Good morning. My name is Christie and I will be your conference operator today. At this time, I would like to welcome everyone to the AAM Fourth Quarter and Full Year 2012 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Mr. Christopher Son, Director, Investor Relations, Corporate Communications and Marketing, you may begin your conference.

Thanks, Christie and good morning everyone, and thank you for joining us today and for your interest in AAM. Earlier this morning, we released our fourth quarter and full year 2012 earnings announcement. If you have not had an opportunity to review this announcement, you can access it on the aam.com website or through the PR Newswire Services. A replay of this call will also be available beginning at noon today through 5:00 PM Eastern Time, February 15 by calling 855-859-2056, reservation number 86568260. Before we begin, I would like to remind everyone that the matters discussed in this call may contain comments and forward-looking statements subject to risks and uncertainties which cannot be predicted or quantified and which may cause future activities and results of operations to differ materially from those discussed. For additional information, we ask that you refer to our filings with the Securities and Exchange Commission. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures as well as a reconciliation of these non-GAAP measures to GAAP financial information is also available on our website. Over the next several months, we planned to participate in the following conferences. The JPMorgan Global High Yield & Leveraged Finance Conference on February 26 and 27 and the Bank of America Merrill Lynch New York Automotive Summit on March 27. In addition, we are always happy to host investors at any of our facilities. Please feel free to contact either myself or (indiscernible) to schedule a visit. With that, let me turn things over to AAM’s Co-Founder and Executive Chairman of the Board, Dick Dauch.

Thank you, Chris and good morning everyone. Thank you for joining us today to discuss AAM’s financial results for the fourth quarter and full year of 2012. Joining me on the call today are David C. Dauch, our President and Chief Executive Officer and Mike Simonte, our Executive Vice President and Chief Financial Officer. To begin my comments today, I will review some highlights of our fourth quarter and full year 2012 results. I will then provide a brief review of our business strategy before turning it over to the David and Mike. After that, we will open the call up for any questions you ladies and gentlemen may have. So, let us get started. AAM’s fourth quarter 2012 sales grew $736.7 million. For the full year 2012, AAM’s sales were $2.93 billion. Net income in the fourth quarter of 2012 was $319.9 million. And for the full year 2012, AAM’s net income was $367.7 million. AAM’s net income in 2012 was favorably impacted by a tax adjustment of $337.5 million. This related to the reversal of our U.S. deferred tax valuation allowance. AAM’s adjusted EBITDA in fourth quarter of 2012 was $64.5 million. For the full year 2012, AAM’s adjusted EBITDA was $346.7 million. David and Mike will provide additional information regarding the details of our financial results later in this call. Now, I want to discuss AAM’s aligned business strategy, which is designed to build value for our key stakeholders. This strategy emphasized a commitment to leadership in the areas of first quality, second technology leadership, and third operational excellence. We are keenly focused on maintaining AAM’s high-quality standards. This is the foundation of AAM’s world-class delivery warranty, durability, and reliability performance. Over the last 10 years, AAM has operated in average of less than 10 discrepant parts…

Good morning everyone and hello. My comments this morning will focus on three critical areas. First, I will provide some additional detail regarding our operational performance in the fourth quarter of 2012. Second, I will summarize our key AAM accomplishments in 2012 while updating you on our excellent progress in making to achieve AAM’s long-term strategic objectives. And finally, I want to make a few comments in regard to AAM’s 2013 outlook before turning things over to Mike. In the fourth quarter 2012 AAM’s sales were $736.7 million. This represents an increase of 22% over the prior year. For the full year 2012, our sales were $2.93 billion, up approximately 13.5% as compared to the full year 2011. Excluding the impact of our nearly $10 million of debt refinancing and redemption costs and approximately $6 million of restructuring costs that we booked in the quarter, our adjusted EBITDA was $64.5 million in the fourth quarter of 2012. As we have previously announced the special charges and restructuring costs we incurred in 2012 were primarily related to the closure of our largest factory at the time our Detroit manufacturing complex and our Cheektowaga manufacturing facility. AAM’s EBITDA margin was approximately 9% of sales in the fourth quarter of 2012. For the full year 2012 AAM’s adjusted EBITDA was approximately $350 million or approximately 12% of sales. AAM’s net income in the fourth quarter 2012 was $319.9 million or $4.21 per share. As previously stated this included a favorable impact of $337.5 million benefit relating to the reversal by U.S. deferred tax valuation allowance. The most important thing I can tell you about this tax adjustment is that it reflects AAM’s positive outlook for continued future profitability. For the full year of 2012 AAM’s net income totaled nearly $367.7 million or $4.87…

Thank you, David and good morning everybody and Happy New Year to those that we missed at the Detroit Auto Show Conference. Today, I will review with you the highlights of our financial performance in the fourth quarter and full year 2012. David covered the basics, so I’ll get right into the details starting with sales. AAM’s sales in the fourth quarter of 2012 were $737 million almost 22% higher than the fourth quarter of 2011. On a sequential basis AAM’s sales in the fourth quarter of 2012 were up $34 million, almost 5% versus the third quarter of 2012. AAM’s content-per-vehicle is measured as the dollar value of our product sales supporting our customers North American light truck and SUV programs. AAM’s content-per-vehicle in the fourth quarter of 2012 was $1,514, up 3% on a sequential basis as compared to $1,466 in the third quarter of 2012 and this also compares to $1,498 in the fourth quarter one year ago in 2011. On a sequential basis the increase in AAM’s content-per-vehicle was due to a favorable mix shift in the fourth quarter of 2012 most notably shipments supporting the Ram heavy-duty series pickup trucks were up 20% in the quarter. The GMT-900 full-size trucks and the GMT-610 full-size vans were also stronger in the fourth quarter as compared to the third quarter. For the full year 2012 AAM’s content-per-vehicle was $1,473. As we have previously discussed, we expect our content-per-vehicle to increase 5% to 10% over the next two years primarily due to the launch of new AAM product content for both GM and Chrysler. As David said, we experienced operational challenges and lower profitability in the second half of 2012. And this was principally associated with an increased level of launch activity. In addition, we incurred asset impairments…

Great, thank you, Mike, as well as David Dauch, We’ve reserved some time to take some questions. I would ask that you please try to limit questions to no more than two. So, at this time I’ll turn back over to Christie to handle the Q&A queue.

(Operator Instructions) And your first question comes from the line of Itay Michaeli from Citigroup. Your line is open.

Great, thanks, good morning.

Good morning, Itay.

Good morning, Itay.

I appreciate all the detail on the walk into 2013. Mike, I was hoping we can take a little bit more into the second half outlook, the exit margin would be imply to be very, very strong. What’s exactly driving that? Is that some of the higher content perhaps on the K2XX and kind of what you are just assuming for market conditions in the second half of the year?

Okay, Itah, couple of things I would point out. We mentioned that we do expect to recover the impact of the adverse sales mix in calendar year in 2013 and that should be improving as we work away through the year. We also expect a good positive contribution from our new business backlog in this calendar year ’13 and again that’s going to be skewed or weighted to the back half of calendar year 2013. In terms of the launch preparation cost, I mentioned are going to be heavier in the first half of the year. We should see a significant reduction in project expense and even our R&D expense because we’ve got higher customer validation requirements earlier in the year and so, we are going to be able to reduce our spending in that area and the back half of the year to a more normalized level. The other point I’d make is with respect to the improvement in our operating performance just our plant production cost if you will. The actions that we are taking in places like Brazil, I will take sometime to kick in. So, we’ll be improving that as we work away to the back half of the year. Our guidance range for the first half of the year is 11% to 12%. Of course, we are focused on the higher end of that range to the extent of our ability. So, we do expect higher margin in the second half of the year. We don’t really have to be much higher, Itah in the first half of 2012 to accomplish our objectives. And so, we think that once we get our operations settle down, some of these unusual cost driver settle down. You should be able to return our profit performance to the levels that we enjoyed in the first half of 2012.

That’s helpful. Mike, you mentioned your good start to January with respect to some of the operational issues may be too early to declare a victory to use your words, but and you feel confident now that you have a real strong hand though on a situation. What’s the biggest risk perhaps how you de-risked are some of these operational issues in 2013?

Itay, this is David Dauch. As I mentioned in my comments we’ve spoken before the two biggest issues that we had from a performance standpoint, one down in Mexico, that issue for the most part of behind us which we committed to getting done in the fourth quarter last year. At the same time, Brazilian issues we said we are going to take it into the first two quarters of this year. We made substantial progress in regards to stabilized net operation from a production standpoint. But at the same time as we communicated before there is some of the localization in sourcing things and validations things that we need to get done that’s going to take a little time here in the first half of the year. So, I feel very confident that we put a restructuring plan or performance improvement plan in place, the teams at or ahead of schedule with respect to that as Mike indicated January numbers appear to be favorable, that’s one dot, we need to get multiple dots in the performance trend. At the same time, we get the right leadership team focus on the performance metrics of what needs to get done in Brazil, but Brazil, one of the main issue, but we still need to get after which should be no surprise anybody.

Right. And to quick housekeeping one do you have a pension under funding amount for year-end and how much of the 2013 CapEx is being used to support 2014 launch, that’s it all I have? Thank you.

Okay, Itay, the first question you asked was the pension funded status at the end of 2012 on a quantitative basis that is approximately $147 million again that’s 83% funded at a discount rate just a little bit north of 4%. With respect to your second question, our increased level of capital spending we’ve been traveling a little bit 6.5%, 7% for the past 12 months and we should be traveling closer to 7% for the next 12 months. A significant portion of that of course is to support the launch of major programs coming in 2013 and the early part of ’14. Of the contribution of higher sales from our new business backlog, many, many of the programs that generate sales in 2014 actually launched at some point of time during calendar year 2013. So what I would tell you, Itay is that most of the capital spending that we are making in calendar year 2012 and ’13 and certainly into the first half of ’14 will be to support the $950 million or so of new business is launching in calendar year ’13 and ’14.

That’s very helpful. Thanks again.

You got it.

Our next question comes from the line of Rod Lache from Deutsche Bank. Your line is open.

Good morning everybody. Couple of things. One is I was just hoping you could just help us, just bridge this year-over-year EBITDA decline a little bit better, you had in the $4 million of higher D&A, $9 million of lower GM amortization, and I think you called out $10 million of higher premium freight, but you should have had some tailwinds I would imagine from lower pension, and you had a $130 million increase in revenue. That ordinarily would have wiped out that some of those cost items. So, can you help us maybe just bridge that $21 million decline in EBITDA from last year’s fourth quarter, what is missing in that?

Okay. So with respect to the fourth quarter Rod, we did have some favorable contribution as you pointed out from higher sales on key programs, but the combination of premium freight costs, labor inefficiencies, and production performance issues that we experienced in Brazil, also in Mexico, in relation to some of the unibody activities, these were the significant drivers of the expense reductions. We had very weak production volumes from our customers in the commercial vehicle area. So, we had very poor capacity utilization in our commercial vehicle operations. In Europe, we had lower production totals from our main customer, Audi, that’s separate from the commercial vehicle activity. And even in India, we had very light production activity some of it relating to production downtime and others relating to weakness in the markets in which we serve. So, I don’t want to oversimplify this, but the major drivers of our weaker performance in the back half of 2012 was simply the mix, which was weak. We didn’t really have the opportunity to overcome some of these challenges with stronger light truck mix in North America. We had weaker or higher I should say launch preparation costs. Project expense was elevated in the fourth quarter just as it was in the third quarter. Our R&D spending was up another $3 million. A lot of this to higher product validation costs. We added people both SG&A and cost of goods sold to stabilize production to prepare for launch. These activities, Rod are what related to those higher expenses. At the end of the year, I guess the other thing I would mention at the end of the year, we also take very detailed inventory accounting measures and there were couple to maybe $3 million or $4 million of net inventory adjustments that we are taking in the fourth quarter as well. All these issues are drivers of that performance in the fourth quarter.

And also to follow-up on Itay’s question on the implied margins for the back half of this year just to get to the low end of your guidance would be in the mid 14s. How much should we think these project expenses and R&D expenses could decline? And do you see any of those costs returning in 2014 or is that level of profitability indicative of what you might be able to achieve in the out years?

Okay. Let me address that sort of one step at a time. With respect to the back half of 2013 and the magnitude of the spending levels we have on R&D and project expense. Project expense was traveling at roughly $4 million, maybe $5 million a quarter in the first half of 2012 jumped up to between $7 million and $8 million in the back half of the year. And we will take a further increase to somewhere around $9 million or $10 million a quarter in the first half of this year. Very similar to the bubble or the increase we had in capital expenditures Rod, these types of expenses tend to track a little bit with those trends. In the back half of 2013, we would expect our spending in this area to decline back to the level of roughly $4 million or maybe $5 million a quarter. And I am going to talk about the back half of ‘13 before I make any comment about ‘14. With respect to R&D spending, we expect our R&D spending to increase somewhere in the range of maybe $3 million to as much as $5 million a quarter in the first half of 2013 and settle back down to a lower run rate in the back half of 2013. So, there is a fairly sizable impact relating to these quote on quote launch preparation costs which are going to settle down in calendar year 2013 in the back half. In 2014, Rod, of course we continue to have significant new business backlog activity, but most of the programs that are driving the sales increase in calendar year ‘13 and ‘14 actually launched sometime in calendar year ‘13. And so the product validation, the process validation, the early days of launch, all that type of activity is going to be very much emphasized in ‘13. In ‘14 we wouldn’t expect improvements per se in those pending levels. We might see a little bit of inflation. Some of that’s going to depend on how successful how we are in winning new business awards we are holding right now.

Okay. And the same thing I think you implied at the capital spending since most of these ‘14 projects are launching in late ‘13 would capital spending moderate to the more normal 4% to 6%?

Yeah, we definitely think that capital spending will begin to normalize or moderate in 2014. I think in the first half of ‘14 we expect to continue funding some of the growth as I mentioned in Itay’s question, but as we get to the back half of ‘14 we should be back into our range 4% to 6% comfortably. And so, yes, we do expect that to begin moderating Rod at ‘14.

Right, thank you.

Thanks Rod.

Your next question comes from the line of John Murphy from Bank of America. Your line is open.

Good morning guys.

Hi John.

Good morning John.

Just a first question the backlog as we look at the roll on in ‘13, ‘14, and ’15, so lot of new business coming on. Just curious as you look at that new business coming on, how did that differ than relative to the business that you have had problems with more recently. I am just trying to understand as we look at this pretty heavy launch schedule in front of us, I just want to make sure we are not going to run into the same operational hiccups you have more recently in Mexico and Brazil?

Yes, I mean let’s first start I mean obviously the biggest launch we are dealing with right now is the K2XX launch this year. We also got the Ram heavy duty. Those were all being launched at well-established facilities. They have been making those products for an extended period of time. Some of the other future programs that we have forthcoming here, some of the knees-on stuff that we have is a variation of what we are already doing today. So, that will mitigate some of the launch there. Some of the other business that we have as far as passenger car business are variations of what we have already experienced some of the pain in launching earlier as we go forward. We have now got our leadership teams in place in these global locations. We have standardized operations in those different global locations as well. We are doing different things to strengthen our program management and supplier readiness activity, which obviously caused us a lot of pain issue, especially out of Mexico when we didn’t have a supplier capable support in what we needed to have done. So, there is a lot of lessons learned that we have gone through this past year in 2012, but we are making sure that we don’t duplicate in 2013 or beyond going forward.

Great, that’s helpful. And then the $500 million that you mentioned you are quoting on David, what kind of success rate you typically have or win rate do you have on those kinds of quoting activities. And is the timing of those 14 or 15 or is it 15 and 16 with the bulk of that business?

Typically John, our hit rate is in the 25% to 30% range. However, we are going through a little bit more detailed sales filter, which should drive that performance or hit rate up potentially. So, those programs are mainly 2015 and out programs. There are some things from our ‘14 business or barriers that we have open capacity that potentially could impact the 2014 period of time, but most of everything that we are working is 2015 and beyond.

Okay, that’s great. And then Mike, just one question on the accounts receivable, they are up 40% year-over-year obviously outpatient sales, is that purely just a function of the change in payment terms which again when we should see that sort of more settled down in line with sales growth going forward?

Yeah, John, yes. Let me comment on that, the increase in accounts receivable reflects the increase in sales activity at the end of the year, year-over-year. I told you that our fourth quarter sales in calendar year 2012, was up 22% on a year-over-year basis. So, that’s a significant driver of the increase. The $33 million increase that is attributable to the change in administration by GM of payment terms to the supplier base is another driver. And our re-billable tooling balances, these are tooling recoveries that we will make from our customers. These are higher as well. This tends to increase in period of heavy launch because we are not able to collect these costs from our customers until we achieve PPAP certification, which is typically near the actual time of launch. So, with elevated launch just like we see CapEx, you see project expense up, we see some R&D cost up, our re-available tooling balances were comparable from our customers are also up and those reflected in our accounts receivable.

That might yield a little bit sort of mid 2013, little bit.

Yeah, the re-available tooling activity should come down a little bit in calendar year ’13 obviously the general sales activities going to go up so that’s going to cause an increase, but we do not expect any noise around change in payment terms in 2013.

Then just one last question on the pension, you got a lot of companies that are in a similar situation where they gone through pre-funding yet there is this – those idea that they might put in a lot of discretionary money into the pension plan above and beyond what’s required obviously, some of that this year already. We through sort of this topping up the pension plan of $147 million under funding to what asset return to discount rates really try to take care of the rest for you there or will be discretionary contributions in 2013 and 2014.

Okay, John, excellent question. Let me address that from two perspective, we never say never, yeah, there is a set of fashion circumstances that proved to be beneficial to the company we might consider discretionary funding before there is going to be any governmental requirement. But it is not our intention at this point in time to make any further discretionary contributions for the next three to five years or so certainly that’s true in U.S. and the reason as we just did that to a large degree in calendar year 2012, we are very pleased with the improvement in our funding status and our view as John that we are going to let the asset returns and the what we believe we’ll eventually the normalized interest rate environment, which would increase the discount rate used to measured these liabilities. We are going to let these dynamics do some work force and we think that our funding status will probably continue to increase over the next three to five years despite the fact that we are not going to be making any significant additional contributions.

I very much agree with you, thanks a lot guys.

Thanks, john.

The next question comes from the line of Chris Ceraso from Credit Suisse. Your line is open.

Thanks, good morning, can you hear me?

Yeah, good morning, Chris.

Good morning, Chris.

Okay, just a couple of things left and I hate to comeback and rehash kind of stuff Michael, but can you help us get from the run rate of call it 9% EBITDA margin in Q4 to the 11% to 12% that you are expecting in the first half of ‘13 may be just some of the big buckets. How much lower premium freight that you expect? How much of an improvement in launch related cost etcetera?

Yeah, no problem. Okay, the improvements that are going to be most significant in that law, Chris, it’s going to be the sales mix issue that’s as I mentioned roughly 150 basis points of margin impact and relates primarily to the lower – unusually low recent in relation to current sales level, production that GM had for the GMT900 program in the back half of 2012. So, if we increase our quarterly production rate by 10, 20, may be even 30, 000 units depending on exactly what you have and we’ll do relative to inventory and startup timing on the K2XX. That’s going to be the significant improvement, one that all of us should have been expecting to impact 2012 negatively, but also bounce back and improve 2013. So, that’s a big impact of getting from roughly 9% up to 11%, 12%. The other issues the production performance issues are as we’ve already mentioned going to be mitigated significantly in the first half of 2013 at least is compared to the fourth quarter of 2013. The premium freight as we mentioned and I think Rod pointed out in his question was about $10 million in the fourth quarter. We would not expect that to be higher than $2 million, may be $3 million a quarter at any point during 2013 probably low end of that range. So from a magnitude perspective, these two issues alone will do a lot of work for us in terms of helping improve our margins here in the first quarter and second quarter of 2013. The launch preparation cost will be a bit of an offset to that, but we are going to working to improve production performance not just in Brazil and not just in our premium freight, but in our budget, our plan for 2013 includes other favorable drivers including the contribution from new programs launching that will help us to improve capacity utilization at some of our global operations.

Okay. As you turnover to the new truck I’m talking about GM in particular is it reasonable that your margin on that program at least initially at launch will be lower than the outgoing program until you get up to full speed and until you start to generate some productivity and have you factored that into your walk to the back half?

Yeah we’ve absolutely factored that into our walk to the back half. A couple of things I would say David has made, mentioned of the fact that one of the significant reasons why our margin in 2013 and maybe the early days of ‘14 will be a little bit lower, our contribution margin on the GMT-900 K2XX program is the fact that we need to support both programs on the same production lines then the same facilities for a period of time. So, changeover costs are going to be elevated. We have the normal launch preparation costs that we’ve already discussed they are going to be higher. And we also have other launch issues I guess you would say to manage in the normal course of running our business. Yes, we would typically have better profit margin performance in the second year of launch for example than we would in the first. So, all those dynamics are going to play out. The one thing that’s a lot different actually about the GMT-900 K2XX transition as compared to the business we launched in 2012 is that many of the components we need to manufacture for the K2XX program or either carryover components or consist of a significant consistency with the GMT-900 activity. And so this risk profile certainly not devoid of risk is better for us in relation to our launch in 2013.

Okay and then just last one can you give us any more details on the axle win with Ford that you mentioned?

Yeah I can’t speak to the specific program. But it’s – obviously the first axle driveline program it’s a program that’s global in nature. And it’s like I said there are first (foray) into Ford Motor Company and we look forward to being a successful on that program and open up other opportunities.

Okay. Thank you.

Your next question comes from the line of Joe Spak from RBC Capital Markets. Your line is open.

Hi good morning everyone and again thanks for all the detail. Just one quick clarification on the first half EBITDA margin guidance, you’re saying 11% to 12%, that’s for the first half in totality. So, it is possible the exit the second quarter at a rate similar to or above that is that the right way to think about that?

Yes, Joe that’s right, first of all good morning. Yes what we’re saying is that our EBITDA margin for the first half of the year should be 11% to 12%. We do expect there are elements of activity in the first quarter that will make it a little bit more challenging to perform at the high end of that level than it would in the second quarter including the fact that GM had significant downtime on the SUV portion of the GMT-900 program here in the month of January. So, our volume on that key program should improve second quarter versus first quarter at least as in relation to the SUVs. So, yes I think that’s a fair comment. We expect to be able to improve our performance as we work through the year. We will make steady improvement on mitigating some of these production performance issues. While we are feels good about our January performance I would tell you that’s more indicative with the low end of the range, the high end of the range. So, we’re making progress but we still need to keep our heads down and focus on continuing that progress to achieve exactly what you described.

Okay. And then I just want to make sure I understand the termination of GM agreement. I thought you said that actually in the first quarter of ‘12 there was still a benefit for you. So, I’m assuming obviously as we roll forward in the first quarter of ’13 on the year-over-year basis it’s – that’s another one of the headwinds we should think about in the first quarter?

Yeah that’s exactly right Joe, exactly right it was about $7 million of benefit in the first quarter of 2012 and because it ended in the first quarter that’s the same as for the first half and the same for the full year. So, it’s exactly right.

Okay. And then you briefly touched on this. But I think when you announced that you’ll – you mentioned pension expense that obviously goes down maybe even flips to a pension income, it sounds like to offset higher interest expense. Can you give us an order magnitude that would help of where pension expense finished ‘12 and what back can go to in ’13?

Yeah, Joe, the best way to think about it in tracking exactly to what we said then, is that we borrowed somewhere between $200 million and $225 million depending on whether you considered the pension contributions we made prior to the borrowing part of the deal. We borrowed the money at roughly six and five eights interest expense. And we expect the impact of that higher interest expense to be offset by lower pension expense. We expect that’s the net impact of that portion of refinancing activity that would be P&L neutral. Interest expense up, pension expense down, so those are some dynamics depending at which profit metric you’re looking at EBITDA or net income for example. But big picture of the net income impact should be neutral. Pension expense was in the neighborhood of $14 million in 2012. There were a lot of puts and takes in this number, Joe. But basically we expect our pension expense to be negligible and as you pointed out could very well the pension income either in 2013 or soon thereafter.

Okay, great. Thanks very helpful.

Your next question comes from the line of Ryan Brinkman from JPMorgan. Your line is open.

Hi, good morning. It seems your non-GM revenues are likely to begin to inflect higher pretty soon after not rising a whole lot as percentage of revenue in 2012. Can you maybe just walk us through the cadence some of the launch of non-GM business highlighting individual programs as you are able to and then maybe share what types of products generally that you expect to be launching on these non-GM vehicles, how similar are those products to the products that you currently manufacture? Thanks.

Yeah, Ryan this is David Dauch. Clearly we are launching new business with Mercedes that volumes are going to continue to grow. Those are independent rear axles were actual that we play out of our China to facility as I mentioned in my earlier comments. We are making commercial axle business out of our Chennai facility for Daimler. We’ve got the Transfer Case business and other passenger car related business with Jaguar Land Rover that’s similar to what we do today. As I mentioned Nissan, we have additional axle programs at the variation of what we’re doing today with them. We’ve also got the business (indiscernible) some component and machining business. We’ve got some drive share business which is right now wheelhouse similar to what we do today. We obviously had – the newest issue that we are dealing with his our EcoTrac disconnecting all-wheel-drive which is everybody knows that launched this year for us and we’ll roll into a bigger launch in the 2014 period of time. So, that’s probably the one thing that’s really new and different. Some other things that we’re doing with Chrysler on the Ram program and we are right in the middle of launching the 2013 program right now. We have a subsequent launch in 20s – later this year which they call it 2014 model year, which again is some changes to what we’re doing but things we’re very familiar with in that respect. So, again our focus is launching the business that we have right in front of us at the same time we have – we are now taking the less of loan that I mentioned earlier to make sure that we disciplined program management, the supply readiness activity to manage to future launches before this year and then future years as well.

That’s really helpful. Thanks and then just last question coming off couple of pretty strong pickup truck months in December and in January which also featured some improved market share and better inventories for General Motors relative to October and November. I was just wondering if given this do you feel any differently about combined K2XX GMT-900 volumes in 2013 I think you had previously guided to that have being flat year-over-year and just any comments on the pickup truck market overall into 2013? Thanks.

Our guidance is still roughly nine units on GMT-900 K2XX combination for this year. Clearly the market is growing on the pickup truck side, so there is potential upside there for us as we’ve communicated before. The Detroit International – North American International show – highlighted a lot of new products. General Motors were just one with their K2XX but Ford and Chrysler also had their product out there was 150 and then things they’re doing with Chrysler both the 1500 series and 2500, 3500 series. Tundra, Toyota is coming out with new product, Nissan is coming out with the new product. So, we feel good about where the pickup truck market is going. We feel good about our penetration with those customers in regards to the products going forward. And we are hopeful that K2XX as we see very favorably in the marketplace like it typically is with the launch of a new program and we hope that we can convert that and benefit from that going forward. Mike?

Hey, Ryan, one thing I would add, General Motors has made clear to the supply chain to be ready to produce more vehicles to support the production of more vehicles then what we are assuming in our guidance. So, there is clear upside potential of your and I think that upside potential becomes more acute in 2014. So, we’ve got a right in that and most importantly we are making sure there are own operations in our supply chain can handle the higher volume. We do expect higher volume in this program. At some point in time in the next couple of three years perhaps as much as a 1 million to a 2 million of production. We are just little cautious about how quickly that may come due to launch activity, due to the inventory levels, and we don’t want to get too carried away with higher volume assumptions. We don’t want to put excess cost in our system only to have to strip out. We’d much rather play from having upside potential, adding some cost along the way. We find that to be a more prudent way to manage our business. We managed our guidance in the same passion. We are being very exclusive in transparent about our assumptions and also about the upside potential.

Great, thank you. I appreciate all the color.

Thanks, Ryan.

Your next question comes from the line of Brian Johnson from Barclays. Your line is open.

Good morning, team. I just want to ask just two questions here. The first, it’s – I see people starting to go through the math and see have an exit rate of 14%, you’ve talked about good profits or sort of a level of profitability of 2014 that benefits from the launch is being behind you. What I look at your mid-year guidance if I were just to take the 500 divided by $4 billion that would get us closer to 12.5% profit. So is that 14.5% something that we should think about is the new run rate and there is just rounding in that mid 15 or is it going to kind of come and go with the launch activity. Next, I’ll ask a more strategic question.

Alright, good morning, Brian, couple of things to say here the first is with respect to our profit margin guidance, we really haven’t provide any specific guidance on 2014, I think what you are commenting on relatively to what we have said make sense and we do expect to exit ’13 in a very solid strong profit margin. We do recognized there could be other inflationary headwinds and we know we’ve got some price reductions or productivity commitments as they referred to pass along to some of our customers. The other dynamics that’s going to cover over the next two or three, four, five years is the fact that is we became a more diverse company as we began to look very much more like our peers with a better balance of revenue between the GMT-900 program and other elements of our business. We do expect a long-term margin performance to decline from the levels that we’ve enjoyed over the past several years. From our perspective that’s absolutely okay as long as we address the cost drivers associated with our balance sheet. We commented on the pension situation. We’ve commented in respect to the question right to ask about CapEx moderating over the next few years and the other one we have to address and plan to address with the generation of free cash flow as well as lower interest expense over a period of time. If we do that you come for many companies, Brian, that have EBITDA margins in the range of 11%, 12%, 13% to generate a lot of free cash flow. We think we can transition to becoming a much more stable strong growth company with solid profit margins with good cash flow, but at a lower margin. So, specifically I want to address the comment you made about our longer term 2015 guidance. What we said early specifically what we expect our sales to exceed $4 million and we expect our EBITDA to be at least $500 million at that time period. There are lots of numbers higher than $500 million and I am not trying to be a smart elect, but we do expect to be able to perform at that levels higher than $500 million even at the level of $4 billion potentially depending on how we manage our business, the overall mix of the production pool that come from our customers and the dynamics of the customer relationships to drive the pricing over the long-term conditions. So, we’re not saying the 12.5% is a point estimate for our future margin guidance. What we are saying is that we expect our sales to be at least $4 billion by 2015. We expect our EBITDA to be at least $500 million. The great thing about that information is that it can illustrate that our plan should be achievable and generate substantial free cash flow in the future.

Okay. And my second question really for Dick Dauch is kind of as you look at it and for Dave as well, but acting as a team, when you kind of look at it the core seems to be here, you are transitioning to a much more diversified company with a broader range of customer and end use applications. And at least the first stage of it’s been kind of rocking, how do we, you have talked a bit about the processes, but how do we really get confidence over the next couple of years that every time there is a new set of new business that rolls on, but it’s a bit out of the wheelhouse, we won’t see launch preparation cost overruns. Are there different things you are doing in terms of hiring more experienced locals or in-market expats? Would you think about acquisitions to get the supply chain and that kind of on-the-ground experience? And how does it go back as you kind of build this backlog to make sure your quoting activity is reflecting the cost of doing business outside of the your wheelhouse?

Well, good morning Brian, this is Dick Dauch, thank you for the question, your long-term respect for our company and our needs. We have always from 1993/94 on said that we would selectively globalize our company. And there are some growing pains when you go from a regional outfit to a global outfit. We feel all the base foundation has been established. There was a little bit of a hiccup period in the last three or six months. We grant that. There is nothing there that can’t be overcome by good execution and good performance which will rebuild the credibility for you men and women that analyze and review our performance. Anything that we do need to do we are not going to tell you because we are already doing it or will be doing it and we don’t want our competition to know what we are doing.

Okay, thanks.

Great, thanks Brian. We have got time for one last question.

Your last question comes from the line of Peter Nesvold from Jefferies. Your line is open.

Hi, this is Elaine. Sorry, all of our questions have been asked. Thank you.

Okay, great. Thanks Elaine. And we think all of you have participated on this call and appreciate your interest in American Axle & Manufacturing. We look forward to talking with you in the future.

Ladies and gentlemen, this concludes today’s conference call. You may now disconnect.