What changed in this filing

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Item 1. Financial Statements

2022-04-28 compared with 2021-10-26 · 147 added, 504 removed, 687 unchanged (49% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

$ 2,480  

$ 2,263  

$ 6,672  

$ 4,998  

Costs and expenses

3 unchanged sentences

Restructuring charges, net

Impairment of goodwill

Other income (expense), net

( 33 )  

Earnings before interest and income taxes

Loss on extinguishment of debt

( 24 )  

Interest income

Interest expense

Earnings (loss) before income taxes

Earnings before income taxes

Income tax expense

Equity in earnings of affiliates

Net income (loss)

Noncontrolling interests net income

Redeemable noncontrolling interests net loss

( 10 )  

Net income (loss) attributable to the parent company

Net income (loss) per share available to common stockholders

$ 0.33  

$ 0.31  

Net income attributable to the parent company

Net income per share available to common stockholders

$ 0.12  

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Other comprehensive income (loss), net of tax:

Currency translation adjustments

( 25 )  

( 11 )  

Hedging gains and losses

( 10 )  

Defined benefit plans

Other comprehensive income (loss)

( 30 )  

( 10 )  

Total comprehensive income (loss)

Total comprehensive income

Comprehensive (income) loss attributable to noncontrolling interests

( 15 )  

Comprehensive loss attributable to redeemable noncontrolling interests

Comprehensive income (loss) attributable to the parent company

Comprehensive income attributable to the parent company

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

(In millions, except share and per share amounts)

September 30,

Current assets

40 unchanged sentences

Noncontrolling interests

Total liabilities and equity

Total liabilities, redeemable noncontrolling interests and equity

$ 8,053  

4 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income (loss)

Amortization of deferred financing charges

Redemption premium on debt

Write-off of deferred financing costs

Earnings of affiliates, net of dividends received

( 11 )  

Stock compensation expense

1 unchanged sentence

Pension expense, net

Impairment of goodwill

Change in working capital

( 501 )  

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Investing activities

Purchases of property, plant and equipment

( 228 )  

Acquisition of businesses, net of cash acquired

( 18 )  

Investments in affiliates

( 23 )  

Proceeds from sale of subsidiary, net of cash disposed

Purchases of marketable securities

( 25 )  

Proceeds from sales of marketable securities

Proceeds from maturities of marketable securities

Settlement of terminated fixed-to-fixed cross currency swap

( 22 )  

Settlements of undesignated derivatives

Proceeds from sales and maturities of marketable securities

Net cash used in investing activities

( 260 )  

Financing activities

2 unchanged sentences

Repayment of long-term debt

( 805 )  

Redemption premium on debt

( 21 )  

Deferred financing payments

( 13 )  

Dividends paid to common stockholders

( 44 )  

Repurchases of common stock

Distributions to noncontrolling interests

( 10 )  

Sale of interest to noncontrolling shareholder

Contributions from noncontrolling interests

Deconsolidation of non-wholly owned subsidiary

Contributions from redeemable noncontrolling interests

Payments to acquire noncontrolling interests

Repurchases of common stock

( 23 )  

Net cash provided by (used in) financing activities

( 71 )  

Net increase (decrease) in cash, cash equivalents and restricted cash

( 312 )  

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash –

1 unchanged sentence

Effect of exchange rate changes on cash balances

( 16 )  

Cash, cash equivalents and restricted cash –

40 unchanged sentences

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.

During the first quarter of 2022, we identified an error related to certain intercompany inventory transfers that were not appropriately eliminated and recorded an adjustment of $ 8 to cost of sales.

A portion of this adjustment relates to prior periods.

We concluded that the correction of this error is not material to the financial statements for the quarter ended March 31, 2022 or any prior periods.  

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.

In October 2021, the FASB issued Accounting Standards Update (ASU) 2021 - 08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .

The guidance is intended to provide clarification on how to account for contract assets acquired via business combination, which will generally be at the same value as recognized by the acquiree assuming the acquiree followed US GAAP.

The guidance becomes effective January 1, 2023.

We do not expect adoption of this guidance to have a material impact on our consolidated financial statements.

In November 2021, the FASB issued ASU 

2021 - 10,  

Disclosures by Business Entities about Government Assistance . This guidance requires annual disclosures about the nature of certain government assistance received, the accounting policy used to account for the transactions, the location in the financial statements where such transactions were recorded and significant terms and conditions associated with such transactions. The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted.

We do not expect adoption of this guidance to have a material impact on our consolidated financial statements. 

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.

1 unchanged sentence

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.

Goodwill and Other Intangible Assets

1 unchanged sentence

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.

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.

We did not identify any events or circumstances during the first quarter of 2022  that required an interim impairment test. We expect that the fair value of our reporting units will continue to exceed their carrying values in future periods.

The change in the carrying amount of goodwill in 2022  is due to currency fluctuation.

Changes in the carrying amount of goodwill by segment 

4 unchanged sentences

Balance, December 31, 2021

( 11 )  

Currency impact

( 10 )  

Balance, September 30, 2021

Balance, March 31, 2022

Components of other intangible assets — 

September 30, 2021

March 31, 2022

December 31, 2021

12 unchanged sentences

( 12 )  

Customer relationships

6 unchanged sentences

The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at 

September 30, 2021 were as follows:

March 31, 2022 were as follows:

Light Vehicle —

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Charged to cost of sales

1 unchanged sentence

Total amortization

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.

The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on March 31, 2022 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.

5 unchanged sentences

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

Balance, June 30, 2021

Charges to restructuring

Adjustments of accruals

Cash payments

Balance, September 30, 2021

Balance, December 31, 2021

2 unchanged sentences

Cash payments

Currency impact

Balance, September 30, 2021

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

Total to Date

Future Cost to Complete

Commercial Vehicle

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.

Balance, March 31, 2022

At March 31, 2022 , the accrued employee termination benefits include costs to reduce approximately 100 employees to be completed over the next year.

Supplemental Balance Sheet and Cash Flow Information

Inventory components at —

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

Cash, cash equivalents and restricted cash at —

September 30, 2021

March 31, 2022

December 31, 2021

September 30, 2020

March 31, 2021

December 31, 2020

5 unchanged sentences

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.

Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first  quarter of 2022.

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.

2 unchanged sentences

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 .

Under the program, we spent $ 25  to repurchase 1,483,742  shares of our common stock during the first quarter of 2022  through open market transactions.

Approximately $ 102  remained available for future share repurchases as of March 31, 2022 .

Changes in equity —

Three Months Ended September 30,

Additional Paid-In Capital

3 unchanged sentences

Non-controlling Interests

Balance, June 30, 2021

Balance, December 31, 2021

$ 2,427  

3 unchanged sentences

Other comprehensive income (loss)

( 28 )  

Common stock dividends

Common stock dividends and dividend equivalents

( 14 )  

Distributions to noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Deconsolidation of non-wholly owned subsidiary

Common stock share repurchases

( 25 )  

Stock compensation

Balance, September 30, 2021

$ 2,425  

$ ( 184 )  

$ ( 1,035 )  

$ 1,912  

Balance, June 30, 2020

$ 2,390  

$ ( 156 )  

$ ( 1,082 )  

$ 1,720  

Other comprehensive income

Distributions to noncontrolling interests

Purchase of noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Stock compensation

Balance, September 30, 2020

Stock withheld for employees taxes

Balance, March 31, 2022

$ 2,431  

2 unchanged sentences

$ 1,987  

Nine Months Ended September 30,

Additional Paid-In Capital

8 unchanged sentences

$ 1,834  

Other comprehensive loss

( 11 )  

Common stock dividends

( 44 )  

Distributions to noncontrolling interests

( 10 )  

Sale of noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

( 10 )  

Deconsolidation of non-wholly owned subsidiary

Common stock share repurchases

( 23 )  

Stock compensation

Stock withheld for employee taxes

Balance, September 30, 2021

$ 2,425  

$ ( 184 )  

$ ( 1,035 )  

$ 1,912  

Balance, December 31, 2019

$ 2,386  

$ ( 150 )  

$ ( 987 )  

$ 1,968  

Adoption of ASU 2016-13 credit losses, January 1, 2020

Net income (loss)

( 71 )  

Other comprehensive income (loss)

( 18 )  

Common stock dividends

( 15 )  

Distributions to noncontrolling interests

Common stock dividends and dividend equivalents

( 14 )  

Purchase of noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Stock compensation

Stock withheld for employee taxes

Balance, September 30, 2020

Stock withheld for employees taxes

Balance, March 31, 2021

$ 2,415  

7 unchanged sentences

Accumulated Other Comprehensive Loss

Balance, June 30, 2021

Balance, December 31, 2021

$ ( 809 )  

2 unchanged sentences

Currency translation adjustments

( 23 )  

Holding gains and losses

3 unchanged sentences

Other comprehensive income (loss)

( 23 )  

Balance, September 30, 2021

$ ( 812 )  

$ ( 1 )  

$ ( 222 )  

Balance, June 30, 2020

$ ( 855 )  

$ ( 236 )  

Other comprehensive income (loss):

Currency translation adjustments

Holding gains and losses

( 51 )  

Reclassification of amount to net income (a)

Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)

Other comprehensive income

Balance, September 30, 2020

Balance, March 31, 2022

$ ( 770 )  

9 unchanged sentences

Currency translation adjustments

( 10 )  

Holding gains and losses

2 unchanged sentences

Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)

Other comprehensive income (loss)

( 10 )  

Balance, September 30, 2021

$ ( 812 )  

$ ( 1 )  

$ ( 222 )  

Balance, December 31, 2019

$ ( 714 )  

$ ( 30 )  

$ ( 243 )  

Other comprehensive income (loss):

Currency translation adjustments

( 134 )  

Holding gains and losses

( 29 )  

Reclassification of amount to net income (a)

Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)

Tax (expense) benefit

1 unchanged sentence

( 17 )  

Balance, September 30, 2020

Balance, March 31, 2021

$ ( 806 )  

$ ( 8 )  

$ ( 230 )  

(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.

2 unchanged sentences

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.

Hydro-Québec holds 45 % redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 USA, LLC, Dana (Beijing) Electric Motor Co., Ltd., Dana TM4 Italia S.r.l., Ashwoods Innovations Ltd., Dana TM4 India Private Limited and Dana TM4 (Sweden) AB (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. 

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. 

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 and terminal growth rates. 

Reconciliation of changes in redeemable noncontrolling interests —

Three Months Ended

Nine Months Ended

September 30,

Balance, beginning of period

Capital contribution from redeemable noncontrolling interest

Sale of redeemable noncontrolling interest

Adjustment to redemption value

1 unchanged sentence

Net loss attributable to redeemable noncontrolling interests

( 10 )  

Other comprehensive income (loss) attributable to redeemable noncontrolling interests

3 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net income (loss) available to common stockholders - Numerator basic and diluted

Net income available to common stockholders - Numerator basic and diluted

Weighted-average common shares outstanding - Basic

2 unchanged sentences

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 

We excluded 0.4  million and 0.9 million CSEs from the calculation of diluted earnings per share for the first quarters of 

2022 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.

2021  as the effect of including them would have been anti-dilutive.

Stock Compensation

8 unchanged sentences

Treasury constant maturity rates at the grant date.

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 dividend yield of 1.67 % was calculated using our historical approach calculated by dividing the expected annual dividend by the average stock price over the prior year.

The estimated volatility of 63.9 % 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 

During 2022, we paid $ 4  of cash to settle RSUs and issued 0.8  million and 0.1  million shares of common stock based on the vesting of RSUs and PSUs, respectively.

We recognized stock compensation expense of $ 4  and $ 5  during the 

first quarters of 

2022 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.

2021 . At March 31, 2022 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 39 .

This cost is expected to be recognized over a weighted-average period of 2.2 years.

Pension and Postretirement Benefit Plans

2 unchanged sentences

Components of net periodic benefit cost (credit) — 

Three Months Ended September 30,

Interest cost

Expected return on plan assets

Amortization of net actuarial loss

Net periodic benefit cost (credit)

Nine Months Ended September 30,

Three Months Ended March 31,

Interest cost

5 unchanged sentences

Marketable Securities

September 30, 2021

March 31, 2022

December 31, 2021

1 unchanged sentence

Gains (Losses)

Certificates of deposit

Corporate securities

Total current marketable securities

Noncurrent marketable securities - Corporate securities

Certificates of deposit - Current marketable securities

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.

October 

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.

one  year or less total $ 19  at 

March 31, 2022 .

Financing Agreements

1 unchanged sentence

Interest Rate

September 30, 2021

March 31, 2022

December 31, 2021

Senior Notes due December 15, 2024

Senior Notes due April 15, 2025

Senior Notes due June 1, 2026

Senior Notes due November 15, 2027

Senior Notes due June 15, 2028

Senior Notes due July 15, 2029

Senior Euro Notes due July 15, 2029

Senior Notes due September 1, 2030

Term B Facility

Senior Notes due February 15, 2032

Other indebtedness

6 unchanged sentences

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

See Note 13 for additional information.

Interest on the senior notes is payable semi-annually.

Other indebtedness includes the note payable to the former owners of SME S.p.A., borrowings from various financial institutions, and finance lease obligations.

Senior notes activity — 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.

On May 28, 2021, Dana Financing Luxembourg S.à

(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 %.

8 unchanged sentences

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.

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.

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.

On November 24, 2021, we completed the sale of $ 350 in senior unsecured notes (the February 2032 Notes) at 4.5 %.

The February 2032 Notes rank equally with Dana’s other unsecured senior notes.

Interest on the notes is payable on February 15 and August 15 of each year, beginning on August 15, 2022.

The February 2032 Notes will mature on February 15, 2032.

Net proceeds of the offering totaled $ 345 .

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, along with cash on hand, were used to fully pay down the Term B Facility.

See credit agreement discussion below.

Senior notes redemption provisions 

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:

19 unchanged sentences

101.417 %  

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”

100.000 %  

100.708 %  

100.000 %  

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.

4 unchanged sentences

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 February 15, 2025, we may redeem up to 40% of the aggregate principal amount of the February 2032 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.500 % 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 February 2032 Notes remains outstanding after the redemption.

Prior to February 15, 2027, we may redeem some or all of the February 2032 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”

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.

1 unchanged sentence

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.

On November 30, 2021, we fully paid down the Term B Facility.

Deferred financing costs on our Revolving Facility are included in other noncurrent assets. 

The Revolving Facility is 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:

7 unchanged sentences

0.75 %  

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:

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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.

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.

March 31, 2022 , we had $ 265  of outstanding borrowings under the Revolving Facility and had utilized $ 21 for letters of credit.

We had availability at March 31, 2022 under the Revolving Facility of $ 864  after deducting outstanding borrowings and the letters of credit.

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.

At March 31, 2022 , we were in compliance with the covenants of our financing agreements.

Under the 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.

Fair Value Measurements and Derivatives

5 unchanged sentences

Fair Value Level

September 30, 2021

March 31, 2022

December 31, 2021

1 unchanged sentence

Marketable securities

Available-for-sale securities

Other noncurrent assets

Currency forward contracts

5 unchanged sentences

Other accrued liabilities

Interest rate collars

Other accrued liabilities

Currency swaps

2 unchanged sentences

Other noncurrent liabilities

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.

1 unchanged sentence

The financial instruments that are not carried in our balance sheet at fair value are as follows:

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

Long-term debt

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 —

5 unchanged sentences

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.

The following fixed-to-fixed cross-currency swaps were outstanding at September 30, 2021 :

The following fixed-to-fixed cross-currency swaps were outstanding at March 31, 2022 :

Underlying Financial Instrument

19 unchanged sentences

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,  

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,  

The following currency derivatives were outstanding at September 30, 2021 :

The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $ 393 at March 31, 2022 and $ 449 at December 31,  

The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 1,083 at March 31, 2022 and $ 1,096 at December 31,  

The following currency derivatives were outstanding at March 31, 2022 :

Notional Amount (U.S.

2 unchanged sentences

Traded Currency

Mexican peso, Canadian dollar

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

Mexican peso, Thai baht

dollar, Australian dollar, Brazilian real, Canadian dollar, Swiss franc, Chinese renminbi, Hungarian forint, Indian rupee, Japanese yen, Mexican peso, Norwegian krone, Swedish krona, Singapore dollar, South African rand

British pound

Swedish krona

South African rand

dollar, euro, Thai baht

Canadian dollar

Brazilian real

2 unchanged sentences

dollar, euro, Canadian dollar

Australian dollar

Total forward contracts

9 unchanged sentences

Deferred Gain (Loss) in AOCI

September 30, 2021

March 31, 2022

December 31, 2021

3 unchanged sentences

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

Three Months Ended

Derivatives Designated as Cash Flow Hedges

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  

(Gain) or loss on cash flow hedging relationships

Foreign currency forwards

Amount of (gain) loss reclassified from AOCI into income

Cross-currency swaps

Amount of (gain) loss reclassified from AOCI into income

Nine Months Ended September 30, 2021

Derivatives Designated as Cash Flow Hedges

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

(Gain) or loss on cash flow hedging relationships

1 unchanged sentence

Amount of (gain) loss reclassified from AOCI into income

Cross-currency swaps

Amount of (gain) loss reclassified from AOCI into income

Three Months Ended September 30, 2020

Derivatives Designated as Cash Flow Hedges

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

(Gain) or loss on cash flow hedging relationships

Foreign currency forwards

Amount of (gain) loss reclassified from AOCI into income

Cross-currency swaps

Amount of (gain) loss reclassified from AOCI into income

Nine Months Ended September 30, 2020

Derivatives Designated as Cash Flow Hedges

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

(Gain) or loss on cash flow hedging relationships

Foreign currency forwards

Amount of (gain) loss reclassified from AOCI into income

Cross-currency swaps

Amount of (gain) loss reclassified from AOCI into income

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.

3 unchanged sentences

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

Cost of sales

Foreign currency forward contracts

$ (2 ) Other income (expense), net

Amount of Gain (Loss) Recognized in Income

Three Months Ended

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

Cost of sales

(Gain) or loss recognized in income

Foreign currency forward contracts

$ (14 )  

Other income (expense), net

5 unchanged sentences

Product liabilities —

Accrued product liability costs were $ 2  at September 30, 2021 and $ 1  at December 31,  

We had also recognized amounts recoverable from third parties of $ 11  at September 30, 2021 and $ 11  at December 31,  

Accrued product liability costs were $ 3  at March 31, 2022 and $ 2  at December 31,  

We had also recognized amounts recoverable from third parties of $ 13  at March 31, 2022 and $ 13  at December 31,  

Payments made to claimants precede recovery of amounts from third parties, and may result in recoverable amounts in excess of the total liability.

1 unchanged sentence

Environmental liabilities —

Accrued environmental liabilities were $ 9  at September 30, 2021 and $ 10  at December 31,  

Accrued environmental liabilities were $ 9  at March 31, 2022 and $ 10  at December 31,  

We consider the most probable method of remediation, current laws and regulations and existing technology in estimating our environmental liabilities.

16 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Balance, beginning of period

8 unchanged sentences

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 

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 

nine -month period.

We reported income tax expense of $ 18 and $ 22 for the first quarter of 2022 and 2021, respectively.

Our effective tax rates were 49 % and 29 % for the first quarter of 2022 and 2021.

Our effective income tax rates vary from the U.S.

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Non-service cost components of pension and OPEB costs

$ ( 2 )  

$ ( 3 )  

$ ( 7 )  

Government grants and incentives

Foreign exchange gain (loss)

Foreign exchange gain

Strategic transaction expenses

( 11 )  

Loss on investment in Hyliion

( 20 )  

Loss on disposal group held for sale

Loss on de-designation of fixed-to-fixed cross currency swaps

Other income (expense), net

$ ( 4 )  

$ ( 8 )  

$ ( 33 )  

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 2022 were primarily attributable to investigating potential acquisitions and business ventures and other strategic initiatives.

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.

5 unchanged sentences

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.

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. We completed the disposal of this business in April 2021.

Revenue from Contracts with Customers

11 unchanged sentences

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 .

We had $ 9 and $ 8  recorded in other current assets and $ 35 and $ 38 recorded in other noncurrent assets at March 31, 2022  and December 31, 2021 .

Certain of our customer contracts include rebate incentives.

5 unchanged sentences

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,  

Contract liabilities were $ 32 and $ 34 at March 31, 2022 and December 31,  

Contract liabilities are included in other accrued liabilities on our consolidated balance sheet.

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.

Disaggregation of revenue —

The following table disaggregates revenue for each of our operating segments by geographical market:

Three Months Ended September 30, 2021

Three Months Ended

Light Vehicle

North America

South America

Commercial Vehicle

Power Technologies

North America

$ 1,050  

South America

$ 2,204  

Nine Months Ended September 30, 2021

North America

$ 1,999  

$ 3,157  

South America

$ 2,799  

$ 1,132  

$ 1,931  

$ 6,672  

Three Months Ended September 30, 2020

Power Technologies

North America

$ 1,069  

South America

$ 1,994  

Nine Months Ended September 30, 2020

North America

$ 1,518  

$ 2,530  

South America

$ 2,058  

$ 1,435  

$ 4,998  

We are a global provider of high-technology products to virtually every major vehicle manufacturer in the world.

14 unchanged sentences

Segment information —

Three Months Ended September 30,

Three Months Ended March 31,

External Sales

8 unchanged sentences

Eliminations and other

( 86 )  

( 67 )  

$ 2,204  

$ 1,994  

Nine Months Ended September 30,

Light Vehicle

$ 2,799  

$ 2,058  

Commercial Vehicle

Power Technologies

Eliminations and other

( 269 )  

( 170 )  

$ 6,672  

$ 4,998  

Reconciliation of segment EBITDA to consolidated net income 

Three Months Ended

Nine Months Ended

September 30,

Segment EBITDA

Corporate expense and other items, net

( 92 )  

( 88 )  

( 272 )  

( 18 )  

Non-service cost components of pension and OPEB costs

1 unchanged sentence

Stock compensation expense

( 15 )  

Strategic transaction expenses

( 11 )  

Amounts attributable to previously divested/closed operations

Loss on investment in Hyliion

( 20 )  

Impairment of goodwill

Loss on disposal group held for sale

Loss on de-designation of fixed-to-fixed cross currency swaps

Earnings before interest and income taxes

Loss on extinguishment of debt

( 24 )  

Interest income

Interest expense

Earnings (loss) before income taxes

Earnings before income taxes

Income tax expense

Equity in earnings of affiliates

Net income (loss)

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 — 

Equity method investments exceeding $5 at March 31, 2022 — 

Ownership Percentage

7 unchanged sentences

Investments in affiliates

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements