DANA Inc 10-Q

ITEM 1. FINANCIAL STATEMENTS   Dana Incorporated Consolidated Statement of Operations (Unaudited) (In millions, except per share amounts)       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Net sales   $ 2,204     $ 1,994     $ 6,672     $ 4,998   Costs and expenses                                 Cost of sales     1,998       1,780       5,963       4,588   Selling, general and administrative expenses     103       111       348       299   Amortization of intangibles     4       4       11       10   Restructuring charges, net     1       2       2       21   Impairment of goodwill                             ( 51 ) Other income (expense), net     ( 4 )     ( 8 )     ( 33 )     ( 5 ) Earnings before interest and income taxes     94       89       315       24   Loss on extinguishment of debt                     ( 24 )     ( 5 ) Interest income     2       3       6       7   Interest expense     31       38       99       99   Earnings (loss) before income taxes     65       54       198       ( 73 ) Income tax expense     20       16       56       34   Equity in earnings of affiliates     5       7       29       17   Net income (loss)     50       45       171       ( 90 ) Less: Noncontrolling interests net income     4       4       9       6   Less: Redeemable noncontrolling interests net loss     ( 2 )     ( 4 )     ( 10 )     ( 25 ) Net income (loss) attributable to the parent company   $ 48     $ 45     $ 172     $ ( 71 )                                   Net income (loss) per share available to common stockholders                                 Basic   $ 0.33     $ 0.31     $ 1.19     $ ( 0.49 ) Diluted   $ 0.33     $ 0.31     $ 1.17     $ ( 0.49 )                                   Weighted-average common shares outstanding                                 Basic     144.8       144.5       145.0       144.4   Diluted     146.2       145.2       146.4       144.4     The accompanying notes are an integral part of the consolidated financial statements.   3 Table of Contents     Dana Incorporated Consolidated Statement of Comprehensive Income (Unaudited) (In millions)       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Net income (loss)   $ 50     $ 45     $ 171     $ ( 90 ) Other comprehensive income (loss), net of tax:                                 Currency translation adjustments     ( 25 )     14       ( 11 )     ( 133 ) Hedging gains and losses     ( 9 )     1       ( 10 )     40   Defined benefit plans     4       4       11       11   Other comprehensive income (loss)     ( 30 )     19       ( 10 )     ( 82 ) Total comprehensive income (loss)     20       64       161       ( 172 ) Less: Comprehensive (income) loss attributable to noncontrolling interests     ( 4 )     ( 15 )     2       ( 7 ) Less: Comprehensive loss attributable to redeemable noncontrolling interests     4       8             25   Comprehensive income (loss) attributable to the parent company   $ 20     $ 57     $ 163     $ ( 154 )   The accompanying notes are an integral part of the consolidated financial statements.   4 Table of Contents     Dana Incorporated Consolidated Balance Sheet (Unaudited) (In millions, except share and per share amounts)       September 30,     December 31,       2021     2020   Assets                 Current assets                 Cash and cash equivalents   $ 220     $ 559   Marketable securities     18       21   Accounts receivable                 Trade, less allowance for doubtful accounts of $7 in 2021 and $7 in 2020     1,404       1,201   Other     239       231   Inventories     1,546       1,149   Other current assets     176       127   Total current assets     3,603       3,288   Goodwill     483       479   Intangibles     240       236   Deferred tax assets     591       611   Other noncurrent assets     127       169   Investments in affiliates     174       152   Operating lease assets     188       190   Property, plant and equipment, net     2,171       2,251   Total assets   $ 7,577     $ 7,376                     Liabilities and equity                 Current liabilities                 Short-term debt   $ 70     $ 26   Current portion of long-term debt     8       8   Accounts payable     1,513       1,331   Accrued payroll and employee benefits     206       190   Taxes on income     43       35   Current portion of operating lease liabilities     40       43   Other accrued liabilities     293       308   Total current liabilities     2,173       1,941   Long-term debt, less debt issuance costs of $28 in 2021 and $27 in 2020     2,387       2,420   Noncurrent operating lease liabilities     154       154   Pension and postretirement obligations     454       479   Other noncurrent liabilities     302       368   Total liabilities     5,470       5,362   Commitments and contingencies (Note 14)                     Redeemable noncontrolling interests     195       180   Parent company stockholders' equity                 Preferred stock, 50,000,000 shares authorized, $0.01 par value, no shares outstanding     —       —   Common stock, 450,000,000 shares authorized, $0.01 par value, 144,228,817 and 144,515,658 shares outstanding     2       2   Additional paid-in capital     2,425       2,408   Retained earnings     648       530   Treasury stock, at cost ( 11,659,073 and 10,442,582 shares)     ( 184 )     ( 156 ) Accumulated other comprehensive loss     ( 1,035 )     ( 1,026 ) Total parent company stockholders' equity     1,856       1,758   Noncontrolling interests     56       76   Total equity     1,912       1,834   Total liabilities and equity   $ 7,577     $ 7,376     The accompanying notes are an integral part of the consolidated financial statements.   5 Table of Contents     Dana Incorporated Consolidated Statement of Cash Flows (Unaudited) (In millions)       Nine Months Ended       September 30,       2021     2020   Operating activities                 Net income (loss)   $ 171     $ ( 90 ) Depreciation     272       257   Amortization     18       15   Amortization of deferred financing charges     5       6   Redemption premium on debt     21           Write-off of deferred financing costs     3       5   Earnings of affiliates, net of dividends received     ( 11 )     5   Stock compensation expense     15       5   Deferred income taxes     8       ( 28 ) Pension expense, net             3   Impairment of goodwill             51   Change in working capital     ( 501 )     ( 50 ) Other, net     18       16   Net cash provided by operating activities     19       195   Investing activities                 Purchases of property, plant and equipment     ( 228 )     ( 181 ) Acquisition of businesses, net of cash acquired     ( 18 )     ( 6 ) Investments in affiliates     ( 23 )     ( 4 ) Proceeds from sale of subsidiary, net of cash disposed     ( 4 )         Purchases of marketable securities     ( 25 )     ( 36 ) Proceeds from sales of marketable securities     30       5   Proceeds from maturities of marketable securities     27       27   Settlement of terminated fixed-to-fixed cross currency swap     ( 22 )         Settlements of undesignated derivatives     ( 2 )     ( 5 ) Other, net     5       7   Net cash used in investing activities     ( 260 )     ( 193 ) Financing activities                 Net change in short-term debt     43       ( 2 ) Proceeds from long-term debt     802       512   Repayment of long-term debt     ( 805 )     ( 12 ) Redemption premium on debt     ( 21 )         Deferred financing payments     ( 13 )     ( 13 ) Dividends paid to common stockholders     ( 44 )     ( 15 ) Distributions to noncontrolling interests     ( 10 )     ( 10 ) Sale of interest to noncontrolling shareholder             7   Contributions from noncontrolling interests     6       3   Deconsolidation of non-wholly owned subsidiary     ( 6 )         Payments to acquire noncontrolling interests             ( 1 ) Repurchases of common stock     ( 23 )         Other, net             ( 3 ) Net cash provided by (used in) financing activities     ( 71 )     466   Net increase (decrease) in cash, cash equivalents and restricted cash     ( 312 )     468   Cash, cash equivalents and restricted cash – beginning of period     567       518   Effect of exchange rate changes on cash balances     ( 16 )     ( 20 ) Cash, cash equivalents and restricted cash – end of period (Note 5)   $ 239     $ 966                     Non-cash investing activity                 Purchases of property, plant and equipment held in accounts payable   $ 75     $ 54     The accompanying notes are an integral part of the consolidated financial statements.   6 Table of Contents     Dana Incorporated Index to Notes to Consolidated Financial Statements     1. Organization and Summary of Significant Accounting Policies     2. Acquisitions     3. Goodwill and Other Intangible Assets     4. Restructuring of Operations     5. Supplemental Balance Sheet and Cash Flow Information     6. Stockholders' Equity     7. Redeemable Noncontrolling Interests     8. Earnings per Share     9. Stock Compensation     10. Pension and Postretirement Benefit Plans     11. Marketable Securities     12. Financing Agreements     13. Fair Value Measurements and Derivatives     14. Commitments and Contingencies     15. Warranty Obligations     16. Income Taxes     17. Other Income (Expense), Net     18. Revenue from Contracts with Customers     19. Segments     20. Equity Affiliates   7 Table of Contents   Notes to Consolidated Financial Statements (Unaudited) (In millions, except share and per share amounts)     Note 1. Organization and Summary of Significant Accounting Policies   General   Dana Incorporated (Dana) is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. As a global provider of high technology driveline (axles, driveshafts and transmissions); sealing and thermal-management products; and motors, power inverters, and control systems for electric vehicles our customer base includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets.   The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.   Summary of significant accounting policies   Basis of presentation — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. These statements are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The results reported in these consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the consolidated financial statements in Item 8 of our Annual Report on Form 10 -K for the year ended December 31,   2020 (the  2020 Form 10 -K). Certain prior year amounts have been reclassified to conform to the current presentation.   Recently adopted accounting pronouncements   On January 1, 2021, we adopted Accounting Standards Update (ASU) 2019 - 12, Income Taxes – Simplifying the Accounting for Income Taxes . This guidance is intended to simplify various aspects of income tax accounting including the elimination of certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Adoption of this guidance requires certain changes to primarily be made prospectively, with some changes to be made retrospectively. The adoption of this standard did not have a material impact on our consolidated financial statements.   Recently issued accounting pronouncements   In March 2020, the FASB issued ASU 2020 - 04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU 2021 - 01, Reference Rate Reform . The guidance is intended to provide temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments in these ASUs are elective and are effective upon issuance for all entities through December 31, 2022.  We are currently assessing the impact of the guidance on our consolidated financial statements.   8 Table of Contents     Note 2. Acquisitions   Pi Innovo Holding Limited  — On March 1, 2021, we acquired the remaining 51 % ownership interest in Pi Innovo Holding Limited (Pi Innovo). Pi Innovo designs, develops and manufactures electronic control units spanning a range of applications and industries. The acquisition of the remaining ownership interest provides us with a 100 % ownership interest in Pi Innovo. The total purchase consideration of $ 35 is comprised of $ 18 of cash paid at closing and the $ 17 fair value of our previously held equity method investment in Pi Innovo. The results of operations of the business are reported within our Commercial Vehicle operating segment. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented.   Ashwoods Innovations Limited  — On February 5, 2020, we acquired Curtis Instruments, Inc.'s (Curtis) 35.4 % ownership interest in Ashwoods Innovations Limited (Ashwoods). Ashwoods designs and manufactures permanent magnet electric motors for the automotive, material handling and off-highway vehicle markets. The acquisition of Curtis' interest in Ashwoods, along with our existing ownership interest in Ashwoods, provided us with a 97.8 % ownership interest and a controlling financial interest in Ashwoods. We recognized a $ 3 gain to other income (expense), net on the required remeasurement of our previously held equity method investment in Ashwoods to fair value. The total purchase consideration of $ 22 is comprised of $ 8 of cash paid to Curtis at closing, the $ 10 fair value of our previously held equity method investment in Ashwoods and $ 4 related to the effective settlement of a pre-existing loan payable due from Ashwoods. During March 2020, we acquired the remaining noncontrolling interests in Ashwoods held by employee shareholders. See Hydro-Québec relationship discussion below for details of subsequent changes in our ownership interest in Ashwoods. The results of operations of the business are reported within our Off-Highway operating segment. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented.   Hydro-Québec Relationship — On April 14, 2020, Hydro-Québec acquired an indirect 45 % redeemable noncontrolling interest in Ashwoods. We received $ 9 in cash at closing, inclusive of $ 2 in proceeds on a loan from Hydro-Québec. Dana will continue to consolidate Ashwoods as the governing documents continue to provide Dana with a controlling financial interest in this subsidiary.     Note 3. Goodwill and Other Intangible Assets   Goodwill — Our goodwill is tested for impairment annually as of October 31 for all of our reporting units, and more frequent if events or circumstances warrant such a review. No impairment charge was recorded in connection with our annual goodwill impairment test performed as of October 31, 2020 and we did not identify any events or circumstances that required an interim impairment test since our last annual test. We expect that the fair value of our reporting units will continue to exceed their carrying values in future periods.   As a result of the effect of the global COVID- 19 pandemic on our expected future operating cash flows, a decrease in our share price which reduced our market capitalization below the book value of net assets and lower cushion in our expected reporting unit fair values as a result of the recent acquisitions, we determined certain impairment triggers had occurred in the first quarter of 2020. Accordingly, we performed interim impairment analyses at each of our reporting units as of March 31, 2020. Based on the results of our interim impairment tests, we concluded that carrying value exceeded fair value in our Commercial Vehicle and Light Vehicle reporting units and we recorded a goodwill impairment charge of $ 51 in the first quarter of 2020. See Note 3 to our consolidated financial statements in Item 8 of our 2020 Form 10 -K for additional information on these impairment losses.   9 Table of Contents   The change in the carrying amount of goodwill in 2021 is primarily due to the acquisition of Pi Innovo, measurement period adjustments for the 2020 Ashwoods acquisition and currency fluctuation. See Note 2 for additional information on recent acquisitions.   Changes in the carrying amount of goodwill by segment  —        Light Vehicle     Commercial Vehicle     Off-Highway     Power Technologies     Total   Balance, December 31, 2020   $ —     $ 177     $ 302     $ —     $ 479   Acquisitions             22       ( 11 )             11   Currency impact             3       ( 10 )             ( 7 ) Balance, September 30, 2021   $ —     $ 202     $ 281     $ —     $ 483     Components of other intangible assets —              September 30, 2021     December 31, 2020       Weighted Average Useful Life (years)     Gross Carrying Amount     Accumulated Impairment and Amortization     Net Carrying Amount     Gross Carrying Amount     Accumulated Impairment and Amortization     Net Carrying Amount   Amortizable intangible assets                                                       Core technology   8     $ 162     $ ( 108 )   $ 54     $ 146     $ ( 103 )   $ 43   Trademarks and trade names   13       31       ( 11 )     20       31       ( 9 )     22   Customer relationships   8       522       ( 431 )     91       525       ( 431 )     94   Non-amortizable intangible assets                                                       Trademarks and trade names           75               75       77               77             $ 790     $ ( 550 )   $ 240     $ 779     $ ( 543 )   $ 236     The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at  September 30, 2021 were as follows: Light Vehicle — $ 20 , Commercial Vehicle — $ 77 , Off-Highway — $ 137 and Power Technologies — $ 6 .   Amortization expense related to amortizable intangible assets —        Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Charged to cost of sales   $ 2     $ 2     $ 7     $ 5   Charged to amortization of intangibles     4       4       11       10   Total amortization   $ 6     $ 6     $ 18     $ 15     The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on September 30, 2021 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.       Remainder of 2021     2022     2023     2024     2025   Amortization expense   $ 6     $ 23     $ 23     $ 22     $ 20     10 Table of Contents     Note 4. Restructuring of Operations   Our restructuring activities have historically included rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. In recent years our focus has been primarily headcount reduction initiatives to reduce operating costs, including actions taken at acquired businesses to rationalize cost structures and achieve operating synergies. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including certain operating costs of facilities that we are in the process of closing.   Net restructuring charges of $ 1 and $ 2  in the  third quarter of  2021  and  2020  and $ 2  and $ 21 in the nine months ended  September 30, 2021  and  2020  were comprised of severance and benefit costs related to integration of recent acquisitions, headcount reductions across our operations and exit costs related to previously announced actions.   Accrued restructuring costs and activity —       Employee Termination Benefits     Exit Costs     Total   Balance, June 30, 2021   $ 20     $ —     $ 20   Charges to restructuring     1       1       2   Adjustments of accruals     ( 1 )             ( 1 ) Cash payments     ( 4 )     ( 1 )     ( 5 ) Balance, September 30, 2021   $ 16     $ —     $ 16                             Balance, December 31, 2020   $ 30     $ —     $ 30   Charges to restructuring     1       5       6   Adjustments of accruals     ( 4 )             ( 4 ) Cash payments     ( 10 )     ( 5 )     ( 15 ) Currency impact     ( 1 )             ( 1 ) Balance, September 30, 2021   $ 16     $ —     $ 16     At September 30, 2021 , the accrued employee termination benefits include costs to reduce approximately 300 employees to be completed over the next year.   Cost to complete — The following table provides project-to-date and estimated future restructuring expenses for completion of our approved restructuring initiatives for our business segments at September 30, 2021 .       Expense Recognized               Prior to 2021     2021     Total to Date     Future Cost to Complete   Commercial Vehicle   $ 41     $ 1     $ 42     $ 1     The future cost to complete includes estimated separation costs, primarily those associated with one -time benefit programs, and exit costs through 2021, equipment transfers and other costs which are required to be recognized as closures are finalized or as incurred during the closure.   11 Table of Contents     Note 5. Supplemental Balance Sheet and Cash Flow Information   Inventory components at —       September 30, 2021     December 31, 2020   Raw materials   $ 648     $ 473   Work in process and finished goods     989       752   Inventory reserves     ( 91 )     ( 76 ) Total   $ 1,546     $ 1,149     Cash, cash equivalents and restricted cash at —       September 30, 2021     December 31, 2020     September 30, 2020     December 31, 2019   Cash and cash equivalents   $ 220     $ 559     $ 956     $ 508   Restricted cash included in other current assets     8       5       7       6   Restricted cash included in other noncurrent assets     11       3       3       4   Total cash, cash equivalents and restricted cash   $ 239     $ 567     $ 966     $ 518         Note 6. Stockholders’ Equity   Common stock — Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first, second and third  quarters of 2021. Dividends accrue on restricted stock units (RSUs) granted under our stock compensation program and will be paid in cash or additional units when the underlying units vest.   Share repurchase program — On February 16, 2021  our Board of Directors approved an extension of our existing common stock share repurchase program through December 31, 2023. Under the program, we spent $ 23 to repurchase 1,000,000 shares of our common stock during the third quarter of 2021 through open market transactions. Approximately $ 127  remained available for future share repurchases as of September 30, 2021 .   Changes in equity —       Three Months Ended September 30,   2021   Common Stock     Additional Paid-In Capital     Retained Earnings     Treasury Stock     Accumulated Other Comprehensive Loss     Non-controlling Interests     Total Equity   Balance, June 30, 2021   $ 2     $ 2,420     $ 617     $ ( 161 )   $ ( 1,007 )   $ 68     $ 1,939   Net income                     48                       4       52   Other comprehensive income (loss)                                     ( 28 )     —       ( 28 ) Common stock dividends                     ( 15 )                             ( 15 ) Distributions to noncontrolling interests                                             ( 8 )     ( 8 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 2 )                             ( 2 ) Deconsolidation of non-wholly owned subsidiary                                             ( 8 )     ( 8 ) Common stock share repurchases                             ( 23 )                     ( 23 ) Stock compensation             5                                       5   Balance, September 30, 2021   $ 2     $ 2,425     $ 648     $ ( 184 )   $ ( 1,035 )   $ 56     $ 1,912                                                             2020                                                         Balance, June 30, 2020   $ 2     $ 2,390     $ 490     $ ( 156 )   $ ( 1,082 )   $ 76     $ 1,720   Net income                     45                       4       49   Other comprehensive income                                     12       11       23   Distributions to noncontrolling interests                                             ( 2 )     ( 2 ) Purchase of noncontrolling interests                                           1       1   Stock compensation             2                                       2   Balance, September 30, 2020   $ 2     $ 2,392     $ 535     $ ( 156 )   $ ( 1,070 )   $ 90     $ 1,793     12 Table of Contents       Nine Months Ended September 30,   2021   Common Stock     Additional Paid-In Capital     Retained Earnings     Treasury Stock     Accumulated Other Comprehensive Loss     Non-controlling Interests     Total Equity   Balance, December 31, 2020   $ 2     $ 2,408     $ 530     $ ( 156 )   $ ( 1,026 )   $ 76     $ 1,834   Net income                     172                       9       181   Other comprehensive loss                                     ( 9 )     ( 11 )     ( 20 ) Common stock dividends                     ( 44 )                             ( 44 ) Distributions to noncontrolling interests                                             ( 10 )     ( 10 ) Sale of noncontrolling interests                                             ( 1 )     ( 1 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 10 )                             ( 10 ) Deconsolidation of non-wholly owned subsidiary                                             ( 8 )     ( 8 ) Other                                             1       1   Common stock share repurchases                             ( 23 )                     ( 23 ) Stock compensation             17                                       17   Stock withheld for employee taxes                             ( 5 )                     ( 5 ) Balance, September 30, 2021   $ 2     $ 2,425     $ 648     $ ( 184 )   $ ( 1,035 )   $ 56     $ 1,912                                                             2020                                                         Balance, December 31, 2019   $ 2     $ 2,386     $ 622     $ ( 150 )   $ ( 987 )   $ 95     $ 1,968   Adoption of ASU 2016-13 credit losses, January 1, 2020                     ( 1 )                             ( 1 ) Net income (loss)                     ( 71 )                     6       ( 65 ) Other comprehensive income (loss)                                     ( 83 )     1       ( 82 ) Common stock dividends                     ( 15 )                             ( 15 ) Distributions to noncontrolling interests                                             ( 10 )     ( 10 ) Purchase of noncontrolling interests             1                               ( 2 )     ( 1 ) Stock compensation             5                                       5   Stock withheld for employee taxes                             ( 6 )                     ( 6 ) Balance, September 30, 2020   $ 2     $ 2,392     $ 535     $ ( 156 )   $ ( 1,070 )   $ 90     $ 1,793     Changes in each component of accumulated other comprehensive income (loss) (AOCI) of the parent —       Parent Company Stockholders       Foreign Currency Translation     Hedging     Defined Benefit Plans     Accumulated Other Comprehensive Loss   Balance, June 30, 2021   $ ( 789 )   $ 8     $ ( 226 )   $ ( 1,007 ) Other comprehensive income (loss):                                 Currency translation adjustments     ( 23 )                     ( 23 ) Holding gains and losses             15               15   Reclassification of amount to net income (a)             ( 24 )             ( 24 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     5       5   Tax expense                   ( 1 )     ( 1 ) Other comprehensive income (loss)     ( 23 )     ( 9 )     4       ( 28 ) Balance, September 30, 2021   $ ( 812 )   $ ( 1 )   $ ( 222 )   $ ( 1,035 )                                   Balance, June 30, 2020   $ ( 855 )   $ 9     $ ( 236 )   $ ( 1,082 ) Other comprehensive income (loss):                                 Currency translation adjustments     7                       7   Holding gains and losses             ( 51 )             ( 51 ) Reclassification of amount to net income (a)             52               52   Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     5       5   Tax expense                     ( 1 )     ( 1 ) Other comprehensive income     7       1       4       12   Balance, September 30, 2020   $ ( 848 )   $ 10     $ ( 232 )   $ ( 1,070 )     13 Table of Contents       Parent Company Stockholders       Foreign Currency Translation     Hedging     Defined Benefit Plans     Accumulated Other Comprehensive Loss   Balance, December 31, 2020   $ ( 802 )   $ 9     $ ( 233 )   $ ( 1,026 ) Other comprehensive income (loss):                                 Currency translation adjustments     ( 10 )                     ( 10 ) Holding gains and losses             43               43   Reclassification of amount to net income (a)             ( 51 )             ( 51 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     14       14   Tax expense             ( 2 )     ( 3 )     ( 5 ) Other comprehensive income (loss)     ( 10 )     ( 10 )     11       ( 9 ) Balance, September 30, 2021   $ ( 812 )   $ ( 1 )   $ ( 222 )   $ ( 1,035 )                                   Balance, December 31, 2019   $ ( 714 )   $ ( 30 )   $ ( 243 )   $ ( 987 ) Other comprehensive income (loss):                                 Currency translation adjustments     ( 134 )                     ( 134 ) Holding gains and losses             ( 29 )             ( 29 ) Reclassification of amount to net income (a)             68               68   Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     15       15   Tax (expense) benefit             1       ( 4 )     ( 3 ) Other comprehensive income (loss)     ( 134 )     40       11       ( 83 ) Balance, September 30, 2020   $ ( 848 )   $ 10     $ ( 232 )   $ ( 1,070 )   (a) Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments treated as cash flow hedges are reclassified from AOCI into the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. See Note 13  for additional details. (b) See Note 10  for additional details.   14 Table of Contents     Note 7. Redeemable Noncontrolling Interests   Hydro-Québec holds direct 45 % redeemable noncontrolling interest in Dana TM4 Inc. and Dana TM4 USA, LLC and indirect 45 % ownership interests in Dana (Beijing) Electric Motor Co., Ltd., Dana TM4 Italia S.r.l., Ashwoods Innovations Ltd. and Dana TM4 India Private Limited (together Dana TM4 ). Hydro-Québec may put all, and not less than all, of its ownership interests in Dana TM4 to Dana at fair value. See Note 2 for additional information.   Redeemable noncontrolling interests reflected as of the balance sheet date are the greater of the redeemable noncontrolling interest balances adjusted for comprehensive income items and distributions or the redemption values. Redeemable noncontrolling interest adjustments of redemption value are recorded in retained earnings. We estimate the fair value of the redemption value using an income based approach based on discounted cash flow projections. In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth  rates, projected EBITDA, discount rates, terminal growth rates and exit multiples.    Reconciliation of changes in redeemable noncontrolling interests —       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Balance, beginning of period   $ 194     $ 159     $ 180     $ 167   Capital contribution from redeemable noncontrolling interest     3       1       6       3   Sale of redeemable noncontrolling interest                           7   Adjustment to redemption value     2               10         Other                   ( 1 )         Comprehensive income (loss) adjustments:                                 Net loss attributable to redeemable noncontrolling interests     ( 2 )     ( 4 )     ( 10 )     ( 25 ) Other comprehensive income (loss) attributable to redeemable noncontrolling interests     ( 2 )     ( 4 )     10       -   Balance, end of period   $ 195     $ 152     $ 195     $ 152         Note 8. Earnings per Share   Reconciliation of the numerators and denominators of the earnings per share calculations —        Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Net income (loss) available to common stockholders - Numerator basic and diluted   $ 48     $ 45     $ 172     $ ( 71 )                                   Denominator:                                 Weighted-average common shares outstanding - Basic     144.8       144.5       145.0       144.4   Employee compensation-related shares, including stock options     1.4       0.7       1.4       —   Weighted-average common shares outstanding - Diluted     146.2       145.2       146.4       144.4     The share count for diluted earnings per share is computed on the basis of the weighted-average number of common shares outstanding plus the effects of dilutive common stock equivalents (CSEs) outstanding during the period. We excluded 0.6  million and 1.6  million CSEs from the calculation of diluted earnings per share for the third quarters of  2021 and  2020  and excluded 0.8  million and 1.3  million of CSEs for the respective year-to-date periods as the effect of including them would have been anti-dilutive. In addition, we excluded CSEs that satisfied the definition of potentially dilutive shares of 0.5  million for the year-to-date 2020 period since there was no net income available to common stockholders for that period.   15 Table of Contents     Note 9. Stock Compensation   The Compensation Committee of our Board of Directors approved the grant of RSUs and performance share units (PSUs) shown in the table below during 2021 .        Granted     Grant Date       (In millions)     Fair Value*   RSUs     0.8     $ 23.47   PSUs     0.2     $ 26.81   * Weighted-average per share   We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The number of PSUs that ultimately vest is contingent on achieving specified financial targets and specified total shareholder return targets relative to peer companies. For the portion of the award based on financial metrics, we estimated the fair value of the PSUs at grant date based on the closing market price of our common stock at the date of grant adjusted for the value of assumed dividends over the period because the awards are not dividend protected. For the portion of the award based on shareholder returns, we estimated the fair value of the PSUs at grant date using various assumptions as part of a Monte Carlo simulation. The expected term represents the period from the grant date to the end of the three -year performance period. The risk-free interest rate of 0.18 % was based on U.S. Treasury constant maturity rates at the grant date. The  dividend yield of 2.27 % was calculated using a blended approach of a historical average yield calculated by dividing the expected annual dividend by the average stock price over the prior year and the current yield calculated by dividing the expected annual dividend by the grant date stock price. The estimated volatility of 62.8 % was based on observed historical volatility of daily stock returns for the 3 -year period preceding the grant date.    During 2021, we received $ 5  of cash from the exercise of stock options related to 0.3 million shares, paid $ 2  of cash to settle RSUs and issued 0.5  million and 0.1  million shares of common stock based on the vesting of RSUs and PSUs, respectively. We recognized stock compensation expense of $ 6 and $ 2  during the  third quarters of  2021 and  2020  and expense of $ 15 and $ 5  during the respective year-to-date periods. At September 30, 2021 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 29 . This cost is expected to be recognized over a weighted-average period of 1.7  years.   On April 21, 2021, our stockholders approved the 2021 Omnibus Incentive Plan (the Plan), replacing the 2017 Omnibus Incentive Plan (the Prior Plan). The Plan authorizes the grant of stock options, stock appreciation rights (SARs), RSUs and PSUs through April 2031. The maximum aggregate number of shares of common stock that may be issued under the Plan is 3.5 million shares of common stock plus the number of shares that remained available for new grants under the Prior Plan. Cash-settled awards do not count against the number of shares available for award under the Plan. At September 30, 2021, there were 6.0  million shares available for future grants. Shares of common stock to be issued under the Plan are made available from authorized and unissued Dana common stock.       Note 10. Pension and Postretirement Benefit Plans   We have a number of defined contribution and defined benefit, qualified and nonqualified, pension plans covering eligible employees. Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.   Components of net periodic benefit cost (credit) —        Pension     OPEB       2021     2020     2021     2020   Three Months Ended September 30,   U.S.     Non-U.S.     U.S.     Non-U.S.     Non-U.S.     Non-U.S.   Interest cost   $ 3     $ 1     $ 6     $ 1     $ 1     $ 1   Expected return on plan assets     ( 7 )     ( 1 )     ( 9 )     ( 1 )                 Service cost             15               2                   Amortization of net actuarial loss     3       2       2       3                   Net periodic benefit cost (credit)   $ ( 1 )   $ 17     $ ( 1 )   $ 5     $ 1     $ 1                                                     Nine Months Ended September 30,                                                 Interest cost   $ 10     $ 3     $ 16     $ 4     $ 2     $ 2   Expected return on plan assets     ( 20 )     ( 2 )     ( 26 )     ( 3 )                 Service cost             19               6                   Amortization of net actuarial loss     7       7       8       7                   Net periodic benefit cost (credit)   $ ( 3 )   $ 27     $ ( 2 )   $ 14     $ 2     $ 2     The service cost components of net periodic pension and OPEB costs are included in cost of sales and selling, general and administrative expenses as part of compensation cost and are eligible for capitalization in inventory and other assets. The non-service components are reported in other income (expense), net and are not eligible for capitalization.   16 Table of Contents     Note   11.    Marketable Securities       September 30, 2021     December 31, 2020               Unrealized     Fair             Unrealized     Fair       Cost     Gains (Losses)     Value     Cost     Gains (Losses)     Value   Certificates of deposit   $ 18     $ —     $ 18     $ 21     $ —     $ 21   Corporate securities     —       —       —       —       —       —   Total current marketable securities   $ 18     $ —     $ 18     $ 21     $ —     $ 21                                                     Noncurrent marketable securities - Corporate securities   $ —     $ —     $ —     $ 16     $ 33     $ 49     Certificates of deposit maturing in  one  year or less total $ 18 at  September 30, 2021 .   We held $ 16  of convertible notes receivable from our investment in Hyliion Inc. On  October  1,   2020,  Hyliion completed its merger with Tortoise Acquisition Corp. The business combination resulted in the combined company being renamed Hyliion Holdings Corp., with its common stock being listed on the New York Stock Exchange under the ticker symbol HYLN. Effective with the completed merger, our notes receivable were converted into  2,988,229  common shares of HYLN. Our investment in Hyliion was carried at fair value with changes in fair value included in other income (expense), net. Our investment in Hyliion was included in noncurrent marketable securities at December 31, 2020. The strategic partnership with Hyliion established Dana as the preferred supplier for e-propulsion systems to Hyliion as long as Dana maintained a minimum equity investment in Hyliion; in the second quarter of 2021, the partnership arrangement was modified whereby a minimum equity investment was no longer required, thereby we reclassified our investment to current assets on the balance sheet. During the third quarter of 2021, we sold all of our Hyliion shares.       Note 12. Financing Agreements   Long-term debt at —     Interest Rate     September 30, 2021     December 31, 2020   Senior Notes due December 15, 2024 5.500 %     $ —     $ 425   Senior Notes due April 15, 2025 5.750 % *     400       400   Senior Notes due June 1, 2026 6.500 % *     —       375   Senior Notes due November 15, 2027 5.375 %       400       400   Senior Notes due June 15, 2028 5.625 %       400       400   Senior Notes due July 15, 2029 3.000 %       376       —   Senior Notes due September 1, 2030 4.250 %       400       —   Term B Facility         349       349   Other indebtedness         98       106   Debt issuance costs         ( 28 )     ( 27 )           2,395       2,428   Less: Current portion of long-term debt         8       8   Long-term debt, less debt issuance costs       $ 2,387     $ 2,420     * In conjunction with the issuance of the April 2025 Notes we entered into 8 -year fixed-to-fixed cross-currency swaps which have the effect of economically converting the April 2025 Notes to euro-denominated debt at a fixed rate of 3.850 %. In conjunction with the issuance of the June 2026 Notes we entered into 10 -year fixed-to-fixed cross-currency swaps which have the effect of economically converting the June 2026 Notes to euro-denominated debt at a fixed rate of 5.140 %. See Note 13  for additional information.     Interest on the senior notes is payable semi-annually and interest on the Term B Facility is payable quarterly. Other indebtedness includes the note payable to the former owners of S.M.E. S.p.A., borrowings from various financial institutions, and finance lease obligations.   Senior notes activity — On May 28, 2021, Dana Financing Luxembourg S.à r.l. (Dana Financing), a wholly-owned subsidiary of Dana, completed the sale of €325 ( $396 as of May 28, 2021) in senior unsecured notes ( July 2029 Notes) at 3.000 %. The July 2029 Notes are fully and unconditionally guaranteed by Dana. The July 2029 Notes rank equally with Dana's other unsecured senior notes. Interest on the notes is payable on January 15 and July 15 of each year, beginning on January 15, 2022. The July 2029 Notes will mature on July 15, 2029. Net proceeds of the offering totaled €320 ( $391 as of May 28, 2021). Financing costs of €5 ($ 6  as of May 28, 2021) were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The proceeds from the offering were used to redeem all of our June 2026 Notes. On June 10, 2021 we redeemed all of our June 2026 Notes at a price equal to 103.25 % plus accrued and unpaid interest. The $ 16 loss on extinguishment of debt includes the $ 12 redemption premium and the $ 4 write-off of previously deferred financing costs associated with the June 2026 Notes.   17 Table of Contents   On May 13, 2021, we redeemed $ 254 of our December 2024 Notes pursuant to a tender offer at a weighted average price equal to 102.000 % plus accrued and unpaid interest. On May 17, 2021, we called the remaining $ 171 of our December 2024 Notes at a price equal to 101.833 % plus accrued and unpaid interest. The $ 8 loss on extinguishment of debt recorded in May 2021 includes the redemption premium of $ 8 and the write-off of $ 3 of previously deferred financing costs associated with the December 2024 Notes. These charges were partially offset by the recognition of $ 3 related to an unamortized fair value adjustment associated with a fixed-to-floating interest rate swap that was terminated in 2015.   On May 13, 2021, we completed the sale of $ 400 in senior unsecured notes (the September 2030 Notes) at 4.25 %. The September 2030 Notes rank equally with Dana's other unsecured senior notes. Interest on the notes is payable on March 1 and September 1 of each year, beginning on September 1, 2021. The September 2030 Notes will mature on September 1, 2030. Net proceeds of the offering totaled $ 395 . Financing costs of $ 5 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. Proceeds from the offering will be used to finance or refinance, in whole or in part, recently completed or future eligible green projects related to clean transportation, renewable energy, sustainable water and wastewater management, and green buildings.   We may redeem some or all of the senior notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12 -month period commencing on the anniversary date of the senior notes in the year set forth below:       Redemption Price       April     November     June     July     September   Year   2025 Notes     2027 Notes     2028 Notes     2029 Notes     2030 Notes   2021     102.875 %                                 2022     101.438 %     102.688 %                         2023     100.000 %     101.344 %     102.813 %                 2024     100.000 %     100.000 %     101.406 %     101.500 %         2025             100.000 %     100.000 %     100.750 %         2026             100.000 %     100.000 %     100.000 %     102.125 % 2027                     100.000 %     100.000 %     101.417 % 2028                             100.000 %     100.708 % 2029                                     100.000 %   At any time prior to May 1, 2024, we may redeem up to 40% of the aggregate principal amount of the September 2030 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.250 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided that at least 50 % of the aggregate principal amount of the September 2030 Notes remains outstanding after the redemption. Prior to May 1, 2026, we may redeem some or all of the September 2030 Notes at a redemption price equal to 100 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.   At any time prior to July 15, 2024, we may redeem up to 40% of the aggregate principal amount of the July 2029 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 103.000 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50 % of the aggregate principal amount of the July 2029 Notes remain outstanding after the redemption.  Prior to July 15, 2024, we may also redeem some or all of the July 2029 Notes at a redemption price equal to 100 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.   At any time prior to November 15, 2022, we may redeem up to 35% of the aggregate principal amount of the November 2027 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.375 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50 % of the original aggregate principal amount of the November 2027 Notes remains outstanding after the redemption. Prior to November 15, 2022, we may redeem some or all of the November 2027 Notes at a redemption price of 100.000 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.   At any time prior to June 15, 2023, we may redeem up to 35% of the aggregate principal amount of the June 2028 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.625 % of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50 % of the original aggregate principal amount of the June 2028 Notes remains outstanding after the redemption. Prior to June 15, 2023, we may redeem some or all of the June 2028 Notes at a redemption price of 100.000 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.   18 Table of Contents   Credit agreement — On December 31, 2020, we fully paid down the Term A Facility. We wrote off $ 3 of previously deferred financing costs associated with the Term A Facility. On March 25, 2021, we amended our credit and guaranty agreement, increasing the Revolving Facility to $ 1,150 and extending the maturity to March 25, 2026. We recorded deferred fees of $ 2 related to the amendment. The deferred fees are being amortized over the life of the applicable facilities. Deferred financing costs on our Revolving Facility are included in other noncurrent assets. The Term B Facility will mature on February 28, 2026. We may prepay some or all of the amounts under the Term B Facility without penalty.   The Term B Facility and the Revolving Facility are guaranteed by all of our wholly-owned domestic subsidiaries subject to certain exceptions (the guarantors) and are secured by a first -priority lien on substantially all of the assets of Dana and the guarantors, subject to certain exceptions.   Advances under the Revolving Facility bear interest at a floating rate based on, at our option, the base rate or Eurodollar rate (each as described in the credit agreement) plus a margin as set forth below:       Margin   Total Net Leverage Ratio   Base Rate     Eurodollar Rate   Less than or equal to 1.00:1.00     0.25 %     1.25 % Greater than 1.00:1.00 but less than or equal to 2.00:1.00     0.50 %     1.50 % Greater than 2.00:1.00     0.75 %     1.75 %   The Term B Facility bears interest based on, at our option, the Base Rate plus 1.25 % or the Eurodollar rate plus 2.25 %. We have elected to pay interest on our advances under Term Facility B at the Eurodollar Rate. The interest rate on the Term B Facility was 2.34 %, inclusive of the applicable margins, as of September 30, 2021 .   Commitment fees are applied based on the average daily unused portion of the available amounts under the Revolving Facility as set forth below:   Total Net Leverage Ratio   Commitment Fee   Less than or equal to 1.00:1.00     0.250 % Greater than 1.00:1.00 but less than or equal to 2.00:1.00     0.375 % Greater than 2.00:1.00     0.500 %   Up to $ 275 of the Revolving Facility may be applied to letters of credit, which reduces availability. We pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable margin for Eurodollar rate advances based on a quarterly average availability under issued and undrawn letters of credit under the Revolving Facility and a per annum fronting fee of 0.125 %, payable quarterly.   At  September 30, 2021 , we had $ 52 of outstanding borrowings under the Revolving Facility and had utilized $ 21 for letters of credit. We had availability at September 30, 2021 under the Revolving Facility of $ 1,077  after deducting outstanding borrowings and the letters of credit.   Bridge facility — On April 16, 2020, we entered into a $ 500 bridge facility (the Bridge Facility). We recorded deferred fees of $ 5 related to the Bridge Facility. The deferred fees were being amortized over the life of the Bridge Facility. The Bridge Facility was to mature on April 15, 2021. On June 19, 2020, in connection with the issuance of our June 2028 Notes, we terminated the Bridge Facility and wrote off the $ 5 of deferred fees associated with the Bridge Facility.   Debt covenants — At September 30, 2021 , we were in compliance with the covenants of our financing agreements. Under the Term B Facility, Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types and, in the case of the Revolving Facility, a maintenance covenant tested on the last day of each fiscal quarter requiring us to maintain a first lien net leverage ratio not to exceed 2.00  to 1.00.   19 Table of Contents     Note 13. Fair Value Measurements and Derivatives   In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate. Our valuation techniques include a combination of observable and unobservable inputs.   Fair value measurements on a recurring basis — Assets and liabilities that are carried in our balance sheet at fair value are as follows:                 Fair Value   Category   Balance Sheet Location   Fair Value Level     September 30, 2021     December 31, 2020   Certificates of deposit   Marketable securities   2     $ 18     $ 21   Available-for-sale securities   Other noncurrent assets   1             49   Currency forward contracts                           Cash flow hedges   Accounts receivable - Other   2       7       15   Cash flow hedges   Other accrued liabilities   2       2       1   Undesignated   Accounts receivable - Other   2       3       2   Undesignated   Other accrued liabilities   2       1       1   Interest rate collars   Other accrued liabilities   2       2       7   Currency swaps                           Cash flow hedges   Other noncurrent liabilities   2       47       128   Undesignated   Other noncurrent liabilities   2       18             Fair Value Level 1 assets and liabilities reflect quoted prices in active markets. Fair Value Level 2 assets and liabilities reflect the use of significant other observable inputs.   Fair value of financial instruments — The financial instruments that are not carried in our balance sheet at fair value are as follows:               September 30, 2021     December 31, 2020       Fair Value Level   Carrying Value     Fair Value     Carrying Value     Fair Value   Long-term debt     2     $ 2,338     $ 2,427     $ 2,376     $ 2,475     Interest rate derivatives — Our portfolio of derivative financial instruments periodically includes interest rate swaps and interest rate collars designed to mitigate our interest rate risk. As of September 30, 2021 , no fixed-to-floating interest rate swaps are outstanding. We have outstanding interest rate collars with a notional value of $ 425 that will mature in December 2021. For interest rate collars, no payments or receipts are exchanged unless interest rates rise or fall in excess of a predetermined ceiling or floor rate.   Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory through the next fifteen months, as well as currency swaps associated with certain recorded external notes payable and intercompany loans receivable and payable. Periodically, our foreign currency derivatives also include net investment hedges of certain of our investments in foreign operations.   We have executed fixed-to-fixed cross-currency swaps in conjunction with the issuance of certain notes to eliminate the variability in the functional-currency-equivalent cash flows due to changes in exchange rates associated with the forecasted principal and interest payments. All of the underlying designated financial instruments have been designated as the hedged items in each respective cash flow hedge relationship, as shown in the table below. Designated as cash flow hedges of the forecasted principal and interest payments of the underlying designated financial instruments all of the swaps economically convert the underlying designated financial instruments into the functional currency of each respective holder. The impact of the interest rate differential between the inflow and outflow rates on all fixed-to-fixed cross-currency swaps is recognized during each period as a component of interest expense.   20 Table of Contents   The following fixed-to-fixed cross-currency swaps were outstanding at September 30, 2021 :   Underlying Financial Instrument     Derivative Financial Instrument   Description   Type   Face Amount     Rate     Notional Amount     Traded Amount     Inflow Rate     Outflow Rate   April 2025 Notes   Payable   $ 400       5.75 %   $ 400     € 371       5.75 %     3.85 % Luxembourg Intercompany Notes   Receivable   € 278       3.70 %   € 278     $ 300       5.38 %     3.70 % Undesignated 2026 Swap                       $ 188     € 169       6.50 %     5.14 % Undesignated Offset 2026 Swap                       € 169     $ 188       3.13 %     6.50 %   The designated swaps are expected to be highly effective in offsetting the corresponding currency-based changes in cash outflows related to the underlying designated financial instruments. Based on our qualitative assessment that the critical terms of the underlying designated financial instruments and the associated swaps match and that all other required criteria have been met, we do not expect to incur any ineffectiveness. As effective cash flow hedges, changes in the fair value of the swaps will be recorded in OCI during each period. Additionally, to the extent the swaps remain effective, the appropriate portion of AOCI will be reclassified to earnings each period as an offset to the foreign exchange gain or loss resulting from the remeasurement of the underlying designated financial instruments. See Note 12  for additional information about the April 2025 Notes. To the extent the swaps are no longer effective, changes in their fair values will be recorded in earnings.   We had previously entered into fixed-to-fixed cross currency swaps as a hedge against our June 2026 Notes.  In June 2021, we elected to redeem all of the June 2026 Notes and de-designated the fixed-to-fixed cross currency swaps. See Note 12 for additional information about the extinguishment of the June 2026 Notes.  As the forecasted payments subject to the hedge will no longer occur in the forecasted periods, we reclassified $ 9 of previously deferred losses from AOCI into other income (expense), net.  We settled $ 187 of the $ 375 notional value resulting in a net cash outflow of $ 22 .  The remaining $ 188 continues to remain outstanding and we have entered into an offsetting swap to hedge against future fair value adjustments which will be included in earnings. The fair value of the remaining $ 188 will be settled with the counterparty over the life of the swap through the difference in the euro denominated inflow and outflow rates which are settled on June 15 and December 15 each year through June 2026.   The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $ 393 at September 30, 2021 and $ 386 at December 31,   2020 . The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 1,106 at September 30, 2021 and $ 1,118 at December 31,   2020 .   The following currency derivatives were outstanding at September 30, 2021 :           Notional Amount (U.S. Dollar Equivalent)       Functional Currency   Traded Currency   Designated     Undesignated     Total     Maturity U.S. dollar   Mexican peso, Canadian dollar   $ 107     $ -     $ 107     Sep-2022 Euro   U.S. dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Mexican peso, Australian dollar, Chinese renminbi, Brazilian real, Japanese yen, New Zealand dollar, Canadian dollar, South African rand     59       111       170     Jan-2024 British pound   U.S. dollar, euro             3       3     Oct-2021 Swedish krona   euro             1       1     Oct-2021 South African rand   U.S. dollar, euro, Thai baht             7       7     Nov-2021 Thai baht   U.S. dollar     1             1     Dec-2021 Canadian dollar   U.S. dollar     3               3     Dec-2021 Brazilian real   U.S. dollar, euro     33       10       43     Aug-2022 Indian rupee   U.S. dollar, euro, British pound             49       49     Apr-2022 Chinese renminbi   U.S. dollar, euro, Canadian dollar             9       9     Oct-2021 Total forward contracts         203       190       393                                         U.S. dollar   euro     322       196       518     Nov-2027 Euro   U.S. dollar     400       188       588     Jun-2026 Total currency swaps         722       384       1,106       Total currency derivatives       $ 925     $ 574     $ 1,499         Designated cash flow hedges — With respect to contracts designated as cash flow hedges, changes in fair value during the period in which the contracts remain outstanding are reported in OCI to the extent such contracts remain effective. Effectiveness is measured by using regression analysis to determine the degree of correlation between the change in the fair value of the derivative instrument and the change in the associated foreign currency exchange rates. Changes in fair value of contracts not designated as cash flow hedges or as net investment hedges are recognized in other income (expense), net in the period in which the changes occur. Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments, including those that have been designated as cash flow hedges and those that have not been designated, are recognized in the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. Accordingly, amounts are potentially recorded in sales, cost of sales or, in certain circumstances, other income (expense), net.   21 Table of Contents   The following table provides a summary of deferred gains (losses) reported in AOCI as well as the amount expected to be reclassified to income in one year or less:       Deferred Gain (Loss) in AOCI       September 30, 2021     December 31, 2020     Gain (loss) expected to be reclassified into income in one year or less   Forward Contracts   $ —     $ 9     $ —   Collar     ( 2 )     ( 6 )     ( 2 ) Cross-Currency Swaps           3           Total   $ ( 2 )   $ 6     $ ( 2 )   The following table provides a summary of the location and amount of gains or losses recognized in the consolidated statement of operations associated with cash flow hedging relationships:       Three Months Ended September 30, 2021   Derivatives Designated as Cash Flow Hedges   Net sales     Cost of sales     Other income (expense), net   Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded   $ 2,204     $ 1,998     $ ( 4 ) (Gain) or loss on cash flow hedging relationships                         Foreign currency forwards                         Amount of (gain) loss reclassified from AOCI into income             ( 3 )     ( 1 ) Cross-currency swaps                         Amount of (gain) loss reclassified from AOCI into income                     ( 21 )       Nine Months Ended September 30, 2021   Derivatives Designated as Cash Flow Hedges   Net sales     Cost of sales     Other income (expense), net   Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded   $ 6,672     $ 5,963     $ ( 33 ) (Gain) or loss on cash flow hedging relationships                         Foreign currency forwards                         Amount of (gain) loss reclassified from AOCI into income             ( 8 )     ( 3 ) Cross-currency swaps                         Amount of (gain) loss reclassified from AOCI into income                     ( 40 )       Three Months Ended September 30, 2020   Derivatives Designated as Cash Flow Hedges   Net sales     Cost of sales     Other income (expense), net   Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded   $ 1,994     $ 1,780     $ ( 8 ) (Gain) or loss on cash flow hedging relationships                         Foreign currency forwards                         Amount of (gain) loss reclassified from AOCI into income           3         Cross-currency swaps                         Amount of (gain) loss reclassified from AOCI into income                     49         Nine Months Ended September 30, 2020   Derivatives Designated as Cash Flow Hedges   Net sales     Cost of sales     Other income (expense), net   Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded   $ 4,998     $ 4,588     $ ( 5 ) (Gain) or loss on cash flow hedging relationships                         Foreign currency forwards                         Amount of (gain) loss reclassified from AOCI into income     1       15       1   Cross-currency swaps                         Amount of (gain) loss reclassified from AOCI into income                     51     The amounts reclassified from AOCI into income for the cross-currency swaps represent an offset to a foreign exchange loss on our foreign currency-denominated intercompany and external debt instruments.   22 Table of Contents   Certain of our hedges of forecasted transactions have not formally been designated as cash flow hedges. As undesignated forward contracts, the changes in the fair value of such contracts are included in earnings for the duration of the outstanding forward contract. Any realized gain or loss on the settlement of such contracts is recognized in the same period and in the same line item in the consolidated statement of operations as the underlying transaction. The following table provides a summary of the location and amount of gains or losses recognized in the consolidated statement of operations associated with undesignated hedging relationships.       Amount of Gain (Loss) Recognized in Income     Derivatives Not Designated as Hedging Instruments   Three Months Ended September 30, 2021     Three Months Ended September 30, 2020   Location of Gain or (Loss) Recognized in Income Foreign currency forward contracts   $ 1     $ —   Cost of sales Foreign currency forward contracts   $ 2     $ (2 ) Other income (expense), net         Amount of Gain (Loss) Recognized in Income     Derivatives Not Designated as Hedging Instruments   Nine Months Ended September 30, 2021     Nine Months Ended September 30, 2020   Location of Gain or (Loss) Recognized in Income Foreign currency forward contracts   $ 1     $ —   Cost of sales Foreign currency forward contracts   $ (14 )   $ (8 ) Other income (expense), net     Net investment hedges — We periodically designate derivative contracts or underlying non-derivative financial instruments as net investment hedges. With respect to contracts designated as net investment hedges, we apply the forward method, but for non-derivative financial instruments designated as net investment hedges, we apply the spot method. Under both methods, we report changes in fair value in the cumulative translation adjustment (CTA) component of OCI during the period in which the contracts remain outstanding to the extent such contracts and non-derivative financial instruments remain effective.       Note 14. Commitments and Contingencies   Product liabilities — Accrued product liability costs were $ 2  at September 30, 2021 and $ 1  at December 31,   2020 . We had also recognized amounts recoverable from third parties of $ 11  at September 30, 2021 and $ 11  at December 31,   2020 . Payments made to claimants precede recovery of amounts from third parties, and may result in recoverable amounts in excess of the total liability. We estimate these liabilities based on current information and assumptions about the value and likelihood of the claims against us.   Environmental liabilities — Accrued environmental liabilities were $ 9  at September 30, 2021 and $ 10  at December 31,   2020 . We consider the most probable method of remediation, current laws and regulations and existing technology in estimating our environmental liabilities.   Guarantee of lease obligations — In connection with the divestiture of our Structural Products business in 2010, leases covering three U.S. facilities were assigned to a U.S. affiliate of Metalsa. Under the terms of the sale agreement, we will guarantee the affiliate’s performance under the leases, which run through June 2025, including approximately $ 6 of annual payments. In the event of a required payment by Dana as guarantor, we are entitled to pursue full recovery from Metalsa of the amounts paid under the guarantee and to take possession of the leased property.   Other legal matters — We are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, we cannot state what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, we believe that any liabilities that may result from these proceedings will not have a material adverse effect on our liquidity, financial condition or results of operations.   23 Table of Contents     Note 15. Warranty Obligations   We record a liability for estimated warranty obligations at the dates our products are sold. We record the liability based on our estimate of costs to settle future claims. Adjustments to our estimated costs at time of sale are made as claim experience and other new information becomes available. Obligations for service campaigns and other occurrences are recognized as adjustments to prior estimates when the obligation is probable and can be reasonably estimated.   Changes in warranty liabilities —        Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Balance, beginning of period   $ 95     $ 96     $ 98     $ 101   Amounts accrued for current period sales     9       12       28       26   Adjustments of prior estimates     ( 2 )     ( 4 )           ( 1 ) Settlements of warranty claims     ( 7 )     ( 11 )     ( 20 )     ( 32 ) Divestitures                   ( 10 )         Currency impact             2       ( 1 )     1   Balance, end of period   $ 95     $ 95     $ 95     $ 95         Note 16. Income Taxes   We estimate the effective tax rate expected to be applicable for the full fiscal year and use that rate to provide for income taxes in interim reporting periods. We also recognize the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur.   We have generally not recognized tax benefits on losses generated in several entities where the recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for the recognition of deferred tax assets. Consequently, there is no income tax expense or benefit recognized on the pre-tax income or losses in these jurisdictions as valuation allowances are adjusted to offset the associated tax expense or benefit. We believe it is reasonably possible that valuation allowances of up to approximately $ 50 related to subsidiaries in Germany will be released in the next twelve months.    We record interest and penalties related to uncertain tax positions as a component of income tax expense. Net interest expense for the periods presented herein is not significant.   We reported an income tax expense of $ 20  and $ 16  for the third  quarters of 2021 and 2020 and income tax expense of $ 56  and $ 34  for the respective year-to-date periods. Our effective tax rates were 28 % and ( 46 )% for the first   nine months of 2021 and  2020 . During the first  quarter of 2020, a pre-tax goodwill impairment charge of $ 51  with an associated income tax benefit of $ 1  was recorded. Also, during the first  quarter of 2020, we recorded tax benefits of $ 37  related to tax actions that adjusted federal tax credits, tax expense of $ 2  to record additional valuation allowance in the U.S. based on reduced income projections, and tax expense of $ 4 to record valuation allowances in foreign jurisdictions due to reduced income projections. In the second quarter of 2020, we recorded an income tax expense of $ 56 for valuation allowances in foreign jurisdictions due to reduced income projections. Excluding these items, the effective tax rate would have been ( 45 )% for the  2020   nine -month period. Our effective income tax rates vary from the U.S. federal statutory rate of 21 % due to establishment, release and adjustment of valuation allowances in several countries, nondeductible expenses and deemed income, local tax incentives in several countries outside the U.S., different statutory tax rates outside the U.S. and withholding taxes related to repatriations of international earnings. The effective income tax rate may vary significantly due to fluctuations in the amounts and sources, both foreign and domestic, of pretax income and changes in the amounts of non-deductible expenses.   Dividends of earnings from non-U.S. operations are generally no longer subjected to U.S. income tax. We continue to analyze and adjust the estimated tax impact of the income and non-U.S. withholding tax liabilities based on the amounts and sources of these earnings.   24 Table of Contents     Note 17. Other Income (Expense), Net         Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Non-service cost components of pension and OPEB costs   $ ( 2 )   $ ( 3 )   $ ( 7 )   $ ( 8 ) Government grants and incentives     5       3       13       9   Foreign exchange gain (loss)     1       ( 2 )     2       5   Strategic transaction expenses     ( 3 )     ( 4 )     ( 11 )     ( 15 ) Loss on investment in Hyliion     ( 6 )             ( 20 )         Loss on disposal group held for sale                     ( 7 )         Loss on de-designation of fixed-to-fixed cross currency swaps                   ( 9 )         Other, net     1       ( 2 )     6       4   Other income (expense), net   $ ( 4 )   $ ( 8 )   $ ( 33 )   $ ( 5 )   Foreign exchange gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included above. Foreign exchange gains and losses on intercompany loans that are permanently invested are reported in OCI.    Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs. Strategic transaction expenses in 2021 were primarily attrib utable to our pursuit of the acquisition of a portion of the thermal-management business of Modine Manufacturing Company and certain other strategic initiatives. Strategic transaction expenses in 2020 were primarily attributable to the acquisitions of the Oerlikon Drive Systems segment of the Oerlikon Group (ODS) and Nordresa Motors, Inc. and certain other strategic initiatives.   We held convertible notes receivable from our investment in Hyliion Inc. On October 1, 2020, Hyliion Inc. completed its merger with Tortoise Acquisition Corp. The business combination resulted in the combined company being renamed Hyliion Holdings Corp. (Hyliion), with its common stock being listed on the New York Stock Exchange under the ticker symbol HYLN. Effective with the completed merger, our notes receivable were converted into 2,988,229 common shares of HYLN. Our investment in Hyliion was included in marketable securities and carried at fair value with changes in fair value included in net income. During the third quarter of 2021, we sold all of our Hyliion shares. See Note 11 for additional information.   We had previously entered into fixed-to-fixed cross currency swaps as a hedge against our June 2026 Notes. In June 2021, we redeemed all of the June 2026 Notes and de-designated the fixed-to-fixed cross currency swaps. See Note 13 for additional information.   In conjunction with our acquisition of ODS, we acquired a controlling financial interest in a joint venture in China. We were required to divest our interest in this joint venture as it violates competitive restrictions of another of our China joint venture shareholder agreements. During the first quarter of 2021, we recorded an impairment charge of $ 7 , as we determined the carrying value of the disposal group exceeded its fair value less costs to sell. The disposal group had net assets of $ 2  as of March 31, 2021.  Individual asset and liability balances were not material and therefore the amounts were not segregated as held for sale on our consolidated balance sheet. We completed the disposal of this business in April 2021.   During October 2021,  we signed a definitive sale-leaseback agreement on three of our U.S. manufacturing facilities. We will receive proceeds of $ 78 from the sale of the properties, which have a carrying value of $ 8 , resulting in a $ 70 gain on the sale transaction. The initial term of the leaseback is 20 years and has eight 5 -year renewal options. The renewal options are not reasonably assured of being executed and will not be included in the initial measurement of the right-of-use asset and lease liability. The leases on these facilities will be classified as operating leases with annual lease expense of $ 6 and total committed lease payments of $ 119 over the initial 20 -year lease term. We expect the transaction to close in December 2021.     Note 18. Revenue from Contracts with Customers   We generate revenue from selling production parts to original equipment manufacturers (OEMs) and service parts to OEMs and aftermarket customers. While we provide production and service parts to certain OEMs under awarded multi-year programs, these multi-year programs do not contain any commitment to volume by the customer. As such, individual customer releases or purchase orders represent the contract with the customer. Our customer contracts do not provide us with an enforceable right to payment for performance completed to date throughout the contract term. As such, we recognize part sales revenue at the point in time when the parts are shipped, and risk of loss has transferred to the customer. We have elected to continue to include shipping and handling fees billed to customers in revenue, while including costs of shipping and handling in costs of sales. Taxes collected from customers are excluded from revenues and credited directly to obligations to the appropriate government agencies. Payment terms with our customers are established based on industry and regional practices and generally do not exceed 180 days.    We continually seek new business opportunities and at times provide incentives to our customers for new program awards. We evaluate the underlying economics of each payment made to our customers to determine the proper accounting by understanding the nature of the payment, the rights and obligations in the contract, and other relevant facts and circumstances. Upfront payments to our customers are capitalized if we determine that the payments are incremental and incurred only if the new business is obtained and we expect to recover these amounts from the customer over the term of the new business program. We recognize a reduction to revenue as products that the upfront payments are related to are transferred to the customer, based on the total amount of products expected to be sold over the term of the program. We evaluate the amounts capitalized each period for recoverability and expense any amounts that are no longer expected to be recovered. We had $ 8  and $ 8  recorded in other current assets and $ 40  and $ 45  recorded in other noncurrent assets at September 30, 2021  and December 31, 2020 .   Certain of our customer contracts include rebate incentives. We estimate expected rebates and accrue the corresponding refund liability, as a reduction of revenue, at the time covered product is sold to the customer based on anticipated customer purchases during the rebate period and contractual rebate percentages. Refund liabilities are included in other accrued liabilities on our consolidated balance sheet. We provide standard fitness for use warranties on the products we sell, accruing for estimated costs related to product warranty obligations at time of sale. See Note 15  for additional information.   25 Table of Contents   Contract liabilities are primarily comprised of cash deposits made by customers with cash in advance payment terms. Generally, our contract liabilities turn over frequently given our relatively short production cycles. Contract liabilities were $ 37 and $ 27  at September 30, 2021 and December 31,   2020 . Contract liabilities are included in other accrued liabilities on our consolidated balance sheet.   Disaggregation of revenue —   The following table disaggregates revenue for each of our operating segments by geographical market:   Three Months Ended September 30, 2021   Light Vehicle     Commercial Vehicle     Off-Highway     Power Technologies     Total   North America   $ 667     $ 181     $ 80     $ 122     $ 1,050   Europe     83       59       391       118       651   South America     47       116       4       7       174   Asia Pacific     121       40       152       16       329   Total   $ 918     $ 396     $ 627     $ 263     $ 2,204                                             Nine Months Ended September 30, 2021                                         North America   $ 1,999     $ 564     $ 218     $ 376     $ 3,157   Europe     324       192       1,248       372       2,136   South America     122       286       10       16       434   Asia Pacific     354       90       455       46       945   Total   $ 2,799     $ 1,132     $ 1,931     $ 810     $ 6,672     Three Months Ended September 30, 2020                                         North America   $ 694     $ 190     $ 60     $ 125     $ 1,069   Europe     94       50       321       112       577   South America     32       56       3       5       96   Asia Pacific     93       21       120       18       252   Total   $ 913     $ 317     $ 504     $ 260     $ 1,994                                             Nine Months Ended September 30, 2020                                         North America   $ 1,518     $ 510     $ 192     $ 310     $ 2,530   Europe     233       136       929       290       1,588   South America     72       153       7       12       244   Asia Pacific     235       53       307       41       636   Total   $ 2,058     $ 852     $ 1,435     $ 653     $ 4,998         Note 19. Segments   We are a global provider of high-technology products to virtually every major vehicle manufacturer in the world. We also serve the stationary industrial market. Our technologies include drive systems (axles, driveshafts, transmissions, and wheel and track drives); motion systems (winches, slew drives, and hub drives); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle, medium/heavy vehicle and off-highway markets through four operating segments – Light Vehicle Drive Systems (Light Vehicle), Commercial Vehicle Drive and Motion Systems (Commercial Vehicle), Off-Highway Drive and Motion Systems (Off-Highway) and Power Technologies, which is the center of excellence for sealing and thermal-management technologies that span all customers in our on-highway and off-highway markets. These operating segments have global responsibility and accountability for business commercial activities and financial performance.   Dana evaluates the performance of its operating segments based on external sales and segment EBITDA. Segment EBITDA is a primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. Our segments are charged for corporate and other shared administrative costs. Segment EBITDA may not be comparable to similarly titled measures reported by other companies.   During the second quarter of 2021, we realigned certain of our Indian operations previously reported in our Commercial Vehicle operating segment to be reported within our Off-Highway operating segment and we realigned certain of our Brazilian operations previously reported in our Off-Highway operating segment to be reported within our Commercial Vehicle operating segment. Prior period amounts have been recast to conform with our current operating segment reporting structure.   26 Table of Contents   Segment information —       2021     2020   Three Months Ended September 30,   External Sales     Inter-Segment Sales     Segment EBITDA     External Sales     Inter-Segment Sales     Segment EBITDA   Light Vehicle   $ 918     $ 39     $ 54     $ 913     $ 27     $ 89   Commercial Vehicle     396       25       20       317       21       17   Off-Highway     627       16       100       504       13       64   Power Technologies     263       6       38       260       6       34   Eliminations and other             ( 86 )                     ( 67 )         Total   $ 2,204     $ —     $ 212     $ 1,994     $ —     $ 204                                                     Nine Months Ended September 30,                                                 Light Vehicle   $ 2,799     $ 126     $ 241     $ 2,058     $ 76     $ 140   Commercial Vehicle     1,132       73       53       852       49       32   Off-Highway     1,931       52       276       1,435       32       172   Power Technologies     810       18       111       653       13       63   Eliminations and other             ( 269 )                   ( 170 )       Total   $ 6,672     $ —     $ 681     $ 4,998     $ —     $ 407     Reconciliation of segment EBITDA to consolidated net income  —       Three Months Ended     Nine Months Ended       September 30,     September 30,       2021     2020     2021     2020   Segment EBITDA   $ 212     $ 204     $ 681     $ 407   Corporate expense and other items, net     ( 2 )     ( 3 )     ( 4 )     ( 6 ) Depreciation     ( 92 )     ( 88 )     ( 272 )     ( 257 ) Amortization     ( 6 )     ( 6 )     ( 18 )     ( 15 ) Non-service cost components of pension and OPEB costs     ( 2 )     ( 3 )     ( 7 )     ( 8 ) Restructuring charges, net     ( 1 )     ( 2 )     ( 2 )     ( 21 ) Stock compensation expense     ( 6 )     ( 2 )     ( 15 )     ( 5 ) Strategic transaction expenses     ( 3 )     ( 4 )     ( 11 )     ( 15 ) Amounts attributable to previously divested/closed operations     ( 1 )           ( 1 )         Loss on investment in Hyliion     ( 6 )             ( 20 )         Impairment of goodwill                             ( 51 ) Loss on disposal group held for sale                     ( 7 )         Loss on de-designation of fixed-to-fixed cross currency swaps                   ( 9 )         Other items     1       ( 7 )           ( 5 ) Earnings before interest and income taxes     94       89       315       24   Loss on extinguishment of debt                 ( 24 )     ( 5 ) Interest income     2       3       6       7   Interest expense     31       38       99       99   Earnings (loss) before income taxes     65       54       198       ( 73 ) Income tax expense     20       16       56       34   Equity in earnings of affiliates     5       7       29       17   Net income (loss)   $ 50     $ 45     $ 171     $ ( 90 )   27 Table of Contents     Note 20. Equity Affiliates   We have a number of investments in entities that engage in the manufacture and supply of vehicular parts (primarily axles, axle housings and driveshafts).   Equity method investments exceeding $5 at September 30, 2021 —        Ownership Percentage   Investment   Dongfeng Dana Axle Co., Ltd.   50 %   $ 109   ROC-Spicer, Ltd.   50 %     22   Axles India Limited   48 %     10   Tai Ya Investment (HK) Co., Limited   50 %     5   All others as a group         4   Investments in equity affiliates         150   Investments in affiliates carried at cost         24   Investments in affiliates       $ 174     On July 29, 2021, we acquired a 1 % ownership interest in Switch Mobility Limited (Switch) for $ 18 . Our investment in Switch will be carried at cost and included in the net assets of our Commercial Vehicle operating segment.   On July 7, 2021, we sold a portion of our ownership interest in Tai Ya Investment (HK) Co., Limited (Tai Ya) to China Motor Corporation (CMC), reducing our ownership interest in Tai Ya to 50 %. In conjunction with the decrease in our ownership interest, the Tai Ya shareholders agreement was amended, eliminating our controlling financial interest in Tai Ya. Upon our loss of control, we recognized a de minimis loss to other income (expense), net on the deconsolidation of Tai Ya. The $ 4  fair value of our retained interest in Tai Ya was determined based on the share sale to CMC. Our retained investment in Tai Ya is being accounted for by applying the equity method. Our equity method investment in Tai Ya is included in the net assets of our Light Vehicle operating segment.   On March 1, 2021, we acquired the remaining 51 % ownership interest in Pi Innovo Holdings Limited (Pi Innovo). The additional interest, along with our existing ownership interest, provided us with a 100 % ownership interest in Pi Innovo. As such, we ceased accounting for our investment in Pi Innovo under the equity method. See Note 2 for additional information.   28 Table of Contents