Financial Overview

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	Rate of change (%)	Factors
Net Sales	3,696.0	3,207.3	15.2	1)
Operating Income	267.6	240.3	11.4	-

Factors
1) Net Sales
-Net sales increased by 15.2% to USD 3,696.0 million in 2014 as compared to USD 3,207.3 million in 2013. The increase in sales in 2014 primarily reflects an increase of approximately 8% in production volumes for the North American light truck and SUV programs. The Company currently supports for GM and FCA and higher sales in support of FCA's AWD Jeep Cherokee.

Contracts

-The Company has approximately USD 825 million of new and incremental business backlog launching from 2015 to 2017.

• Approximately 80% relates to AWD and RWD applications for passenger cars, crossover vehicles and driveline applications for the commercial vehicle market.
• Approximately 85% has been sourced to the Company's manufacturing facilities outside the U.S.
• Approximately 60% is for end use markets outside the U.S. 
• Approximately 70% is for customers other than GM. 
• In addition, the Company has over USD 1 billion in quoted and emerging new business opportunities. 

-AAM's new and incremental business backlog launching from 2014 through 2016 includes product programs supporting the all-new Jeep Cherokee with AAM's EcoTrac Disconnecting Driveline System; the all-new Cadillac CTS with AAM's high efficiency rear drive modules; and the e-AAM hybrid and electric system that will be featured on a future model year Qoros vehicle. (From a press release on January 15, 2014)

-The joint venture with Hefei Automobile Axle Co., Ltd. (HAAC), a subsidiary of the JAC Group (Anhui Jianghuai Automotive Group Co., Ltd.), includes 100% of HAAC's light commercial axle business. The Company supplies front and rear beam axles to several leading Chinese light truck manufacturers, including JAC and BAIC Foton, making AAM the second largest axle supplier in China's light commercial truck segment.

 

Awards

-During 2014, the Colfor Minerva Facility in Ohio, Dietronik location in Michigan and Changshu Manufacturing Facility in China were recognized with the GM Supplier Quality Excellence Award.

ISO Certification

-The Company announced that AAM's World Headquarters located in Detroit, Michigan, USA has earned ISO 50001 certification. This is AAM's first facility to receive this certification. (From a press release on January 24, 2014)

R&D Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	103.9	103.4	123.4

R&D Activities

-The Company continues to support and focus on:

• Electronic integration in its products to advance their performance
• Development of hybrid and electric vehicle systems
• Development of products and systems that provide customers with advancements in fuel efficiency and emissions reduction 
• Improved performance metrics such as noise vibration harshness (NVH) and power density

-The Company has developed and commercialized a disconnecting AWD system. AAM's EcoTrac Disconnecting AWD system is an industry-first technology that seamlessly engages AWD functionality while improving fuel efficiency and reducing CO2 emissions. This system is now featured on the award-winning Jeep Cherokee and the Chrysler 200. The Company is designing the next generation of the EcoTrac Disconnecting AWD system which is smaller, lighter in weight and aims to recover up to 90% of fuel penalty, compared to 80% currently.

-The e-AAM Driveline Systems AB (e-AAM) subsidiary was created to design and commercialize electric and hybrid driveline systems to be commercialized for passenger cars and crossover vehicles. These systems are designed to improve fuel efficiency by up to 30%, reduce CO2 emissions and provide AWD capability with the additional benefit of improved vehicle stability when compared to traditional mechanical AWD systems.

-The top priority for 2014 has been to flawlessly launch 16 critical programs for its customers. These launches included GM's next generation Heavy Duty pickups and SUVs (K2XX Program).

-The Company announced in 2014 the plan to construct an Advanced Technology Development Center at our Detroit Campus. With a USD 15 to USD 20 million investment and the estimated creation of 75 to 100 jobs, the Company plans to open the state-of-the-art center by mid-2015.

Capital Expenditure

(in million USD)

	FY ended Dec. 31, 2014	FY ended Dec. 31, 2013	FY ended Dec. 31, 2012
Overall	206.5	251.9	207.6

-The capital spending primarily supported significant global program launches within new and incremental business backlog, as well as the upgrades to ERP systems.

-The Company expects its capital spending in 2015 to be approximately 5% of sales, which includes support for global program launches in 2015 and 2016 within new and incremental business backlog.