DETROIT — American Axle & Manufacturing Holdings, Inc. (AAM) has reported its financial results for the fourth quarter and full year 2004. AAM reported fourth quarter diluted earnings of 61 cents per share compared to 96 cents per share in the fourth quarter of 2003. Earnings for the full year 2004 were $159.5 million as compared to $197.1 million in 2003. Full year 2004 diluted earnings per share were $2.98 as compared to $3.70 per share in 2003.

AAM’s results for 2004 include the impact of a one-time charge of $23.5 million related to debt refinancing and redemption activities in the first quarter of 2004 and a charge of $10 million related to lump-sum voluntary separation payments accepted by 186 hourly associates in the fourth quarter of 2004. Excluding the impact of these charges, AAM’s earnings for the full year 2004 would have approximated $3.40 per share.

Sales for the fourth quarter of 2004 were $875.6 million as compared to $926.1 million in the fourth quarter of 2003. Non-GM sales represented 20 percent of total sales in the quarter versus 18.7 percent in the fourth quarter of 2003. AAM’s sales for the full year 2004 were $3.6 billion as compared to $3.7 billion in 2003. Non-GM sales increased by more than $50 million for the year to $728 million, or 20 percent of total sales in 2004 versus 18 percent in the prior year. However, lower GM light truck production volumes resulted in an overall decrease in AAM’s full year 2004 sales as compared to 2003. AAM sales content per vehicle was $1,173 for the full year 2004, approximately the same as in 2003.

Operating income was $47.8 million or 5.5 percent of sales in the fourth quarter of 2004 versus $91.5 million or 9.9 percent of sales for the fourth quarter of 2003. Operating income in 2004 was $284.8 or 7.9 percent of sales versus $346.3 or 9.4 percent of sales in 2003. AAM’s lower fourth quarter and full year 2004 operating income levels reflect the impact of higher steel and other metallic material prices, as well as the $10 million charge related to lump-sum voluntary separation payments accepted by 186 hourly associates in the fourth quarter of 2004.

AAM defines net operating cash flow (also referred to as net cash flow provided by operations) to be net cash provided by operating activities less capital expenditures. Cash flow provided by operating activities increased 32 percent in the fourth quarter of 2004 to $225.1 million as compared to $170.9 million in the fourth quarter of 2003. Capital spending in the fourth quarter of 2004 was $81.4 million. As a result, net operating cash flow was $143.7 million in the fourth quarter and $213.0 million for the full year 2004.

On January 13, 2005, AAM announced that it expects its 2005 earnings to be approximately $2.40 to $2.55 per share. AAM’s 2005 earnings outlook is based on its assumption that its customers’ production volumes for the major North American light truck programs it currently supports will be approximately 8 percent lower than in 2004. AAM’s 2005 earnings outlook also assumes that the cost of steel and other purchased metal market commodities will continue to increase in 2005. In addition, AAM will adopt FASB Statement No. 123 (as revised in 2004) in 2005 and recognize book expense related to stock-based compensation granted to its executives. AAM currently estimates that this accounting change will reduce diluted earnings per share by approximately 20 cents in 2005.

AAM announced today that it expects earnings for the first quarter of 2005 to be approximately 40 cents to 45 cents per share. AAM’s first quarter 2005 earnings outlook is based on its assumption that its customers’ production volumes for the major North American light truck programs it currently supports will be 13 percent – 14 percent lower in the first quarter of 2005 as compared to the first quarter of 2004. AAM’s first quarter 2005 earnings outlook also assumes substantial increases in the cost of steel and other purchased metal market commodities.

For more information about AAM, go to: www.aam.com.

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