Fourth Quarter Highlights:

• Fourth quarter sales of $875.6 million

• Non-GM sales were 20% of total sales, up from 18.7% in the same period one year ago

• Net earnings of $31.3 million or $0.61 per share

• Fourth quarter results include a $10.0 million charge ($0.15 per share in the quarter) related to lump-sum voluntary separation payments accepted by 186 hourly associates

• Net operating cash flow increased 25% to a record $143.7 million in the quarter

Full Year Highlights:

• Net sales of $3.6 billion

• Non-GM sales increased 8% versus 2003 to $728 million, or 20% of total net sales

• Net earnings of $159.5 million or $2.98 per share

• Net operating cash flow of $213.0 million * Repurchased 5.0 million shares of common stock for $171.0 million

• Increased backlog of new business to more than $1 billion in future annual sales

AAM reported fourth quarter diluted earnings per share of 61 cents 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 $10.0 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% of total sales in the quarter versus 18.7% 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% of total sales in 2004 versus 18% 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% of sales in the fourth quarter of 2004 versus $91.5 million or 9.9% of sales for the fourth quarter of 2003. Operating income in 2004 was $284.8 or 7.9% of sales versus $346.3 or 9.4% 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 $10.0 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% 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. AAM invested a total of $240.2 million of capital expenditures in support of new product programs and ongoing cost, productivity and maintenance activities in 2004.

AAM also used its strong cash flow in 2004 to fund cash dividends of $23.0 million and to repurchase a total of 5.0 million shares of its common stock for $171.0 million.

AAM also reduced its net debt balances at year-end 2004 to $433.6 million versus $437.3 million at year-end 2003. Net debt to capital improved to 31.2% at year-end 2004 versus 31.4% at year- end 2003. AAM's research and development (R&D) spending increased approximately 13% in 2004 to $68.6 million versus $60.7 million in 2003. This increase supports AAM's initiatives to develop future products targeted at growth segments of the market. AAM is expanding its existing light truck and SUV product lines to support new programs and derivative models and is developing new passenger car and crossover vehicle applications utilizing independent front drive axles (IFDA), rear drive modules (RDM) and independent rear suspension modules (RSM) targeted at growth segments of the market. As a result of these successful efforts, AAM recently announced that it has increased its backlog of new business by nearly $500 million to more than $1 billion in future annual sales. AAM also confirmed its 2005 earnings outlook. 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% 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 $0.20 in 2005.

AAM announced today that it expects earnings for the first quarter of 2005 to be approximately $0.40 to $0.45 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% - 14% 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.

Recent developments

On November 1, 2004, AAM announced the production launch of its 2005 Dodge Ram Power Wagon driveline system. The all-new Dodge Ram Power Wagon is the first production vehicle to feature a fully integrated, computer-controlled chassis system utilizing AAM's SmartBar(TM), an electronically actuated stabilizer bar-based roll-control system, and TracRite(R) GTL and TracRite(R) EL differentials in conjunction with the standard AAM heavy duty front and rear axles and driveshaft.

On January 13, 2005, AAM confirmed its 2004 earnings estimate and announced that it had achieved its $200 million target for net operating cash flow.

On January 13, 2005, AAM announced that it has increased its backlog of new business by nearly $500 million to more than $1 billion in future annual sales. AAM also announced its 2005 earnings outlook.

On January 24, 2005, AAM announced that it had been awarded new metal formed products business worth annualized revenue of more than $63 million, as a portion of the $1 billion in future annual sales.