AAM's fourth quarter 2021 sales were $1.24 billion, and for the full year 2021, AAM's sales were approximately $5.2 billion.
In 2021, we experienced volume recovery from the impact of the 2020 global pandemic, but semiconductor supply chip shortages impacted AAM by over $600 million.
From a profitability perspective, AAM's adjusted EBITDA in the fourth quarter of 2021 was $164.6 million, or 13.3% of sales.
For the full year 2021, AAM's adjusted EBITDA was $833.3 million, or 16.2% of sales.
AAM's adjusted earnings per share in the fourth quarter 2021 was a loss of $0.09 per share.
For the full year 2021, AAM's adjusted earnings per share was $0.93 per share, compared to $0.14 per share in 2020.
AAM's adjusted free cash for the fourth quarter of 2021 was $43.6 million.
And for the full year of 2021, AAM's adjusted free cash flow was $423 million.
We reduced our gross debt by approximately $350 million and a turn of leverage.
Let me talk about some key highlights for 2021 and the start of 2022, which you can see on Slides 4 and 5 of our slide deck.
And earlier today, we announced that AAM has secured multiple next-generation full-sized truck axle programs with global OEM customers with lifetime sales valued at greater than $10 billion.
AAM expects our gross new business backlog covering three-year period of 2022 through 2024 to be approximately $700 million.
We expect the launch case of this backlog to be $175 million in 2022, $325 million in 2023, and $200 million in 2024.
You can also see the backlog breakdown on Slide 6, with about 55% of this new business backlog related to global light trucks, including crossover vehicles, and most importantly, 35% stems from electrification.
This is more than double the 15% last year that we had.
Currently, AAM is quoted on approximately $1.5 billion of revenue, but two-thirds of the quotes coming from electrification-based programs.
And AAM is targeting sales in the range of $5.6 billion to $5.9 billion, adjusted EBITDA of approximately $800 million to $875 million, adjusted free cash flow approximately $300 million to $375 million.
And that assumes our capital spending in the range of 3.5% to 4% of sales.
And from a launch standpoint, we have 25 launches here in 2022, which should drive growth over the next several years.
And from an end market perspective, we forecast production at approximately 14.8 million to 15.2 million units for our primary North American market.
This represents about a 14% to 17% increase over last year's performance.
On the surface, you will note our sales were down nearly $200 million on a year over year basis.
AAM's product sales were down more than $300 million on a year over year basis due to semiconductor shortages and overall market dynamics.
Partially offsetting the drop in product sales is a $100 million increase in an index-related metal market costs that we passed through to our customers at no margin.
In the fourth quarter of 2021, AAM sales were $1.24 billion, compared to $1.44 billion in the fourth quarter of 2020.
We estimate that AAM was unfavorably impacted by the industrywide semiconductor shortage by approximately $137 million in the fourth quarter of 2021.
Other volume and mix in pricing was negative by $200 million.
Metal markets and foreign currency accounted for an increase of approximately $94 million to our total sales in the quarter.
For the full year of 2021, AAM sales were $5.16 billion as compared to the $4.71 billion for the full year of 2020.
The primary drivers of the increase was a return of COVID-related volumes, an increase of over $300 million in index-related metal pass-throughs and foreign currency, partially offset by volumes lost due to semiconductor chip shortages that exceeded $600 million for 2021.
Gross profit was $140 million, or 11.3% of sales in the fourth quarter of 2021, compared to $237 million, or 16.4% of sales in the fourth quarter of 2020.
Adjusted EBIDTA was $165 million in the fourth quarter of 2021 or 13.3% of sales.
This compares to $262 million in the fourth quarter of 2020, or 18.2% of sales.
During the quarter, semiconductor sales disruptions and other volumes and mix had a negative impact of $39 million and $59 dollars, respectively.
The retained portion impacting this quarter plus FX was approximately $30 million.
For the full year of 2021, AAM's adjusted EBITDA was $833 million and adjusted EBITDA margin of 16.2% of sales.
SG&A expense, including R&D in the fourth quarter of 2021, was $78 million, or 16.3% of sales.
This compares to $83 million in the fourth quarter of 2020, or 5.8% of sales.
AAM's R&D spending in the fourth quarter of 2021 was approximately $20 million, compared to $31 million in the fourth quarter of 2020.
And we would expect R&D to increase in 2022 by approximately $45 million to support these new multiple new opportunities.
Net interest expense was $42 million in the quarter of 2021, compared to $50 million in the fourth quarter of 2020.
In the fourth quarter of 2021, we recorded an income tax benefit of $2.3 million, compared to an expense of $13.9 million in the fourth quarter of 2020.
As we head into 2022, we expect our adjusted effective tax rate to be approximately 15% to 20%.
And lastly, during the fourth quarter, AAM completed the transfer of nearly $100 million of pension obligations to an insurance company.
As a result of this transaction, AAM recorded a non-cash pre-tax pension settlement charge of $42 million.
Taking all these aforementioned items into account, including the pension settlement charge, our GAAP net loss was $46 million or $0.41 per share in the fourth quarter of 2021, compared to an income of $36 million or $0.30 per share in the fourth quarter of 2020.
Adjusted lost per share for the fourth quarter of 2021 was $0.09, compared to $0.51 earnings per share in the fourth quarter of 2020.
For the full year of 2021, AAM earned adjusted earnings per share of $0.93 versus $0.14 in 2020.
Net cash provided by operating activities for the fourth quarter of 2021 was $102 million.
Capital expenditures, net of proceeds from the sale of property plant equipment in the fourth quarter, was $65 million.
And cash payments for restructuring and acquisition-related activity for the fourth quarter of 2021 were $9.8 million.
Reflecting the impact of these activities, AAM generated adjusted free cash flow of $44 million in the fourth quarter of 2021.
For the full year of 2021, AAM generated adjusted free cash flow of $423 million, compared to $311 million in the full year of 2020.
From a debt lover's perspective, we ended the year with net debt of $2.6 billion and LTM adjusted EBITDA of $833 million, calculating a net leverage ratio 3.1 times on December 31st.
In 2021, we prepaid over $350 million of gross debt.
AAM ended 2021 with total available liquidity of approximately $1.5 billion, consisting of available cash and borrowing capacity on AAM's global credit facilities.
As for sales, we are targeting the range of $5.6 billion to $5.9 billion for 2022.
This sales target is based upon North American production estimates of 14.8 million to 15.2 million units, new business backlog launches of $175 million and attrition of approximately $100 million.
From an EBITDA perspective, we're expecting adjusted EBITDA in the range of $800 million to $875 million.
First, yes, we expect to convert our year-over-year product sales increases and expected contribution margins of approximately 25% to 30%, as shown on our year-over-year walk.
By way of perspective, this net amount reflected on our walk represents only slightly more than 1% of our annual purchase component buy.
You can see continued year-over-year performance on our walk of nearly $35 million.
From an adjusted free cash flow perspective, we are targeting approximately $300 million to $375 million in 2022.
However, our capex to sales ratio is still very low by our historical measures as we are targeting capex as a percent of sales of approximately 3.5% to 4%.
And lastly, we estimate our restructuring payments to be in the range of $20 million to $30 million for 2022.
Our new three-in-one electric drive platform and components are driving global interest, and as such, our backlog of electrification is now at 35%.

Summary:
AAM's fourth quarter 2021 sales were $1.24 billion, and for the full year 2021, AAM's sales were approximately $5.2 billion.
AAM's adjusted earnings per share in the fourth quarter 2021 was a loss of $0.09 per share.
AAM expects our gross new business backlog covering three-year period of 2022 through 2024 to be approximately $700 million.
We expect the launch case of this backlog to be $175 million in 2022, $325 million in 2023, and $200 million in 2024.
And AAM is targeting sales in the range of $5.6 billion to $5.9 billion, adjusted EBITDA of approximately $800 million to $875 million, adjusted free cash flow approximately $300 million to $375 million.
And from an end market perspective, we forecast production at approximately 14.8 million to 15.2 million units for our primary North American market.
In the fourth quarter of 2021, AAM sales were $1.24 billion, compared to $1.44 billion in the fourth quarter of 2020.
Taking all these aforementioned items into account, including the pension settlement charge, our GAAP net loss was $46 million or $0.41 per share in the fourth quarter of 2021, compared to an income of $36 million or $0.30 per share in the fourth quarter of 2020.
Adjusted lost per share for the fourth quarter of 2021 was $0.09, compared to $0.51 earnings per share in the fourth quarter of 2020.
As for sales, we are targeting the range of $5.6 billion to $5.9 billion for 2022.
This sales target is based upon North American production estimates of 14.8 million to 15.2 million units, new business backlog launches of $175 million and attrition of approximately $100 million.
From an EBITDA perspective, we're expecting adjusted EBITDA in the range of $800 million to $875 million.