Q4 2025 Dauch Corp Earnings Call

February 13, 2026

Speaker #1: Fourth quarter 2025 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 period.

Speaker #1: Good morning . My name is Jamie and I will be your conference facilitator today . At this time , I would like to welcome everyone to the Dauch Corporation fourth Quarter 2020 Earnings Conference call .

Speaker #1: If you would like to ask a question during this time, simply press the star key, then the number 1 on your telephone keypads. If you'd like to withdraw your questions, you may press the star key and then the number 2.

Speaker #1: All lines have been placed on mute to prevent any background noise After the speaker's remarks , there will be a question and answer period .

Operator 3: ... All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press the star key, then the number one on your telephone keypads. If you'd like to withdraw your questions, you may press the star key and then the number two. As a reminder, today's event is being recorded. I would now like to turn the floor over to Mr. David Lim, Head of Investor Relations. Please go ahead, Mr. Lim.

Operator: ... All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press the star key, then the number one on your telephone keypads. If you'd like to withdraw your questions, you may press the star key and then the number two. As a reminder, today's event is being recorded. I would now like to turn the floor over to Mr. David Lim, Head of Investor Relations. Please go ahead, Mr. Lim.

Speaker #1: As a reminder, today's event is being recorded. I would now like to turn the floor over to Mr. David Lim, Head of Investor Relations.

Speaker #1: If you would like to ask a question during this time , simply press the star key . Then the number one on your telephone keypads .

Speaker #1: If you would like to withdraw your questions , you may press the star key and then the number two . As a reminder , today's event is being recorded .

Speaker #1: Please go ahead, Mr. Lim.

Speaker #2: Thank you, and good morning. I'd like to welcome everyone who is joining us on Dauch Corporation's fourth quarter earnings call. Earlier this morning, we released our fourth quarter of 2025 earnings announcement.

Speaker #1: I would now like to turn the floor over to Mr. David Lim, Head of Investor Relations. Please go ahead, Mr. Lim.

Speaker #2: You can access this announcement on the Investor Relations page of our website, www.dauch.com. And through the PR Newswire services, you can also find supplemental slides for this conference call on the Investor page of our website as well.

David H. Lim: Thank you, and good morning. I'd like to welcome everyone who is joining us on Dauch Corporation's Q4 earnings call. Earlier this morning, we released our Q4 of 2025 earnings announcement. You can access this announcement on the Investor Relations page of our website, www.dauch.com, and through the PR Newswire services. You can also find supplemental slides for this conference call on the Investor Relations page of our website as well. To listen to the replay of this call, you can dial 855-669-9658, replay access code 577-1070. This replay will be available through February 20. As for upcoming investor conferences, we'll be at the JP Morgan 2026 Global Leverage Finance Conference on March 3, and we'll also attend the Bank of America 2026 Global Automotive Summit on March 17.

Speaker #2: You can access this announcement on the Investor Relations page of our website and through the PRNewswire services. You can also find supplemental slides for this conference call on the investor page of our website, as well.

Speaker #2: To listen to the replay of this call, you can dial 855-669-9658, replay access code 5771070. This replay will be available through February 20th. As for an upcoming investor conferences, we'll be at the JPMorgan 2026 Global Leverage Finance Conference on March 3rd, and we'll also attend the Bank of America 2026 Global Automotive Summit on March 17th.

Speaker #2: To listen to the replay call , you can dial (855) 669-9658 . Replay access code 5771070 . This replay will be available through February 20th .

Speaker #2: As for upcoming investor conferences, we'll be at the J.P. Morgan 2026 Global Leveraged Finance Conference on March 3rd, and will also attend the Bank of America 2026 Global Automotive Summit on March 17th.

Speaker #2: We look forward to seeing you there. Now, before we begin, I'd like to remind everyone that the matters discussed in this call today may contain comments and forward-looking statements that are subject to risk and uncertainties, which cannot be predicted or quantified, and which may cause future activities and results of operations to differ materially from those discussed.

Speaker #2: We look forward to seeing you there . Now , before we begin , I'd like to remind everyone that the matters discussed in this call today may contain comments and forward looking statements that are subject to risks and uncertainties , which cannot be predicted or quantified , in which may cause future activities and results of operations to differ materially from those discussed For additional information , please reference .

David H. Lim: We look forward to seeing you there. Now, before we begin, I'd like to remind everyone that the matters discussed in this call today may contain comments and forward-looking statements that are 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, please reference slide two of our investor presentation or the press release that was issued today. Also, during this call, we may refer to certain non-GAAP financial measures. Information regarding these non-GAAP measures, as well as reconciliation of the non-GAAP measures to GAAP financial information, is available in the presentation. With that, let me turn things over to our Chairman and CEO, David Dauch.

Speaker #2: For additional information, please reference slide 2 of our Investor Presentation or the press release that was issued today. Also, during this call, we may refer to certain non-GAAP financial measures.

Speaker #2: Information regarding these non-GAAP measures, as well as reconciliation of the non-GAAP measures to GAAP financial information, is available in the presentation. With that, let me turn things over to our chairman and CEO, David Dauch.

Speaker #2: Slide two of our Investor presentation or the press release that was issued today Also during this call , we may refer to certain non-GAAP financial measures Information regarding these non-GAAP and non-GAAP measures , as well as reconciliation of non-GAAP measures to GAAP financial information , is available in the presentation .

Speaker #3: Thank you, David, and good morning, everyone. Thank you for joining us today for our first earnings call as the new Dauch Corporation. As a newly combined company, we warmly welcome our new Dowley associates to the team.

Speaker #2: With that, let me turn things over to our Chairman and CEO, David Dauch.

Speaker #3: Thank you , David , and good morning , everyone Thank you for joining us today for our first earnings call as a new doubt , as a newly combined company , we warmly welcome our new Dolly associates to the team Together .

David Dauch: Thank you, David, and good morning, everyone. Thank you for joining us today for our first earnings call as the new Dauch Corporation. As a newly combined company, we warmly welcome our new Dauch associates to the team. Together, the future is even brighter as we join together the strength of two great companies into one robust global automotive supplier. And again, welcome to the Dowlais and GKN team members. On this call, we will discuss our financial results for the Q4 of 2025, our full year of 2025, and our guidance for 2026. Joining me on the call today is Chris May, our Executive Vice President and Chief Financial Officer. To begin my comments today, I'll review the highlights of our Q4 and full year 2025 financial performance. Next, I will also cover a number of our achievements in 2025.

Speaker #3: Together, the future is even brighter as we join together the strengths of two great companies into one robust global automotive supplier. And again, welcome to the Dowley and GKN team members.

Speaker #3: On this call, we will discuss our financial results for the fourth quarter of 2025, our full year of 2025, and our guidance for 2026.

Speaker #3: The future is even brighter as we join together the strengths of two great companies into one robust, global automotive supplier. And again, welcome to Dolly and team members.

Speaker #3: Joining me on the call today is Chris May, our executive vice president and chief financial officer. To begin, my comments today, I'll review the highlights of our fourth quarter and full year 2025 financial performance.

Speaker #3: On this call, we will discuss our financial results for the fourth quarter of 2025, our full year of 2025, and our guidance for 2026.

Speaker #3: Joining me on the call today is Chris May, our Executive Vice President and Chief Financial Officer. To begin my comments today, I'll review the highlights of our fourth quarter and full year 2025 financial performance. Next, I will also cover a number of our achievements in 2025.

Speaker #3: Next, I will also cover a number of our achievements in 2025. Then I'll discuss the completion of our transformational Dowley acquisition and the benefits that these two companies bring together.

Speaker #3: After Chris covers the details of our financial results, we will open up the call for any questions that you all may have. So let's begin.

Speaker #3: Then I'll discuss the completion of our transformational Dolly acquisition and the benefits that these two companies bring together. After Chris covers the details of our financial results, we will open up the call for any questions that you all may have.

David Dauch: Then I'll discuss the completion of our transformational Dowlais acquisition and the benefits that these two companies bring together. After Chris covers the details of our financial results, we will open up the call for any questions that you, that you all may have. Let's begin. We concluded 2025 on a positive note with good momentum. We delivered strong fourth quarter and full-year Adjusted EBITDA margin growth, reflecting solid performance as we made positive operational progress throughout the year, generating over $200 million in Adjusted Free Cash Flow in 2025. Our 2025 fourth quarter sales were approximately $1.4 billion. For the full year, sales were approximately $5.8 billion. From a profitability perspective, Adjusted EBITDA in the fourth quarter was $169 million, or 12.2% of sales.

Speaker #3: We concluded 2025 on a positive note with good momentum. We delivered strong fourth quarter and full year adjusted EBIT and margin growth, reflecting solid performance, as we made positive operational progress throughout the year.

Speaker #3: So let's begin . We concluded 2025 on a positive note with good momentum . We delivered strong fourth quarter and full year adjusted EBITDA margin growth , reflecting solid performance as we made positive operational progress throughout the year , generating over $200 million in adjusted free cash flow in 2025 .

Speaker #3: Generating over $200 million in adjusted free cash flow in 2025. Our 2025 fourth quarter sales were approximately $1.4 billion. For the full year, sales were approximately $5.8 billion.

Speaker #3: From a profitability perspective, adjusted EBITDA in the fourth quarter was $169 million, or $12.2% of sales. For the full year, adjusted EBITDA was $743 million, or $12.7% of sales, up from $12.2% last year.

Speaker #3: Our 2025 fourth quarter sales were approximately $1.4 billion. For the full year, sales were approximately $5.8 billion. From a profitability perspective, adjusted EBITDA in the fourth quarter was $169 million, or 12.2% of sales for the full year.

Speaker #3: We experienced margin improvement in both our metal-forming and our driveline business units as we remained focused on operational efficiency. Our adjusted earnings per share in the fourth quarter of 2025 was $0.07 per share.

David Dauch: For the full year, Adjusted EBITDA was $743 million, or 12.7% of sales, up from 12.2% last year. We experienced margin improvement in both our Metal Forming and our Driveline business units as we remained focused on operational efficiency. Our adjusted earnings per share in the fourth quarter of 2025 was $0.07 per share. For the full year, adjusted earnings per share was $0.53 per share. Adjusted free cash flow was $70 million in the quarter and $213 million for the full year in 2025. For 2025, we delivered on the financial targets that were outlined last February while navigating a very volatile macro environment.

Speaker #3: Adjusted EBITDA was 743 million , or 12.7% of sales , up from 12.2% last year . We experienced margin improvement in both our metal forming and our driveline business units , as we remain focused on operational efficiency , our adjusted earnings per share in the fourth quarter of 2025 was $0.07 per share for the full year , adjusted earnings per share was $0.53 per share .

Speaker #3: For the full year, adjusted earnings per share was $0.53 per share. Adjusted free cash flow was $70 million in the quarter, and $213 million for the full year in 2025.

Speaker #3: For 2025, we delivered on the financial targets that were outlined last February while navigating a very volatile macro environment. It was a solid performance by our team as we managed factors under our control and remained focused on the fundamental pillars of our company: technology leadership, operational excellence, and quality.

Speaker #3: Adjusted free cash flow was $70 million in the quarter, and $213 million for the full year in 2025. For 2025, we delivered on our financial targets that were outlined last February while navigating a very volatile macro environment.

Speaker #3: It was a solid performance by our team, as we managed factors under our control and remained focused on the fundamental pillars of our company: technology, leadership, operational excellence, and quality.

David Dauch: It was a solid performance by our team as we managed factors under our control and remained focused on the fundamental pillars of our company: technology, leadership, operational excellence, and quality. Now, let's talk about some exciting business news, and please refer to slide 4 in our investor deck. We're very happy to announce that we will supply our innovative Smart Bar product to Scout Motors. This is in addition to the front electric drive units and the electric rear beam axles that we announced last year. These wins signify not only our advanced technology capabilities, but also demonstrate that OEMs can come to us for a variety of products to enhance their vehicles' drive characteristics. In addition, our Asia team received Chery Automotive's Best Supplier Award of the Year for 2025.

Speaker #3: Now, let's talk about some exciting business news, and please refer to slide 4 in our investor deck. We were very happy to announce that we will supply our innovative Smart Bar product to Scout Motors.

Speaker #3: This is in addition to the front electric drive units and the electric rear beam axles that we announced last year. These win significantly not only our advanced technology capabilities, but also demonstrate that OEMs can come to us for a variety of products to enhance their vehicles' drive characteristics.

Speaker #3: Now , let's talk about some exciting business news and please refer to slide four . In our investor deck . We were very happy to announce that we will supply our innovative , smart bar product to scout Motors .

Speaker #3: This is in addition to the front electric drive units and the electric rear beam axles that we announced last year. These wins are significant.

Speaker #3: In addition, our Asia team received cherries, cherry automotives, best supplier award of the year for 2025. This is a very prestigious award as it recognizes suppliers for outstanding quality, reliable delivery.

Speaker #3: Not only are advanced technology capabilities , but also demonstrate that OEMs can come to us for a variety of products to enhance their vehicles , drive characteristics in addition , our Asia team received cherries , cherry Automotive's Best Supplier Award of the year for 2025 .

Speaker #3: We were very honored to receive this recognition from Cherry. Finally, we earned several GM supplier quality excellence awards as we continue to meet or exceed GM's rigorous quality performance criteria.

Speaker #3: This is a very prestigious award as it recognizes suppliers for outstanding quality and reliable delivery . We were very honored to receive this recognition from Cherry Finally , we earned several GM Supplier Quality Excellence Awards as we continue to meet or exceed GM's rigorous quality performance criteria , our focus is to operate at a high level to satisfy customer expectations globally as we manage our day to day business , we simultaneously completed a transformational and historical acquisition for our company .

David Dauch: This is a very prestigious award as it recognizes suppliers for outstanding quality and reliable delivery. We are very honored to receive this recognition from Chery. Finally, we earned several GM Supplier Quality Excellence Awards as we continue to meet or exceed GM's rigorous quality performance criteria. Our focus is to operate at a high level to satisfy customer expectations globally. As we manage our day-to-day business, we simultaneously completed a transformational and historical acquisition, the acquisition of the Dowlais Group plc and its subsidiaries, GKN Automotive and GKN Powder Metallurgy. This transaction officially closed on 3 February 2026.

Speaker #3: Our focus is to operate at a high level to satisfy customer expectations globally. As we manage our day-to-day business, we simultaneously completed a transformational and historical acquisition for our company.

Speaker #3: The acquisition of the Dowley Group PLC and its subsidiaries, GKN Automotive and GKN Powder Metallurgy. This transaction officially closed on February 3rd of this year, 2026.

Speaker #3: The acquisition of the Dalai Group plc and its subsidiaries, GCN Automotive and GCN Powder Metallurgy. This transaction officially closed on February 3.

Speaker #3: This acquisition creates a leading global driveline and metal-forming supplier, and we now have significant size and scale. A comprehensive powertrain agnostic product portfolio from beam axle supporting North America and global light trucks, side shafts on substantially all global automotive product segments, electric drives for future growth, and metal-forming components serving the automotive and industrial markets.

Speaker #3: Of this year . 2026 . This acquisition creates a leading global driveline and metal forming supplier , and we now have significant size and scale a comprehensive , powertrain agnostic product portfolio from beam axle supporting North America and global light trucks , side shafts on substantially all global automotive product segments .

David Dauch: This acquisition creates a leading global driveline and metal forming supplier, and we now have significant size and scale, a comprehensive powertrain-agnostic product portfolio from beam axles supporting North America and global light trucks, side shafts on substantially all global automotive product segments, electric drives for future growth, and metal forming components serving the automotive and industrial markets. These products can support electric, hybrid, and ICE powertrains. We diversified our customer base and balanced our geographic presence across the globe, anchored by our strong truck franchise here in North America and a significant global presence in side shafts. We have compelling industrial logic with an estimated $300 million in synergies associated with the deal, with an expected full run rate achievement by the end of year three. We expect high margins, earnings, and cash flow potential as a result of this strategic combination.

Speaker #3: These products can support electric, hybrid, and ice powertrains. We diversified our customer base and balanced our geographic presence across the globe anchored by our strong truck franchise here in North America, and a significant global presence in side shafts.

Speaker #3: Electric drives for future growth and metal forming components serving the automotive and industrial markets. These products can support electric, hybrid, and ICE powertrains.

Speaker #3: We diversified our customer base and balanced our geographic presence across the globe, anchored by our strong truck franchise here in North America and a significant global presence inside shafts. We have compelling industrial logic with an estimated $300 million in synergies associated with the deal, with an expected full run-rate achievement by the end of year three.

Speaker #3: We have compelling industrial logic with an estimated $300 million in synergies associated with the deal with an expected full run rate achievement by the end of year three.

Speaker #3: And we expect high margins, earnings, and cash flow potential as a result of this strategic combination. From a business perspective, our strategy has been consistent.

Speaker #3: We continue to strive to improve our and optimize our operations: drive profitability and free cash flow generation, and manage factors under our control. With the acquisition, our focus is achieving efficient integration, delivering the full value capture potential of the transaction, and achieving our financial and operational targets.

Speaker #3: And we expect high margins, earnings, and cash flow potential as a result of this strategic combination. From a business perspective, our strategy has been consistent.

David Dauch: From a business perspective, our strategy has been consistent. We continue to strive to improve our operations, drive profitability and free cash flow generation, and manage factors under our control. With the acquisition, our focus is achieving efficient integration, delivering the full value capture potential of the transaction, and achieving our financial and operational targets. Synergy realization is a core priority. We established a dedicated integration office early, led by senior leaders from both legacy organizations, to drive accountability and execution. The teams are filling market basket of ideas and making fantastic progress across numerous cost-saving verticals. The approximately $300 million of identified synergy opportunities span SG&A, purchasing, and operations. We expect to achieve a 60% annual run rate by the end of the second full year, with the majority of the realized by the end of the year three.

Speaker #3: We continue to strive to improve our optimize our operations , drive profitability and free cash flow generation , and manage factors under our control with the acquisition , our focus is achieving efficient integration , delivering the full value capture potential of the transaction and achieving our financial and operational targets .

Speaker #3: Synergy realization is a core priority. We established a dedicated integration office early, led by senior leaders from both legacy organizations, to drive accountability and execution.

Speaker #3: The teams are filling market basket of ideals and making fantastic progress across numerous cost-saving verticals. The approximately $300 million of identified synergy opportunities span SG&A, purchasing, and operations.

Speaker #3: The teams are filling the market basket of ideals and making fantastic progress across numerous cost savings verticals. The approximately $300 million of identified synergy opportunities span SG&A, purchasing, and operations.

Speaker #3: We expect to achieve a 60% annual run rate by the end of the second full year, with the majority of the realized by the end of the year three.

Speaker #3: Importantly, we anticipate exceeding $100 million in run rate savings by the end of the first year positioning us well to drive value. Before I hand the call over to Chris, let's talk about our 2026 financial outlook.

Speaker #3: We expect to achieve a 60% annual run rate by the end of the second full year, with the majority of that realized by the end of the year.

Speaker #3: Three importantly , we anticipate exceeding $100 million in run rate savings by the end of the first year , positioning us well to drive value Before I hand the call over to Chris , let's talk about our 2026 financial outlook .

David Dauch: Importantly, we anticipate exceeding $100 million in run rate savings by the end of the first year, positioning us well to drive value. Before I hand the call over to Chris, let's talk about our 2026 financial outlook. 2026 will be no less interesting than 2025. In our view, trade policy discussions will continue as USMCA becomes finalized later in the year, and once finalized, OEMs can then fine-tune their respective product planning and plant loading decisions. We want to clearly underscore that it is very important and very difficult to speculate the outcome of these discussions. Hence, we will manage our business accordingly. As such, from an end market perspective, we assume 2026 North American production at approximately 15 million units, Europe at approximately 17 million units, China at approximately 33 million units, and global production at approximately 93 million units.

Speaker #3: 2026 will be no less interesting than 2025. In our view, trade policy discussions will continue as USMCA becomes finalized later in the year, and once finalized, OEMs can then fine-tune their respective product planning and plant loading decisions.

Speaker #3: 2026 will be no less interesting than 2025 . In our view , trade policy discussions will continue as Usmca becomes finalized later in the year , and once finalized , OEMs can then fine tune their respective product planning and plant loading decisions .

Speaker #3: We want to clearly underscore that it is very important and very difficult to speculate the outcome of these discussions. Hence, we will manage our business accordingly.

Speaker #3: As such, from an end-market perspective, we assume 2026 North American production at approximately $15 million units, Europe at approximately $17 million units, China at approximately $33 million units, and global production at approximately $93 million units.

Speaker #3: We want to clearly underscore that it is very important—and very difficult—to speculate on the outcome of these discussions. Hence, we will manage our business accordingly.

Speaker #3: As such , from an end market perspective , we assume 2026 North American production at approximately 15 million units , Europe at approximately 17 million units , China at approximately 33 million units , and global production at approximately 93 million units .

Speaker #3: Slide 7 illustrates the company's 2026 financial outlook. Our outlook takes into consideration a partial year contribution from Dowley, and recall we just closed the transaction on February 3rd of this year.

Speaker #3: Slide seven illustrates the company's 2026 financial outlook. Our outlook takes into consideration a partial year contribution from Dowlais, and recall, we just closed the transaction on February 3rd of this year.

David Dauch: Slide seven illustrates the company's 2026 financial outlook. Our outlook takes into consideration a partial year contribution from Dowlais. And recall, we just closed the transaction on 3 February of this year. We are targeting sales of $10.3 to 10.7 billion, adjusted EBITDA of approximately $1.3 to 1.4 billion, and adjusted free cash flow in the range of $235 to 325 million. In the longer term, our priorities are to realize strong synergies from our Dowlais acquisition and combination, generate solid adjusted free cash flow, strengthen our balance sheet, advance our agnostic product portfolio, position the Dauch Corporation for sustained profitable growth, and return of capital to our shareholders. In addition, to mark this transformational moment for our company and its shareholders, we recently announced we changed our name from American Axle & Manufacturing Holdings, Inc.

Speaker #3: We are targeting sales of $10.3 to $10.7 billion, adjusted EBITDA of approximately $1.3 to $1.4 billion, and adjusted free cash flow in the range of $235 to $325 million.

Speaker #3: In the longer term, our priorities are to realize strong synergies from our Dowley acquisition and combination, generate solid adjusted free cash flow, strengthen our balance sheet, advance our agnostic product portfolio, position the Dow Corporation for sustained profitable growth, and return of capital to our shareholders.

Speaker #3: In the longer term , our priorities are to realize strong synergies from our Dowlais acquisition and combination , generate solid adjusted free cash flow , strengthen our balance sheet , advance our agnostic product portfolio , position the Dauch Corporation for sustained , profitable growth and return of capital to our shareholders .

Speaker #3: In addition to market transformational moment for our company and its shareholders, we recently announced we changed our name from American Axle Manufacturing Holdings, Inc., to the Dow Corporation or Dowk.

Speaker #3: In addition to market, this is a transformational moment for our company and its shareholders. We recently announced we changed our name from American Axle Manufacturing Holdings, Inc. to the Dauch Corporation, or Duke.

Speaker #3: The name isn't just my family name. It's a brand that stands for clarity, confidence, and a commitment to performance with a legacy of leadership that has helped shape engineering and manufacturing.

David Dauch: to the Dauch Corporation or Dauch. The name isn't just my family name; it's a brand that stands for clarity, confidence, and a commitment to performance, with a legacy of leadership that has helped shape engineering and manufacturing. It represents a responsibility to our stakeholders, a dedication to operational excellence, and a willingness to take bold steps as we strive to exceed today's standards and capitalize on tomorrow's potential. Our new brand honors the strength and shared entrepreneurial spirit of both AAM and GKN, while signaling our commitment to performance with staying power. Under the unified brand, we are a premier driveline and metal forming supplier serving the global automotive industry, built on the same foundational pillars of technology leadership, operational excellence, and quality that my father built AAM on.

Speaker #3: The name isn't just my family name, it's a brand that stands for clarity, confidence, and a commitment to performance, with a legacy of leadership that has helped shape engineering and manufacturing.

Speaker #3: It represents the responsibility to our stakeholders, a dedication to operational excellence, and a willingness to take bold steps as we strive to exceed today's standards and capitalize on tomorrow's potential.

Speaker #3: It represents a responsibility to our stakeholders, a dedication to operational excellence, and a willingness to take bold steps as we strive to exceed today's standards and capitalize on tomorrow's potential.

Speaker #3: Our new brand honors the strength and shared entrepreneurial spirit of both AAM and GKN, while signaling our commitment to performance with staying power. Under the unified brand, we are premier driveline and metal-forming supplier serving the global automotive industry, built on the same foundational pillars of technology leadership, operational excellence, and quality that my father built AAM on.

Speaker #3: Our new brand honors the strength and shared entrepreneurial spirit of both AEM and GCN, while signaling our commitment to performance with staying power under the unified brand.

Speaker #3: We are a premier driveline and metal forming supplier serving the global automotive industry. Built on the same foundational pillars of technology, leadership, operational excellence, and quality that my father built ARM on.

Speaker #3: These remain the brand foundation of who we are today, and as our brand platform states, our company is built to perform. I'm proud of the team, what we've accomplished, and I'm looking forward to a positive and productive 2026.

Speaker #3: These remain the brand foundation of who we are today, and as our brand platform states, our company is built to perform. I'm proud of the team.

David Dauch: These remain the brand foundation of who we are today, and as our brand platform states, our company is built to perform. I'm proud of the team, what we've accomplished, and I'm looking forward to a positive and productive 2026. That concludes my formal remarks. Let me turn the call over to our Executive Vice President and Chief Financial Officer, Chris May. Chris?

Speaker #3: That concludes my formal remarks. Let me turn the call over to our executive vice president and chief financial officer, Chris May. Chris?

Speaker #3: What we've accomplished, and I am looking forward to a positive and productive 2026. That concludes my formal remarks. Let me turn the call over to our Executive Vice President and Chief Financial Officer, Christopher May.

Speaker #4: Okay. Thank you, David, and good morning, everyone. I will cover the financial details of our fourth quarter and full year 2025 results, and our 2026 outlook with you today.

Speaker #4: I will also refer to the earnings slide deck as part of my prepared comments. So let's go ahead and begin with sales. In the fourth quarter of 2025, our sales were $1.38 billion, which were flat compared to the fourth quarter of 2024.

Speaker #3: Chris . Okay .

Chris May: Okay, thank you, David, and good morning, everyone. I will cover the financial details of our Q4 and full year 2025 results and our 2026 outlook with you today. I will also refer to the earnings slide deck as part of my prepared comments. Let's go ahead and begin with sales. In the Q4 of 2025, our sales were $1.38 billion, which were flat compared to the Q4 of 2024. Slide 8 shows a walk of Q4 2024 sales to Q4 2025 sales. Volume, mix, and other lowered sales by $2 million, pricing was $6 million, and the sale of the commercial vehicle axle business in India, which occurred in mid-2025, lowered sales by $27 million in the quarter.

Speaker #4: Thank you, David, and good morning, everyone. I will cover the financial details of our fourth quarter and full year 2025 results, as well as our 2026 outlook, with you today.

Speaker #4: I will also refer to the earnings slide deck as part of my prepared comments. So let's go ahead and begin with sales in the fourth quarter of 2025.

Speaker #4: Slide 8 shows a walk of fourth quarter 2024 sales to fourth quarter 2025 sales. By mix and other, lowered sales by $2 million, pricing was $6 million, and the sale of the commercial vehicle axle business in India, which occurred in mid-2025, lowered sales by $27 million in the quarter.

Speaker #4: Our sales were 1.38 billion , which were flat compared to the fourth quarter of 2024 . Slide eight shows a week of fourth quarter 2024 sales to fourth quarter 2025 sales volume mix and other lowered sales by $2 million .

Speaker #4: Metal market pass-throughs and FX increased net sales by approximately $38 million, as both were higher year over year. For the full year of 2025, our sales were $5.84 billion as compared to $6.12 billion for the full year of 2024.

Speaker #4: Pricing was 6 million , and the sale of the commercial vehicle axle business in India , which occurred in mid 2025 , lowered sales by 27 million in the quarter .

Speaker #4: Middle market passthroughs and FX increased net sales by approximately $38 million, as both were higher year over year. For the full year of 2025, our sales were $5.84 billion compared to $6.12 billion for the full year of 2024.

Chris May: Metal market pass-throughs and FX increased net sales by approximately $38 million, as both were higher year over year. For the full year of 2025, our sales were $5.84 billion, as compared to $6.12 billion for the full year of 2024. The primary drivers in the decrease were volume and mix, and the sale of our India commercial vehicle axle business, partially offset by favorable FX and metal markets. Now, let's move on to profitability. Gross profit was $140.9 million in Q4 2025, as compared to $154.3 million in Q4 2024. Adjusted EBITDA was $169 million in Q4 2025, versus $160.8 million last year.

Speaker #4: The primary drivers of the decrease were volume and mix, and the sale of our India commercial vehicle axle business, partially offset by favorable FX and metal markets.

Speaker #4: Now, let's move on to profitability. Gross profit was $140.9 million in the fourth quarter of 2025 as compared to $154.3 million in the fourth quarter of 2024.

Speaker #4: The primary drivers of the decrease were volume and mix, and the sale of our India Commercial Vehicle axle business, partially offset by favorable FX and metal markets. Now, let's move on to profitability.

Speaker #4: Adjusted EBITDA was $169 million in the fourth quarter of 2025 versus $160.8 million last year. You can see a year-over-year walk down of adjusted EBITDA on slide 9.

Speaker #4: Gross profit was $140.9 million in the fourth quarter of 2025, as compared to $154.3 million in the fourth quarter of 2024. Adjusted EBITDA was $169 million in the fourth quarter of 2025, versus $160.8 million last year.

Speaker #4: Although sales volume and mix declined in the quarter, we realized a positive adjusted EBITDA of approximately $5 million due to mix effect. R&D expense continued to be favorable and was slightly lower year over year, and performance was $8 million favorable.

Speaker #4: You can see a year over year walk down of adjusted EBITDA on slide nine . Although sales volume and mix declined in the quarter , we realized a positive adjusted EBITDA of approximately $5 million due to mix effect , R&D expense continued to be favorable and was slightly lower year over year , and performance was 8 million .

Chris May: You can see a year-over-year walk down of Adjusted EBITDA on Slide 9. Although sales volume and mix declined in the quarter, we realized a positive Adjusted EBITDA of approximately $5 million due to mix effect. R&D expense continued to be favorable and was slightly lower year over year, and performance was $8 million favorable. For the full year of 2025, our Adjusted EBITDA was $743.2 million, and Adjusted EBITDA margin was 12.7% of sales. For the full year, this was a 50 basis point margin improvement from 2024. Let's move on to interest and taxes. Net interest expense was $50.8 million in the fourth quarter of 2025, compared to $37.3 million in the fourth quarter of 2024.

Speaker #4: For the full year of 2025, our adjusted EBITDA was $743.2 million, and adjusted EBITDA margin was $12.7% of sales. For the full year, this was a 50 basis point margin improvement from 2024.

Speaker #4: Dollars favorable for the full year of 2025. Our adjusted EBITDA was $743.2 million, and adjusted EBITDA margin was 12.7% of sales for the full year.

Speaker #4: Let's move on to interest and taxes. Net interest expense was $50.8 million in the fourth quarter of 2025 compared to $37.3 million in the fourth quarter of 2024.

Speaker #4: This was a 50 basis point margin improvement from 2024. Let's move on to interest and taxes. Net interest expense was $50.8 million in the fourth quarter of 2025, compared to $37.3 million in the fourth quarter of 2020.

Speaker #4: The increase in interest expense in 2025 as compared to 2024 was primarily due to the issuance of new debt in connection to the acquisition of Dowley, which was held in escrow until the closing in February of 2026.

Speaker #4: The increase in interest expense in 2025 as compared to 2024 was primarily due to the issuance of new debt in connection to the acquisition of Dali, which was held in escrow until the closing in February of 2026.

Chris May: The increase in interest expense in 2025 as compared to 2024 was primarily due to the issuance of new debt in connection to the acquisition of Dowlais, which was held in escrow until the closing in February 2026. In Q4 2025, we recorded an income tax benefit of $10 million, compared to an expense of $6.8 million in Q4 2024. Taking all these sales and cost drivers into account, our GAAP net loss was $75.3 million or $0.63 per share in Q4 2025, compared to a net loss of $13.7 million or $0.12 per share in Q4 2024.

Speaker #4: In the fourth quarter of 2025, we recorded an income tax benefit of $10 million compared to an expense of $6.8 million in the fourth quarter of 2024.

Speaker #4: Taking all these sales and cost drivers into account, our gap net loss was $75.3 million or $63 per share in the fourth quarter of '25 compared to a net loss of $13.7 million or $0.12 per share in the fourth quarter of 2024.

Speaker #4: In the fourth quarter of 2025 , we recorded an income tax benefit of $10 million , compared to an expense of 6.8 million in the fourth quarter of 2024 , taking all of these sales and cost drivers into account , our GAAP net loss was 75.3 million , or $0.63 per share , in the fourth quarter of 25 , compared to a net loss of 13.7 million , or $0.12 per share , in the fourth quarter of 2020 .

Speaker #4: Adjusted earnings per share, which excludes the impact of items noted in our earnings press release, was $0.07 per share in the fourth quarter of 2025 compared to a loss of $0.06 per share for the fourth quarter of 2024.

Speaker #4: For adjusted earnings per share , which excludes the impact of items noted in our earnings press release , was $0.07 per share in the fourth quarter of 2025 , compared to a loss of $0.06 per share for the fourth quarter of 2024 .

Chris May: Adjusted earnings per share, which excludes the impact of items noted in our earnings press release, was $0.07 per share in Q4 2025, compared to a loss of $0.06 per share for Q4 2024. For the full year of 2025, our adjusted earnings per share was $0.53 versus $0.51 per share in 2024. Let's now move to cash flow and the balance sheet. Net cash provided by operating activities for Q4 2025 was $120.5 million, compared to $151.2 million in Q4 2024. Capital expenditures, net of proceeds from the sale of property, plant, and equipment for Q4 2025, were $66 million.

Speaker #4: For the full year of 2025, our adjusted earnings per share was $53 versus $51 per share in 2024. Let's now move to cash flow and the balance sheet.

Speaker #4: Net cash provided by operating activities for the fourth quarter of '25 was $120.5 million compared to $151.2 million in the fourth quarter of 2024.

Speaker #4: For the full year of 2025, our adjusted earnings per share was $0.53, versus $0.51 per share in 2024. Let's now move to cash flow and the balance sheet. Net cash provided by operating activities for the fourth quarter of 2025 was $120.5 million, compared to $151.2 million in the fourth quarter of 2024.

Speaker #4: Capital expenditures, net of proceeds from the sale of property, plant, and equipment for the fourth quarter of 2025, were $66 million. For the full year, we finished at $250.9 million or $4.3% of sales.

Speaker #4: Capital expenditures, net of proceeds from the sale of property, plant, and equipment for the fourth quarter of 2025 were $66 million.

Speaker #4: Cash payments for restructuring for the fourth quarter of 2025 were $2.8 million and cash payments related to our Dowley acquisition were $25.9 million. Reflecting the impact of these activities, we generated adjusted free cash flow of $70.1 million in the fourth quarter of 2025.

Speaker #4: For the full year , we finished at 250.9 million , or 4.3% of sales . Cash payments for restructuring for the fourth quarter of 2025 were 2.8 million , and cash payments related to our acquisition were 25.9 million , reflecting the impact of these activities , we generated adjusted free cash flow of 70.1 million in the fourth quarter of 2025 , for the full year of 2025 , we generated adjusted free cash flow of $213 million , compared to 230,000,000 in 2020 .

Chris May: For the full year, we finished at $250.9 million or 4.3% of sales. Cash payments for restructuring for the fourth quarter of 2025 were $2.8 million, and cash payments related to our Dowlais acquisition were $25.9 million. Reflecting the impact of these activities, we generated adjusted free cash flow of $70.1 million in the fourth quarter of 2025. For the full year of 2025, we generated adjusted free cash flow of $213 million compared to $230 million in 2024. From a debt leverage perspective, we ended the year with net debt of $1.8 billion and LTM adjusted EBITDA of $743 million, calculating a net leverage ratio of 2.5 times at December 31.

Speaker #4: For the full year of 2025, we generated adjusted free cash flow of $213 million compared to $230 million in 2024. From a debt leverage perspective, we ended the year with net debt of $1.8 billion in LTM adjusted EBITDA of $743 million, calculating a net leverage ratio of 2.5 times at December 31st.

Speaker #4: From a debt leverage perspective, we ended the year with net debt of $1.8 billion and LTM adjusted EBITDA of $743 million.

Speaker #4: This is down from 2.8 times a year ago on December 31st, 2024, driven by our cash flow generation and proceeds we received from asset sales.

Speaker #4: Calculating a net leverage ratio of 2.5 times at December 31st . This is down from 2.8 times a year ago . On December 31st , 2024 , driven by our cash flow generation and proceeds we received from asset sales during the quarter , we completed our financing for our acquisition of Dali and funds were still held in escrow at December 31st , pending the closing of the transaction .

Speaker #4: During the quarter, we completed our financing for our acquisition of Dowley and funds were still held in escrow at December 31st, pending the closing of the transaction.

Chris May: This is down from 2.8 times a year ago on 31 December 2024, driven by our cash flow generation and proceeds we received from asset sales. During the quarter, we completed our financing for our acquisition of Dowlais, and funds were still held in escrow at 31 December, pending the closing of the transaction. You can see the results of the financing activity on our balance sheet. Our strong cash generation and successful financing activity in 2025 allow us to support the Dowlais acquisition closing as planned. Before we move to the Q&A portion of the call, let me provide some thoughts on our 2026 financial outlook. This year will be exciting as we bring two iconic automotive suppliers together.

Speaker #4: You can see the results of the financing activity on our balance sheet. Our strong cash generation and successful financing activity in 2025 allowed us to support the daily acquisition, closing as planned. Before we move to the Q&A portion of the call, let me provide some thoughts on our 2026 financial outlook.

Speaker #4: Before we move to the Q&A portion of the call, let me provide some thoughts on our 2026 financial outlook. This year, we'll be exciting as we bring two iconic automotive suppliers together.

Speaker #4: In our earnings slide deck, we have included walks from our 2025 actual results to our 2026 financial targets, and you can find those starting on slide 10.

Speaker #4: This year will be exciting as we bring two iconic automotive suppliers together in our earnings slide deck. We have included walks from our 2025 actual results to our 2026 financial targets, and you can find those starting on slide ten.

Speaker #4: We note that the 2026 figures represent a full year of Dell Corporation previously AAM and only a partial year contribution for Dowley, as we did not close the transaction until February.

Chris May: In our earnings slide deck, we have included walks from our 2025 actual results to our 2026 financial targets, and you can find those starting on Slide 10. We note that the 2026 figures represent a full year of Dauch Corporation, previously AAM, and only a partial year contribution for Dowlais, as we did not close the transaction until February. In addition to the regional production assumptions that are in our press release and deck, we assume GM's large pickup and SUV production in the 1.3 to 1.4 million unit range. As for financial guidance, we are targeting sales range of $10.3 to 10.7 billion for 2026. We have provided a breakout on the walk of the Dowlais contribution to sales for a full year, less the portion applicable to the prior period to the closing date.

Speaker #4: In addition to the regional production assumptions that are in our press release and deck, we assume GM's large pickup and SUV production in the $1.3 to $1.4 million unit range.

Speaker #4: We note that the 2026 figures represent a full year of Dauch Corporation. Previously, ARM and only a partial year contribution for Dolly, as we did not close the transaction until February.

Speaker #4: As for financial guidance, we are targeting sales range of $10.3 to $10.7 billion for 2026. We have provided a breakout on the walk of the Dowley contribution to sales for a full year, less the portion applicable to the prior period to the closing date.

Speaker #4: In addition to the regional production assumptions that are in our press release and deck, we assume GM's large pickup and SUV production in the 1.3 to 1.4 million unit range.

Speaker #4: As for financial guidance, we are targeting a sales range of $10.3 to $10.7 billion for 2026. We have provided a breakout on the walk of the Dolly contribution to sales for a full year, less the portion applicable to the prior period to the closing date. From an EBITDA perspective, we are expecting adjusted EBITDA in the range of $1.3 to $1.4 billion.

Speaker #4: From an EBITDA perspective, we are expecting adjusted EBITDA in the range of $1.3 to $1.4 billion. Let me provide some color on the key elements of our year-over-year EBITDA walk that is on page 11.

Speaker #4: This chart walks Dow Corporation's standalone year-over-year variances and then adds the portion related to the Dowley acquisition. As it relates to the standalone variances, we expect EBITDA to be impacted by volume and mix at normal contribution margin rates.

Chris May: From an EBITDA perspective, we are expecting adjusted EBITDA in a range of $1.3 to 1.4 billion. Let me provide some color on the key elements of our year-over-year EBITDA walk that is on page 11. This chart walks Dauch Corporation's standalone year-over-year variances and then adds the portion related to the Dowlais acquisition. As it relates to the standalone variances, we expect EBITDA to be impacted by volume and mix at normal contribution margin rates. R&D optimization should continue and drive approximately $10 to 20 million in annual savings. We anticipate continued cost reductions, operational productivity, and efficiency gains, and you can see year-over-year performance improvements as a net favorable $40 to 50 million on our walk. We currently expect a headwind from metal market and FX, in particular, due to the strengthening of the Mexican peso.

Speaker #4: Let me provide some color on the key elements of our year over year EBITDA walk . That is on page 11 . This chart walks out Corporation's standalone year over year variances .

Speaker #4: R&D optimization should continue and drive approximately 10 to 20 million dollars in annual savings. We anticipate continued cost reductions, operational productivity, and efficiency gains, and you can see year-over-year performance improvements as the net favorable 40 to 50 million dollars on our walk.

Speaker #4: And then adds the portion related to the daily acquisition as it relates to the standalone variances. We expect EBITDA to be impacted by volume and mix at normal contribution margin rates.

Speaker #4: R&D optimization should continue and drive approximately 10 to $20 million in annual savings . We anticipate continued cost reductions operational productivity and efficiency gains , and you can see year over year performance improvements as a net favorable 40 to $50 million on our walk .

Speaker #4: We currently expect a headwind from metal market and FX, in particular due to the strengthening of the Mexican peso. We then expect Dowley to contribute approximately $600 million for the year, which represents a full cost margin of approximately 12.1%.

Speaker #4: We currently expect a headwind from the metal market and FX, in particular due to the strengthening of the Mexican peso. We then expect Dolly to contribute approximately $600 million for the year, which represents a full cost margin of approximately 12.1%. And very importantly, synergy flow-through is forecasted to contribute $50 to $75 million in adjusted EBITDA in 2026.

Speaker #4: And very importantly, Synergy P&L flow-through is forecasted to contribute 50 to 75 million in adjusted EBITDA in 2026. This equates to a run rate of greater than 100 million dollars by the end of year one.

Chris May: We then expect Dauch to contribute approximately $600 million for the year, which represents a full cost margin of approximately 12.1%. And very importantly, synergy P&L flow-through is forecasted to contribute $50 to 75 million in adjusted EBIT in 2026. This equates to a run rate of greater than $100 million by the end of year one, as momentum builds throughout the year. For our full-year guidance, at the midpoint, this performance drives a third consecutive year of margin improvement. As for adjusted free cash flow, we are targeting approximately $235 to 325 million in 2026. At this point, the main driver of this range is primarily to align within the EBITDA range. However, as you know, there are many puts and takes that drive cash flow.

Speaker #4: As momentum builds throughout the year, for a full year guidance at the midpoint, this performance drives a third consecutive year of margin improvement. As for adjusted free cash flow, we are targeting approximately $235 to $325 million in 2026.

Speaker #4: This equates to a run rate of greater than $100 million by the end of year one. As momentum builds throughout the year for our full-year guidance at the midpoint, this performance drives a third consecutive year of margin improvement.

Speaker #4: At this point, the main driver of this range is primarily to align within the EBITDA range. However, as you know, there are many puts and takes that drive cash flow.

Speaker #4: As for adjusted free cash flow, we are targeting approximately $235 million to $320 million in 2026. At this point, the main driver of this range is primarily to align within the EBITDA range.

Speaker #4: Our assumption for CAPEX is 4.5 to 5% of sales to support multiple upcoming launches including for our large GM truck programs. We expect core operational restructuring-related cash outflows to be in the range of $110 to $150 million as the former Dowley restructuring initiatives are in their final year of completion, and for the closure of select former AAM facilities.

Speaker #4: However , as you know , there are many puts and takes that drive cash flow . Our assumption for CapEx is four and a half to 5% of sales to support multiple upcoming launches , including for our large GM truck programs , we expect core operational restructuring related cash outflows to be in the range of 110 to $150 million , as the former Dolly restructuring initiatives are in their final year of completion , and for the closure of select former arm facilities .

Chris May: Our assumption for CapEx is 4.5 to 5% of sales to support multiple upcoming launches, including for our large GM truck programs. We expect core operational restructuring-related cash outflows to be in the range of $110 to 150 million, as the former Dauch restructuring initiatives are in their final year of completion and for the closure of select former AAM facilities. Lastly, we expect cash costs associated with synergy capture to be in the range of $100 to 125 million for 2026. Taking a step back, when you read through all of the details, you'll see an expectation of margin growth, and even after absorbing restructuring and synergy costs, real positive cash flow available for debt repayment from our operations in the first year of this transformational transaction.

Speaker #4: Lastly, we expect cash costs associated with Synergy capture to be in the range of $100 to $125 million for 2026. Taking a step back, when you read through all of the details, you'll see an expectation of margin growth and even after absorbing restructuring and synergy costs, real positive cash flow available for debt repayment from our operations in the first year of this transformational transaction.

Speaker #4: Lastly, we expect cash costs associated with Synergy Capture to be in the range of $100 million to $225 million for 2026. Taking a step back, when you read through all of the details, you will see an expectation of margin growth.

Speaker #4: While we do not provide quarterly guidance, we do want to provide some perspective on timing in 2026. As it relates to the revenue cadence for the year, due to meaningful January downtime at key customers and only a partial quarter for Dowley sales contributions, we anticipate the first quarter to be our weakest quarter.

Speaker #4: And even after absorbing restructuring and synergy costs, real positive cash flow is available for debt repayment from our operations in the first year of this transformational transaction.

Speaker #4: While we do not provide quarterly guidance, we do want to provide some perspective on timing in 2026 as it relates to the revenue cadence for the year, due to meaningful January downs, customers, and only a partial quarter for Dolly sales contributions.

Chris May: While we do not provide quarterly guidance, we do want to provide some perspective on timing in 2026. As it relates to the revenue cadence for the year, due to meaningful January customers and only a partial quarter for Dowlais sales contributions, we anticipate Q1 to be our weakest quarter. In addition, we expect normal seasonal cash outflow in the quarter. Let me provide you with some key housekeeping items for modeling purposes. I know many have been reviewing and analyzing published Dowlais financial data. However, I just want to remind you that we are on different accounting standards. Dowlais is IFRS and Dauch is U.S. GAAP, and each company has different adjustment definitions. You cannot simply add the two figures together, as the differences are significant and have been part of our planning since day one.

Speaker #4: In addition, we expect normal seasonal cash outflow in the quarter. Let me provide you with some key housekeeping items for modeling purposes. I know many have been reviewing and analyzing published Dowley financial data.

Speaker #4: We anticipate the first quarter to be our weakest quarter. In addition, we expect normal seasonal cash outflow in the quarter. Let me provide you with some key housekeeping items for modeling purposes.

Speaker #4: However, I just want to remind you that we are on different accounting standards: Dowley is IFRS and Dow is US GAAP, and each company has different adjustment definitions.

Speaker #4: I know many have been reviewing and analyzing published daily financial data. However, I just want to remind you that we are on different accounting standards.

Speaker #4: And you cannot simply add the two figures together as the differences are significant, and have them part of our planning since day one. Please see our previously published proxy materials for additional insights.

Speaker #4: Dolly is IFRS, and Doc is US GAAP, and each company has different adjustment definitions. You cannot simply add the two figures together, as the differences are significant and have been part of our planning since day one.

Speaker #4: We expect approximately $243 million fully diluted shares outstanding for 2026. We expect normal variable contribution margin on product sales for the new company, and the 25 to 30 percent range essentially the same as prior.

Speaker #4: Please see our previously published proxy materials for additional insights. We expect approximately 243 million fully diluted shares outstanding for 2026. We expect normal variable contribution margin on product sales for the new company in the 25% to 30% range, essentially the same as prior.

Chris May: Please see our previously published proxy materials for additional insights. We expect approximately 243 million fully diluted shares outstanding for 2026. We expect normal variable contribution margin on product sales for the new company in the 25% to 30% range, essentially the same as prior. We expect annual cash pension contributions of approximately $40 to 50 million, primarily related to legacy Dauch plants. At this time, use approximately 30% tax rate for book purposes, and cash taxes assume $150 to 170 million for 2026. Given the size of this transaction and the fact we just closed less than two weeks ago, there will be significant effects from purchase accounting, transaction costs, and other activity in Q1 2026.

Speaker #4: We expect annual cash pension contributions of approximately 40 to 50 million dollars, primarily related to legacy Dowley plans. At this time, use approximately 30% tax rate for book purposes, and cash taxes assume 150 to 170 million for 2026.

Speaker #4: We expect annual cash pension contributions of approximately $40 to $50 million, primarily related to legacy dolly plants. At this time, use an approximately 30% tax rate for book purposes and cash taxes.

Speaker #4: Given the size of this transaction and the fact we just closed less than two weeks ago, there will be significant effects from purchase accounting transaction costs and other activity in the first quarter of 2026.

Speaker #4: Assume $150 million to $250 million for 2026. Given the size of this transaction and the fact we just closed less than two weeks ago, there will be significant effects from purchase accounting, transaction costs, and other activity in the first quarter of 2026.

Speaker #4: We look forward to sharing all this related information with you at our first quarter earnings call. All that said, we are very pleased with how we finished 2025, and we are already starting to see the benefits of our newly sized and named company in 2026. With synergy, value capture gaining momentum, and the depth of our talent and products, the opportunity is right before us to attain strong financial results as we integrate together.

Chris May: We look forward to sharing all this related information with you at our Q1 earnings call. All that said, we are very pleased with how we finished 2025, and we are already starting to see the benefits of our newly sized and named company in 2026. With synergy value capture gaining momentum and the depth of our talent and products, the opportunity is right before us to attain strong financial results as we integrate together. This puts us on the road to deliver best-in-class financial metrics with a more balanced future capital allocation profile. It is a very exciting time at Dauch Corporation. Thank you for your time and participation on the call today. I'm going to stop here, and we are happy to take your questions.

Speaker #4: With Synergy value capture gaining momentum and the depth of our talent and products, the opportunity is right before us to attain strong financial results as we integrate together.

Speaker #4: This puts us on the road to deliver best-in-class financial metrics with a more balanced future capital allocation profile. It is a very exciting time at Dow Corporation.

Speaker #4: we Thank you ,

Speaker #4: Thank you for your time and participation on the call today. I'm going to stop here, and we are happy to take your questions. David?

Speaker #4: This puts us on the road to deliver best in class financial metrics with a more balanced future . Capital allocation profile . It is a very exciting time at Dauch Corporation .

Speaker #1: Thank you, David and Chris. We have reserved some time to take questions. I would ask that you please limit your questions to no more than two, so at this time, please feel free to proceed with any questions you may have.

Speaker #4: Thank you for your time and participation on the call. Today, I'm going to stop here, and we are happy to take your questions.

Speaker #1: Operator?

Speaker #4: David .

David H. Lim: Thank you, David and Chris. We have reserved some time to take questions. I would ask that you please limit your questions to no more than two. So at this time, please feel free to proceed with any questions you may have. Operator?

Speaker #2: David and Chris, we have reserved some time to take questions. I would ask that you please limit your questions to no more than two.

Speaker #3: And at this time, we will begin that question-and-answer session. If you'd like to ask a question, please press star and then one. To withdraw your questions, you may press star and two.

Speaker #2: So at this time, please feel free to proceed with any questions you may have. Operator.

Speaker #3: Our first question today comes from Joe Spak from UBS. Please go ahead with your question.

Speaker #1: And at this time, we will begin the question and answer session. If you'd like to ask a question, please press star, then one. To withdraw your questions, please press star, then two.

Operator 3: At this time, we will begin that question-and-answer session. If you'd like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. Our first question today comes from Joe Spak from UBS. Please go ahead with your question.

Operator: At this time, we will begin that question-and-answer session. If you'd like to ask a question, please press star and then one. To withdraw your questions, you may press star and two. Our first question today comes from Joe Spak from UBS. Please go ahead with your question.

Speaker #4: Thanks. Good morning, everyone. Maybe just to start, if you could sort of help us at a high level of what you sort of see going on at the two individual businesses, because for the old American Axle, it looks like down 2%, maybe 1% of that's the sales, so down 1%.

Speaker #1: You may press star and two. Our first question today comes from Joe Sack from UBS. Please go ahead with your question.

Speaker #5: Thanks . Good morning everyone . Maybe just to start , if you could sort of help us at a high level of what you see going on at the two individual businesses , because for for the old American Axle , it looks like you're down 2% minus , you know , maybe 1% of that's the sales down 1% .

Joe Spak: Thanks. Good morning, everyone. Maybe just to start, if you could, if you could sort of help us, at a high level of, of what you sort of see going on at, at the two individual businesses, because, you know, for year-- for the old American Axle, it looks like you're down 2% minus, you know, maybe 1% of that's the, the sales, so down 1%. So what are some of the assumptions there? And then for Dowlais, you know, I know you're sort of saying about $5.4 billion full year, then you don't have the, the one month, but it looks like there's not really, you know, some growth going on there either.

Speaker #4: So what are some of the assumptions there? And then for Dowley, I know you're sort of saying about 5.4 billion full year, then you don't have the one month.

Speaker #4: But it looks like there's not really some growth going on there either. So maybe you could sort of just talk about what happened in that business in the back half of 2025 where we didn't see the financials yet, and then what the outlook is even beyond this year.

Speaker #5: So, what are some of the assumptions there? And then for dollar— you know, I know you're sort of saying about $5.4 billion full year.

Speaker #5: Then you don’t have the one month. But it looks like there’s not really some growth going on there either. So maybe you could just talk about what happened in that business.

Speaker #4: Thanks.

Joe Spak: Maybe you could sort of just talk about what happened in that business, you know, in the back half of 2025, where we didn't see the financials yet, and then what the outlook is even beyond this year. Thanks.

Speaker #5: Yeah. Good morning, Joe. This is Chris. And at this point in time, Dowley has still not completed or published their full year 2025 results.

Speaker #5: You know, in the back half of '25 where we didn't see the financials yet, and what the outlook is even beyond this year.

Speaker #5: So we will not be able to comment on their full year results. However, in terms of what we're seeing from a sales perspective for both companies, generally, I would say our very similar, meaning our core assumptions, as you know from a North America perspective, are down slightly from 15.3 million units to 15 in 2026.

Speaker #5: Thanks .

Speaker #4: Yeah . Good morning Joe . This is Chris . And at this point in time , dollar has still not completed or published their full year 2025 results .

Chris May: Yeah. Good morning, Joe. This is Chris. And at this point in time, Dowlais has still not completed or published their full year 2025 results, so we will not be able to comment on their full year results. However, you know, in terms of what we're seeing from a sales perspective, for both companies, generally, I would say are very similar, meaning our core assumptions, as you know from a North America perspective, are down slightly from 15.3 million units to 15 in 2026. That's our guidance that we have shared with you. Relatively flat in the European market and from our Tier 1 truck production for legacy Dowlais. You can see down slightly year-over-year, and then you have sort of a net backlog and attrition that's relatively, I would say, flat within the year.

Speaker #4: So we will not be able to comment on their full year results . However , you know , in terms of what we're seeing from a sales perspective for both companies generally , I would say are very similar , meaning our core assumptions , as you know , from a North America perspective or down slightly from 15.3 million units to 15 in 2026 .

Speaker #5: That's our guidance that we have shared with you relatively flat in the European market, and from our T1 truck production for legacy Dow Corporation, you can see down slightly year over year.

Speaker #4: That's our guidance that we have shared with you , relatively flat in the European market and from our T1 truck production for for legacy Dow , you can see down slightly year over year .

Speaker #5: And then you have sort of a net backlog and attrition that's relatively, I would say, flat within the year. So that sort of transitions our sales from 25 to 26 on a relatively flat basis.

Speaker #4: Okay. Maybe one follow-up on that if you could give us the GM T1 assumption you're looking for for 2026. And then the second question is really a clarification, because I thought I heard you say even after the restructuring and this integration cost, like you're generating real free cash, but I mean, I think you're excluding those from your free cash flow.

Speaker #4: And then you have sort of a net backlog in attrition that's relatively, I would say, flat within the year. So that's sort of transitions.

Chris May: So that sort of transitions our sales from 25 to 26 on a relatively flat basis.

Speaker #4: Our sales from '25 to '26 are on a relatively flat basis.

Speaker #5: Okay . Maybe one one follow up on that . If you could give us the , you know , the GMT one assumption you're looking for , for , for 26 and then the second question is really a clarification because I thought I heard you say , you know , even after the the restructuring and the integration costs , like you're generating real free cash , but , I mean , I think you're excluding those from your free cash flow .

Joe Spak: Okay. Maybe one follow-up on that. If you could give us the, you know, the GMT one assumption you're looking for, for 2026. And then the second question is really a clarification, 'cause I thought I heard you say, you know, even after the, the restructuring and this integration costs, like, you're generating real free cash. But, I mean, I'm-- I think you're excluding those from your free cash flow, so I'm a little confused, because it looks like there's a cash use ex those, ex those payments. And then I guess, just on those payments as well, is this really just a 2026 issue? Do we think, like, are there still restructuring and synergy integration costs beyond this year? Thanks.

Speaker #4: So I'm a little confused because it looks like there's a cash use X those payments. And then I guess it's on those payments as well.

Speaker #4: Is this really just a 2026 issue? Do we think are there still restructuring in synergy integration costs beyond this year? Thanks.

Speaker #5: So I'm a little confused because it looks like there's a cash use ex . Those ex those payments . And then I guess just on those payments as well .

Speaker #5: Yeah. I mean, I'll work through each of those pieces. Our T1 assumption for calendar year 2026 at this point in time is 1.3 to 1.4 million units.

Speaker #5: Is this really just a '26 issue? Do we think there are still restructuring and synergy integration costs beyond this year? Thanks.

Speaker #5: And as you know, both companies do supply into that vehicle. And Joe, as you think about the cash flow question, I guess maybe it's probably easiest to look at maybe our supplemental decks that reconcile to our gap numbers in the tables of our press release or our earnings deck.

Speaker #4: Yeah . Let me I'll work through each of those pieces . Our T1 assumption for calendar year 26 . At this point in time is 1.3 to 1.4 million units .

Chris May: Yeah. Let me, I'll work through each of those pieces. Our T1 assumption for calendar year 2026, at this point in time, is 1.3 to 1.4 million units. And as you know, both companies do supply into that vehicle. And Joe, as you think about the cash flow question, I guess maybe it's probably easiest to look at our supplemental decks that reconcile to our GAAP numbers in the tables of our press release or our earnings deck. You can see, really, subtotal there, a line generating true free cash flow for the company. Subtract that out, obviously, restructuring costs and synergy integration costs. Synergy integration costs, yes, I would expect to continue into 2027.

Speaker #4: And as you know , both companies do supply into that vehicle . And Joe , as you think about the cash flow question , I guess maybe it's probably easiest to look at .

Speaker #5: You can see really subtotal there aligned generating true free cash flow for the company. Subtract that out, obviously, restructuring costs and synergy integration costs.

Speaker #4: Maybe our supplemental decks that reconcile to our GAAP numbers in the tables of our press release or our earnings deck. You can see, really, subtotal there, line generating true, true, true free cash flow for the company.

Speaker #5: Synergy integration costs, yes, I would expect to continue into 2027. And as we've always stated, the from those perspectives, we expect to spend a total of $300 million to implement our synergies front-weighted to the first two years.

Speaker #4: Subtract that out . Obviously restructuring costs and synergy integration costs . Synergy integration costs . Yes I would expect to continue into 2027 .

Speaker #5: From a core restructuring cost, I would expect that to drop significantly as Dowley is in the or the legacy Dowley business is in the final throes of their significant restructuring that they've been going on the past couple of years.

Speaker #4: And as we've always stated, from those perspectives, we expect to spend a total of $300 million to implement our synergies, front weighted to the first two years, from a core restructuring cost.

Chris May: As we've always stated, from those perspectives, we expect to spend a total of $300 million to implement our synergies, front-weighted to the first two years. From a core restructuring cost, I would expect that to drop significantly as Dowlais is in the... or the legacy Dowlais businesses in the final throes of their significant restructuring that they've been going on the past couple of years. As a standalone Dauch Corporation, we are closing a couple facilities. That should be done here in 2026.

Speaker #5: And as a standalone Dow Corporation, we are closing a couple of facilities that should be done here in 2026.

Speaker #4: I would expect that to drop significantly, as Dolly is in—or the legacy Dolly business is in—the final throes of their significant restructuring that they've been going through in the past couple of years.

Speaker #4: Okay. But just when you include those payments, you are burning cash this year. Right?

Speaker #4: And as a standalone corporation, we are closing a couple of facilities that should be done here in 2026.

Speaker #5: I expect from operations to be net-net after those payments, we'll generate cash flow. So for example, just using the high-end for a moment, we have $325 million of adjusted free cash flow.

Speaker #5: Okay. But just like when you include those payments, you are burning cash this year, right?

Joe Spak: Okay. But just, like, when you include those payments, like, you are burning cash this year, right?

Speaker #4: I expect from operations to be net net after those payments , we will generate cash flow . So for example , our just using the high end for a moment , we have $325 million of adjusted free cash flow at the high end of our synergy integration costs 125 million at the high end of our restructuring costs , 150 million , which would generate $50 million of cash flow for the company in 2026 .

Chris May: I expect from operations to be net, net. After those payments, we'll generate cash flow. So for example, using the high end for a moment, we have $325 million of adjusted free cash flow. At the high end of our synergy integration costs, $125 million. At the high end of our restructuring costs, $150 million, which would generate $50 million of cash flow for the company in 2026, available for debt repayment and other capital allocations. I expect our core operations to generate cash flow after restructuring and synergy costs.

Speaker #5: At the high end of our synergy integration costs, $125 million; at the high end of our restriction costs, $150 million, which would generate $50 million of cash flow for the company in 2026.

Speaker #5: Available for debt repayment and other capital allocations. I expect our core operations to generate cash flow after restructuring and synergy costs.

Speaker #4: Sorry. Then what's this? Sorry to get bogged down. So what's the cash payments for acquisition costs that's in that?

Speaker #4: Available for debt repayment and other capital allocations. I expect our core operations to generate cash flow after restructuring and synergy costs.

Speaker #5: So think of that as all the closing costs for the transactions that were completed on Feb 3. So that was funded through financing. That was funded through our cash build last year.

Speaker #5: Sorry . Then what's this ? What ? Sorry to get bogged down . What's the cash payments for acquisition costs ? That's in that .

Joe Spak: Sorry, then what's this -- what the... Sorry to get bogged down. So what's the cash payment for acquisition cost that's in that?

Speaker #5: That's really the closing of the transaction. All the fees, etc., associated with that. Really nothing to do with the core operations of the company.

Speaker #4: So ? So think of that as all the closing costs for the transactions that were completed on Feb three . So that was funded through financing that was funded through our cash build last year .

Chris May: So think of that as all the closing costs for the transactions that were completed on 3 February 2026. So that was funded through financing, through our cash build last year. That's really the closing of the transaction, all the fees, et cetera, associated with that.

Speaker #4: Sure. Thanks.

Speaker #5: Yep.

Speaker #3: Our next question comes from Tom Narian from RBC. Please go ahead with your question.

Speaker #4: That's really the closing of the transaction , all the fees , etc. associated with that . Really nothing to do with the core operations of the company .

Joe Spak: Okay.

Chris May: Really nothing to do with the core operations of the company.

Speaker #6: Hi. This is Thomas Ito on for Tom. Thanks for taking the question. For those $300 million in synergies from the Dowley combination, I think you've given a rough estimate that about 50% are from purchasing 30% from SG&A and 20% from operating efficiencies.

Speaker #5: Sure . Thanks .

Joe Spak: Sure. Thanks.

Speaker #6: Yep

Chris May: Yep.

Speaker #1: Our next question comes from Tom Naryan from RBC. Please go ahead with your question.

Operator 3: Our next question comes from Tom Narayan from RBC. Please go ahead with your question.

Operator: Our next question comes from Tom Narayan from RBC. Please go ahead with your question.

Speaker #7: Hi, this is Thomas Ito on for Tom. Thanks for taking the question regarding those $300 million in synergies from the Dalai combination.

Thomas Ito, CFA: Hi, this is Thomas Ito on for Tom. Thanks for taking the question. For those $300 million in synergies from the Dowlais combination, I think you've given a rough estimate that about 50% are from purchasing, 30% from SG&A, and 20% from operating efficiencies. My question is, do you think there's any room for upside there, particularly in the operating efficiencies category, after you've been able to see the Dowlais plants now that the deal is closed?

Thomas Ito: Hi, this is Thomas Ito on for Tom. Thanks for taking the question. For those $300 million in synergies from the Dowlais combination, I think you've given a rough estimate that about 50% are from purchasing, 30% from SG&A, and 20% from operating efficiencies. My question is, do you think there's any room for upside there, particularly in the operating efficiencies category, after you've been able to see the Dowlais plants now that the deal is closed?

Speaker #6: My question is, do you think there's any room for upside there, particularly in the operating efficiencies category after you've been able to see the Dowley plants now that the deal is closed?

Speaker #7: I think you've given a rough estimate that about 50% are from purchasing , 30% from SG&A and 20% from operating efficiencies . My question is , do you think there's any room for upside there , particularly in the operating efficiencies category , after you've been able to see the Dalai plants , now that the deal is closed ?

Speaker #5: Yeah. Tom, is this David Dauch? The answer to that is yes. I mean, obviously, we're committed to the $300 million that we identified earlier as we had publicly communicated multiple times.

Speaker #5: That had to go through a third-party audit before it could be published. And so we're highly confident we can deliver that $300 million. As we've said all along, we think the synergy realization will be front-loaded towards the SG&A side of things and some of the initial purchasing initiatives.

Speaker #3: Yeah . Tom is this David Dauch the answer to that is , is yes . I mean , obviously we're committed to the 300 million that we identified earlier as we had publicly communicated multiple times , that had to go through a third party audit before it could be published .

Chris May: Yeah, Thomas, this is David Dauch. The answer to that is yes. I mean, obviously, we're committed to the $300 million that we identified earlier. As we had publicly communicated multiple times, that had to go through a third-party audit before it could be published, and so we're highly confident we can deliver that $300 million. As we've said all along, we think the synergy realization will be front-loaded towards the SG&A side of things and some of the initial purchasing initiatives. On the backside will be more of the balance of the purchasing as well as the operational side. We were also limited in getting into the plants when we did the $300 million initially. We've now had the opportunity to get to the plants, and we see some opportunity to enhance potentially that number.

Speaker #3: And so we're highly confident we can deliver , deliver that 300 million , as we've said all along , we think the synergy realization will be front loaded towards the SG&A side of things .

Speaker #5: On the backside, we'll be more of the balance of the purchasing as well as the operational side. We are also limited in getting into the plants when we did the $300 million initially.

Speaker #3: And some of the initial purchasing initiatives on the back side will be more of the balance of the purchasing, as well as the operational side.

Speaker #5: We've now had the opportunity to get to the plants, and we see some opportunity to enhance potentially that number. But at the same time, we need to get to all the plants and do the full review before we can make any adjustments to where we are.

Speaker #3: We are also limited in getting into the plants. When we did the $300 million initially, we've now had the opportunity to get to the plants, and we see some opportunity to enhance, potentially, that number.

Speaker #5: But again, highly confident we'll deliver the $300 million, and we'll see if we can increase that on a go-forward basis. But we'll do that on a quarterly basis as we announce our financials and get more knowledge and familiarity with their business.

Speaker #3: But at the same time, we need to get to all the plants and do the full review before we can make any adjustments to where we are.

Chris May: But at the same time, we need to get to all the plants and do the full review before we can make any adjustments to, to where we are. But, again, highly confident we'll deliver the $300 million, and we'll see if we can increase that on a go-forward basis. But we'll do that on a quarterly basis as we announce our financials and get more, knowledge and familiarity with their business.

Speaker #3: But again, highly confident we'll deliver the $300 million, and we'll see if we can increase that on a go-forward basis. But we'll do that on a quarterly basis as we announce our financials and get more knowledge and familiarity with their business.

Speaker #6: Okay. Gotcha. And as a quick follow-up, it looks like your 2026 suggested EBITDA estimate for the combined entity is pretty consistent with the guidance you gave back in June of 2025.

Speaker #7: Okay . Gotcha . And as a quick follow up , it looks like your 2026 adjusted EBITDA estimate for the combined entity is pretty consistent with the guidance you gave back in June of 2025 , even though Dalai has released its 2025 preliminary results that exceed its third quarter guidance .

Thomas Ito, CFA: Okay, gotcha. And as a quick follow-up, it looks like your 2026 Adjusted EBITDA estimate for the combined entity is pretty consistent with the guidance you gave back in June 2025, even though Dowlais has released its 2025 preliminary results that exceed its Q3 guidance. I guess in addition to what you have on slide 9, can you give a little more color on what potentially drove estimates lower than what we might have expected? Is it like... If it's a function of those IFRS adjustments, would you be able to quantify the impact of that? Thanks.

Thomas Ito: Okay, gotcha. And as a quick follow-up, it looks like your 2026 Adjusted EBITDA estimate for the combined entity is pretty consistent with the guidance you gave back in June 2025, even though Dowlais has released its 2025 preliminary results that exceed its Q3 guidance. I guess in addition to what you have on slide 9, can you give a little more color on what potentially drove estimates lower than what we might have expected? Is it like... If it's a function of those IFRS adjustments, would you be able to quantify the impact of that? Thanks.

Speaker #6: Even though Dowley has released its 2025 preliminary results that exceed its third-quarter guidance, I guess in addition to what you have on slide 9, can you give a little more color on what potentially drove estimates lower than what we might have expected?

Speaker #6: Is it like if it's a function of those IFRS adjustments, would you be able to quantify the impact of that? Thanks.

Speaker #7: I guess in addition to what you have on slide nine, can you give a little more color on what potentially drove estimates lower than what we might have expected?

Speaker #5: Yeah. Certainly. In terms of what we're providing here today, by the way, is very consistent with our thought process all along. There's nothing new here.

Speaker #7: Is it like, if it's a function of those IFRS adjustments, would you be able to quantify the impact of that? Thanks.

Speaker #5: We're sharing with you today, generally speaking. But in terms of the IFRS adjustments, they are meaningful differences between what Dowley reports and what Dowley, especially, reports on their adjusted numbers.

Speaker #4: Yeah , certainly . In terms of what we're providing here today , by the way , is very consistent with our thought process all along .

Chris May: Yeah, certainly. In terms of what we're providing here today, by the way, is very consistent with our thought process all along. There's nothing new here, what we're sharing with you today, generally speaking. But in terms of the IFRS adjustments, they are meaningful differences between what Dowlais reports and what Dauch, especially, reports on their adjusted numbers. So for example, in their revenue numbers, they include adjusted equity share of their joint venture, which is 50/50, which is unconsolidated. Those sales are grossed up for almost three quarters of a billion dollars. That would be a sizable difference between the two, so you can't add our sales together if you're using their adjusted sales. And from an EBITDA perspective, that would include things such as how they treat the joint venture. You have pension differences, you have lease differences, you have R&D differences.

Speaker #4: There's nothing new here . We're sharing with you today . Generally speaking , but in terms of the IFRS adjustments , they are meaningful differences between what Dolly reports and what Dolly especially reports on .

Speaker #5: So for example, in their revenue numbers, they include adjusted equity share of their joint venture, which is 50/50, which is unconsolidated. Those sales are grossed up for almost three-quarters of a billion dollars.

Speaker #4: Their adjusted numbers . So , for example , in their revenue numbers , they include adjusted equity share of their joint venture , which is 5050 , which is unconsolidated .

Speaker #5: That would be a sizable difference between the two. So you can't add our sales together if you're using their adjusted sales. And from an EBITDA perspective, that would include things such as how they treat the joint venture.

Speaker #4: Those sales are grossed up for almost three-quarters of $1 billion. That would be a sizable difference between the two. So you can't add our sales together if you're using their adjusted sales.

Speaker #5: You have pension differences. You have lease differences. You have R&D differences. The delta can be upwards of $100 million difference. Again, all part of our planning and all the figures that we shared with you previously.

Speaker #4: And from an EBITDA perspective, that would include things such as how they treat the joint venture. You have pension differences.

Speaker #5: But the differences are meaningful.

Speaker #4: You have lease differences , you have R&D differences . The Delta can be upwards of $100 million difference . Again , all part of our planning and all the figures that we've shared with you previously .

Speaker #6: Okay. Great. Thank you.

Chris May: The delta can be upwards of $100 million difference. Again, all part of our planning and all the figures that we shared with you previously. But the differences are meaningful.

Speaker #5: Yep. Thank you.

Speaker #3: Our next question comes from James Piccarello from BMP. Please go ahead with your question.

Speaker #4: But the differences are meaningful.

Speaker #7: Hey, guys. This is Jake on for James. I just wanted to follow up on I just wanted to follow up on Joe's question on free cash.

Speaker #7: Okay, great. Thank you.

Joe Spak: Okay, great. Thank you.

Speaker #4: Thank you .

Chris May: Yep, thank you.

Speaker #1: Our next question comes from James Picarello from BNP. Please go ahead with your question.

Operator 3: Our next question comes from James Picariello from BNP. Please go ahead with your question.

Operator: Our next question comes from James Picariello from BNP. Please go ahead with your question.

Speaker #7: So at the adjusted at the midpoint of your adjusted free cash guide, which rubs out acquisition costs, cash flow is up about 70 million dollars versus standalone Axel in 2025.

Speaker #8: Hey guys . This is Jake on for James . I just want to follow up on I just want to follow up on Joe's question on free cash .

James Picariello, CFA: Hey, guys, this is Jake on for James.

James Picariello: Hey, guys, this is Jake on for James.

Chris May: Hi.

James Picariello, CFA: I just want to follow up on Joe's question on free cash. So at the midpoint of your adjusted free cash guide, which rubs out acquisition costs, cash flow is up about $70 million versus standalone Axle in 2025. So how do we get from here to the previous, you know, to the targeted $600 million? Thank you.

James Picariello: I just want to follow up on Joe's question on free cash. So at the midpoint of your adjusted free cash guide, which rubs out acquisition costs, cash flow is up about $70 million versus standalone Axle in 2025. So how do we get from here to the previous, you know, to the targeted $600 million? Thank you.

Speaker #8: So at the adjusted at the midpoint of your adjusted free cash guide , which out acquisition costs , cash flows up about $70 million versus standalone Axel in 2025 .

Speaker #7: So how do we get from here to the previous to the targeted 600 million? Thank you.

Speaker #5: Yeah. Certainly. In terms of where do I think your question and your spirit is, how do we go forward past '26 in terms of driving our cash flow?

Speaker #8: So, how do we get from here to the previous— to the targeted $600 million? Thank you.

Speaker #5: Well, it'll come in a variety of different buckets. But if you take our midpoint at 280, for example, you have yet another 250 million plus of synergies that will come into play over the next couple of years just to get to our 300 million from where we are having EBITDA flow through here in 2026.

Speaker #4: Yeah , certainly . In terms of where do I think your question or your spirit is how do we go forward past 26 in terms of driving our cash flow ?

Chris May: Yeah, certainly. In terms of, I think your question and your spirit is how do we go forward past 2026 in terms of driving our cash flow? Well, it'll come in a variety of different buckets, but if you take our midpoint at $280, for example, you have yet another $250 million+ of synergies that will come into play over the next couple of years just to get to our $300 million from where we are having EBITDA flow through here in 2026. That would be one. Two, your interest expense will continue to decline post 2026, remember, and that would be cash interest. You're taking your heaviest load of that, of course, in year one. And as you know, we're fully set up from our financing standpoint from that perspective.

Speaker #4: Well , it'll come in a variety of different buckets . But if you take our midpoint at 280 , for example , you have yet another 250 million plus of synergies that will come into play over the next couple of years just to get to our 300 million from where we are having EBITDA flow through here in 2026 , that would be one two , your interest expense will continue to decline post 2026 .

Speaker #5: That would be one. Two, your interest expense will continue to decline post-2026. Remember, and that would be cash interest. You're taking your heaviest load of that, of course, in year one.

Speaker #5: And as you know, we're fully set up from our financing standpoint from that perspective. You see CapEx. We've articulated through the process we would expect CapEx somewhere between overall the combined companies going forward, roughly between 4 and 5 percent.

Speaker #4: Remember , this would be cash interest . You're taking your heaviest load of that . Of course in year one . And as you know we're fully set up from our financing standpoint .

Speaker #5: We're a little bit at the top half of that range in '26. As you know, we're launching the next generation, the GM full-size trucks.

Speaker #4: From that perspective , you see CapEx , you know , we've we've articulated through the process , we would expect CapEx somewhere between overall , the combined companies going forward , roughly between 4 and 5% .

Chris May: You see CapEx, you know, we've articulated through the process, we would expect CapEx somewhere between overall the combined companies going forward, roughly between 4 and 5%. We're a little bit at the top half of that range in 2026. As you know, we're launching the next generation of the GM full-size trucks. Dowlais has a few programs as well that they're launching. But again, that would moderate a little bit. And then once you get into some, I would say, opportunities to evaluate income taxes over time, that's clearly not something that can happen in year one. Potentially some opportunities there. And I would say we would expect to see working capital optimization as we go forward, as well as we bring these two companies together and streamline all those processes over the next year or two.

Speaker #5: Dowley has a few programs as well that they're launching. But again, that would moderate a little bit. And then once you get into some, I would say, opportunities to evaluate income taxes over time, that's clearly not something that can happen in year one.

Speaker #4: We're a little bit at the top half of that range in 26 . As you know , we're launching the next generation . The GM full size trucks .

Speaker #4: Dolly has a few programs as well that they're launching , but again , that would moderate a little bit . And then once you get into some I would say opportunities to evaluate income taxes over time , that's clearly not something that can happen in year one , potentially some opportunities there .

Speaker #5: Potentially, some opportunities there. And I would say we would expect to see working capital optimization as we go forward as well as we bring these two companies together and streamline all those processes over the next year or two.

Speaker #5: I mean, that's a main driver of this piece. And then obviously, from just a true cash flow piece, your restructuring steps down significantly, as I mentioned earlier, into '27 and beyond.

Speaker #4: And I would say we would expect to see working capital optimization as we go forward, as well as we bring these two companies together and streamline all those processes over the next year or two.

Speaker #4: I mean , that's that's a main driver of this piece . And then obviously from a just a true cash flow piece , you're restructuring steps down significantly .

Chris May: I mean, that's a main driver of this piece. And then obviously, from just a true cash flow piece, your restructuring steps down significantly, as I mentioned earlier, into 2027 and beyond.

Speaker #7: Thank you. That's very helpful. And then how are you guys accounting for Dowley's equity income in your P&L? Thank you.

Speaker #4: As I mentioned earlier, into '27 and beyond.

Speaker #5: Yes. Yeah. That will be reported as equity income. Inside of our P&L, it's included in our adjusted EBITDA number. It'll be in the range of 65 to 75 million dollars.

Speaker #8: Thank you, that's very helpful. And then, how are you guys accounting for equity income in your P&L? Thank you.

James Picariello, CFA: Thank you. That's, that's very helpful. And then, how are you guys accounting for Dowlais' equity income in your P&L? Thank you.

James Picariello: Thank you. That's, that's very helpful. And then, how are you guys accounting for Dowlais' equity income in your P&L? Thank you.

Speaker #4: Yeah, yeah, that will be reported as equity income inside of our P&L. It's included in our adjusted EBITDA number. It'll be in the range of $65 to $75 million.

Chris May: Yeah, that, that will be reported as equity income inside of our P&L. It's included in our Adjusted EBITDA number. It'll be in the range of $65 to 75 million. And that's for our 50% share.

Speaker #5: And that's for our 50% share.

Speaker #3: And if that answers your question, we will move on to Edison June from Deutsche Bank. Please go ahead with your question.

Speaker #4: And that's for our 50% share.

Speaker #8: Hi. Thank you. This is Winnie Yong for Edison. I just wanted to hi. Quantitatively, I was wondering if you can help us frame sort of the Dowley business directionally on an apples-to-apples basis after adjusting for accounting differences in terms of your outlook for 2026 and how that's sort of compares to 2025.

Speaker #1: And if that if that answers your question , we will move on to Edison Joon from Deutsche Bank . Please go ahead with your question .

Operator 3: If that answers your question, we will move on to Edison Yu from Deutsche Bank. Please go ahead with your question.

Operator: If that answers your question, we will move on to Edison Yu from Deutsche Bank. Please go ahead with your question.

Speaker #9: Hi . Thank you . This is Lynn Young for Edison . I just wanted to . Hi . Quantitatively , I was wondering if you can help us frame sort of the daily business directionally on an apples to apples basis .

Winnie Dong: Hi, thank you. This is Winnie Yong for Edison.

Chris May: Hi.

Winnie Dong: Hi. Qualitatively, I was wondering if you can help us frame sort of the Dauch business directionally on an apples-to-apples basis after adjusting for product accounting differences in terms of, you know, your outlook for 2026 and how that sort of compares to 2025, just, you know, on the underlying, core operations. And then my second question is sort of similar to that first question, but specifically more on the China JV business. Can you maybe help us sort of understand, you know, your expectations for that market and then the relative performance, there from the JV? Thank you.

Speaker #8: Just on the line, core operations. And then my second question is sort of similar to that first question, but specifically more on the China, JV business.

Speaker #9: After adjusting for the differences in terms of your outlook for 2026, and how that sort of compares to 2025, just on the underlying core operations.

Speaker #8: Can you maybe help us sort of understand your expectations for that market and then the relative performance there from the JV? Thank you.

Speaker #9: And then my second question is sort of similar to that first question, but specifically more on the China JV business. Can you maybe help us sort of understand your expectations for that market?

Speaker #5: Yeah. Winnie, I'll take the first crack at some of this. In terms of, again, '25 to '26, as you know, as I mentioned, Dowley has not published their '25 figures.

Speaker #9: And then the relative performance there from the KD? Thank you.

Speaker #5: But big picture-wise, we operate in very similar markets and seeing similar demands from a volume perspective. And also, in terms of their restructuring, they've had even heavier restructuring investments they made in the calendar year '25 that's stepping down a little bit here this year.

Speaker #4: Yeah , I'll take the first crack at this in terms of again 25 to 26 . As you know , as I've mentioned , Dolly has not published their 25 figures .

Chris May: Yeah, Winnie, I'll take the first crack at this. In terms of again, 2025 to 2026, as you know, as I mentioned, Dowlais has not published their 2025 figures, but big picture-wise, we operate in very similar markets and seeing similar demands from a volume perspective. And also in terms of their restructuring, they've had even heavier restructuring investments they made in the calendar year 2025. That's stepping down a little bit here this year. We'll start to see some of those benefits transition into our P&L here in 2026, and clearly more meaningful into 2027 on the, I would call, core operations of the company. From the JV side of the house, obviously, this is a significant JV size. Revenues are nearly $1.5 billion. It's almost exclusive inside of the China market.

Speaker #4: But big picture wise , we operate in very similar markets . And seeing similar demands from a volume perspective and also in terms of their restructuring , they've had even heavier restructuring investments they made in the calendar year 25 , that stepping down a little bit here this year , we'll start to see some of those benefits .

Speaker #5: We'll start to see some of those benefits transition into our P&L here in '26 and clearly more meaningful into 2027 on the, I will call it, core operations of the company.

Speaker #5: From the JV side of the house, obviously, this is a significant JV size. Revenues are nearly a billion five. It's almost exclusive inside of the China market.

Speaker #4: Transition into our PNL here in 26 . And clearly more meaningful into 2027 . On the call core operations of the company from the JV side of the house , obviously , this is a significant JV .

Speaker #5: You would watch that performance to continue to be strong and steady. It would mirror a little bit to the macro movements of the China market.

Speaker #4: Size . Revenues are nearly a billion . Five . It's almost exclusive inside of the China market . You would you would watch that performance continue to be strong and steady .

Speaker #5: So if you track volumes from that perspective, that is helpful in terms of how you think about our joint venture. And as you know, I shared with you what our equity portion is flowing through our EBITDA, but I would also expect a sizable dividend associated with that.

Chris May: You would watch that performance continue to be strong and steady. It would mirror a little bit to the macro movements of the China market. So if you track volumes from that perspective, that is helpful in terms of how you think about our joint venture. And as you know, I shared with you what our equity portion is flowing through our EBITDA, but I would also expect, you know, a sizable dividend associated with that.

Speaker #4: It would mirror a little bit to the macro movements of the China market. So if you track volumes from that perspective, that is helpful in terms of how you think about our joint venture.

Speaker #8: Got it. Thank you. If I may just squeeze in just for moderating purposes, how are you sort of planning to report your assignments going forward?

Speaker #4: And as you know, I shared with you what our equity portion is, flowing through our EBITDA. But I would also expect, you know, a sizable dividend associated with that.

Speaker #8: Is it going to be sort of all integrated, or are you thinking about a different way of segmenting the business?

Speaker #9: Got it . Thank you . If I may just squeeze in just for like , you know , modeling purposes . How are you planning to to report your segments going forward ?

Winnie Dong: Got it. Thank you. If I may just squeeze in, just for, like, you know, modeling purposes, how are you still planning to report your segments going forward? Is it going to be sort of all integrated, or you are thinking about, like, a different way of segmenting the business?

Speaker #5: Winnie, I'm sorry. I didn't hear the first part of the question. Can you repeat that, please?

Speaker #9: Is it going to be sort of all integrated, or are you thinking about a different way of cementing the business?

Speaker #8: Yeah. In terms of the segments that you're going to report on a go-forward basis, is it all?

Speaker #5: Oh, segments. Yeah. We'll update you at the first quarter on our segment reporting. But currently, as you know, today, we're drive line and metal forming.

Chris May: Winnie, I'm sorry, I didn't hear the first part of the question. Can you repeat that, please?

Speaker #4: I'm sorry, I didn't hear the first part of the question. Can you repeat that, please?

Chris May: Winnie, I'm sorry, I didn't hear the first part of the question. Can you repeat that, please?

Speaker #9: Yeah. In terms of the segments that you're going to report on a go-forward basis, is—

Winnie Dong: ... Yeah, in terms of the segments that you're gonna report on a go-forward basis?

Speaker #5: I expect you'll see something similar, but we got to finalize that piece. We'll share that with you at the first quarter.

Chris May: Oh.

Speaker #4: It segments ? Yeah . We'll we'll update you at the first quarter on our segment reporting . But currently as you know , today we're driveline and metal forming .

Winnie Dong: Is it all-

Chris May: Segments. Yeah, we'll update you at Q1 on our segment reporting, but currently, as you know, today, we're driveline and metal forming. I expect you'll see something similar, but we got to finalize that piece. We'll share that with you in Q1.

Speaker #8: Great. Thank you.

Speaker #3: And our next question comes from Ide McAllie from TD Cowan. Please go ahead with your question.

Speaker #4: I expect you'll see something similar. But we have to finalize that piece. We'll share that with you in the first quarter.

Speaker #9: Great . Thank you

Speaker #9: Great. Thanks. Good morning, everybody. I just want to go back. Morning. Just want to go back to the cash restructuring of 110 to 150 million this year.

Winnie Dong: Great. Thank you.

Speaker #1: And our next question comes from Eddie Micheli from TD Cowen. Please go ahead with your question.

Operator 3: Our next question comes from Itay Michaeli from TD Cowen. Please go ahead with your question.

Operator: Our next question comes from Itay Michaeli from TD Cowen. Please go ahead with your question.

Speaker #9: I'm curious if you can dimension the savings from that particular line item. Is that already reflected or a large part of it reflected this year, or is there sort of another incremental payback for that we should think about for next year?

Speaker #10: Great . Thanks . Good morning everybody . I just want to go back . Morning I just want to go back to the cash restructuring of 110 to 150 million this year .

Itay Michaeli: Great. Thanks. Good morning, everybody.

Chris May: Good morning.

Itay Michaeli: Just wanna go back. Morning. Just wanna go back to the cash restructuring of $110 to 150 million this year. I'm curious if you can dimension the savings from that particular line item. Is that already reflected or a large part of it reflected this year? Or is there sort of another incremental payback for that we should think about for next year?

Speaker #10: I'm curious if you could dimension the savings from that particular line item. Is that already reflected, or is a large part of it reflected this year, or is there sort of another incremental payback for that?

Speaker #5: Yeah. Yeah. This is Chris. So this is, again, over two-thirds of this relates to, I would say, the ongoing campaign of restructuring that Dowley has seen at several of their factories moving from high-cost countries to lower-cost countries.

Speaker #10: What should we think about for next year?

Speaker #4: Yeah . Okay . This is Chris . So this is again over two thirds of this relates to I would say the the ongoing campaign of restructuring that Dolly has seen at several other factories moving from high cost countries to lower cost countries .

Chris May: Yeah. Ide, this is Chris. So this is, again, over two-thirds of this relates to, I would say, the ongoing campaign of restructuring that Dowlais has seen at several of their factories, moving from high-cost countries to lower-cost countries. This is the final piece of that. You've seen some flow-through and benefits, most likely in 2025. You'll see some in 2026, but again, concluding here in 2026, you should see a good benefit in 2027 associated with that. In terms of the other third, which is the American Axle side, where we are closing a couple facilities that we started last year and will conclude here this year, you'd start to see that really benefit us here in the year following, meaning 2027.

Speaker #5: This is the final piece of that. You've seen some flow-through and benefits, most likely in '25. You'll see some in '26. But again, concluding here in '26, you should see a good benefit in '27 associated with that.

Speaker #4: This is the final piece of that. You've seen some flow through and benefits. Most likely, in '25, you'll see some in '26.

Speaker #5: In terms of the other third, which is the American Axle side where we are closing a couple of facilities that we started last year and will conclude here this year, you'd start to see that really benefit us here in the year following, meaning '27.

Speaker #4: But again, concluding here in '26, you should see a good benefit in '27 associated with that. In terms of the other third, which is the American Axle side, we are closing a couple of facilities that we started last year and will conclude here this year.

Speaker #9: Terrific. Thank you, Chris. And just as a quick follow-up, are you able to share any kind of pro forma debt net debt post the closing of transaction?

Speaker #4: You'd start to see that really benefit us here in the year following meeting 27.

Speaker #5: Yeah. Look, I would say in the obviously, we're still completing some of the final pieces of the close. Since it was only 10 days ago, but we would expect sort of roughly in the ballpark range of about 4.2 billion.

Itay Michaeli: Terrific. Thank you, Chris. Just as a quick follow-up, are you able to share any kind of like pro forma debt, net debt, like post the closing of transaction?

Speaker #10: Terrific . Thank you , Chris , and just a quick follow up . Are you able to share any kind of pro forma debt , net debt post of transaction .

Itay Michaeli: Terrific. Thank you, Chris. Just as a quick follow-up, are you able to share any kind of like pro forma debt, net debt, like post the closing of transaction?

Speaker #4: Yeah. Look, I would say, you know, obviously we're still completing some of the final pieces of the close since it was only ten days ago.

Chris May: Yeah, look, I would say in the you know, obviously, we're still completing some of the final pieces of the close since it was only 10 days ago. But, you know, we would expect sort of roughly in the ballpark range of about $4.2 billion at sort of day of closing, if you will. That's again, very consistent, very consistent with what we planned on, and our cash flow generation and financing activity supported that, so.

Speaker #5: At sort of day of closing, if you will. And that's, again, it's very consistent, very consistent with what we planned on in our cash flow generation and financing activity supported that, so.

Speaker #4: But, you know, we would expect sort of roughly in the ballpark range of about $4.2 billion in sort of day closing, if you will.

Speaker #9: Great. Perfect. That's all very helpful. Thank you.

Speaker #5: Yep.

Speaker #4: That's again , very consistent , very consistent with what we planned on in our cash flow generation and financing activity . Supported that .

Speaker #3: And ladies and gentlemen, at this time, we'll be closing our question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

Speaker #4: So

Speaker #10: Great. Perfect. That's all very helpful. Thank you.

Itay Michaeli: Great. Perfect. That's, that's all very helpful. Thank you.

Speaker #10: Great. Thank you all who participated on this call, and we appreciate your interest in Dell. We certainly look forward to talking with you in the future.

Speaker #4: Yep

Chris May: Yep.

Speaker #1: And ladies and gentlemen , at this time we'll be closing our question and answer session . I'd like to turn the floor back over to management for any closing remarks .

Operator 3: Ladies and gentlemen, at this time, we'll be closing our question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

Operator: Ladies and gentlemen, at this time, we'll be closing our question-and-answer session. I'd like to turn the floor back over to management for any closing remarks.

Speaker #10: Thank you.

Speaker #2: Great. Thank you all who participated on this call, and we appreciate your interest in Dauch. We certainly look forward to talking with you in the future.

Chris May: Great. Thank you all who participated on this call, and we appreciate your interest in Dauch. We certainly look forward to talking with you in the future. Thank you.

Speaker #2: Thank you .

Operator 3: With that, we'll close today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Operator: With that, we'll close today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Q4 2025 Dauch Corp Earnings Call

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