AAM's fourth quarter 2020 sales were $1.44 billion compared to $1.43 billion in the fourth quarter of 2019.
For the full year 2020, AAM's sales were $4.7 billion.
From a profitability perspective, AAM's adjusted EBITDA in the fourth quarter of 2020 was $261.5 million or 18.2% of sales, a fourth quarter record for AAM.
For the full year 2020, AAM's adjusted EBITDA was $720 million or 15.3% of sales.
AAM's adjusted earnings per share in the fourth quarter of 2020 was $0.51 per share.
And for the full year 2020, AAM's adjusted earnings per share was $0.14 per share.
AAM's adjusted free cash flow in the fourth quarter 2020 was $173 million.
And for the full year 2020, AAM's adjusted free cash flow was $311 million.
We also reduced our gross debt by nearly $200 million in 2020, paying down approximately $100 million just in the fourth quarter alone.
Operationally, we completed 17 program launches.
We received 13 customer quality awards and multiple Supplier of the Year awards from customers such as General Motors and Hyundai.
AAM expects our gross new business backlog, covering the three-year period of 2021 through 2023, to be approximately $600 million.
We expect the launch cadence of this backlog to be $200 million in 2021, $150 million in 2022, and $250 million in 2023.
About 70% of this new business backlog relates to global light trucks, including crossover vehicles, and another 15% relates to hybrid electric powertrains.
AAM is targeting full year sales between $5.3 billion and $5.5 billion in 2021.
AAM is targeting adjusted EBITDA of approximately $850 million to $925 million in 2021.
And AAM is targeting adjusted free cash flow in 2021 of approximately $300 million to $400 million, which contemplates capital spending of approximately 4.5% of sales.
From an end market perspective, we see production at approximately 15.5 million to 16 million units for our primary North American market.
Light trucks made up 74% of the production in North America in 2020, and we see no signs of that changing or slowing down in 2021.
In the fourth quarter of 2020, AAM sales were $1.44 billion, compared to $1.43 billion in the fourth quarter of 2019.
First, we stepped cut down our fourth quarter 2019 sales by $119 million to reflect the sale of the US casting business unit that was completed in December of 2019.
Then we account for the unfavorable impact of COVID-19 on our fourth quarter of 2020 sales, which we estimate to be approximately $40 million.
On a year-over-year basis, we are also impacted by GM's exit of its Thailand operations by approximately $10 million.
And the transition from a rear beam axle to a new lightweight and highly efficient independent rear drive axle for GM's new full-size SUV impacted sales by about $35 million in the quarter.
Other volume and mix was positive by $38 million, mainly driven by strong light truck mix in North America.
Pricing came in at $19 million on year-over-year impact.
And metal market pass-throughs and foreign currency accounted for increase in sales of about $7 million year-over-year.
For the full year of 2020, AAM sales were $4.71 billion as compared to $6.53 billion in the full year of 2019.
Gross profit was $236.5 million or 16.4% of sales in the fourth quarter of 2020 compared to $183.4 million or 12.8% of sales in the fourth quarter of 2019.
Adjusted EBITDA was $261.5 million in the fourth quarter of 2020 or 18.2% of sales.
This compares to $193.5 million in the fourth quarter of 2019 or 13.5% of sales.
For the full year of 2020, AAM's adjusted EBITDA was $720 million and adjusted EBITDA margin was 15.3% of sales.
SG&A expense, including R&D, in the fourth quarter of 2020 was $83 million or 5.8% of sales.
This compares to $90 million in the fourth quarter of 2019 or 6.3% of sales.
AAM's R&D spending in the fourth quarter of 2020 was $31.1 million compared to $39.8 million in the fourth quarter of 2019.
For the year, SG&A expense was down about $50 million, due mainly to our cost reduction actions, both temporary and structural.
Net interest expense was $52.3 million in the fourth quarter of 2020 compared to $53.4 million in the fourth quarter of 2019.
In the fourth quarter of 2020, we recorded income tax expense of $13.9 million compared to a benefit of $11.5 million in the fourth quarter of 2019.
As we head into 2021, we expect our effective tax rate to be approximately 20%.
Taking all of these sales and cost drivers into account, our GAAP net income was $36 million or $0.30 per share in the fourth quarter of 2020 compared to a loss of $454.4 million or a loss of $4.04 per share in the fourth quarter of 2019.
Adjusted earnings per share for the fourth quarter of 2020 was $0.51 per share versus $0.13 per share in the fourth quarter of 2019.
Net cash provided by operating activities in the fourth quarter of 2020 was $208 million.
Capital expenditures, net of proceeds from the sale of property, plant and equipment, for the fourth quarter was $69 million.
Cash payments for restructuring and acquisition-related activity in the fourth quarter of 2020 were $33.6 million.
Reflecting the impact of this activity, AAM generated adjusted free cash flow of $172.7 million in the fourth quarter of 2020.
For the full year of 2020, AAM generated adjusted free cash flow of $311.4 million compared to $207.8 million in the full year 2019.
From a debt leverage perspective, we ended the year with net debt of $2.9 billion and [Indecipherable] adjusted EBITDA of $720 million, calculating a net leverage ratio of 4 times at December 31.
In the fourth quarter of 2020, we prepaid over $100 million of our term loans.
AAM ended 2020 with total available liquidity of $1.5 billion, consisting of available cash and borrowing capacity on AAM's global credit facilities.
As for sales, we are targeting a range of $5.3 billion to $5.5 billion for 2021.
This sales target is based upon a North American production of 15.5 million to 16 million units, a new business backlog of $200 million and attrition of approximately $100 million.
From an EBITDA perspective, we are expecting adjusted EBITDA in the range of $850 million to $925 million.
At the midpoint, this performance would represent EBITDA margin growth of over 100 basis points versus last year.
As you can see on the walk-down on Page 15, we expect volume and mix to positively contribute as well as continued productivity benefits.
We also expect approximately $40 million in pricing and $15 million in higher R&D spending, as we continue to invest in electric propulsion.
From an adjusted free cash flow perspective, we are targeting approximately $300 million to $400 million in 2021, and the year-over-year walk is very simple.
And while on a dollar basis, capex is slightly higher than 2020, we are targeting capex as a percent of sales of approximately 4.5%.

Summary:
AAM's fourth quarter 2020 sales were $1.44 billion compared to $1.43 billion in the fourth quarter of 2019.
AAM's adjusted earnings per share in the fourth quarter of 2020 was $0.51 per share.
AAM expects our gross new business backlog, covering the three-year period of 2021 through 2023, to be approximately $600 million.
We expect the launch cadence of this backlog to be $200 million in 2021, $150 million in 2022, and $250 million in 2023.
AAM is targeting full year sales between $5.3 billion and $5.5 billion in 2021.
AAM is targeting adjusted EBITDA of approximately $850 million to $925 million in 2021.
And AAM is targeting adjusted free cash flow in 2021 of approximately $300 million to $400 million, which contemplates capital spending of approximately 4.5% of sales.
From an end market perspective, we see production at approximately 15.5 million to 16 million units for our primary North American market.
In the fourth quarter of 2020, AAM sales were $1.44 billion, compared to $1.43 billion in the fourth quarter of 2019.
Pricing came in at $19 million on year-over-year impact.
Taking all of these sales and cost drivers into account, our GAAP net income was $36 million or $0.30 per share in the fourth quarter of 2020 compared to a loss of $454.4 million or a loss of $4.04 per share in the fourth quarter of 2019.
Adjusted earnings per share for the fourth quarter of 2020 was $0.51 per share versus $0.13 per share in the fourth quarter of 2019.
As for sales, we are targeting a range of $5.3 billion to $5.5 billion for 2021.
This sales target is based upon a North American production of 15.5 million to 16 million units, a new business backlog of $200 million and attrition of approximately $100 million.
From an EBITDA perspective, we are expecting adjusted EBITDA in the range of $850 million to $925 million.
From an adjusted free cash flow perspective, we are targeting approximately $300 million to $400 million in 2021, and the year-over-year walk is very simple.