AMERICAN AXLE & MANUFACTURING HOLDINGS INC

Previous wording

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.

Current wording

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 15 countries, AAM is bringing the future faster for a safer and more sustainable tomorrow.

Previous wording

We are a primary supplier of driveline components to General Motors Company (GM) for its full-size rear-wheel drive (RWD) light trucks, sport utility vehicles (SUVs), and crossover vehicles manufactured in North America, supplying a significant portion of GM’s rear axle and four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 44% of our consolidated net sales for the first three months of 2025, 40% for the first three months of 2024 and 42% for the full year 2024.

Current wording

We are a primary supplier of driveline components to General Motors Company (GM) for its full-size rear-wheel drive (RWD) light trucks, sport utility vehicles (SUVs), and crossover vehicles manufactured in North America, supplying a significant portion of GM’s rear axle and four-wheel drive and all-wheel drive (4WD/AWD) axle requirements for these vehicle platforms. We also supply GM with various products from our Metal Forming segment. Sales to GM were approximately 44% of our consolidated net sales for the first six months of 2025, 41% for the first six months of 2024 and 42% for the full year 2024.

Previous wording

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. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 11% of our consolidated net sales for the first three months of 2025, 14% for the first three months of 2024 and 13% for the full year 2024.

Current wording

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. In addition, we sell various products to Stellantis from our Metal Forming segment. Sales to Stellantis were approximately 13% of our consolidated net sales for the first six months of 2025, 14% for the first six months of 2024 and 13% for the full year 2024.

Previous wording

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 15% of our consolidated net sales for the first three months of 2025 and 13% for both the first three months of 2024 and the full year 2024.

Current wording

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 15% of our consolidated net sales for the first six months of 2025 and 13% for both the first six months of 2024 and the full year 2024.

Previous wording

On January 29, 2025, AAM announced that we reached 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 (the Business Combination). In connection with the Business Combination, on January 29, 2025, AAM and Dowlais entered into a Co-operation Agreement.

Current wording

In the first quarter of 2025, AAM announced that we 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 (the Business Combination). In connection with the Business Combination, on January 29, 2025, AAM and Dowlais entered into a Co-operation Agreement.

Previous wording

Pursuant to the Business Combination, Dowlais shareholders will be entitled to receive for each Dowlais ordinary share: 0.0863 shares of new AAM common stock and 42 pence per share in cash (approximately $0.54 per share as of March 31, 2025). The transaction has been unanimously approved by the Boards of Directors of AAM and Dowlais. Following the close of the transaction, the combined company will be headquartered in Detroit, Michigan and will be led by AAM's Chairman and CEO. The transaction is expected to close by the end of 2025, subject to approval by both sets of shareholders, receipt of regulatory approvals, and satisfaction of customary closing conditions.

Current wording

Pursuant to the Business Combination, Dowlais shareholders will be entitled to receive for each Dowlais ordinary share: 0.0881 shares of new AAM common stock and 43 pence per share in cash (approximately $0.59 per share as of June 30, 2025). The transaction has been unanimously approved by the Boards of Directors of AAM and Dowlais and has also been approved by both sets of shareholders. Following the close of the transaction, the combined company will be headquartered in Detroit, Michigan and will be led by AAM's Chairman and CEO. The transaction is expected to close in the fourth quarter of 2025, subject to receipt of regulatory approvals and satisfaction of customary closing conditions.

Previous wording

In October 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.) to Bharat Forge Limited for a sales price of $65 million, subject to certain customary adjustments at closing (the India Sale Agreement). The sale is expected to close in the first half of 2025, subject to customary closing conditions.

Current wording

In October 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.) to Bharat Forge Limited for a sales price of $65 million (the India Sale Agreement). In July 2025, we completed the sale of AAM India Manufacturing Corporation Pvt., Ltd., which is subject to customary post-closing adjustments, including a working capital true-up, that we expect will be finalized in the third quarter of 2025. We estimate that total cash proceeds from the sale, net of cash divested, will be approximately $65 million subsequent to post-closing adjustments, of which we collected approximately $58 million at closing, and the remainder is expected to be collected in the second half of 2025.

Previous wording

The U.S. government has recently announced the implementation of new tariffs, as well as increases in certain existing tariffs, on various products including assembled vehicles and automotive parts and components imported into the U.S., and there is considerable uncertainty around the extent, timing and duration of these tariffs. This has resulted in retaliatory tariffs against the U.S. by the governments of various countries, resulting in significant instability and uncertainty in U.S. trade relations with certain countries. Due to the uncertainty associated with the potential further implementation or expansion of tariffs, as well as retaliatory actions and other changes to existing trade agreements or changes in international trade relations, the ultimate impact on our net sales, results of operations and cash flows is unknown.

Current wording

The U.S. government has recently announced the implementation of new tariffs, as well as increases in certain existing tariffs, on various products including assembled vehicles and automotive parts and components imported into the U.S., and there is considerable uncertainty around the extent, timing and duration of these tariffs. This has resulted in retaliatory tariffs against the U.S. by the governments of various countries, resulting in significant instability and uncertainty in U.S. trade relations with certain countries.

Previous wording

Amortization of Intangible Assets Amortization expense related to intangible assets was $20.6 million for the three months ended March 31, 2025, as compared to $20.7 million for the three months ended March 31, 2024.

Current wording

Amortization of Intangible Assets Amortization expense related to intangible assets was $20.4 million for the three months ended June 30, 2025 and $20.6 million for the three months ended June 30, 2024.

Previous wording

Interest income was $5.6 million in the first three months of 2025 as compared to $8.3 million in the first three months of 2024.

Current wording

Interest income was $5.6 million in the second quarter of 2025 and $6.1 million in the second quarter of 2024.

Previous wording

During the three months ended March 31, 2025 and March 31, 2024, in computing our estimated annual effective tax rate, we recorded a valuation allowance against the deferred tax asset on the current year estimated disallowed interest expense in the U.S. Our effective income tax rate for the three months ended March 31, 2025 varies from our effective income tax rate for the three months ended March 31, 2024 primarily as a result of the mix of earnings on a jurisdictional basis and the impact of the discrete item noted above.

Current wording

During the three months ended June 30, 2025 and June 30, 2024, in computing our estimated annual effective tax rate, we recorded a valuation allowance against substantially all of the deferred tax asset on the current year estimated disallowed interest expense in the U.S.

Previous wording

For the three months ended March 31, 2025, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact of disallowed interest expense deductions in the U.S., as well as the mix of earnings on a jurisdictional basis, the impact of certain non-U.S. tax rates and non-U.S. withholding taxes, and the impact of global intangible low-taxed income (GILTI). In addition, the impact of tax expense from valuation allowances in certain non-U.S. jurisdictions also impacted our effective tax rate, as compared to the U.S. federal statutory rate, in the first quarter of 2025. These tax expenses were partially offset by the favorable impact of tax credits.

Current wording

Our effective income tax rate for the three months ended June 30, 2025 varies from our effective income tax rate for the three months ended June 30, 2024 primarily as a result of the mix of earnings on a jurisdictional basis. For the three months ended June 30, 2025, our effective income tax rate varies from the U.S. federal statutory rate primarily due to the unfavorable impact of disallowed interest expense deductions in the U.S., as well as the mix of earnings on a jurisdictional basis, and the impact of certain non-U.S. tax rates and non-U.S. withholding taxes. In addition, the impact of tax expense from valuation allowances in certain non-U.S. jurisdictions also impacted our effective tax rate, as compared to the U.S. federal statutory rate, for the three months ended June 30, 2025. These tax expenses were partially offset by the favorable impact of tax credits.

Previous wording

For the three months ended March 31, 2024, our effective income tax rate varied from the U.S. federal statutory rate primarily due to the unfavorable impact of disallowed interest expense deductions in the U.S. and tax expense related to GILTI, net of the favorable impact of certain non-U.S. tax rates and the impact of tax credits.

Current wording

For the three months ended June 30, 2024, our effective income tax rate varied from the U.S. federal statutory rate primarily due to the unfavorable impact related to the disallowed interest expense deductions in the U.S., and tax expense related to global intangible low-taxed income, partially offset by the impact of certain non-U.S. tax rates and the impact of tax credits.

Previous wording

The change in net sales in the first three months of 2025, as compared to the first three months of 2024, reflects a reduction of approximately $28 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Current wording

The change in net sales in the first six months of 2025, as compared to the first six months of 2024, reflects a reduction of approximately $17 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Previous wording

The decrease in cost of goods sold in the first three months of 2025, as compared to the first three months of 2024, reflects a reduction of approximately $32 million associated with the effect of metal market pass-through costs and the impact of foreign exchange related to translation adjustments. The remainder of the decrease in cost of goods sold is primarily attributable to lower production volumes on certain vehicle programs that we support and the impact of improved operating performance. For the three months ended March 31, 2025, material costs were approximately 55% of total cost of goods sold as compared to approximately 58% for the three months ended March 31, 2024. The reduction in material costs as a percentage of total cost of goods sold is primarily attributable to the lower cost of steel and other metallic materials in the first quarter of 2025 as compared to the first quarter of 2024.

Current wording

The decrease in cost of goods sold in the first six months of 2025, as compared to the first six months of 2024, reflects a reduction of approximately $26 million associated with the effect of metal market pass-through costs and the impact of foreign exchange related to translation adjustments. The remainder of the decrease in cost of goods sold is primarily attributable to lower production volumes on certain vehicle programs that we support and the impact of improved operating performance. For the six months ended June 30, 2025, material costs were approximately 55% of total cost of goods sold as compared to approximately 58% for the six months ended June 30, 2024. The reduction in material costs as a percentage of total cost of goods sold is primarily attributable to the lower cost of steel and other metallic materials in the first six months of 2025 as compared to the six months of 2024.

Previous wording

Gross margin was 12.3% in the first three months of 2025 as compared to 12.4% in the first three months of 2024. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.

Current wording

Gross margin was 12.7% in the first six months of 2025, as compared to 12.8% in the first six months of 2024. Gross profit and gross margin were impacted by the factors discussed in Net Sales and Cost of Goods Sold above.

Previous wording

SG&A as a percentage of net sales was 6.4% in the first three months of 2025 as compared to 6.1% in the first three months of 2024. R&D expense, net of customer ED&D recoveries, was approximately $36.3 million in the first three months of 2025, as compared to $36.7 million in the first three months of 2024. The decrease in SG&A in the first three months of 2025, as compared to the first three months of 2024, primarily reflects lower compensation-related expense.

Current wording

SG&A as a percentage of net sales was 6.5% in the first six months of 2025 as compared to 6.3% in the first six months of 2024. R&D expense, net of customer ED&D recoveries, was approximately $72.4 million in the first six months of 2025, as compared to $81.2 million in the first six months of 2024, and was the primary driver of the decrease in SG&A.

Previous wording

Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $19.7 million for the three months ended March 31, 2025, as compared to $2.5 million for the three months ended March 31, 2024. The change in restructuring and acquisition-related costs was primarily related to acquisition-related costs incurred in connection with the Business Combination. Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred.

Current wording

Restructuring and Acquisition-Related Costs Restructuring and acquisition-related costs were $36.2 million for the six months ended June 30, 2025, as compared to $7.5 million for the six months ended June 30, 2024. The change in restructuring and acquisition-related costs was primarily related to acquisition-related costs incurred in connection with the Business Combination. Acquisition-related costs primarily consist of advisory, legal, accounting, valuation and certain other professional or consulting fees incurred.

Previous wording

In 2025, we expect to incur approximately $20 million to $30 million of total restructuring charges. In addition, we expect to incur $60 million to $70 million of acquisition-related costs in 2025 associated with the Business Combination. See Note 12 - Restructuring and Acquisition-Related Costs for additional detail regarding our restructuring, acquisition and integration activity.

Current wording

In 2025, we expect to incur approximately $30 million to $40 million of total restructuring charges. In addition, we expect to incur $60 million to $70 million of acquisition-related costs in 2025 associated with the Business Combination. See Note 12 - Restructuring and Acquisition-Related Costs for additional detail regarding our restructuring, acquisition and integration activity.

Previous wording

Operating Income Operating income was $42.7 million in the first three months of 2025 as compared to $77.0 million in the first three months of 2024. Operating margin was 3.0% in the first three months of 2025, as compared to 4.8% in the first three months of 2024. The changes in operating income and operating margin were due primarily to the factors discussed in Net Sales, Cost of Goods Sold, SG&A and Restructuring and Acquisition-Related Costs above.

Current wording

Operating Income Operating income was $97.7 million in the first six months of 2025 as compared to $163.5 million in the first six months of 2024. Operating margin was 3.3% in the first six months of 2025, as compared to 5.0% in the first six months of 2024. The changes in operating income and operating margin were due primarily to the factors discussed in Net Sales, Cost of Goods Sold, SG&A and Restructuring and Acquisition-Related Costs above.

Previous wording

Interest Expense and Interest Income Interest expense was $42.9 million in the first three months of 2025 as compared to $49.0 million in the first three months of 2024. The weighted-average interest rate of our long-term debt outstanding was 6.9% for the three months ended March 31, 2025 and 7.1% for the three months ended March 31, 2024. We expect our interest expense for the full year 2025 to be approximately $170 million to $180 million.

Current wording

Interest Expense and Interest Income Interest expense was $86.0 million in the first six months of 2025 as compared to $96.9 million in the first six months of 2024. The weighted-average interest rate of our long-term debt outstanding was 6.7% for the six months ended June 30, 2025 and 7.1% for the six months ended June 30, 2024. The reduction in interest expense in the first six months of 2025, as compared to the first six months of 2024, was attributable to lower outstanding indebtedness and the reduction in our weighted-average interest rate. We expect our interest expense for the full year 2025 to be approximately $170 million to $180 million on an AAM standalone basis without giving effect to interest expense that could be incurred in connection with financing the Business Combination.

Previous wording

Debt Refinancing and Redemption Costs In the first three months of 2025, we expensed $3.3 million of fees and unamortized debt issuance costs in connection with the Second Amendment to the Amended and Restated Credit Facility. See Note 5 - Long-Term Debt for further detail on the Second Amendment to the Amended and Restated Credit Facility.

Current wording

Debt Refinancing and Redemption Costs In the first six months of 2025, we expensed $3.3 million of fees and unamortized debt issuance costs in connection with the Second Amendment to the Amended and Restated Credit Facility. See Note 5 - Long-Term Debt for further detail on the Second Amendment to the Amended and Restated Credit Facility.

Previous wording

Unrealized Gain on Business Combination Derivative In the first three months of 2025, we recognized an unrealized gain on the Business Combination Derivative of $21.9 million. See Note 6 - Derivatives for additional detail on the Business Combination Derivative.

Current wording

Unrealized Gain on Business Combination Derivative In the first six months of 2025, we recognized an unrealized gain on the Business Combination Derivative of $68.2 million. See Note 6 - Derivatives for additional detail on the Business Combination Derivative.

Previous wording

Gain on Equity Securities We had previously invested in the equity securities of REE Automotive, which were measured at fair value each reporting period with changes in fair value reported as a gain or loss within Other income (expense) in our Condensed Consolidated Statement of Income. We recognized an unrealized gain on our investment in REE shares of $0.1 million for the three months ended March 31, 2024.

Current wording

Loss on Equity Securities We had previously invested in the equity securities of REE Automotive, which were measured at fair value each reporting period with changes in fair value reported as a gain or loss within Other income (expense) in our Condensed Consolidated Statement of Income. During the six months ended June 30, 2024, we sold all of our remaining equity securities of REE Automotive, resulting in a loss of $0.1 million.

Previous wording

Other Expense, Net Other 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. Other expense, net was $2.9 million in the first three months of 2025, and was de minimis in the first three months of 2024.

Current wording

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. Other income (expense), net was income of $0.7 million in the first six months of 2025, as compared to expense of $8.8 million in the first six months of 2024.

Previous wording

Income Tax Expense Income tax expense was $14.0 million for the three months ended March 31, 2025, as compared to $15.9 million for the three months ended March 31, 2024. Our effective income tax rate was 66.4% in the first three months of 2025 as compared to 43.7% in the first three months of 2024.

Current wording

Income Tax Expense Income tax expense was $42.1 million for the six months ended June 30, 2025, as compared to $33.1 million for the six months ended June 30, 2024. Our effective income tax rate was 47.6% in the first six months of 2025 as compared to 46.1% in the first six months of 2024.

Previous wording

Net Income and Earnings Per Share (EPS) Our net income was $7.1 million in the first three months of 2025, as compared to $20.5 million in the first three months of 2024. Diluted earnings per share was $0.06 in the first three months of 2025, as compared to $0.17 per share in the first three months of 2024. Net income and EPS for the first three months of 2025 and 2024 were primarily impacted by the factors discussed above.

Current wording

Net Income and Earnings Per Share (EPS) Our net income was $46.4 million in the first six months of 2025, as compared to $38.7 million in the first six months of 2024. Diluted earnings per share was $0.38 in the first six months of 2025, as compared to $0.32 per share in the first six months of 2024. Net income and EPS for the first six months of 2025 and 2024 were primarily impacted by the factors discussed above.

Previous wording

The following table represents sales by reportable segment for the three months ended March 31, 2025 and 2024(in millions):

Current wording

The following table represents sales by reportable segment for the three and six months ended June 30, 2025 and 2024(in millions):

Previous wording

The change in Driveline sales for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, reflects 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, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Current wording

The change in Driveline sales for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, reflects lower production volumes on certain vehicle programs that we support, partially offset by an increase of approximately $7 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 Driveline sales for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, reflects a reduction of approximately $8 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Previous wording

The change in Metal Forming sales for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, reflects a reduction of approximately $13 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Current wording

The change in Metal Forming sales for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, reflects lower production volumes on certain vehicle programs that we support, partially offset by an increase of approximately $4 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 six months ended June 30, 2025, as compared to the six months ended June 30, 2024, reflects a reduction of approximately $9 million associated with the effect of metal market pass-throughs to our customers and the impact of foreign exchange related to translation adjustments, with the remainder attributable to lower production volumes on certain vehicle programs that we support.

Previous wording

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. The amounts for Segment Adjusted EBITDA for the three months ended March 31, 2025 and 2024 are as follows(in millions):

Current wording

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. The amounts for Segment Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 are as follows(in millions):

Previous wording

For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, Segment Adjusted EBITDA for the Driveline segment reflects the impact of lower production volumes on certain vehicle programs that we support.

Current wording

For the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, Segment Adjusted EBITDA for the Driveline segment reflects the impact of lower production volumes on certain vehicle programs that we support, partially offset by a reduction of SG&A expense of approximately $6 million and $12 million, respectively, which was primarily attributable to lower R&D expense.

Previous wording

For the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, the increase in Segment Adjusted EBITDA for the Metal Forming segment reflects improved operating performance partially offset by the impact of lower production volumes on certain vehicle programs that we support.

Current wording

For the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 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, offset by improved operating performance.

Previous wording

We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. 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 the derivative associated with our Business Combination with Dowlais, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items. We believe that EBITDA and Total Segment Adjusted EBITDA are meaningful measures of performance as they are commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and the banking institutions routinely use EBITDA and Total Segment Adjusted EBITDA, together with other measures, to measure our operating performance relative to other Tier 1 automotive suppliers and to assess the relative mix of Adjusted EBITDA by segment. We also believe that Total Segment Adjusted EBITDA is a meaningful measure as it is used for operational planning and decision-making purposes. EBITDA and Total Segment Adjusted EBITDA are also key metrics used in our calculation of incentive compensation. These non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures as presented by AAM may not be comparable to similarly titled measures reported by other companies.

Current wording

We define EBITDA to be earnings before interest expense, income taxes, depreciation and amortization. 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 the derivative associated with our Business Combination with Dowlais, gains or losses on equity securities, pension curtailment and settlement charges, impairment charges and non-recurring items. We believe that EBITDA and Total Segment Adjusted EBITDA are meaningful measures of performance as they are commonly utilized by management and investors to analyze operating performance and entity valuation. Our management, the investment community and banking institutions routinely use EBITDA and Total Segment Adjusted EBITDA, together with other measures, to measure our operating performance relative to other Tier 1 automotive suppliers and to assess the relative mix of Adjusted EBITDA by segment. We also believe that Total Segment Adjusted EBITDA is a meaningful measure as it is used for operational planning and decision-making purposes. EBITDA and Total Segment Adjusted EBITDA are also key metrics used in our calculation of incentive compensation. These non-GAAP financial measures are not and should not be considered a substitute for any GAAP measure. Additionally, non-GAAP financial measures as presented by AAM may not be comparable to similarly titled measures reported by other companies.

Previous wording

At March 31, 2025, we had over $1.5 billion of liquidity consisting of approximately $549 million of cash and cash equivalents, approximately $897 million of available borrowings under our Revolving Credit Facility and approximately $76 million of available borrowings under non-U.S. credit facilities. We have no significant debt maturities before 2027.

Current wording

At June 30, 2025, we had over $1.5 billion of liquidity consisting of approximately $587 million of cash and cash equivalents, approximately $897 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.

Previous wording

Operating Activities In the first three months of 2025, net cash provided by operating activities was $55.9 million as compared to $17.8 million in the first three months of 2024. The following factors impacted cash from operating activities in the first three months of 2025, as compared to the first three months of 2024:

Current wording

Operating Activities In the first six months of 2025, net cash provided by operating activities was $147.8 million as compared to $160.6 million in the first six months of 2024. The following factors impacted cash from operating activities in the first six months of 2025, as compared to the first six months of 2024:

Previous wording

Interest paid Interest paid was $36.2 million for the three months ended March 31, 2025, as compared to $47.8 million for the three months ended March 31, 2024. The decrease in interest paid was the result of lower interest rates on certain of our variable-rate debt, as well as lower outstanding indebtedness in the first quarter of 2025 as compared to the first quarter of 2024.

Current wording

Interest paid Interest paid was $83.9 million for the six months ended June 30, 2025, as compared to $101.7 million for the six months ended June 30, 2024. The decrease in interest paid was the result of lower interest rates on certain of our variable-rate debt, as well as lower outstanding indebtedness in the first six months of 2025 as compared to the first six months of 2024.

Previous wording

Investing Activities In the first three months of 2025, net cash used in investing activities was $40.2 million as compared to $48.2 million for the three months ended March 31, 2024. Capital expenditures were $69.3 million in the first three months of 2025 as compared to $48.0 million in the first three months of 2024. We expect our capital spending in 2025 to be approximately 5% of sales.

Current wording

Investing Activities In the first six months of 2025, net cash used in investing activities was $98.6 million as compared to $94.9 million for the six months of 2024. Capital expenditures were $126.6 million in the first six months of 2025 as compared to $96.8 million in the first six months of 2024. We expect our capital spending in 2025 to be approximately 5% of sales.

Previous wording

In the first quarter of 2025, we exited our 50% ownership of both Hefei AAM Automotive Driveline & Chassis System Co., Ltd. and Liuzhou AAM Automotive Driveline System Co., Ltd. As a result, we collected approximately $30.1 million in cash, which approximated the carrying value of our investments in these joint ventures at the time of disposition. We accounted for these Chinese joint ventures as equity method investments and, as such, their results of operations, cash flows and account balances were not consolidated in our financial statements.

Current wording

In the first six months of 2025, we exited our 50% ownership of both Hefei AAM Automotive Driveline & Chassis System Co., Ltd. and Liuzhou AAM Automotive Driveline System Co., Ltd. As a result, we collected approximately $30.1 million in cash, which approximated the carrying value of our investments in these joint ventures at the time of disposition. We accounted for these Chinese joint ventures as equity method investments and, as such, their results of operations, cash flows and account balances were not consolidated in our financial statements.

Previous wording

In connection with the Business Combination, Dowlais shareholders will be entitled to receive 42 pence per share for each Dowlais ordinary share, which translated to $0.54 per share at the March 31, 2025 exchange rate. At this exchange rate, the cash consideration associated with the Business Combination would be approximately $735 million.

Current wording

In connection with the Business Combination, Dowlais shareholders will be entitled to receive 43 pence per share for each Dowlais ordinary share, which translated to $0.59 per share at the June 30, 2025 exchange rate. At this exchange rate, the cash consideration associated with the Business Combination would be approximately $784 million.