from a reactive safety environment to an interdependent safety environment.
The primary goal of S 4 is to achieve compliance with all internal and external requirements and regulations while driving behavioral changes to maintain a safe and environmentally friendly workplace. We believe safety performance is a journey where each facility strives to achieve S 4 by moving from a reactive safety environment to an interdependent safety environment.
This development starts with early career programs and progresses through leadership development. These programs are designed to help associates realize their full potential by understanding the expectations of their current role and setting goals for future growth and learning, which contributes to the overall success of AAM.
This development starts with early career programs and progresses through leadership development. These programs are designed to help associates realize their full potential by understanding the expectations of their current role and setting goals for future growth and learning, which contributes to the overall success of the Company.
Patents and Trademarks We maintain and have pending various United States (U.S.) and non-U.S. patents, 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.
Patents and Trademarks We maintain and have pending various U.S. and non-U.S. patents, 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.
AAM's lightweight axle technology features an innovative design, which offers significant mass reduction and increased fuel economy and efficiency that is scalable across multiple applications without the loss of performance or power. • We have secured our core business as we have been awarded multiple next-generation full-size pickup truck front and rear axle programs, sport utility vehicle programs and crossover vehicle programs with OEM customers, and by also being named as the axle supplier for GM's Chevrolet Colorado and GMC Canyon mid-size pickup trucks.
Our lightweight axle technology features an innovative design, which offers significant mass reduction, resulting in increased fuel economy that is scalable across multiple applications without the loss of performance or power. • We have secured our core business as we have been awarded multiple next-generation full-size pickup truck front and rear axle programs, sport utility vehicle programs and crossover vehicle programs with OEM customers, and by also being named as the axle supplier for GM's Chevrolet Colorado and GMC Canyon mid-size pickup trucks.
Health and Wellness Programs At AAM, the health of our associates is very important to us. We maintain a comprehensive, interactive and personalized wellness program to make it easy for our associates and their families to live a healthier lifestyle and help achieve personal wellness goals.
Health and Wellness Programs The health of our associates is very important to us. We maintain a comprehensive, interactive and personalized wellness program to make it easy for our associates and their families to live a healthier lifestyle and help achieve personal wellness goals.
(since April 2005); Manager - Finance, Detroit Manufacturing Facility (since June 2003); Manager - Finance, Forging Division (since September 2001); Finance Manager - Albion Automotive (since October 1998); Supervisor - Cost Estimating (since February 1998) and Financial Analyst at the Detroit Manufacturing Facility since joining AAM in September 1996. Prior to joining AAM, Mr.
(since April 2005); Manager - Finance, Detroit Manufacturing Facility (since June 2003); Manager - Finance, Forging Division (since September 2001); Finance Manager - Albion Automotive (since October 1998); Supervisor - Cost Estimating (since February 1998) and Financial Analyst at the Detroit Manufacturing Facility since joining the Company in September 1996. Prior to joining the Company, Mr.
From 2015 to 2019, he served in various executive positions at AAM including Senior Vice President - Global Procurement and Supplier Quality Engineering (since January 2019), President - Driveline (since September 2018), and Senior Vice President - AAM and President - AAM North America (since September 2015). Prior to joining AAM in 2015, Mr.
From 2015 to 2019, he served in various executive positions at the Company including Senior Vice President - Global Procurement and Supplier Quality Engineering (since January 2019), President - Driveline (since September 2018), and Senior Vice President - AAM and President - AAM North America (since September 2015). Prior to joining the Company in 2015, Mr.
This includes our e-Beam axles which incorporate high-reduction gearboxes and highly-integrated inverters. These hybrid and electric driveline systems leverage AAM's experience in power density, torque transfer, noise-vibration-harshness reduction, heat management and systems integration, and are designed to improve fuel efficiency, reduce CO 2 emissions and provide AWD capability.
This includes our e-Beam axles which incorporate high-reduction gearboxes and highly-integrated inverters. These hybrid and electric driveline systems leverage the Company's experience in power density, torque transfer, noise-vibration-harshness reduction, heat management and systems integration, and are designed to improve fuel efficiency, reduce CO 2 emissions and provide AWD capability.
Prior to that, he served as Vice President & Chief Financial Officer (since August 2015), Treasurer (since December 2011); Assistant Treasurer (since September 2008); Director of Internal Audit (since September 2005); Divisional Finance Manager - Metal Formed Products (since June 2003); Finance Manager - Three Rivers Manufacturing Facility (since August 2000); Manager, Financial Reporting (since November 1998) and Financial Analyst since joining AAM in 1994.
Prior to that, he served as Vice President & Chief Financial Officer (since August 2015), Treasurer (since December 2011); Assistant Treasurer (since September 2008); Director of Internal Audit (since September 2005); Divisional Finance Manager - Metal Formed Products (since June 2003); Finance Manager - Three Rivers Manufacturing Facility (since August 2000); Manager, Financial Reporting (since November 1998) and Financial Analyst since joining the Company in 1994.
The AAM Operating System includes our E 4 system, which is AAM’s energy and environmental sustainability program designed to drive continuous improvement in our operations by reducing energy consumption, greenhouse gas (GHG) emissions and water usage, while minimizing waste and lessening the environmental impact of our production operations.
Our operating system includes our E 4 system, which is the Company’s energy and environmental sustainability program designed to drive continuous improvement in our operations by reducing energy consumption, greenhouse gas (GHG) emissions and water usage, while minimizing waste and lessening the environmental impact of our production operations.
General Development of Business 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. In 2017, we acquired Metaldyne Performance Group, Inc. (MPG), with MPG becoming a wholly-owned subsidiary of Holdings.
General Development of Business The Company, 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. In 2017, we acquired Metaldyne Performance Group, Inc. (MPG), with MPG becoming a wholly-owned subsidiary of the Company.
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Edge, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 13% of our consolidated net sales in 2024, and 12% in 2023 and 2022.
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 15% of our consolidated net sales in 2025, 13% in 2024, and 12% in 2023.
S 4 (S-to-the-Fourth) Safety System At AAM, our first responsibility every day, in every facility, is the safety of our global associates. AAM’s S 4 safety system is focused on developing, engaging, monitoring, and continuously educating our associates on standardized procedures that are the basis of our safety culture and safety policy.
S 4 (S-to-the-Fourth) Safety System Our first responsibility every day, in every facility, is the safety of our global associates. Our S 4 safety system is focused on developing, engaging, monitoring, and continuously educating our associates on standardized procedures that are the basis of our safety culture and safety policy.
AAM associates can also raise issues and concerns to the attention of management through the use of associate surveys and our 24/7 ethics hotline. Through our AAM360 program, AAM management monitors workforce demographics and attrition, associate performance data, succession and development plans and feedback from associates to ensure that our associates’ experience is meeting these objectives.
The Company's associates can also raise issues and concerns to the attention of management through the use of associate surveys and our 24/7 ethics hotline. Through this program, the Company's management monitors workforce demographics and attrition, associate performance data, succession and development plans and feedback from associates to ensure that our associates’ experience is meeting these objectives.
Securing and Enhancing Our Core Business • AAM has established a high-efficiency product portfolio that is designed to improve axle efficiency and fuel economy through innovative product design technologies. As our customers focus on reducing weight through the use of aluminum and other lightweighting alternatives, AAM is well positioned to offer innovative, industry leading solutions.
Securing and Enhancing Our Core Business • The Company has established a product portfolio that is designed to improve axle efficiency and fuel economy through innovative product design technologies. As our customers focus on reducing weight through the use of aluminum and other lightweighting alternatives, we are well positioned to offer innovative, industry leading solutions.
These awards are expected to generate revenues from mid-decade to beyond 2030. • Our Metal Forming segment represents the largest automotive forging operation in the world, and provides engine, transmission, driveline and safety-critical components for light, commercial and industrial vehicles. We have developed advanced forging and machining process technologies to manufacture lightweight, highly precise and power-dense products.
These recently launched programs are expected to generate revenues beyond 2030. • Our Metal Forming segment represents the largest automotive forging operation in the world, and provides engine, transmission, driveline and safety-critical components for light, commercial and industrial vehicles. We have developed advanced forging and machining process technologies to manufacture lightweight, highly precise and power-dense products.
Presently, he serves on the boards of REV Group, Inc., Business Leaders for Michigan, the Detroit Regional CEO Council, the Detroit Economic Club, the Detroit Regional Chamber, the Detroit Regional Partnership, the Great Lakes Council Boy Scouts of America, the Boys & Girls Clubs of Southeast Michigan, the National Association of Manufacturers (NAM), the Stellantis Supplier Advisory Council, Amerisure Mutual Holdings, Inc. and the Amerisure Companies.
Presently, he serves on the boards of Business Leaders for Michigan, the Detroit Regional CEO Council, the Detroit Economic Club, the Detroit Regional Chamber, the Detroit Regional Partnership, the Great Lakes Council Boy Scouts of America, the Boys & Girls Clubs of Southeast Michigan, the National Association of Manufacturers (NAM), the Amerisure Companies and the REV Group, Inc. Mr.
Another area of continued focus to foster a culture of inclusion and develop a more diverse workforce is the sponsorship of our Associate Resource Groups (ARGs) which provide a forum for associates with shared experiences, characteristics or backgrounds to connect and enhance career and personal development. Our ARGs include: POWhER, Young Professionals, U.S.
Another area of continued focus to foster a culture of inclusion and develop a more engaged workforce is the sponsorship of our Associate Resource Groups (ARGs) which provide a forum for associates with shared experiences, characteristics or backgrounds to connect and enhance career and personal development.
In addition to maintaining and building upon our long-standing relationships with GM, Stellantis and Ford, we are focused on generating profitable growth with new and existing global customers. Recent new business awards and program launches include customers such as Xpeng DiDi, Dongfeng and Skywell.
In addition to maintaining and building upon our long-standing relationships with GM, Ford and Stellantis, we are focused on generating profitable growth with new and existing global customers. Recent new business awards and program launches include customers such as Scout Motors, Dongfeng, Skywell, Audi, Volkswagen, FAW Group and Phoebus.
Prior to that, Mr. Dauch served as President & Chief Operating Officer (2009 - 2012) and held several other positions of increasing responsibility from the time he joined AAM in 1995.
Dauch served as President & Chief Operating Officer (2009 - 2012) and held several other positions of increasing responsibility from the time he joined the Company in 1995.
Prior to that, she served as Senior Vice President - Human Resources (since January 2023), Vice President - Human Resources (since September 2012), Executive Director - Human Resources & Labor Relations (since November 2010), Executive Director - Human Resources (since September 2009), Director - Human Resources Operations (since October 2008), and served in various plant and program management roles since joining AAM in July 1996.
Prior to that she served as Senior Vice President - Chief of Staff (since July 2025), Senior Vice President - Human Resources & Sustainability (since March 2023), Senior Vice President - Human Resources (since January 2023), Vice President - Human Resources (since September 2012), Executive Director - Human Resources & Labor Relations (since November 2010), Executive Director - Human Resources (since September 2009), Director - Human Resources Operations (since October 2008), and served in various plant and program management roles since joining the Company in July 1996.
Such expenditures were not significant in 2024, 2023 and 2022. 6 Environmental, Social and Governance Environmental Sustainability We are committed throughout our operations to the conservation and protection of our natural resources and the environment.
Such expenditures were not significant in 2025, 2024 and 2023. 6 Environmental Sustainability and Human Capital Management Environmental Sustainability We are committed throughout our operations to the conservation and protection of our natural resources and the environment.
Item 1. Business 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.
Item 1. Business Effective January 26, 2026, American Axle & Manufacturing Holdings, Inc. changed its name to Dauch Corporation. As used in this report, except as otherwise indicated in information incorporated by reference, references to “our Company,” "we," "our," "us" or “Dauch” mean Dauch Corporation and its subsidiaries and predecessors, collectively.
Our portfolio includes high-efficiency axles, aluminum axles and AWD applications.
Our portfolio includes high-efficiency steel and aluminum axles, as well as AWD applications.
Diversification of Customer, Product and Geographic Sales Mix Another element of building value for our key stakeholders is the diversification of our business through the growth of new and existing customer relationships and expansion of our product portfolio.
The Company was recognized for our modular lightweight axle housing design. Diversification of Customer, Product and Geographic Sales Mix Another element of building value for our key stakeholders is the diversification of our business through the growth of new and existing customer relationships and expansion of our product portfolio.
Our AAM360 program also assists management in developing and implementing standards for recruitment and selection of a knowledgeable and diverse workforce, promoting learning and growth and driving effective performance while fostering an environment of open communication with AAM leadership in a variety of formats, including townhall-style meetings.
These programs also assist management in developing and implementing standards for recruitment and selection of a knowledgeable workforce, promoting learning and growth and driving effective performance while fostering an environment of open communication with the Company's leadership in a variety of formats, including townhall-style meetings.
We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 42% of our consolidated net sales in 2024, 39% in 2023, and 40% in 2022. We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup trucks and its derivatives.
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup truck and its derivatives. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales in 2025, 13% in 2024, and 16% in 2023.
Our Metal Forming segment, in addition to supplying component parts to many external customers, is a key supplier to our Driveline segment, helping to ensure continuity of supply for certain parts to our largest manufacturing facilities. • During 2024, we launched 11 programs across our business units for our customers including GM, Stellantis, Mercedes-AMG and Audi.
Our Metal Forming segment, in addition to supplying component parts to many external customers, is a key supplier to our Driveline segment, helping to ensure continuity of supply for certain parts to our largest manufacturing facilities. • During 2025, we launched seven programs across our business units for our customers including Ford, Stellantis, Skywell and Dongfeng Motor Group.
Lynch served at Stellar Engineering for nine years in various capacities. 9 Christopher J. May , age 55, has been Executive Vice President & Chief Financial Officer since January 2023.
Lynch served at Stellar Engineering for nine years in various capacities and began his automotive career with Concord Design. 9 Christopher J. May , age 56, has been Executive Vice President & Chief Financial Officer since January 2023.
Paroly 59 Vice President & General Counsel David C. Dauch , age 60, has been AAM's Chief Executive Officer since September 2012. Mr. Dauch has served on AAM's Board of Directors since April 2009 and was appointed Chairman of the Board in August 2013. From September 2012 through August 2015, Mr. Dauch served as AAM’s President & CEO.
Dauch , age 61, has been the Company's Chief Executive Officer since September 2012. Mr. Dauch has served on the Company's Board of Directors since April 2009 and was appointed Chairman of the Board in August 2013. From September 2012 through August 2015, Mr. Dauch served as the Company’s President & CEO. Prior to that, Mr.
We are focused on continuous improvement of the S 4 system and in our total recordable incident rate (TRIR) in every facility. We continuously monitor our facilities' progress in the S 4 Safety System.
We are focused on continuous improvement of the S 4 system and in our total recordable incident rate (TRIR) in every facility. We continuously monitor our facilities' progress in the S 4 Safety System. In 2025, our TRIR was 0.66 – a reduction of approximately 69% in recordable injuries since the S 4 program began in 2015.
Prior to joining AAM, Mrs. Kemp served for nine years at Corning Incorporated, where she progressed through a series of manufacturing positions with increasing responsibility, including Industrial Engineer, Department Head and Operations Manager. Michael J. Lynch , age 60, has been AAM's President & Chief Operating Officer since March 2023.
Prior to joining the Company, Mrs. Kemp served for nine years at Corning Incorporated, where she progressed through a series of manufacturing positions with increasing responsibility, including Industrial Engineer, Department Head and Operations Manager. Michael J. Lynch , age 61, has been the Company's President - Driveline since the completion of the Business Combination on February 3, 2026.
Our pending combination with Dowlais is a key step in achieving our goals of customer, product and geographic diversification. Competition We compete with a variety of independent suppliers and distributors, as well as with the in-house operations of certain vertically integrated OEMs. Technology, design, quality, delivery and cost are the primary elements of competition in our industry segments.
Our acquisition of Dowlais is a key step in achieving our goals of customer, product and geographic diversification, as well as significantly increasing our size and scale. Competition We compete with a variety of independent suppliers and distributors, as well as with the in-house operations of certain vertically integrated OEMs.
In 2025, we expect to launch new and replacement programs for a variety of customers across our business units with Stellantis, Audi and Skywell, among others.
In 2026, we expect to launch new and replacement programs for a variety of customers across our business units with GM, Audi, Volkswagen, FAW Group and Phoebus.
Empowerment of our associates is essential to continuously improving our quality performance, technology leadership and operational excellence and enabling our associates to grow professionally into the leaders that will guide AAM into the future.
These programs offer resources, tools and events that are designed to empower associates in their work and personal lives. Empowerment of our associates is essential to continuously improving our quality performance, technology leadership and operational excellence, and enabling our associates to grow professionally into the leaders that will guide the Company into the future.
We are focused on securing and enhancing our core business of manufacturing products that support internal combustion engine (ICE) vehicle programs by delivering operational excellence and quality products to our customers, while growing our hybrid and electric vehicle business, as end-user acceptance of these vehicle types is expected to grow in the future. 2 Competitive Strengths We achieve our strategic objectives by emphasizing a commitment to: Sustaining our operational excellence and focus on cost management. • We deliver operational excellence by leveraging our global standards, policies and best practices across all disciplines through the use of the AAM Operating System, which includes, among other elements, our S 4 (S-to-the-fourth) safety system, Q 4 (Q-to-the-fourth) quality system and E 4 (E-to-the-fourth) energy and environmental sustainability system.
Competitive Strengths We achieve our strategic objectives by emphasizing a commitment to: Sustaining our operational excellence and focus on cost management. • We deliver operational excellence by leveraging our global standards, policies and best practices across all disciplines through the use of our operating system, which includes, among other elements, our S 4 (S-to-the-fourth) safety system, Q 4 (Q-to-the-fourth) quality system and E 4 (E-to-the-fourth) energy and environmental sustainability system.
During 2024, our Metal Forming segment was awarded multiple internal combustion engine vehicle component programs by global OEMs. • We continue to evaluate our existing product portfolio for areas that are not core to our business in order to enhance AAM's ability to compete globally while remaining cost competitive.
During 2025, our Metal Forming segment was awarded multiple new and replacement programs that support global OEMs' internal combustion engine and hybrid vehicle component programs. • Our acquisition of Dowlais increases our size and scale, as well as further diversifies our core business by adding complementary products, including sideshafts, to our Driveline product portfolio. • We continue to evaluate our existing product portfolio for areas that are not core to our business in order to enhance the Company's ability to compete globally while remaining cost competitive.
Additionally, we have committed to reaching net-zero carbon emissions by 2040, and have received the validation of our net-zero emissions targets by the climate-action organization Science Based Targets Initiative. We also have established a goal to purchase 100% of energy from renewable sources for our U.S. operations by the end of 2025 and globally by 2035.
Additionally, we have committed to reaching net-zero carbon emissions by 2040, and have received the validation of our net-zero emissions targets by the climate-action organization Science Based Targets Initiative.
In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales in 2024, 16% in 2023, and 18% in 2022.
We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 44% of our consolidated net sales in 2025, 42% in 2024, and 39% in 2023.
AAM has long-standing relationships with charitable organizations to support local families, youth outreach, education, wellness, and social equality. We support global organizations with both donations and volunteer hours, and AAM associates across the globe regularly participate in charitable and community events that allow our team to contribute to causes important to them.
We support global organizations with both donations and volunteer hours, and our associates across the globe regularly participate in charitable and community events that allow our team to contribute to causes important to them. 8 Executive Officers of the Company Name Age Position David C.
Of the 14,000 hourly associates, approximately 73% are represented under collective bargaining agreements with various labor unions. Creating an Inclusive, Equitable and Diverse Culture At AAM, we believe diversity drives creativity. We believe an inclusive culture encourages, supports and celebrates the unique voices of our global workforce.
Of the 13,000 hourly associates, approximately 76% are represented under collective bargaining agreements with various labor unions. Creating an Inclusive Culture We believe an inclusive culture encourages, supports and celebrates the unique voices of our global workforce. The Company is committed to listening, learning and taking action that will move our company and our communities forward, together.
In addition to traditional competitors in the automotive sector, the trend toward electrification and advanced electronic integration has increased the level of new market entrants.
Technology, design, quality, delivery and cost are the primary elements of competition in our industry segments. In addition to traditional competitors in the automotive sector, advancements in electrification and electronic integration has increased the level of new market entrants.
The Board’s active oversight reflects the importance of an inclusive culture to our business and demonstrates the power of accountability to this critical area of focus. With oversight from our Board and direction from senior leadership, our DEI Steering Committee (DEI Committee) helps to ensure that our actions are guided by the experiences and recommendations of our associates.
With oversight from our Board and direction from senior leadership, our Inclusion Steering Committee helps to ensure that our actions are guided by the experiences and recommendations of our associates. Comprised of talented associates, the Inclusion Steering Committee helps provide direction to advance a respectful and inclusive company culture.
Executive Officers of AAM Name Age Position David C. Dauch 60 Chairman of the Board & Chief Executive Officer Terri M. Kemp 59 Senior Vice President - Human Resources & Sustainability Michael J. Lynch 60 President & Chief Operating Officer Christopher J. May 55 Executive Vice President & Chief Financial Officer Tolga I. Oal 53 President - Driveline Matthew K.
Dauch 61 Chairman of the Board & Chief Executive Officer Markus Bannert 52 President - Metal Forming Terri M. Kemp 60 Senior Vice President - Chief of Staff & Sustainability Michael J. Lynch 61 President - Driveline Christopher J. May 56 Executive Vice President & Chief Financial Officer Tolga I. Oal 54 President - Axle Systems David C.
Comprised of talented and diverse associates, the DEI Committee helps provide direction to advance a respectful and inclusive company culture. We have also established Regional DEI Steering Committees in Asia, Brazil and Mexico to provide additional support locally for these regions.
We have also established Regional Inclusion Steering Committees in Asia, Brazil, Mexico and Europe to provide additional support locally for these regions.
Prior to joining AAM, Mr. May served as a Senior Accountant for Ernst & Young. Mr. May is a certified public accountant. Tolga I. Oal , age 53, has been President - Driveline, since December 2022 when he rejoined AAM after serving as Co-Chief Executive Officer of Howmet Aerospace until October 2021.
Prior to that, he served as President - Driveline since December 2022 when he rejoined the Company after serving as Co-Chief Executive Officer of Howmet Aerospace until October 2021.
Human Capital Management Our ability to sustain and grow our business requires us to attract, retain and develop a highly skilled and diverse workforce. We employ approximately 19,000 associates on a global basis, of which 6,000 are employed in the U.S. and 13,000 are employed at our non-U.S. locations. Approximately 5,000 are salaried associates and approximately 14,000 are hourly associates.
As of December 31, 2025, prior to the completion of the Business Combination, we employed approximately 18,000 associates on a global basis, of which 5,000 are employed in the U.S. and 13,000 are employed at our non-U.S. locations. Approximately 5,000 are salaried associates and approximately 13,000 are hourly associates.
Its four components are designed to enhance our associates’ experience at AAM and includes associate health and safety, professional development, competitive compensation and benefits and the global community. These programs offer resources, tools and events that are designed to empower associates in their work and personal lives.
Our ARG events focus on company, culture, community and career, as well as various learning opportunities. 7 Attracting and Retaining Associates Our recruitment and retention strategy is based on four components that are designed to enhance our associates’ experience at the Company and includes associate health and safety, professional development, competitive compensation and benefits and the global community.
During 2024, we entered into a definitive agreement to sell our commercial vehicle axle business and related assets in India (AAM India Manufacturing Corporation Pvt., Ltd.) for a sales price of $65 million, subject to certain customary adjustments at closing.
During 2025, we completed the sale of our commercial axle business in India (AAM India Manufacturing Corporation Pvt., Ltd.) for approximately $65 million, net of closing adjustments.
Our e-drive technology is designed to be segment agnostic, enabling our products to support a variety of markets and vehicle types. • During 2024, AAM announced new business awards in the Chinese market to supply Xpeng DiDi with 3-in-1 electric drive units, and to supply e-Beam axles to Skywell which is expected to launch in 2025. • Also during 2024, AAM announced a new business award to supply components to a global OEM for its new modular platform that will support multiple propulsion systems, as well as new business awards to supply various electric vehicle components for multiple OEM customers, including electric drive gears for a European OEM.
Our e-drive technology is designed to be segment agnostic, enabling our products to support a variety of markets and vehicle types. • During 2025, we announced a new business award to supply front electric drives and rear electric beam axles for Scout Motors' much anticipated launch of the all-new Scout® Traveler™ SUV and Scout® Terra™ truck.
AAM is committed to listening, learning and taking action that will move our company and our communities forward, together. Embracing diversity promotes innovation and helps AAM to attract and retain the best talent everywhere we do business. AAM’s commitment to inclusion begins with our Board of Directors (Board).
Embracing an inclusive culture helps us attract and retain the best talent everywhere we do business. The Company’s commitment to inclusion begins with our Board of Directors (Board). The Board’s active oversight reflects the importance of an inclusive culture to our business and demonstrates the power of accountability to this critical area of focus.
In 2024, our TRIR was 0.7 – a reduction of approximately 67% in recordable injuries since the S 4 program began in 2015. 8 Partnering with our Global Communities AAM believes that we have a responsibility to give back to the communities in which we live and work.
Partnering with our Global Communities The Company believes that we have a responsibility to give back to the communities in which we live and work. We have long-standing relationships with charitable organizations to support local families, youth outreach, education, wellness, and social equality.
Narrative Description of Business Company Overview As a leading global tier 1 automotive and mobility supplier, AAM designs, engineers and manufactures Driveline and Metal Forming technologies to support electric, hybrid and internal combustion vehicles. Headquartered in Detroit, Michigan, with over 75 facilities in 16 countries, AAM is bringing the future faster for a safer and more sustainable tomorrow.
Following the close of the transaction, the combined company is headquartered in Detroit, Michigan and led by the Company's Chairman and CEO. Narrative Description of Business Company Overview Dauch Corporation is a premier Driveline and Metal Forming supplier serving the global automotive industry with a powertrain-agnostic product portfolio that supports electric, hybrid, and internal combustion vehicles.
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The sale is expected to close in the first half of 2025, subject to customary closing conditions, including the receipt of regulatory approvals. Bringing the Future Faster • AAM's Advanced Technology Development Center (ATDC) at our Detroit campus, allows us to accelerate technological advancements.
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On February 3, 2026, we completed our previously announced acquisition of Dowlais Group plc (Dowlais) whereby we acquired the entire issued share capital of Dowlais (the Business Combination).
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On January 29, 2025, we announced that we had reached an agreement with the Board of Directors of Dowlais Group plc (Dowlais) on the terms of a recommended cash and share offer to be made by AAM to acquire the entire issued and to be issued ordinary share capital of Dowlais for approximately $1.44 billion in cash and AAM shares.
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Pursuant to the Business Combination, Dowlais shareholders received for each Dowlais ordinary share: 0.0881 shares of new Company common stock and 43 pence per share in cash (approximately $0.59 per share as of the closing date), resulting in the issuance of approximately 117 million shares (and an increase in authorized shares from 150 million to 375 million shares) and a total purchase price of approximately $1.7 billion.
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The automotive industry continues to experience volatility in metal and commodity costs. In addition, labor shortages in certain regions in which our suppliers operate could cause production delays, a shortage of materials that we use in our manufacturing operations or increased cost of productive materials.
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The company is headquartered in Detroit, Michigan, with operations that span 24 countries and more than 175 locations. Formed through the acquisition of Dowlais Group plc and its subsidiaries - GKN Automotive and GKN Powder Metallurgy, Dauch unites deep engineering roots with global manufacturing capabilities and an entrepreneurial spirit to move mobility forward.
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We continue to monitor our progress on our Global DEI 2+1 Program, which focuses on two global topics of valuing differences and improving the representation of women in our global workforce. In addition, each AAM facility continues to focus on their selected (+1) topic based on their local initiatives to support our 2030 demographic goals around the world.
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We are focused on securing and enhancing our core business of manufacturing products that support internal combustion engine (ICE) vehicle programs by delivering operational excellence and quality products to our customers, while growing our hybrid and electric vehicle business, as end-user acceptance of these vehicle types is expected to grow in the future.
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Veterans, Black Associate Network and Latin America Talent Inclusion Network. Our ARG events focus on company, culture, community and career, as well as various learning opportunities. 7 Attracting and Retaining Associates Our AAM360 program serves as the foundation for our recruitment and retention strategy.
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Additionally, our Changshu, China facility received the GM Quality Pioneer Award for the 2024 performance year. • For the 2025 performance year, the Company was recognized by Ford with the Q1 Quality Award at our Minerva, Ohio facility. • The Company was also recognized in 2025 for quality by several other customers.
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Terri M. Kemp, age 59, has been Senior Vice President - Human Resources & Sustainability since March 2023.
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We received the Mahindra Innovation Award at our Chakan, India facility, the Dongfeng Motor Group Fearless & Conquer Outstanding Award and Fearless & Conquer Pioneer Team Award at our Changshu, China facility and the Daimler Best Supplier Award in the delivery category at our former Pune, India facility. 3 Achieving technology leadership by delivering innovative products that enhance our product portfolio while increasing our total global served market.
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Oal held various leadership positions in engineering, sales, purchasing, and finance at Siemens VDO Automotive/Continental. Matthew K. Paroly, age 59, has been Vice President and General Counsel since joining AAM in May 2023. Prior to joining AAM, Mr. Paroly served as Vice President, Chief Legal Officer, Global ESG Director and Company Secretary for TI Fluid Systems plc.
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Additionally, we exited our 50% ownership of both of our Chinese joint ventures, Hefei AAM Automotive Driveline & Chassis System Co., Ltd. and Liuzhou AAM Automotive Driveline System Co., Ltd., for approximately $30 million. Bringing the Future Faster • The Company's Advanced Technology Development Center (ATDC) at our Detroit campus, allows us to accelerate technological advancements.
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Prior to joining TI Fluid Systems, Mr. Paroly served as Vice President and Chief Legal Officer at Nexteer Automotive Inc. and Vice President and General Counsel at Fisker Automotive Inc.
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These future programs are expected to begin initial production in 2027. • Also during 2025, the Company was awarded multiple new programs for both Driveline and Metal Forming products that support electric vehicle programs. • Additionally, we received the 2025 Altair Enlighten Award for outstanding advancements in automotive lightweighting and sustainability.
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He has more than 30 years of experience in private law practice and in-house executive and legal positions at both public and private companies, including over 20 years of experience in the automotive industry. Mr. Paroly holds a juris doctor degree. Internet Website Access to Reports The website for American Axle & Manufacturing Holdings, Inc. is www.aam.com.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe loss of the services of our executive officers or other key associates, unexpected turnover, or the inability to attract or retain associates, could have a material adverse effect on our results of operations and financial condition.
Biggest changeThe loss of the services of our executive officers or other key associates, unexpected turnover, or the inability to attract or retain associates, including those associates joining the Company as a result of the Business Combination, could have a material adverse effect on our results of operations and financial condition. 14 Our goodwill, other intangible assets, and long-lived assets are at risk of impairment if our business or market conditions indicate that the carrying value of those assets exceeds their fair value.
Our supply chain, as well as our customers' supply chain, is also at risk of unanticipated events such as pandemic or epidemic illness, natural disasters, industrial incidents, changes in governmental regulations and trade agreements, including tariffs, or financial or operational instability of suppliers that could cause a disruption in the supply of critical components to us and our customers.
Our supply chain, as well as our customers' supply chain, is also at risk of unanticipated events such as changes in governmental regulations and trade agreements, including tariffs, financial or operational instability of suppliers, natural disasters, industrial incidents or pandemic or epidemic illness that could cause a disruption in the supply of critical components to us and our customers.
If we are unable to pass such cost increases on to our customers, or are otherwise unable to mitigate these cost increases through continued technology improvements, cost reductions or other productivity initiatives, or if we are unable to obtain adequate supply of raw materials, utilities and natural resources, this could have a material adverse effect on our results of operations and financial condition. 11 Our business is significantly dependent on sales to GM, Stellantis and Ford.
If we are unable to pass such cost increases on to our customers, or are otherwise unable to mitigate these cost increases through continued technology improvements, cost reductions or other productivity initiatives, or if we are unable to obtain adequate supply of raw materials, utilities and natural resources, this could have a material adverse effect on our results of operations and financial condition. 11 Our business is significantly dependent on sales to GM, Ford and Stellantis.
A reduction in our sales to either Stellantis or Ford or a reduction by Stellantis or Ford of their production of the programs we support, as a result of market share losses or otherwise, could have a material adverse effect on our results of operations and financial condition.
A reduction in our sales to either Ford or Stellantis or a reduction by Ford or Stellantis of their production of the programs we support, as a result of market share losses or otherwise, could have a material adverse effect on our results of operations and financial condition.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, the disruption of our operations or damage to our reputation.
Any such access, disclosure or other loss of information could result in disruption of our operations, legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information or damage to our reputation.
We may also experience difficulties with the performance of our supply chain, or the supply chains of customers and their suppliers, on program launches, which could result in our inability to meet our contractual obligations to key customers.
We may also experience difficulties with the performance of our supply chain, or the supply chains of our customers and their suppliers, on program launches, which could result in our inability to meet our contractual obligations to key customers.
The Senior Secured Credit Facilities and the indentures governing our senior unsecured notes also include customary events of default. Obligations under the Senior Secured Credit Facilities and our senior unsecured notes are required to be guaranteed by most of our U.S. subsidiaries that hold domestic assets.
The Senior Secured Credit Facilities and the indentures governing our senior secured notes and our senior unsecured notes also include customary events of default. Obligations under the Senior Secured Credit Facilities, our senior secured notes and our senior unsecured notes are required to be guaranteed by most of our U.S. subsidiaries that hold domestic assets.
The success of the Business Combination will depend, in significant part, on our ability to successfully integrate the acquired business, grow the revenue of the combined company and realize the anticipated strategic benefits and synergies from the Business Combination.
The success of the Business Combination will depend, in significant part, on our ability to successfully integrate the acquired business, grow the revenue of the combined company and realize the significant strategic benefits and synergies anticipated from the Business Combination.
The Business Combination may expose us to significant unanticipated liabilities relating to the operation of the combined company. These liabilities could include employment or severance-related obligations under applicable law or other benefits arrangements, legal claims, warranty or similar liabilities to customers, and claims by or amounts owed to vendors.
The Business Combination may expose us to significant unanticipated liabilities. The Business Combination may expose us to significant unanticipated liabilities relating to the operation of the combined company. These liabilities could include employment or severance-related obligations under applicable law or other benefits arrangements, legal claims, warranty or similar liabilities to customers, and claims by or amounts owed to vendors.
Further, a change in market comparables, discount rate or long-term growth rate, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. 14 Risks Related to Our Industry We are under continuing pressure from our customers to reduce our prices.
Further, a change in market comparables, discount rate or long-term growth rate, as a result of a change in economic conditions or otherwise, could result in the carrying values of the reporting units exceeding their respective fair values. Risks Related to Our Industry We are under continuing pressure from our customers to reduce our prices.
A violation of any of these covenants or agreements could result in a default under these contracts, which could permit the lenders or note holders, as applicable, to accelerate repayment of any borrowings or notes outstanding at that time and levy on the collateral granted in connection with the Senior Secured Credit Facilities.
A violation of any of these covenants or agreements could result in a default under these contracts, which could permit the lenders or note holders, as applicable, to accelerate repayment of any borrowings or notes outstanding at that time and levy on the collateral granted in connection with the Senior Secured Credit Facilities and our senior secured notes.
There can be no assurance that future negotiations, whether between AAM and the labor unions representing certain of our hourly associates or between our customers or suppliers and the labor unions representing certain of their hourly associates, will not result in additional labor cost increases or other terms and conditions that could adversely affect our results of operations and financial condition, our ability to compete for future business or our ability to attract and retain qualified associates.
There can be no assurance that future negotiations, whether between the Company and the labor unions representing certain of our hourly associates or between our customers or suppliers and the labor unions representing certain of their hourly associates, will not result in additional labor cost increases or other terms and conditions that could adversely affect our results of operations and financial condition, our ability to compete for future business or our ability to attract and retain qualified associates.
Our revenues, operating results and financial condition 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 may incur material losses and costs as a result of product recall or field action, product liability and warranty claims, litigation and other disputes and claims.
Our revenues, operating results and financial condition 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 awards. We may incur material losses and costs as a result of product recall or field action, product liability and warranty claims, litigation and other disputes and claims.
Further, as a portion of our backlog is associated with electric vehicles, these risks could be exacerbated due to uncertainty related to end-user acceptance rates and the availability of critical charging infrastructure. It is also possible that our customers may delay or cancel a product program that has been awarded to us.
Further, as a portion of our business is associated with electric vehicles, these risks could be exacerbated due to uncertainty related to end-user acceptance rates and the availability of critical charging infrastructure. It is also possible that our customers may delay or cancel a product program that has been awarded to us.
Further, various stakeholders, including customers, suppliers, providers of debt and equity capital, regulators and those in the workforce, are increasing their expectations of companies to do their part to combat global climate change and its impact, and to conduct their operations in an environmentally sustainable and socially responsible manner with appropriate oversight by senior leadership.
Further, various stakeholders, including customers, suppliers, providers of debt and equity capital, regulators and those in the workforce, are increasing their expectations of companies to do their part to combat global climate change and its impact, and to conduct their operations in an environmentally sustainable manner with appropriate oversight by senior leadership.
Our company may not realize all of the revenue expected, or we may experience delays in realizing the expected revenue, from our new and incremental business backlog.
Our company may not realize all of the revenue expected, or we may experience delays in realizing the expected revenue, from our new and incremental business.
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 credit availability, interest rates, fuel prices, consumer preference and confidence, and the ability of end-users to secure affordable financing.
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 vehicle cost, credit availability, interest rates, fuel prices, consumer preference and confidence, and the ability of end-users to secure affordable financing.
Our business is dependent on our Guanajuato Manufacturing Complex. A high concentration of our global business is supported by our Guanajuato Manufacturing Complex (GMC) in Mexico. GMC represents a significant portion of our net sales, profitability and cash flow from operations and we expect GMC to continue to represent a substantial portion of these metrics for the foreseeable future.
A high concentration of our global business is supported by our Guanajuato Manufacturing Complex (GMC) in Mexico. GMC represents a significant portion of our net sales, profitability and cash flow from operations and we expect GMC to continue to represent a substantial portion of these metrics for the foreseeable future.
Costs and expenses associated with warranties, field actions, product recalls and product liability claims could have a material adverse impact on our results of operations and financial condition and may differ materially from the estimated liabilities that we have recorded in our consolidated financial statements.
As a result, costs and expenses associated with warranties, field actions, product recalls and product liability claims could have a material adverse impact on our results of operations and financial condition and may differ materially from the estimated liabilities that we have recorded in our consolidated financial statements.
Cybersecurity for additional detail regarding our cybersecurity risk management, strategy and governance. 12 Our company, our suppliers or our customers and their suppliers may not be able to successfully and efficiently manage the timing and costs of new product program launches.
Cybersecurity for additional details regarding our cybersecurity risk management, strategy and governance. 12 Our company, our suppliers or our customers and their suppliers may not be able to successfully and efficiently manage the timing and costs of new product program launches.
This uncertainty could result in AAM’s actual revenues differing materially from those previously estimated and included in our new and incremental business backlog or could result in a change in the timing of recognizing revenues as production dates are subject to change. 15 Our business is dependent on certain global automotive market segments.
This uncertainty could result in the Company’s actual revenues differing materially from those previously estimated and included in our new and incremental business backlog or could result in a change in the timing of recognizing revenues as production dates are subject to change. Our business is dependent on certain global automotive market segments.
In addition, the Senior Secured Credit Facilities are secured on a first priority basis by all or substantially all of the assets of AAM, Inc., the assets of Holdings and each guarantor's assets, including a pledge of capital stock of our U.S. subsidiaries that hold domestic assets, including each guarantor, and a portion of the capital stock of the first tier non-U.S. subsidiaries.
In addition, the Senior Secured Credit Facilities and our senior secured notes are secured on a first priority basis by all or substantially all of the assets of AAM, Inc., the assets of Dauch and each guarantor's assets, including a pledge of capital stock of our U.S. subsidiaries that hold domestic assets, including each guarantor, and a portion of the capital stock of the first tier non-U.S. subsidiaries.
Sales and production levels of these vehicle platforms can be affected by many factors, including changes in consumer demand and preference; adverse economic conditions, such as recession or recessionary concerns; product mix shifts favoring other types of light vehicles, such as passenger cars; fuel prices; vehicle electrification; and government regulations.
Sales and production levels of these vehicle platforms can be affected by many factors, including changes in consumer demand and preference; adverse economic conditions, such as recession or recessionary concerns; the impact of vehicle price on consumer demand; product mix shifts favoring other types of light vehicles, such as passenger cars; fuel prices; vehicle electrification; and government regulations.
Future business operations and opportunities, including potential expansion of our business outside North America, may further increase the risk that cash flows resulting from these global operations may be adversely affected by changes in interest rates or currency exchange rates. Our company faces substantial pension and other postretirement benefit obligations.
Future business operations and opportunities, including the Business Combination with Dowlais and potential further expansion of our business outside North America, may further increase the risk that cash flows resulting from these global operations may be adversely affected by changes in interest rates or currency exchange rates. 17 Our company faces substantial pension and other postretirement benefit obligations.
Under OECD Pillar Two, the Framework provides for a global minimum corporate tax rate of 15%, calculated on a country-by-country basis. Countries may implement the OECD Pillar Two model rules as issued, in a modified form or not at all. Many countries have passed legislation enacting certain parts of the Framework effective in 2024.
Under OECD Pillar Two, the Framework provides for a global minimum corporate tax rate of 15%, calculated on a country-by-country basis. Countries may implement the OECD Pillar Two model rules as issued, in a modified form or not at all. Additional countries have passed legislation enacting certain parts of the Framework effective in 2025.
We have incurred substantial indebtedness and related debt service obligations, which could have important consequences, including: • reduced flexibility in planning for, or reacting to, changes in our business, the competitive environment and the markets in which we operate, and to technological and other changes; • reduced access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenditures and for general corporate purposes; • lowered credit ratings; • reduced funds available for operations, capital expenditures and other activities; and • competitive disadvantages relative to other companies with lower debt levels.
This substantial level of indebtedness could have important consequences to our business, including: • reduced flexibility in planning for, or reacting to, changes in our business, the competitive environment and the markets in which we operate, and to technological and other changes; • reduced access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenditures and for general corporate purposes; • lowered credit ratings; • reduced funds available for operations, capital expenditures and other activities; and • competitive disadvantages relative to other companies with lower debt levels.
Additionally, in 2023, new labor agreements between the UAW and our three largest customers were ratified and resulted in significant compensation increases for the UAW associates.
Additionally, recent labor agreements between the UAW and our three largest customers were ratified and resulted in significant compensation increases for the UAW associates.
A significant disruption to our GMC operations, as a result of changes in trade agreements between Mexico and other jurisdictions, including the U.S., tariffs, compliance with customs regulations, exchange rate fluctuations between the U.S. dollar and the Mexican peso, tax law changes, changes to our operating structure in Mexico, labor disputes or shortages, logistical constraints, natural disasters, availability of natural resources or utilities, pandemic or epidemic illness, or otherwise, could have a material adverse impact on our results of operations and financial condition.
A significant disruption to our GMC operations, as a result of changes in customer sourcing strategies, trade agreements between Mexico and other jurisdictions, including the expected 2026 review of the United States-Mexico-Canada Agreement (USMCA), tariffs, compliance with customs regulations, exchange rate fluctuations between the U.S. dollar and the Mexican peso, tax law changes, changes to our operating structure in Mexico, labor disputes or shortages, logistical constraints, natural disasters, availability of natural resources or utilities, pandemic or epidemic illness, or otherwise, could have a material adverse impact on our results of operations and financial condition.
If we are unable to implement such changes to our internal control over financial reporting in an efficient manner, our business, financial condition and results of operations and the market perception thereof may be materially adversely affected. The Business Combination may expose us to significant unanticipated liabilities.
If we are unable to implement such changes to our internal control over financial reporting in an efficient manner, our business, financial condition and results of operations and the market perception thereof may be materially adversely affected.
We have made public commitments to reduce emissions, conserve resources at our various facilities and further develop a diverse, equitable and inclusive culture. A failure to respond to the expectations and initiatives of our stakeholders or achieve the commitments we have made, could result in damage to our reputation and relationships with various stakeholders.
We have made public commitments to reduce emissions and conserve resources at our various facilities. A failure to respond to the expectations and initiatives of our stakeholders or achieve the commitments we have made could result in damage to our reputation and relationships with various stakeholders.
Our Senior Secured Credit Facilities, comprised of our Revolving Credit Facility, as well as our Term Loan A Facility and Term Loan B Facility, and our senior unsecured notes, contain customary affirmative and negative covenants.
Our Senior Secured Credit Facilities, comprised of our Revolving Credit Facility, as well as our Term Loan A Facility, Term Loan B Facility and Tranche C Term Facility, and the indentures governing our senior secured notes and senior unsecured notes, contain customary affirmative and negative covenants.
The issuance of these new shares will reduce our existing stockholders’ ownership and voting interest in the Company and, as a result, our existing stockholders, individually and in the aggregate, will be able to exert less influence. The issuance of these new shares may also result in fluctuations in the market price of Company shares, including a price decrease.
The issuance of these new shares reduced our existing stockholders’ ownership and voting interest in the Company and, as a result, our existing stockholders, individually and in the aggregate, can exert less influence. The issuance of these new shares may also result in fluctuations in the market price of Company shares, including a price decrease.
Our success depends, in part, on the efforts of our executive officers and other key salaried and hourly associates, such as global operational leadership, engineers, information technology professionals and associates with experience in skilled trades.
Our success depends, in part, on the efforts of our executive officers and other key salaried and hourly associates, such as global operational leadership, engineers, information technology professionals and associates with experience in skilled trades, and those associates joining the Company as a result of the Business Combination.
An increase in the applicable leverage ratio, as a result of decreased earnings or otherwise, could result in reduced access to capital under our Revolving Credit Facility, which is a significant component of our total available liquidity.
The available capacity under our Revolving Credit Facility could be limited by our covenant ratios under certain conditions. An increase in the applicable leverage ratio, as a result of decreased earnings or otherwise, could result in reduced access to capital under our Revolving Credit Facility, which is a significant component of our total available liquidity.
Sales to GM were approximately 42% of our consolidated net sales in 2024, 39% in 2023, and 40% in 2022.
Sales to GM were approximately 44% of our consolidated net sales in 2025, 42% in 2024, and 39% in 2023.
Our future success will depend, in part, on our ability to anticipate and effectively manage these and other risks. 17 Our business could be adversely impacted by global climate change or an inability to meet the expectations of our stakeholders related to environmental, social and governance (ESG) objectives.
Our future success will depend, in part, on our ability to anticipate and effectively manage these and other risks associated with operating internationally. 18 Our business could be adversely impacted by global climate change or an inability to meet the expectations of our stakeholders related to environmental sustainability objectives.
If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Business Combination within a reasonable time, our business, results of operations and financial condition could be adversely affected.
If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Business Combination within a reasonable time, our business, results of operations and financial condition could be adversely affected. Further, the Business Combination involves the integration of two businesses that previously operated independently.
If we 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 or other productivity initiatives, our results of operations and financial condition could be adversely affected. Our business faces substantial competition. The markets in which we compete are highly competitive.
If we are unable to offset the impact of any such price reductions through continued technology improvements, including the potential use of artificial intelligence, cost reductions or other productivity initiatives, our results of operations and financial condition could be adversely affected. Our business faces substantial competition. The markets in which we compete are highly competitive.
We could also experience adverse impacts to our financial condition due to volatility in the cost or availability of capital, difficultly obtaining new business or entering into new supplier relationships, a possible loss of market share on our current product portfolio, fines and penalties, increased cost of complying with new and expanding regulatory requirements, such as the Corporate Sustainability Reporting Directive (CSRD), or difficulty attracting and retaining a skilled workforce.
We could also experience adverse impacts to our financial condition due to volatility in the cost or availability of capital, difficultly obtaining new business or entering into new supplier relationships, a possible loss of market share on our current product portfolio, fines and penalties, litigation, increased cost and complexity of complying with regulatory requirements that differ across various regions, or difficulty attracting and retaining a skilled workforce.
Our results of operations or financial condition could be adversely affected if we initiate a divestiture and it is not completed in accordance with our expected timeline, or at all, or if we do not realize the expected benefits of the divestiture. 19 We may be unable to consummate and successfully integrate acquisitions and joint ventures.
Our results of operations or financial condition could be adversely affected if we initiate a divestiture and it is not completed in accordance with our expected timeline, or at all, or if we do not realize the expected benefits of the divestiture.
Sales to Stellantis accounted for approximately 13% of our consolidated net sales in 2024, 16% in 2023, and 18% in 2022, and sales to Ford accounted for approximately 13% of our consolidated net sales in 2024, and 12% in 2023 and 2022.
Sales to Ford accounted for approximately 15% of our consolidated net sales in 2025, 13% in 2024, and 12% in 2023, and sales to Stellantis were approximately 13% of our consolidated net sales in both 2025 and 2024, and 16% in 2023.
A default or acceleration under the Senior Secured Credit Facilities or the indentures governing the senior unsecured notes may result in defaults under our other debt agreements and may adversely affect our ability to operate our business, our subsidiaries' and guarantors' ability to operate their respective businesses and our results of operations and financial condition. 16 The available capacity under our Revolving Credit Facility could be limited by our covenant ratios under certain conditions.
A default or acceleration under the Senior Secured Credit Facilities or the indentures governing the senior secured notes and the senior unsecured notes may result in defaults under our other debt agreements and may adversely affect our ability to operate our business, our subsidiaries' and guarantors' ability to operate their respective businesses and our results of operations and financial condition.
In connection with the payment of the Business Combination consideration, we expect to issue additional Company shares. Company stockholders and Dowlais shareholders are expected to own approximately 51% and 49%, respectively, of the combined company following completion of the Business Combination.
In connection with the payment of the Business Combination consideration, we issued approximately 117 million Company shares. Company stockholders and Dowlais shareholders own approximately 51% and 49%, respectively, of the combined company following completion of the Business Combination.
In the future, unfavorable changes in exchange rate relationships between the functional currencies of our subsidiaries and their non-functional currency denominated assets and liabilities could have an adverse impact on our results of operations and financial condition.
The combined company’s financial condition and results of operation will therefore be more sensitive to movements in foreign exchange rates. In the future, unfavorable changes in exchange rate relationships between the functional currencies of our subsidiaries and their non-functional currency denominated assets and liabilities could have an adverse impact on our results of operations and financial condition.
Certain Dowlais agreements may contain change of control provisions which, if not waived, could have material adverse effects on the combined company. Dowlais is a party to various agreements with third parties, customer and supplier contracts and other material contracts, that may contain change of control provisions that will be triggered upon the completion of the Business Combination.
Dowlais is a party to various agreements with third parties, customer and supplier contracts and other material contracts, that may contain change of control provisions that will be triggered upon the completion of the Business Combination.
Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than we expect or may take longer to achieve than anticipated.
This growth and the anticipated benefits of the transaction may not be realized fully, or at all, or may take longer to realize than we expect. Actual operating, technological, strategic and revenue opportunities, if achieved at all, may be less significant than we expect or may take longer to achieve than anticipated.
We have significant pension and other postretirement benefit obligations to certain of our associates and retirees. Our ability to satisfy the funding requirements associated with these obligations will depend on our cash flow from operations and our ability to access credit and the capital markets.
Our ability to satisfy the funding requirements associated with these obligations will depend on our cash flow from operations and our ability to access credit and the capital markets.
On a combined company basis, we expect that, together with Dowlais, we would have approximately $4.8 billion of indebtedness, excluding a minimum of $1.25 billion of undrawn commitments under our revolving credit facility.
On a combined company basis, together with Dowlais as of the closing date of the Business Combination, we have approximately $5.4 billion of indebtedness, excluding a minimum of approximately $1.5 billion of undrawn commitments under our revolving credit facility.
Our business and financial results are affected by fluctuations in the global financial markets, including interest rates and currency exchange rates. Failure to respond timely to these fluctuations, or failure to effectively hedge these risks when possible, could lead to a material adverse impact on our results of operations and financial condition.
Failure to respond timely to these fluctuations, or failure to effectively hedge these risks when possible, could lead to a material adverse impact on our results of operations and financial condition.
There can be no assurance that future negotiations with labor unions will be resolved favorably or that we, our customers or suppliers will not experience a work stoppage or disruption that could have a material adverse impact on our results of operations and financial condition.
There can be no assurance that future negotiations with labor unions, including those related to the 2026 expiration of the collective bargaining agreement with the labor union representing certain of our associates at our largest U.S. facility, will be resolved favorably or that we, our customers or suppliers will not experience a work stoppage or disruption that could have a material adverse impact on our results of operations and financial condition.
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 possess. 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 business may be adversely affected by increased competition from suppliers benefiting from OEM affiliate relationships or financial and other resources that we do not possess.
Our business may also be adversely affected by reduced demand for the product programs we currently support, or anticipate supporting in the future, or if we do not obtain sales orders for successor programs that replace our current product programs, as a result of a shift in vehicle architecture from ICE to electrification, or otherwise.
Our business may also be adversely affected by reduced demand for the product programs we currently support, or anticipate supporting in the future, or if we do not obtain sales orders for successor programs that replace our current product programs. Our business is dependent on our Guanajuato Manufacturing Complex.
Additionally, we and certain of our third-party vendors collect and store personal or confidential information, including personally identifiable information, in connection with human resources operations and other aspects of our business. The secure operation of these information technology networks and systems and the proper processing and maintenance of this information are critical to our manufacturing and business operations.
In addition, both our organization and select third-party vendors gather and maintain personal or confidential information, including personally identifiable information, as part of our human resources activities or other business operations. The secure operation of these information technology networks and systems and the proper processing and maintenance of this information is critical to our manufacturing and business operations.
In the future, we may be required to incur significant costs to protect against or repair damage caused by these disruptions or security breaches, or as a result of implementing business continuity processes in response to disruptions or security breaches. See Item 1C.
In the future, we may be required to incur significant costs to protect against or repair damage resulting from disruptions or security breaches, as well as to implement business continuity measures in response to such events. See Item 1C.
Engaging in acquisitions and joint ventures involves potential risks, including financial risks, risks related to integrating enterprise resource planning systems, and failure to successfully integrate and fully realize the expected benefits of such acquisitions and joint ventures. Integrating acquired operations is a significant challenge and there is no assurance that we will be able to manage integrations successfully.
Engaging in acquisitions and joint ventures involves potential risks, including financial risks, risks related to our operations and capacity, risks related to integrating enterprise resource planning systems, and failure to successfully integrate and fully realize the expected benefits of such acquisitions and joint ventures.
In addition, we are exposed to similar risks resulting from cyber attacks experienced by our customers, suppliers and third-party service providers. The occurrence of any of these events could compromise our networks, or the networks of our suppliers and third-party service providers, and the information stored there could be accessed, publicly disclosed or lost.
The occurrence of any of these events could compromise our networks, or the networks of our suppliers and third-party service providers, and the information stored there could be accessed, publicly disclosed or lost.
Some or, with respect to certain covenants, all of these agreements include financial covenants based on leverage and cash interest expense coverage ratios and limitations on Holdings, AAM, Inc., and their restricted subsidiaries to make certain investments, declare or pay dividends or distributions on capital stock, redeem or repurchase capital stock and certain debt obligations, incur liens, incur indebtedness, or merge, make certain acquisitions or sales of assets.
(AAM, Inc.) and their restricted subsidiaries to make certain investments, declare or pay dividends or distributions on capital stock, redeem or repurchase capital stock and certain debt obligations, incur liens, incur indebtedness, or merge, make certain acquisitions or sales of assets.
Our business may be adversely affected by an economic decline or fiscal crisis, including prolonged recessionary periods, that result in a reduction of automotive production and sales by our customers.
Our business may be adversely affected by an economic decline or fiscal crisis, including prolonged recessionary periods, that result in a reduction of automotive production and sales by our customers. Our business could be adversely affected if we, or our customers, fail to respond timely to the proliferation of Chinese OEMs, both within China and also in new markets.
Unfavorable changes in the exchange rate relationship between the U.S. dollar and the functional currencies of our non-U.S. subsidiaries could have an adverse impact on our results of operations and financial condition.
Unfavorable changes in the exchange rate relationship between the U.S. dollar and the functional currencies of our non-U.S. subsidiaries could have an adverse impact on our results of operations and financial condition. 19 Risks Related to Regulations and Taxes Negative or unexpected tax consequences, as well as possible changes in U.S. and non-U.S. tax laws, could adversely affect our results of operations and financial condition.
Annual price reductions are a common practice in the automotive industry. Many 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 requested by our customers.
Annual price reductions are a common practice in the automotive industry. Many of our contracts require us to reduce our prices in subsequent years and, in addition, we occasionally accommodate a customer's demand for higher annual price reductions.
We have business and technical offices and manufacturing facilities in multiple countries outside the U.S. 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, tariffs or import restrictions, compliance with customs regulations, nationalization, immigration policies, expropriation and other governmental action.
Our international operations are subject to certain risks inherent in conducting business outside the U.S., and increased complexity exists for global companies due to potential changes in: currency exchange rates; corporate tax codes or international tax law treaties; price and currency exchange controls; tariffs or import restrictions; compliance with customs regulations; nationalization; immigration policies; expropriation; and other governmental action.
As a result of the Business Combination, the financial results of the combined company will be more exposed to currency exchange rate fluctuations and an increased proportion of assets, liabilities and earnings will be denominated in foreign currencies.
As a result of the Business Combination, our exposure to currency exchange rate fluctuations is expected to increase, which could result in additional volatility in our financial results as a larger proportion of our assets, liabilities and earnings will be denominated in foreign currencies.
We have incurred and expect to continue to incur additional operating expenses as we build up internal resources or engage third-party providers while we integrate the combined company following the Business Combination. Additionally, the process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or both of us and Dowlais.
We have incurred, and expect to continue to incur, additional operating expenses as we enhance internal resources or engage third-party providers while we integrate the combined company following the Business Combination.
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 by governmental authorities. Risks Related to Our Strategy Our restructuring initiatives may not achieve their intended outcomes.
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 by governmental authorities. 20 Risks Related to Our Strategy and the Business Combination with Dowlais We may be unable to consummate and successfully integrate acquisitions and joint ventures, including integrating the recently acquired business of Dowlais, and we may not realize the anticipated benefits and operating synergies expected from the Business Combination.
If the parties complete the Business Combination, it is expected that our Chairman and CEO will lead the combined company, two directors of Dowlais are expected to join the board of directors and certain senior Dowlais executives will be invited to join the senior executive management team of the combined company, in roles to be confirmed.
The combined company will be led by our Chairman and CEO, while two directors of Dowlais have joined the board of directors and certain senior Dowlais executives have been invited to join the senior executive management team of the combined company.
To the extent waivers are required, the inability to obtain waivers from one or more relevant counterparties could have a material adverse effect on the combined company. 23 If certain conditions or approvals are not met or obtained, we may be required to pay a break fee under the terms of the Co-operation Agreement.
To the extent waivers are required, the inability to obtain waivers from one or more relevant counterparties could have a material adverse effect on the combined company.
Risks Related to Liquidity, Indebtedness and the Capital Markets We have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial and other covenants.
Further, our revenues, operating results and financial condition could also be adversely impacted if we fail to establish relationships with, and win new business from, these new Chinese OEMs, both within China and in other markets. 16 Risks Related to Liquidity, Indebtedness and the Capital Markets We have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial and other covenants.
We have initiated restructuring actions in recent years to reduce cost and realign certain areas of our business and expect to initiate further restructuring actions in future periods.
Further, the cost and additional regulatory burden associated with listing our shares on both exchanges may ultimately outweigh the associated benefits. Our restructuring initiatives may not achieve their intended outcomes. We have initiated restructuring actions in recent years to reduce cost and realign certain areas of our business and expect to initiate further restructuring actions in future periods.
The occurrence of such unforeseen or unanticipated liabilities, should they be significant, could have a material adverse effect on our business, financial condition and results of operations. While the Co-operation Agreement is in effect, we are subject to restrictions on our business activities.
The occurrence of such unforeseen or unanticipated liabilities, should they be significant, could have a material adverse effect on our business, financial condition and results of operations. Certain Dowlais agreements may contain change of control provisions which, if not waived, could have material adverse effects on the combined company.
If we are unable to respond timely to changes in technology and market innovation, we risk not being able to develop our intellectual property into commercially viable products. Our results of operations and financial condition are impacted, in part, by our competitive advantage in developing, engineering, and manufacturing innovative products.
Our results of operations and financial condition are impacted, in part, by our competitive advantage in developing, engineering, and manufacturing innovative products.
The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of the operations, or the failure to successfully integrate the two businesses and leadership team, could have a material adverse effect on our business, financial condition and results of operations. 21 We will incur a substantial amount of debt to complete the acquisition of Dowlais.
The diversion of management’s attention and any delays or difficulties encountered in connection with the integration of the operations could have a material adverse effect on our business, financial condition and results of operations. As we continue our diversification efforts, we may pursue strategic growth initiatives, including through additional acquisitions and joint ventures.
The complexity and magnitude of the integration effort associated with the Business Combination are substantial and require that we fund significant capital and operating expenses to support the integration of the combined operations. Such expenses have included significant transaction, consulting and third-party service fees. Further, the anticipated costs of the integration effort are subject to change.
Integrating acquired operations is a significant challenge and there is no assurance that we will be able to manage integrations successfully. The complexity and magnitude of the integration effort associated with the Business Combination are substantial and require that we fund significant capital and operating expenses to support the integration of the combined operations.
See “Risks Related to Liquidity, Indebtedness and the Capital Markets – We have incurred substantial indebtedness and our financial condition and operations may be adversely affected by a violation of financial and other covenants” for a further discussion of risks related to our indebtedness . 22 The complexity of the integration and transition associated with the Business Combination may result in us incurring significant costs to implement changes to our internal control over financial reporting for the combined company.
An inability to successfully achieve the levels of organic and inorganic growth from our strategic initiatives could adversely impact our results of operations and financial condition. 21 The complexity of the integration and transition associated with the Business Combination may result in us incurring significant costs to implement changes to our internal control over financial reporting for the combined company.
We believe that the Business Combination will create a leading global driveline and metal forming supplier with a comprehensive product portfolio and a diversified customer base. We expect that the Business Combination will generate significant synergies, as set out in more detail in our announcement of the combination on January 29, 2025.
We believe that the Business Combination will create a leading global Driveline and Metal Forming supplier with a comprehensive product portfolio and a diversified customer base. Achieving these goals may require growth of the revenue of the combined company and realization of the targeted operating synergies expected from the Business Combination.
Because of this Panel consent requirement, the conditions, including as to a material adverse change affecting Dowlais, may provide us less protection than the customary conditions in an offer for a U.S. domestic company. 24 Issuance of Company shares in connection with the Business Combination will reduce our existing stockholders’ aggregate ownership and voting interest in the Company, will result in existing stockholders exercising less influence over management, and may adversely affect the market price of our shares.
Further, it is possible that a contractual counterparty or government agency may take a different view on the interpretation of a change in control provision to that taken by us, thereby resulting in a dispute. 22 Issuance of Company shares in connection with the Business Combination reduced our existing stockholders’ aggregate ownership and voting interest in the Company, resulting in existing stockholders now exercising less influence over management, which may adversely affect the market price of our shares.
The occurrence of any of these events individually or in combination could have a material adverse effect on our business, results of operations and financial condition. The Business Combination will result in significant integration costs and we may not be able to integrate Dowlais into the combined company successfully.
The failure to successfully integrate the two leadership teams could have a material adverse effect on our business, financial condition and results of operations. Additionally, the process of integrating operations could cause an interruption of, or loss of momentum in, the core operating activities of one or both of us and Dowlais.
Removed
Although we have implemented robust security measures, we cannot be certain that the security measures we have in place to protect these systems and data will be successful or sufficient to protect our IT systems from current and emerging technology threats and damage from computer viruses, unauthorized access, cyber attack, including increasingly sophisticated cyber attacks that incorporate the use of artificial intelligence, and other similar disruptions.
Added
Challenges such as malware, unauthorized access and cyber attacks, including those that use advanced artificial intelligence, phishing campaigns that target our associates, as well as other disruptions, continue to evolve and may surpass our current safeguards. In addition, we are exposed to similar risks resulting from cyber incidents experienced by our customers, suppliers and third-party service providers.
Removed
Our goodwill, other intangible assets, and long-lived assets are at risk of impairment if our business or market conditions indicate that the carrying value of those assets exceeds their fair value.
Added
Many of the products that we produce are complex and certain of the programs for which we have warranty obligations are high volume in nature. The repair or replacement of these components can be labor intensive or could impact a significant number of components, either of which could result in significant costs.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−0 removed5 unchanged
Biggest changeAAM’s Chief Information Security Officer (CISO) manages and monitors these third-party service provider relationships and works closely with AAM’s information security, procurement, legal and internal audit departments to ensure proper evaluation and security assessment of critical third-party service providers and data processors. 25 Cybersecurity Governance The AAM Information Security Council (ISC), comprised of leadership representatives from across the organization, meets periodically to discuss current threats and trends and the resulting information security initiatives and priorities.
Biggest changeOur Chief Information Security Officer (CISO) manages and monitors these third-party service provider relationships and works closely with the Company’s information security, procurement, legal and internal audit departments to ensure proper evaluation and security assessment of critical third-party service providers and data processors.
In addition, on an annual basis, management reports to the Audit Committee the results of our system availability and disaster recovery testing for AAM’s enterprise systems, as well as the results of our incident response testing and corresponding action plans.
In addition, on an annual basis, management reports to the Audit Committee the results of our system availability and disaster recovery testing for our enterprise systems, as well as the results of our incident response testing and corresponding action plans.
Further, in support of our ISMS, we utilize certain third-party service providers, primarily in the following capacities: 1) incident response partners that assist with performing incident simulations and who are available to assist in the event of an actual cybersecurity incident; 2) third-party experts to conduct penetration testing on AAM systems and certain third-party systems, as necessary; and 3) leveraging third-party expertise to assist with testing IT controls and performing gap analysis over IT processes and procedures.
Further, in support of our ISMS, we utilize certain third-party service providers, primarily in the following capacities: 1) incident response partners that assist with performing incident simulations and who are available to assist in the event of an actual cybersecurity incident; 2) third-party experts to conduct penetration testing on Company systems and certain third-party systems, as necessary; and 3) leveraging third-party expertise to assist with testing IT controls and performing gap analysis over IT processes and procedures.
Management provides quarterly reports to the Audit Committee that include, among other items: 1) AAM’s cybersecurity scorecard, which includes certain key performance indicators (KPIs) and provides quantitative measures of these KPIs; 2) industry security trends and outlook; 3) an update on AAM’s security program and roadmap; 4) current quarter IT security accomplishments; and 5) IT security priorities for the following quarter.
Management provides quarterly reports to the Audit Committee that include, among other items: 1) the Company’s cybersecurity scorecard, which includes certain key performance indicators (KPIs) and provides quantitative measures of these KPIs; 2) industry security trends and outlook; 3) an update on the Company’s security program and roadmap; 4) current quarter IT security accomplishments; and 5) IT security priorities for the following quarter.
AAM’s CIO has been an IT professional in various capacities for over 25 years and maintains the following certifications: Certified CISO, Certified Information Systems Security Professional, Certified Cloud Security Professional, and Certified Information Privacy Technologist. Our Board of Directors and its committees play an active role in overseeing our key risks.
Our CIO has been an IT professional in various capacities for over 25 years and maintains the following certifications: Certified CISO, Certified Information Systems Security Professional, Certified Cloud Security Professional, and Certified Information Privacy Technologist. 24 Our Board of Directors and its committees play an active role in overseeing our key risks.
This group is comprised of leadership from the major functions within AAM and the enterprise risk management program includes the identification and continuous evaluation of the risks associated with the systems and information most critical to AAM and the processes and controls in place to protect the systems and information.
This group is comprised of leadership from the major functions within the Company and the enterprise risk management program includes the identification and continuous evaluation of the risks associated with the systems and information most critical to the Company and the processes and controls in place to protect the systems and information.
We have developed and implemented our Information Security Management System (ISMS), which includes robust processes for identifying, assessing and managing risks from cybersecurity threats. Cybersecurity risk is included in AAM’s “Top Risks Assessment” under our enterprise risk management program as identified and monitored by our Risk Management Working Group.
We have developed and implemented our Information Security Management System (ISMS), which includes robust processes for identifying, assessing and managing risks from cybersecurity threats. Cybersecurity risk is included in the Company’s “Top Risks Assessment” under our enterprise risk management program as identified and monitored by our Risk Management Working Group.
Although no cybersecurity incidents during the year ended December 31, 2024 had a material impact on our strategy, financial condition or results of operations, the scope and impact of any future incident cannot be predicted. See Item 1A. Risk Factors for additional discussion regarding AAM’s IT and cybersecurity risks. 26
Although no cybersecurity incidents during the year ended December 31, 2025 had a material impact on our strategy, financial condition or results of operations, the scope and impact of any future incident cannot be predicted. See Item 1A. "Risk Factors" for additional discussion regarding our IT and cybersecurity risks. 25
The ISC members provide support for policy changes and insights into how the information security team can most effectively educate, communicate, and support AAM. The ISC is led by AAM’s Chief Information Officer (CIO) and CISO, our frontline business leaders with regard to cybersecurity risk management.
The ISC is led by our Chief Information Officer (CIO) and CISO, our frontline business leaders with regard to cybersecurity risk management.
Added
Cybersecurity Governance The Information Security Council (ISC), comprised of leadership representatives from across the organization, meets periodically to discuss current threats and trends and the resulting information security initiatives and priorities. The ISC members provide support for policy changes and insights into how the information security team can most effectively educate, communicate, and support the Company.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed1 unchanged
Biggest changeProperties The table below summarizes our global manufacturing locations and administrative, engineering or technical locations: Manufacturing Corporate, Business Offices, Engineering and Technical Centers Country Driveline Metal Forming Brazil 1 4 — China 2 1 2 Czech Republic — 3 — France 2 — — Germany 1 4 1 India 3 — 2 Japan — — 1 Luxembourg — — 1 Mexico 8 (a) 6 — Poland 1 — — Romania — 1 — South Korea 1 — — Spain 1 1 — Thailand 1 — — United Kingdom 2 United States of America 3 21 5 Total 26 41 12 (a) The eight Driveline locations in Mexico include our Guanajuato Manufacturing Complex, which is comprised of six plants.
Biggest changeProperties The table below summarizes our global manufacturing locations and administrative, engineering or technical locations as of December 31, 2025 prior to the completion of the Business Combination: Manufacturing Corporate, Business Offices, Engineering and Technical Centers Country Driveline Metal Forming Brazil 1 4 — China 2 1 2 Czech Republic — 3 — France 2 — — Germany 1 4 1 India 1 — 1 Japan — — 1 Luxembourg — — 1 Mexico 8 (a) 6 — Poland 1 — — South Korea 1 — — Spain 1 1 — Thailand 1 — — United Kingdom 1 — — United States of America 3 21 5 Total 23 40 11 (a) The eight Driveline locations in Mexico include our Guanajuato Manufacturing Complex, which is comprised of six plants.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed1 unchanged
Biggest changeItem 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 (NYSE) under the symbol “AXL.” We had approximately 140 stockholders of record as of February 11, 2025.
Biggest changeItem 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 (NYSE) and on the London Stock Exchange (LSE) under the symbol “DCH.” We had approximately 539 stockholders of record as of February 10, 2026.
Dividends We did not declare or pay any cash dividends on our common stock in 2024. Our Amended and Restated Credit Agreement associated with our Senior Secured Credit Facilities limits our ability to declare or pay dividends or distributions on capital stock.
Dividends We did not declare or pay any cash dividends on our common stock in 2025. Our Amended and Restated Credit Agreement associated with our Senior Secured Credit Facilities and the indentures governing our secured notes limit our ability to declare or pay dividends or distributions on capital stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

122 edited+63 added−52 removed56 unchanged
Biggest changeThe following tables outline our sales and Segment Adjusted EBITDA for each of our reportable segments for the years ended December 31, 2024, 2023 and 2022 (in millions) : Year Ended December 31, 2024 Driveline Metal Forming Total Sales $ 4,253.3 $ 2,414.3 $ 6,667.6 Less: Intersegment sales 1.4 541.3 542.7 Net external sales $ 4,251.9 $ 1,873.0 $ 6,124.9 Segment adjusted EBITDA $ 578.2 $ 171.0 $ 749.2 Year Ended December 31, 2023 Driveline Metal Forming Total Sales $ 4,176.7 $ 2,454.3 $ 6,631.0 Less: Intersegment sales 0.2 551.3 551.5 Net external sales $ 4,176.5 $ 1,903.0 $ 6,079.5 Segment adjusted EBITDA $ 543.6 $ 149.7 $ 693.3 Year Ended December 31, 2022 Driveline Metal Forming Total Sales $ 4,063.5 $ 2,280.7 $ 6,344.2 Less: Intersegment sales — 541.8 541.8 Net external sales $ 4,063.5 $ 1,738.9 $ 5,802.4 Segment adjusted EBITDA $ 510.9 $ 236.4 $ 747.3 38 The increase in Driveline sales for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily reflects increased production volumes on certain vehicle programs that we support, including those associated with program launches in 2024 from our new and incremental business backlog.
Biggest changeThe following tables outline our sales and Segment Adjusted EBITDA for each of our reportable segments for the years ended December 31, 2025 and 2024 (in millions) : Year Ended December 31, 2025 Driveline Metal Forming Total Sales $ 4,062.0 $ 2,320.2 $ 6,382.2 Less: Intersegment sales 2.8 542.7 545.5 Net external sales $ 4,059.2 $ 1,777.5 $ 5,836.7 Segment adjusted EBITDA $ 563.2 $ 180.0 $ 743.2 Year Ended December 31, 2024 Driveline Metal Forming Total Sales $ 4,253.3 $ 2,414.3 $ 6,667.6 Less: Intersegment sales 1.4 541.3 542.7 Net external sales $ 4,251.9 $ 1,873.0 $ 6,124.9 Segment adjusted EBITDA $ 578.2 $ 171.0 $ 749.2 The change in Driveline sales for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily reflects lower production volumes on certain vehicle programs that we support, as well as a reduction of approximately $57 million as a result of the sale of AAM India Manufacturing Corporation Pvt., Ltd.
GLOBAL CONSUMER PREFERENCE AND OEM PRODUCTION FAVORING LIGHT TRUCKS, SPORT UTILITY VEHICLES AND CROSSOVER VEHICLES There has been ongoing demand for light trucks, SUVs and CUVs in certain markets, while demand for passenger cars has decreased.
GLOBAL CONSUMER PREFERENCE AND OEM PRODUCTION FAVORING LIGHT TRUCKS, SPORT UTILITY VEHICLES (SUVs) AND CROSSOVER VEHICLES (CUVs) There has been ongoing demand for light trucks, SUVs and CUVs in certain markets, while demand for passenger cars has decreased.
(Stellantis), Ford Motor Company (Ford) or other customers; • our ability to respond to changes in technology, increased competition or pricing pressures; • our ability to develop and produce new products that reflect market demand; • lower-than-anticipated market acceptance of new or existing products; • our ability to attract new customers and programs for new products; • reduced demand for our customers' products (particularly light trucks and sport utility vehicles (SUVs) produced by GM, Stellantis and Ford); • our ability to consummate strategic initiatives and successfully integrate acquisitions and joint ventures; • risks inherent in our global operations (including tariffs and the potential consequences thereof to us, our suppliers, and our customers and their suppliers, adverse changes in trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), compliance with customs and trade regulations, immigration policies, political stability or geopolitical conflicts, taxes and other law changes, potential disruptions of production and supply, and currency rate fluctuations); • supply shortages and the availability of natural gas or other fuel and utility sources in certain regions, labor shortages, including increased labor costs, or price increases in raw material and/or freight, utilities or other operating supplies for us or our customers as a result of pandemic or epidemic illness, geopolitical conflicts, natural disasters or otherwise; • a significant disruption in operations at one or more of our key manufacturing facilities; • risks inherent in transitioning our business from internal combustion engine vehicle products to hybrid and electric vehicle products; • our ability to realize the expected revenues from our new and incremental business backlog; • negative or unexpected tax consequences, including those resulting from tax litigation; • risks related to a failure of our information technology systems and networks, including cloud-based applications, and risks associated with current and emerging technology threats, and damage from computer viruses, unauthorized access, cyber attacks, including increasingly sophisticated cyber attacks incorporating use of artificial intelligence, and other similar disruptions; • our suppliers', our customers' and their suppliers' ability to maintain satisfactory labor relations and avoid or minimize work stoppages; • cost or availability of financing for working capital, capital expenditures, research and development (R&D) or other general corporate purposes including acquisitions, as well as our ability to comply with financial covenants; • our customers' and suppliers' availability of financing for working capital, capital expenditures, R&D or other general corporate purposes; • an impairment of our goodwill, other intangible assets, or long-lived assets if our business or market conditions indicate that the carrying values of those assets exceed their fair values; • liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers; • our ability or our customers' and suppliers' ability to successfully launch new product programs on a timely basis; • risks of environmental issues, including impacts of climate-related events, that could result in unforeseen issues or costs at our facilities, or risks of noncompliance with environmental laws and regulations, including reputational damage; • our ability to maintain satisfactory labor relations and avoid work stoppages; • our ability to achieve the level of cost reductions required to sustain global cost competitiveness or our ability to recover certain cost increases from our customers; • price volatility in, or reduced availability of, fuel; • our ability to protect our intellectual property and successfully defend against assertions made against us; • adverse changes in laws, government regulations or market conditions affecting our products or our customers' products; • our ability or our customers' and suppliers' ability to comply with regulatory requirements and the potential costs of such compliance; • changes in liabilities arising from pension and other postretirement benefit obligations; • our ability to attract and retain qualified personnel in key positions and functions; and • other unanticipated events and conditions that may hinder our ability to compete.
(Stellantis) or other customers; • reduced demand for our customers' products (particularly light trucks and sport utility vehicles (SUVs) produced by GM, Ford and Stellantis); • our ability to consummate strategic initiatives and successfully integrate acquisitions and joint ventures; • our ability to respond to changes in technology, increased competition or pricing pressures; • our ability to develop and produce new products that reflect market demand; • lower-than-anticipated market acceptance of new or existing products; • our ability to attract new customers and programs for new products; • risks inherent in our global operations (including tariffs and the potential consequences thereof to us, our suppliers, and our customers and their suppliers, adverse changes in trade agreements, such as the United States-Mexico-Canada Agreement (USMCA), compliance with customs and trade regulations, immigration policies, political stability or geopolitical conflicts, taxes and other law changes, potential disruptions of production and supply, and currency rate fluctuations); • supply shortages and the availability of natural gas or other fuel and utility sources in certain regions, labor shortages, including increased labor costs, or price increases in raw material and/or freight, utilities or other operating supplies for us or our customers as a result of pandemic or epidemic illness, geopolitical conflicts, natural disasters or otherwise; • a significant disruption in operations at one or more of our key manufacturing facilities; • risks inherent in transitioning our business from internal combustion engine vehicle products to hybrid and electric vehicle products; • our ability to realize the expected revenues from our new and incremental business backlog; • negative or unexpected tax consequences, including those resulting from tax litigation; • risks related to a failure of our information technology systems and networks, including cloud-based applications, and risks associated with current and emerging technology threats, and damage from computer viruses, unauthorized access, cyber attacks, including increasingly sophisticated cyber attacks incorporating use of artificial intelligence, and other similar disruptions; • our suppliers', our customers' and their suppliers' ability to maintain satisfactory labor relations and avoid or minimize work stoppages; • cost or availability of financing for working capital, capital expenditures, research and development (R&D) or other general corporate purposes including acquisitions, as well as our ability to comply with financial covenants; • our customers' and suppliers' availability of financing for working capital, capital expenditures, R&D or other general corporate purposes; • an impairment of our goodwill, other intangible assets, or long-lived assets if our business or market conditions indicate that the carrying values of those assets exceed their fair values; • liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers; • our ability or our customers' and suppliers' ability to successfully launch new product programs on a timely basis; • risks of environmental issues, including impacts of climate-related events, that could result in unforeseen issues or costs at our facilities, or risks of noncompliance with environmental laws and regulations, including reputational damage; • our ability to maintain satisfactory labor relations and avoid work stoppages; • our ability to achieve the level of cost reductions required to sustain global cost competitiveness or our ability to recover certain cost increases from our customers; • price volatility in, or reduced availability of, fuel; • our ability to protect our intellectual property and successfully defend against assertions made against us; • adverse changes in laws, government regulations or market conditions affecting our products or our customers' products; • our ability or our customers' and suppliers' ability to comply with regulatory requirements and the potential costs of such compliance; • changes in liabilities arising from pension and other postretirement benefit obligations; • our ability to attract and retain qualified personnel in key positions and functions; and • other unanticipated events and conditions that may hinder our ability to compete.
Each guarantee by a Subsidiary Guarantor provides by its terms that it will be automatically, fully and unconditionally released and discharged upon: • any sale, exchange or transfer (by merger or otherwise) of the capital stock of such Subsidiary Guarantor, or the sale or disposition of all the assets of such Subsidiary Guarantor, which sale, exchange, transfer or disposition is made in compliance with the applicable provisions of the indentures; • the exercise by the issuer of its legal defeasance option or covenant defeasance option or the discharge of the issuer’s obligations under the indentures in accordance with the terms of the indentures; or • the election of the issuer to affect such a release following the date that such guaranteed Notes have an investment grade rating from both Standard & Poor's Ratings Group, Inc, and Moody's Investors Service, Inc.
Each guarantee by a Subsidiary Guarantor provides by its terms that it will be automatically, fully and unconditionally released and discharged upon: • any sale, exchange or transfer (by merger or otherwise) of the capital stock of such Subsidiary Guarantor, or the sale or disposition of all the assets of such Subsidiary Guarantor, which sale, exchange, transfer or disposition is made in compliance with the applicable provisions of the indentures; • the exercise by the issuer of its legal defeasance option or covenant defeasance option or the discharge of the issuer’s obligations under the indentures in accordance with the terms of the indentures; or • the election of the issuer to affect such a release following the date that such guaranteed Notes have an investment grade rating from Standard & Poor's Ratings Group, Inc. and Moody's Investors Service, Inc.
Further, due to the uncertainty associated with the potential impact of geopolitical conflicts or events, as well as macroeconomic factors, including sustained or increased inflation, renegotiated trade agreements, and tariffs or import restrictions, we may experience lower than projected earnings in certain jurisdictions in future periods and, as a result, it is reasonably possible that changes in valuation allowances could be recognized in future periods and such changes could be material to our financial statements. 46 Unrecognized Income Tax Benefits We record uncertain tax positions on the basis of a two-step process whereby: (1) we determine whether it is "more likely than not" that the tax positions will be sustained based on the technical merits of the position: and (2) for those positions that meet the "more likely than not" recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority.
Further, due to the uncertainty associated with the potential impact of geopolitical conflicts or events, as well as macroeconomic factors, including sustained or increased inflation, renegotiated trade agreements, and tariffs or import restrictions, we may experience lower than projected earnings in certain jurisdictions in future periods and, as a result, it is reasonably possible that changes in valuation allowances could be recognized in future periods and such changes could be material to our financial statements. 43 Unrecognized Income Tax Benefits We record uncertain tax positions on the basis of a two-step process whereby: (1) we determine whether it is "more likely than not" that the tax positions will be sustained based on the technical merits of the position: and (2) for those positions that meet the "more likely than not" recognition threshold, we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority.
Significant judgments and estimates used by management when evaluating long-lived assets for impairment include: • An assessment as to whether an adverse event or circumstance has triggered the need for an impairment review; • Determination of asset groups, the primary asset within each group, and the primary asset's average estimated useful life; • Undiscounted future cash flows generated by the assets; and • Determination of fair value when an impairment is deemed to exist, which may require assumptions related to future general economic conditions, future expected production volumes, product pricing and cost estimates, working capital and capital investment requirements, discount rates and estimated liquidation values. 49 PRODUCT WARRANTY We record a liability and related charge to cost of goods sold for estimated warranty obligations at the dates our products are sold or when specific warranty issues are identified.
Significant judgments and estimates used by management when evaluating long-lived assets for impairment include: • An assessment as to whether an adverse event or circumstance has triggered the need for an impairment review; • Determination of asset groups, the primary asset within each group, and the primary asset's average estimated useful life; • Undiscounted future cash flows generated by the assets; and • Determination of fair value when an impairment is deemed to exist, which may require assumptions related to future general economic conditions, future expected production volumes, product pricing and cost estimates, working capital and capital investment requirements, discount rates and estimated liquidation values. 46 PRODUCT WARRANTY We record a liability and related charge to cost of goods sold for estimated warranty obligations at the dates our products are sold or when specific warranty issues are identified.
INDUSTRY UNCERTAINTY REGARDING ADOPTION OF ELECTRIC VEHICLES The automotive industry has experienced lower than anticipated adoption of electric vehicles. Various barriers to end-user acceptance exist, such as higher vehicle cost, limited offerings, safety concerns, battery range and vehicle performance anxiety and a lack of necessary charging infrastructure.
INDUSTRY UNCERTAINTY REGARDING ADOPTION OF ELECTRIC VEHICLES The automotive industry has experienced lower than anticipated adoption of electric vehicles. Various barriers to end-user acceptance exist, such as higher vehicle cost, limited offerings, safety concerns, regulatory uncertainty, battery range and vehicle performance anxiety and a lack of necessary charging infrastructure.
GLOBAL AUTOMOTIVE PRODUCTION AND INDUSTRY CONSOLIDATION Our customers continue to design their products to meet demand in global markets and therefore require global support from their suppliers. For this reason, it is critical that suppliers maintain a global presence in these markets in order to compete for new contracts.
GLOBAL AUTOMOTIVE PRODUCTION AND INCREASED INDUSTRY CONSOLIDATION Our customers continue to design their products to meet demand in global markets and therefore require global support from their suppliers. For this reason, it is critical that suppliers maintain a global presence in these markets in order to compete for new contracts.
The IRS subsequently issued a Notice of Tax Due in December 2022 and AAM paid the assessed tax and interest of $10.1 million in January 2023. We filed a claim for refund for the amount of tax and interest paid related to this matter for the 2015 tax year and, in December 2023, we filed suit in the U.S.
The IRS subsequently issued a Notice of Tax Due in December 2022 and we paid the assessed tax and interest of $10.1 million in January 2023. We filed a claim for refund for the amount of tax and interest paid related to this matter for the 2015 tax year and, in December 2023, we filed suit in the U.S.
Under the goodwill guidance, we determined that each of our segments represents a reporting unit. The determination of our reporting units and impairment indicators also require us to make significant judgments. At December 31, 2024 all goodwill was associated with our Driveline reporting unit.
Under the goodwill guidance, we determined that each of our segments represents a reporting unit. The determination of our reporting units and impairment indicators also require us to make significant judgments. At December 31, 2025 and 2024, all goodwill was associated with our Driveline reporting unit.
The measurement period ends once we receive the information that was not obtainable as of the acquisition date, and should not exceed one year from the acquisition date. 50 Forward-Looking Statements In this MD&A and elsewhere in this Form 10-K (Annual Report), we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance.
The measurement period ends once we receive the information that was not obtainable as of the acquisition date, and should not exceed one year from the acquisition date. 47 Forward-Looking Statements In this MD&A and elsewhere in this Form 10-K (Annual Report), we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance.
The issuance of these NOPAs does not impact the aforementioned estimated range of potential income tax expense and interest charges and does not alter AAM’s belief that it is more likely than not that our structure did not give rise to FBCSI and that it’s likely that we will be successful in ultimately defending our position. 47 PENSION AND OTHER POSTRETIREMENT BENEFITS In calculating our assets, liabilities and expenses related to pension and OPEB, key assumptions include the discount rate, expected long-term rates of return on plan assets, mortality projections and rates of increase in health care costs.
The issuance of these NOPAs does not impact the aforementioned estimated range of potential income tax expense and interest charges and does not alter our belief that it is more likely than not that our structure did not give rise to FBCSI and that it’s likely that we will be successful in ultimately defending our position. 44 PENSION AND OTHER POSTRETIREMENT BENEFITS In calculating our assets, liabilities and expenses related to pension and OPEB, key assumptions include the discount rate, expected long-term rates of return on plan assets, mortality projections and rates of increase in health care costs.
Important factors that could cause such differences include, but are not limited to: • global economic conditions, including the impact of inflation, recession or recessionary concerns, or slower growth in the markets in which we operate; • reduced purchases of our products by General Motors Company (GM), Stellantis N.V.
Important factors that could cause such differences include, but are not limited to: • global economic conditions, including the impact of inflation, recession or recessionary concerns, or slower growth in the markets in which we operate; • reduced purchases of our products by General Motors Company (GM), Ford Motor Company (Ford), Stellantis N.V.
If, in the future, GM were unable to fulfill this financial obligation, our OPEB obligations could be different than our current estimates. 48 GOODWILL We record goodwill when the purchase price of acquired businesses exceeds the value of their identifiable net tangible and intangible assets acquired.
If, in the future, GM were unable to fulfill this financial obligation, our OPEB obligations could be different than our current estimates. 45 GOODWILL We record goodwill when the purchase price of acquired businesses exceeds the value of their identifiable net tangible and intangible assets acquired.
As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (NOPA). AAM disagreed with the NOPA, believes that the proposed adjustment is without merit and contested the matter through the IRS's administrative appeals process. No resolution was reached in the appeals process and, in September 2022, the IRS issued a Notice of Deficiency.
As a result of this assertion, the IRS issued a Notice of Proposed Adjustment (NOPA). The Company disagreed with the NOPA, believes that the proposed adjustment is without merit and contested the matter through the IRS's administrative appeals process. No resolution was reached in the appeals process and, in September 2022, the IRS issued a Notice of Deficiency.
All of our assumptions were developed in consultation with our actuarial service providers. While we believe that we have selected reasonable assumptions for the valuation of our pension and OPEB obligations at year-end 2024, actual trends could result in materially different valuations.
All of our assumptions were developed in consultation with our actuarial service providers. While we believe that we have selected reasonable assumptions for the valuation of our pension and OPEB obligations at year-end 2025, actual trends could result in materially different valuations.
Net income (loss) and EPS were primarily impacted by the factors discussed above. 37 SEGMENT REPORTING Our business is organized into Driveline and Metal Forming segments, with each representing a reportable segment under Accounting Standards Codification (ASC) 280 - Segment Reporting .
Net income (loss) and EPS were primarily impacted by the factors discussed above. 35 SEGMENT REPORTING Our business is organized into Driveline and Metal Forming segments, with each representing a reportable segment under Accounting Standards Codification (ASC) 280 - Segment Reporting .
The following represents summarized financial information of Holdings, AAM, Inc. and the Subsidiary Guarantors (collectively, the Combined Entities). The information has been prepared on a combined basis and excludes any investments of AAM Holdings, AAM, Inc., or the Subsidiary Guarantors in non-guarantor subsidiaries. Intercompany transactions and amounts between Combined Entities have been eliminated.
The following represents summarized financial information of Dauch, AAM, Inc. and the Subsidiary Guarantors (collectively, the Combined Entities). The information has been prepared on a combined basis and excludes any investments of Dauch, AAM, Inc., or the Subsidiary Guarantors in non-guarantor subsidiaries. Intercompany transactions and amounts between Combined Entities have been eliminated.
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. 51
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. 48
Accordingly, our quarterly results may reflect these trends. LEGAL PROCEEDINGS See Note 13 - Income Taxes and Note 10 - Commitments and Contingencies in Item 8, "Financial Statements and Supplementary Data" for discussion of legal proceedings and the effect on AAM.
Accordingly, our quarterly results may reflect these trends. LEGAL PROCEEDINGS See Note 13 - Income Taxes and Note 10 - Commitments and Contingencies in Item 8, "Financial Statements and Supplementary Data" for discussion of legal proceedings and the effect on the Company.
As such, we have not recorded any impact of the IRS’s proposed adjustment in our consolidated financial statements as of, and for the years ended, December 31, 2024 and December 31, 2023, with the exception of the cash payment and associated income tax receivable of $10.1 million paid by AAM to the IRS in 2023.
As such, we have not recorded any impact of the IRS’s proposed adjustment in our consolidated financial statements as of, and for the years ended, December 31, 2025, December 31, 2024 and December 31, 2023, with the exception of the cash payment and associated income tax receivable of $10.1 million paid by the Company to the IRS in 2023.
The effect on our pension plans of a 0.5% decrease in both the discount rate and expected return on assets is shown below as of December 31, 2024, our valuation date.
The effect on our pension plans of a 0.5% decrease in both the discount rate and expected return on assets is shown below as of December 31, 2025, our valuation date.
Each guarantee by Holdings and/or any of the Subsidiary Guarantors is: • a senior obligation of the relevant Subsidiary Guarantors; • the unsecured and unsubordinated obligation of the relevant Subsidiary Guarantors; and • of equal rank with all other existing and future unsubordinated and unsecured indebtedness of the relevant Subsidiary Guarantors.
Each guarantee by Dauch and/or any of the Subsidiary Guarantors is: • a senior obligation of the relevant Subsidiary Guarantors; • the unsecured and unsubordinated obligation of the relevant Subsidiary Guarantors; and • of equal rank with all other existing and future unsubordinated and unsecured indebtedness of the relevant Subsidiary Guarantors.
EFFECT OF NEW ACCOUNTING STANDARDS See Note 1 - Organization and Summary of Significant Accounting Policies in Item 8, "Financial Statements and Supplementary Data" for discussion of new accounting standards and the effect on AAM.
EFFECT OF NEW ACCOUNTING STANDARDS See Note 1 - Organization and Summary of Significant Accounting Policies in Item 8, "Financial Statements and Supplementary Data" for discussion of new accounting standards and the effect on the Company.
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Edge, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 13% of our consolidated net sales in 2024, and 12% in 2023 and 2022.
We are also a supplier to Ford Motor Company (Ford) for driveline system products on certain vehicle programs including the Bronco Sport, Maverick, Escape and Lincoln Nautilus, and we also sell various products to Ford from our Metal Forming segment. Sales to Ford were approximately 15% of our consolidated net sales in 2025, 13% in 2024, and 12% in 2023.
Our warranty accrual was $60.6 million as of December 31, 2024 and $66.3 million as of December 31, 2023. During 2024 and 2023, we made adjustments to our warranty accrual to reflect revised estimates regarding our projected future warranty obligations. Actual experience could differ from the amounts estimated requiring adjustments to these liabilities in future periods.
Our warranty accrual was $63.3 million as of December 31, 2025 and $60.6 million as of December 31, 2024. During 2025 and 2024, we made adjustments to our warranty accrual to reflect revised estimates regarding our projected future warranty obligations. Actual experience could differ from the amounts estimated requiring adjustments to these liabilities in future periods.
Additionally, during the year ended December 31, 2024, we recognized an income tax benefit of $7.9 million as a result of elections made as part of our 2023 income tax return.
Additionally, during the year ended December 31, 2024, we recognized an income tax benefit of $7.9 million as a result of elections made as part of a prior year income tax return.
This resulted in a principal payment of $50.0 million and we expensed approximately $0.2 million for the write-off of a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of this borrowing.
This resulted in a principal payment of $50.0 million and $0.9 million in accrued interest. We also expensed approximately $0.2 million for the write-off of a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing.
If, based upon available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. As of December 31, 2024, we have a valuation allowance of approximately $288.8 million related to net deferred tax assets in several non-U.S. jurisdictions and U.S. federal, state and local jurisdictions.
If, based upon available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. As of December 31, 2025, we have a valuation allowance of approximately $313.6 million related to net deferred tax assets in several non-U.S. jurisdictions and U.S. federal, state and local jurisdictions.
The rate is assumed to decrease gradually to 5.0% by 2034 and remain at that level thereafter. A 0.5% decrease in the discount rate for our OPEB would have increased total expense in 2024 and the postretirement obligation, net of GM cost sharing, at December 31, 2024 by $0.4 million and $7.8 million, respectively.
The rate is assumed to decrease gradually to 5.0% by 2036 and remain at that level thereafter. A 0.5% decrease in the discount rate for our OPEB would have increased total expense in 2025 and the postretirement obligation, net of GM cost sharing, at December 31, 2025 by $0.4 million and $8.1 million, respectively.
In 2024, the weighted-average discount rates determined on that basis were 5.65% for the valuation of our pension benefit obligations and 5.70% for the valuation of our OPEB obligations. The discount rates used in the valuations of our non-U.S. pension obligations were based on hypothetical yield curves developed from corporate bond yield information within each regional market.
In 2025, the weighted-average discount rates determined on that basis were 5.35% for the valuation of our pension benefit obligations and 5.45% for the valuation of our OPEB obligations. The discount rates used in the valuations of our non-U.S. pension obligations were based on hypothetical yield curves developed from corporate bond yield information within each regional market.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 202 3 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 16, 2024, which discussion is incorporated herein by reference.
Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 14, 2025, which discussion is incorporated herein by reference.
In 2024, the weighted-average discount rate determined on that basis was 4.95% for our non-U.S. plans. The expected weighted-average long-term rates of return on our plan assets were 6.75% for our U.S. plans, and 5.80% for our non-U.S. plans in 2024.
In 2025, the weighted-average discount rate determined on that basis was 5.15% for our non-U.S. plans. The expected weighted-average long-term rates of return on our plan assets were 6.75% for our U.S. plans, and 5.80% for our non-U.S. plans in 2025.
In addition to AAM's technology development relationships and organic growth in technology and processes, AAM's pending acquisition of Dowlais provides a significant opportunity for AAM to leverage complementary technologies, expand our product portfolio, diversify our global customer base, and strengthen our long-term financial profile through greater scale.
In addition to the Company's technology development relationships and organic growth in technology and processes, our acquisition of Dowlais provides a significant opportunity for us to leverage complementary technologies, expand our product portfolio, diversify our global customer base, and strengthen our long-term financial profile through greater scale.
Intense competition, volatility in the price and availability of raw materials, labor shortages and increased labor costs, fluctuations in exchange rates and interest rates, and significant pricing pressures remain. At the same time, there is a focus on investing in future products that will incorporate the latest technology and meet evolving customer demands.
Intense competition, volatility in the price and availability of raw materials, certain labor shortages, particularly those associated with skilled trades, increased labor costs, fluctuations in exchange rates and interest rates, and significant pricing pressures remain. At the same time, there is a focus on investing in future products that will incorporate the latest technology and meet evolving customer demands.
Additionally, non-GAAP financial measures as presented by AAM may not be comparable to similarly titled measures reported by other companies.
Additionally, non-GAAP financial measures as presented by the Company may not be comparable to similarly titled measures reported by other companies.
The credit ratings and outlook currently assigned to our securities by the rating agencies are as follows: Corporate Family Rating Senior Unsecured Notes Rating Senior Secured Notes Rating Outlook Standard & Poor's BB- B+ BB+ Stable Moody's Investors Services B1 B2 Ba1 Stable Dividend program We have not declared or paid any cash dividends on our common stock in 2024 or 2023.
The credit ratings and outlook currently assigned to our securities by the rating agencies are as follows: Corporate Family Rating Senior Unsecured Notes Rating Senior Secured Notes Rating Outlook Standard & Poor's BB- B+ BB Negative Moody's Investors Services B1 B3 Ba2 Stable Fitch BB- BB- BB+ Stable Dividend program We have not declared or paid any cash dividends on our common stock in 2025 or 2024.
In order to effectively drive technology development, recognize cost synergies, optimize capacity utilization, and increase global footprint, the industry may continue to see consolidation in the supply base as companies recognize and respond to the need for scalability.
In order to effectively drive technology development, recognize cost synergies, optimize capacity utilization, and efficiently serve global markets, the industry may continue to see consolidation in the supply base as companies recognize and respond to the need for scalability.
A 1.0% increase in the assumed health care trend rate would have increased total service and interest cost in 2024 and the postretirement obligation, net of GM cost sharing, at December 31, 2024 by $0.7 million and $11.9 million, respectively.
A 1.0% increase in the assumed health care trend rate would have increased total service and interest cost in 2025 and the postretirement obligation, net of GM cost sharing, at December 31, 2025 by $0.7 million and $12.5 million, respectively.
Gross profit and gross margin were impacted by the factors discussed in Net sales and Cost of goods sold above. 34 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) Year Ended December 31, (in millions) 2024 2023 Change Percent Change Selling, general and administrative expenses $ 387.1 $ 366.9 $ 20.2 5.5 % SG&A as a percentage of net sales was 6.3% in 2024 as compared to 6.0% in 2023.
Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above. 32 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (SG&A) Year Ended December 31, (in millions) 2025 2024 Change Percent Change Selling, general and administrative expenses $ 389.0 $ 387.1 $ 1.9 0.5 % SG&A as a percentage of net sales was 6.7% in 2025 as compared to 6.3% in 2024.
Expected Discount Return on Rate Assets (in millions) Decline in funded status $ (20.0) N/A Increase in 2024 expense $ 0.1 $ 2.2 No changes in benefit levels or in the amortization of gains or losses have been assumed. For 2025, we assumed a weighted-average annual increase in the per-capita cost of covered health care benefits of 6.8% for OPEB.
Expected Discount Return on Rate Assets (in millions) Decline in funded status $ (19.9) N/A Increase in 2025 expense $ — $ 2.0 No changes in benefit levels or in the amortization of gains or losses have been assumed. For 2026, we assumed a weighted-average annual increase in the per-capita cost of covered health care benefits of 7.0% for OPEB.
This change was primarily the result of timing of sales to customers in the applicable periods, as well as the timing of collections on customer receivables due, in part, to our participation in an early payment program offered by our largest customer.
This change was primarily the result of increased sales to customers in the applicable periods, partially offset by the impact of timing of collections on customer receivables due, in part, to our participation in an early payment program offered by our largest customer.
We record interest and penalties on uncertain tax positions in income tax expense (benefit). As of December 31, 2024 and 2023, we had a liability for unrecognized income tax benefits and related interest and penalties of $34.2 million and $38.1 million, respectively.
We record interest and penalties on uncertain tax positions in income tax expense (benefit). As of December 31, 2025 and 2024, we had a liability for unrecognized income tax benefits and related interest and penalties of $32.6 million and $34.2 million, respectively.
AAM and GM share in the cost of OPEB for eligible retirees proportionally based on the length of service an employee had with AAM and GM. We estimate the future cost sharing payments and present it as an asset on our Consolidated Balance Sheet. As of December 31, 2024, we estimated $120.4 million in future GM cost sharing.
The Company and GM share in the cost of OPEB for eligible retirees proportionally based on the length of service an employee had with the Company and GM. We estimate the future cost sharing payments and present it as an asset on our Consolidated Balance Sheet. As of December 31, 2025, we estimated $125.3 million in future GM cost sharing.
The following factors impacted cash provided by operating activities in 2024 as compared to 2023: Accounts receivable For the year ended December 31, 2024, we experienced an increase in cash flow from operating activities of approximately $63 million related to the change in our accounts receivable balance from December 31, 2023 to December 31, 2024, as compared to the change in our accounts receivable balance from December 31, 2022 to December 31, 2023.
The following factors impacted cash provided by operating activities in 2025 as compared to 2024: Accounts receivable For the year ended December 31, 2025, we experienced a decrease in cash flow from operating activities of approximately $93 million related to the change in our accounts receivable balance from December 31, 2024 to December 31, 2025, as compared to the change in our accounts receivable balance from December 31, 2023 to December 31, 2024.
Treasury stock Treasury stock increased by $2.8 million in 2024 to $235.7 million, as compared to $232.9 million at year-end 2023, due to the withholding and repurchase of shares of AAM stock to satisfy employee tax withholding obligations due upon the vesting of stock-based compensation.
Treasury stock Treasury stock increased by $2.8 million in 2025 to $238.5 million, as compared to $235.7 million at year-end 2024, due to the withholding and repurchase of shares of Company stock to satisfy employee tax withholding obligations due upon the vesting of stock-based compensation.
As of December 31, 2024, in the event AAM is not successful in defending its position, the potential additional income tax expense, including estimated interest charges, related to tax years 2015 through 2023, is estimated to be in the range of approximately $315 million to $365 million.
As of December 31, 2025, in the event the Company is not successful in defending its position, the potential additional income tax expense, including estimated interest charges, related to tax years 2015 through 2023, is estimated to be in the range of approximately $335 million to $385 million.
Accounts payable and accrued expenses For the year ended December 31, 2024, we experienced a decrease in cash flow from operating activities of approximately $123 million related to the change in our accounts payable and accrued expenses balance from December 31, 2023 to December 31, 2024, as compared to the change in our accounts payable and accrued expenses balance from December 31, 2022 to December 31, 2023.
Accounts payable and accrued expenses For the year ended December 31, 2025, we experienced an increase in cash flow from operating activities of approximately $158 million related to the change in our accounts payable and accrued expenses balance from December 31, 2024 to December 31, 2025, as compared to the change in our accounts payable and accrued expenses balance from December 31, 2023 to December 31, 2024.
Court of Federal Claims. We believe, after consultation with tax and legal counsel, that it is more likely than not that our structure did not give rise to FBCSI, and it's likely that we will be successful in ultimately defending our position.
Court of Federal Claims. We have a trial date set to begin court proceedings on this matter in 2026. We believe, after consultation with tax and legal counsel, that it is more likely than not that our structure did not give rise to FBCSI, and it's likely that we will be successful in ultimately defending our position.
We also expensed approximately $0.4 million for the write-off of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing. In the fourth quarter of 2023, we voluntarily redeemed a portion of our 6.25% Notes due 2026. This resulted in a principal payment of $50.0 million and $0.9 million in accrued interest.
We also expensed approximately $0.4 million for the write-off of a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing. In the fourth quarter of 2023, we voluntarily redeemed a portion of our then-outstanding 6.25% Notes due 2026.
The change in Metal Forming sales for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily the result of the lower production volumes on certain vehicle programs that we support, as well as a reduction of approximately $15 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
The change in Metal Forming sales for the year ended December 31, 2025, as compared to the year ended December 31, 2024, reflects lower production volumes on certain vehicle programs that we support, partially offset by an increase of approximately $15 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Total Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items.
Total Segment Adjusted EBITDA is defined as EBITDA for our reportable segments excluding the impact of restructuring and acquisition-related costs, debt refinancing and redemption costs, gain or losses on the derivative associated with our Business Combination with Dowlais, interest income on debt held in escrow, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items.
Total debt outstanding, net of debt issuance costs, was $2,624.8 million at year-end 2024 and $2,768.9 million at year-end 2023. The change in total debt outstanding, net of issuance costs, at year-end 2024, as compared to year-end 2023, was primarily due to the factors noted below. Senior Secured Credit Facilities American Axle & Manufacturing Holdings, Inc.
The change in total debt outstanding, net of issuance costs, at year-end 2025, as compared to year-end 2024, was primarily due to the factors noted below. Senior Secured Credit Facilities Dauch Corporation (Dauch) and American Axle & Manufacturing, Inc.
NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE (EPS) Net income was $35.0 million in 2024 as compared to net loss of $33.6 million in 2023. Diluted earnings per share was $0.29 in 2024 as compared to diluted loss per share of $0.29 in 2023.
NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE (EPS) Net loss was $19.7 million in 2025 as compared to net income of $35.0 million in 2024. Diluted loss per share was $0.17 in 2025 as compared to diluted earnings per share of $0.29 in 2024.
This resulted in expense of approximately $0.4 million for the write-off of the remaining unamortized debt issuance costs that we had been amortizing over the expected life of the borrowing. In 2023, we made voluntary prepayments totaling $26.0 million on our Term Loan A Facility and $20.2 million on our Term Loan B Facility.
In 2023, we made voluntary prepayments totaling $26.0 million on our Term Loan A Facility and $20.2 million on our Term Loan B Facility. As a result, we expensed approximately $1.1 million for the write-off of a portion of the unamortized debt issuance costs that we had been amortizing over the expected life of these borrowings.
At December 31, 2024 we had over $1.5 billion of liquidity consisting of approximately $553 million of cash and cash equivalents, approximately $892 million of available borrowings under our Revolving Credit Facility and approximately $78 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2027.
At December 31, 2025 we had over $1.7 billion of liquidity consisting of approximately $709 million of cash and cash equivalents, approximately $898 million of available borrowings under our Revolving Credit Facility and approximately $99 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2028.
We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 42% of our consolidated net sales in 2024, 39% in 2023, and 40% in 2022. We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup trucks and its derivatives.
We also supply driveline system products to Stellantis N.V. (Stellantis) for programs including the heavy-duty Ram full-size pickup truck and its derivatives. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales in both 2025 and 2024, and 16% in 2023.
The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the year ended December 31, 2024, as compared to the year ended December 31, 2023. INCOME TAX EXPENSE Income tax expense was $27.8 million in 2024, as compared to $9.1 million in 2023.
Other income (expense), net was income of $3.8 million in 2025, as compared to expense of $20.0 million in 2024. The change in other income (expense), net was primarily driven by changes in foreign exchange gains and losses in the year ended December 31, 2025, as compared to the year ended December 31, 2024.
As a result of our goodwill impairment test completed in the fourth quarter of 2024, we determined that the fair value of our Driveline reporting unit exceeded its carrying value by approximately 40%. See Note 3 - Goodwill and Other Intangible Assets for further detail regarding our goodwill.
As a result of our goodwill impairment test completed in the fourth quarter of 2024, we determined that the fair value of our Driveline reporting unit exceeded its carrying value by approximately 40%.
This increase was partially offset by a reduction of approximately $50 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
These decreases were partially offset by an increase of approximately $47 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
Redemption of 6.25% Notes due 2026 During the year ended December 31, 2024, we voluntarily redeemed and repurchased the remaining portion of our 6.25% Notes due 2026. This resulted in principal payments totaling $127.6 million and $2.2 million in accrued interest.
Following the issuance of the Notes on October 3, 2025, the Amended and Restated Bridge Facilities were terminated. Redemption of 6.25% Notes Due 2026 During the year ended December 31, 2024, we voluntarily redeemed and repurchased the remaining portion of our then-outstanding 6.25% Notes due 2026. This resulted in principal payments totaling $127.6 million and $2.2 million in accrued interest.
As of December 31, 2023 and 2022, our valuation allowance was $267.1 million and $217.5 million, respectively.
As of December 31, 2024 and 2023, our valuation allowance was $288.8 million and $267.1 million, respectively.
Information regarding expected payments by period can be found in Item 8, "Financial Statements and Supplementary Data" in this Form 10-K at Note 4 - Long-Term Debt for our current and long-term debt obligations, Note 15 - Leasing for our operating and finance lease obligations, Note 10 - Commitments and Contingencies for purchase commitments related to capital expenditures and project expense, and Note 8 - Employee Benefit Plans for pension and other postretirement benefit obligations.
Information regarding expected payments by period can be found in Item 8, "Financial Statements and Supplementary Data" in this Form 10-K at Note 4 - Long-Term Debt for our current and long-term debt obligations, Note 15 - Leasing for our operating and finance lease obligations, Note 10 - Commitments and Contingencies for purchase commitments related to capital expenditures and project expense, and Note 8 - Employee Benefit Plans for pension and other postretirement benefit obligations. 41 The expected future interest obligations associated with our current and long-term debt and finance lease obligations are approximately as follows: $336 million in 2026, $336 million in 2027, $325 million in 2028, $304 million in 2029, $239 million in 2030, and $497 million in 2031 and thereafter.
This was partially offset by a reduction of approximately $35 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
These decreases were partially offset by an increase of approximately $36 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments.
In connection with the Business Combination, we expect to incur significant acquisition-related costs consisting of, among other items, advisory, legal, accounting, valuation and other professional or consulting services.
Further, in connection with the Business Combination, we paid approximately $49 million for acquisition-related costs in 2025, consisting of, among other items, advisory, legal, accounting, valuation and other professional or consulting services.
Year Ended December 31, 2024 2023 2022 (in millions) Net income (loss) $ 35.0 $ (33.6) $ 64.3 Interest expense 186.0 201.7 174.5 Income tax expense 27.8 9.1 2.0 Depreciation and amortization 469.7 487.2 492.1 EBITDA $ 718.5 $ 664.4 $ 732.9 Restructuring and acquisition-related costs 18.0 25.2 30.2 Debt refinancing and redemption costs 0.6 1.3 6.4 Impairment charge 12.0 — — Loss on equity securities 0.1 1.1 25.5 Pension curtailment and settlement charges — 1.3 — Non-recurring items: Malvern Fire insurance recoveries, net of charges — — (39.1) Gain on bargain purchase of business — — (13.6) Acquisition-related fair value inventory adjustment — — 5.0 Total Segment Adjusted EBITDA $ 749.2 $ 693.3 $ 747.3 40 LIQUIDITY AND CAPITAL RESOURCES Our primary liquidity needs are to fund debt service obligations, capital expenditures, R&D spending, including further development of our electrification product portfolio, and working capital requirements, in addition to advancing our strategic initiatives.
Year Ended December 31, 2025 2024 2023 (in millions) Net income (loss) $ (19.7) $ 35.0 $ (33.6) Interest expense 201.1 186.0 201.7 Income tax expense 21.2 27.8 9.1 Depreciation and amortization 459.5 469.7 487.2 EBITDA $ 662.1 $ 718.5 $ 664.4 Restructuring and acquisition-related costs 113.4 18.0 25.2 Debt refinancing and redemption costs 6.2 0.6 1.3 Impairment charges 8.0 12.0 — Loss on equity securities — 0.1 1.1 Pension curtailment and settlement charges — — 1.3 Gain on Business Combination Derivative (52.9) — — Interest income on debt held in escrow (13.6) — — Non-recurring items: Impact of the Electric Vehicle Cancellation Settlement 20.0 — — Total Segment Adjusted EBITDA $ 743.2 $ 749.2 $ 693.3 37 LIQUIDITY AND CAPITAL RESOURCES Our primary liquidity needs are to fund debt service obligations, capital expenditures, R&D spending, and working capital requirements, in addition to advancing our strategic initiatives.
Other income (expense), net We include the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service costs in Other income (expense), net, which was expense of $20.0 million in 2024, as compared to income of $8.1 million in 2023.
Other income (expense), net Other income (expense), net includes the net effect of foreign exchange gains and losses, our proportionate share of earnings from equity in unconsolidated subsidiaries, and all components of net periodic pension and postretirement benefit costs other than service cost.
For the year ended December 31, 2024, as compared to the year ended December 31, 2023, the increase in Segment Adjusted EBITDA for the Driveline segment primarily reflects the impact of increased production volumes on certain vehicle programs that we support, as well as the impact of improved operating performance and lower launch costs.
For the year ended December 31, 2025, as compared to the year ended December 31, 2024, the change in Segment Adjusted EBITDA for the Metal Forming segment reflects the impact of lower production volumes on certain vehicle programs that we support, partially offset by improved operating performance.
The following table represents historical and forecasted light vehicle production volumes in North America as our business is most significantly impacted by production volume fluctuations in this region.
VOLUMES AND OUTLOOK Our results of operations, financial condition and cash flows are significantly impacted by fluctuations in production volumes on the vehicle programs that we support. The following table represents historical and forecasted light vehicle production volumes in North America as our business is most significantly impacted by production volume fluctuations in this region.
In order to assist management, we utilize third party valuation experts in determining the fair values. If the initial accounting for an acquisition is incomplete by the end of the reporting period in which the acquisition occurs, we record provisional amounts for the incomplete items.
If the initial accounting for an acquisition is incomplete by the end of the reporting period in which the acquisition occurs, we record provisional amounts for the incomplete items.
In July 2024, the IRS issued to AAM additional NOPAs for this matter for each of the tax years 2016 through 2019.
The IRS has subsequently issued to the Company additional NOPAs for this matter for each of the tax years 2016 through 2022.
We believe that the termination of these purchase orders reflects, in part, the significant uncertainty currently underlying the electric vehicle environment, including volatility in estimated volumes and the timing of production. We have submitted a cancellation claim to recover certain costs incurred in connection with the terminated purchase orders.
We believe that the termination of these purchase orders reflects, in part, the significant uncertainty currently underlying the electric vehicle environment, including volatility in estimated volumes and the timing of production. In January of 2026, we reached a settlement agreement with the customer on this matter (the Electric Vehicle Cancellation Settlement).
Some OEMs and suppliers may be preparing for these challenges through merger and acquisition activity, restructuring actions, development of strategic partnerships and reduction of vehicle platform complexity.
A critical objective for OEMs and suppliers is the ability to meet these global demands while effectively managing costs and capital investment. Some OEMs and suppliers may be preparing for these challenges through merger and acquisition activity, restructuring actions, development of strategic partnerships and reduction of vehicle platform complexity.
Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions), we expect our regulatory pension funding requirements in 2025 to be approximately $1.1 million.
Due to the availability of our pre-funded pension balances (previous contributions in excess of prior required pension contributions), we expect our regulatory pension funding requirements in 2026 to be approximately $2.5 million. We expect our cash payments for OPEB obligations in 2026, net of GM cost sharing, to be approximately $12.3 million.
During 2024, we sold all of our remaining equity securities of REE Automotive, resulting in a loss of $0.1 million. We recognized an unrealized loss on our investment in REE shares of $1.1 million for the year ended December 31, 2023.
During 2024, we sold all of our remaining equity securities of REE Automotive, resulting in a loss of $0.1 million.
Credit Facilities We utilize local currency credit facilities to finance the operations of certain non-U.S. subsidiaries. These credit facilities, some of which are guaranteed by Holdings and/or AAM, Inc., expire at various dates through September 2028. At December 31, 2024, $27.6 million was outstanding under our non-U.S. credit facilities and an additional $78.2 million was available.
In the fourth quarter of 2023, we also completed an open market repurchase of our 6.25% Notes due 2026 of $2.4 million. Non-U.S. Credit Facilities We utilize local currency credit facilities to finance the operations of certain non-U.S. subsidiaries. These credit facilities, some of which are guaranteed by Dauch and/or AAM, Inc., expire at various dates through September 2028.
See Note 4 - Long-Term Debt for further detail on the New Term Loan B Facility. As a result, we incurred approximately $0.2 million of debt refinancing and redemption costs during the year ended December 31, 2024. In 2024, we voluntarily redeemed the remaining $127.6 million of our 6.25% Notes due 2026.
As a result, we incurred approximately $0.2 million of debt refinancing and redemption costs during 2024. In addition, in 2024, we voluntarily redeemed the remaining $127.6 million of our then outstanding 6.25% Notes due 2026.
These reductions in sales were partially offset by the timing of commercial recoveries for inflationary costs. We use Segment Adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments.
We use Segment Adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments.
OPERATING INCOME Operating income was $241.4 million in 2024 as compared to $146.6 million in 2023. Operating margin was 3.9% in 2024 as compared to 2.4% in 2023. The changes in operating income and operating margin in 2024, as compared to 2023, were primarily due to the factors discussed in Net sales, Cost of goods sold and SG&A above.
Operating margin was 1.9% in 2025 as compared to 3.9% in 2024. The changes in operating income and operating margin in 2025, as compared to 2024, were primarily due to the factors discussed in Net Sales, Cost of Goods Sold and Restructuring and Acquisition-Related Costs above. INTEREST EXPENSE Interest expense was $201.1 million in 2025 and $186.0 million in 2024.
Our effective income tax rate was 44.3% in 2024, as compared to (37.1)% in 2023.
INCOME TAX EXPENSE Income tax expense was $21.2 million in 2025, as compared to $27.8 million in 2024. Our effective income tax rate was 1,413.3% in 2025, as compared to 44.3% in 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+1 added−3 removed3 unchanged
Biggest changeThe fixed-to-fixed cross-currency swap reduces the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At December 31, 2024, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $181.2 million.
Biggest changeAt December 31, 2025 and December 31, 2024, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $205.5 million and $181.2 million, respectively. The fixed-to-fixed cross-currency swap hedges our exposure to changes in exchange rates on the intercompany loans through the second quarter of 2027.
If and when appropriate, we intend to manage these risks by creating natural hedges in the structure of our global operations, utilizing local currency funding of these expansions and various types of foreign exchange contracts. 52 INTEREST RATE RISK We are exposed to variable interest rates on certain credit facilities.
If and when appropriate, we intend to manage these risks by creating natural hedges in the structure of our global operations, utilizing local currency funding of these expansions and various types of foreign exchange contracts. 49 INTEREST RATE RISK We are exposed to variable interest rates on certain credit facilities.
The potential decrease in fair value of foreign exchange contracts, assuming a 10% adverse change in the foreign currency exchange rates, would be approximately $20.7 million at December 31, 2024 and was approximately $18.8 million at December 31, 2023.
The potential decrease in fair value of foreign exchange contracts, assuming a 10% adverse change in the foreign currency exchange rates, would be approximately $19.5 million at December 31, 2025 and was approximately $20.7 million at December 31, 2024.
The pre-tax earnings and cash flow impact of a one-percentage-point increase in interest rates (approximately 15% of our weighted-average interest rate at December 31, 2024) on our long-term debt outstanding at December 31, 2024 would be approximately $4.3 million and was approximately $4.4 million at December 31, 2023, on an annualized basis. 53 AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
The pre-tax earnings and cash flow impact of a one-percentage-point increase in interest rates (approximately 15% of our weighted-average interest rate at December 31, 2025) on our long-term debt outstanding at December 31, 2025 would be approximately $4.4 million and was approximately $4.3 million at December 31, 2024, on an annualized basis. 50 DAUCH CORPORATION
This foreign currency forward contract is non-designated and will be recognized at fair value each reporting period up to, and including, the closing of the Business Combination with changes in fair value recognized in foreign exchange gains and losses in Other income (expense), net in our Consolidated Statement of Operations.
This foreign currency forward contract was non-designated and recognized at fair value each reporting period through the closing of the Business Combination with changes in fair value recognized in Other income (expense), net in our Consolidated Statement of Operations.
In 2022, and in the first quarter of 2023, we entered into new variable-to-fixed interest rate swaps to reduce the variability of cash flows associated with interest payments on our variable rate debt.
In the fourth quarter of 2025, we discontinued the variable-to-fixed interest rate swap. Also, in the fourth quarter of 2025, we entered into a new variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt.
At December 31, 2023, the potential decrease in fair value of our then-outstanding fixed-to-fixed cross-currency swap, assuming a 10% adverse change in the foreign currency exchange rates was approximately $22.1 million.
The potential decrease in fair value of the fixed-to-fixed cross-currency swap, assuming a 10% adverse change in foreign currency exchange rates, would be approximately $20.6 million at December 31, 2025 and was approximately $18.1 million at December 31, 2024.
As of December 31, 2024, we have $700.0 million notional amount hedged in relation to our variable-to-fixed interest rate swap into the third quarter of 2027, $200.0 million of which continues into the fourth quarter of 2029.
As of December 31, 2025, we have $700.0 million notional amount hedged in relation to our variable-to-fixed interest rate swap into the second quarter of 2026, which subsequently increases to $1.0 billion through the fourth quarter of 2028, and decreases thereafter to $900.0 million through the fourth quarter of 2030 and to $500.0 million through the fourth quarter of 2031.
In 2022, we discontinued an existing fixed-to-fixed cross-currency swap, which was in an asset position of $9.7 million on the date that it was discontinued. Also in 2022, we entered into a new fixed-to-fixed cross-currency swap to reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans.
In the second quarter of 2024, we entered into a fixed-to-fixed cross-currency swap that is designated as a fair value hedge. The fixed-to-fixed cross-currency swap reduces the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans.
In the third quarter of 2023, we discontinued these variable-to-fixed interest rate swaps, which were in an asset position of $27.2 million on the date that they were discontinued. Also in the third quarter of 2023, we entered into new variable-to-fixed interest rate swaps to reduce the variability of cash flows associated with interest payments on our variable rate debt.
From time to time, we have used interest rate hedging to reduce the effects of fluctuations in market interest rates. In the third quarter of 2023, we entered into a variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt.
At December 31, 2024 and December 31, 2023, we had currency forward contracts outstanding with a total notional amount of $228.1 million and $206.9 million, respectively.
At December 31, 2025 and December 31, 2024, we had currency forward contracts outstanding with a total notional amount of $216.2 million and $228.1 million, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the second quarter of 2028 and the purchase of certain working capital items into the second quarter of 2026.
In January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract with a notional value of £571.0 million to fix the U.S. dollar equivalent associated with the cash consideration that is expected to be payable to the Dowlais shareholders upon closing of the Business Combination.
In January 2025, in connection with the Business Combination, we entered into a foreign currency forward (the Business Combination Derivative) to reduce the variability in cash flows as a result of fluctuations in the foreign currency exchange rate between the U.S. dollar and pound sterling.
Removed
In the second quarter of 2024, we discontinued our existing €200.0 million fixed-to-fixed cross-currency swap that was designated as a cash flow hedge and entered into a new fixed-to-fixed cross-currency swap that is designated as a fair value hedge.
Added
At December 31, 2025, we had a notional amount outstanding under the Business Combination Derivative of £571.0 million, which was equivalent to approximately $769 million. Upon the closing of the Business Combination on February 3, 2026, the Business Combination Derivative was settled and we received net cash proceeds of approximately $65 million.
Removed
The fixed-to-fixed cross-currency swap hedges our exposure to changes in exchange rates on the intercompany loans through the second quarter of 2027. The potential decrease in fair value of the fixed-to-fixed cross-currency swap, assuming a 10% adverse change in foreign currency exchange rates, would be approximately $18.1 million at December 31, 2024.
Removed
From time to time, we have used interest rate hedging to reduce the effects of fluctuations in market interest rates. In 2022, we discontinued an existing variable-to-fixed interest rate swap, which was in an asset position of $6.1 million on the date that it was discontinued.

Other AXL 10-K year-over-year comparisons