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,       2022     2021     2022     2021   Net sales   $ 2,535     $ 2,204     $ 7,601     $ 6,672   Costs and expenses                                 Cost of sales     2,332       1,998       7,018       5,963   Selling, general and administrative expenses     114       103       374       348   Amortization of intangibles     3       4       10       11   Restructuring charges, net     ( 1 )     1       ( 1 )     2   Impairment of goodwill     ( 191 )             ( 191 )         Other income (expense), net     3       ( 4 )     15       ( 33 ) Earnings (loss) before interest and income taxes     ( 101 )     94       24       315   Loss on extinguishment of debt                             ( 24 ) Interest income     2       2       6       6   Interest expense     32       31       95       99   Earnings (loss) before income taxes     ( 131 )     65       ( 65 )     198   Income tax expense     31       20       67       56   Equity in earnings (loss) of affiliates     ( 1 )     5       ( 1 )     29   Net income (loss)     ( 163 )     50       ( 133 )     171   Less: Noncontrolling interests net income     4       4       11       9   Less: Redeemable noncontrolling interests net loss     ( 79 )     ( 2 )     ( 81 )     ( 10 ) Net income (loss) attributable to the parent company   $ ( 88 )   $ 48     $ ( 63 )   $ 172                                     Net income (loss) per share available to common stockholders                                 Basic   $ ( 0.61 )   $ 0.33     $ ( 0.44 )   $ 1.19   Diluted   $ ( 0.61 )   $ 0.33     $ ( 0.44 )   $ 1.17                                     Weighted-average common shares outstanding                                 Basic     143.4       144.8       143.6       145.0   Diluted     143.4       146.2       143.6       146.4     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,       2022     2021     2022     2021   Net income (loss)   $ ( 163 )   $ 50     $ ( 133 )   $ 171   Other comprehensive income (loss), net of tax:                                 Currency translation adjustments     ( 82 )     ( 25 )     ( 134 )     ( 11 ) Hedging gains and losses     1       ( 9 )     ( 2 )     ( 10 ) Defined benefit plans     1       4       5       11   Other comprehensive loss     ( 80 )     ( 30 )     ( 131 )     ( 10 ) Total comprehensive income (loss)     ( 243 )     20       ( 264 )     161   Less: Comprehensive (income) loss attributable to noncontrolling interests     ( 1 )     ( 4 )     ( 6 )     2   Less: Comprehensive loss attributable to redeemable noncontrolling interests     89       4       97         Comprehensive income (loss) attributable to the parent company   $ ( 155 )   $ 20     $ ( 173 )   $ 163     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,       2022     2021   Assets                 Current assets                 Cash and cash equivalents   $ 371     $ 268   Marketable securities     13       17   Accounts receivable                 Trade, less allowance for doubtful accounts of $ 11 in 2022 and $ 7 in 2021     1,507       1,321   Other     252       220   Inventories     1,603       1,564   Other current assets     208       196   Total current assets     3,954       3,586   Goodwill     246       482   Intangibles     200       233   Deferred tax assets     613       580   Other noncurrent assets     181       131   Investments in affiliates     128       174   Operating lease assets     262       247   Property, plant and equipment, net     2,078       2,199   Total assets   $ 7,662     $ 7,632                     Liabilities and equity                 Current liabilities                 Short-term debt   $ 230     $ 23   Current portion of long-term debt     7       8   Accounts payable     1,839       1,571   Accrued payroll and employee benefits     209       184   Taxes on income     67       41   Current portion of operating lease liabilities     37       43   Other accrued liabilities     269       304   Total current liabilities     2,658       2,174   Long-term debt, less debt issuance costs of $ 22 in 2022 and $ 26 in 2021     2,314       2,386   Noncurrent operating lease liabilities     229       209   Pension and postretirement obligations     350       398   Other noncurrent liabilities     244       292   Total liabilities     5,795       5,459   Commitments and contingencies (Note 14)                     Redeemable noncontrolling interests     196       198   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, 143,353,224 and 144,238,660 shares outstanding     2       2   Additional paid-in capital     2,440       2,427   Retained earnings     491       662   Treasury stock, at cost ( 13,469,842 and 11,661,591 shares)     ( 216 )     ( 184 ) Accumulated other comprehensive loss     ( 1,095 )     ( 985 ) Total parent company stockholders' equity     1,622       1,922   Noncontrolling interests     49       53   Total equity     1,671       1,975   Total liabilities, redeemable noncontrolling interests and equity   $ 7,662     $ 7,632     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,       2022     2021   Operating activities                 Net income (loss)   $ ( 133 )   $ 171   Depreciation     270       272   Amortization     17       18   Amortization of deferred financing charges     4       5   Redemption premium on debt             21   Write-off of deferred financing costs             3   Earnings of affiliates, net of dividends received     29       ( 11 ) Stock compensation expense     13       15   Deferred income taxes     ( 56 )     8   Impairment of goodwill     191           Change in working capital     ( 21 )     ( 501 ) Other, net     ( 7 )     18   Net cash provided by operating activities     307       19   Investing activities                 Purchases of property, plant and equipment     ( 300 )     ( 228 ) Acquisition of businesses, net of cash acquired     ( 1 )     ( 18 ) Investments in affiliates             ( 23 ) Proceeds from sale of subsidiary, net of cash disposed             ( 4 ) Purchases of marketable securities     ( 15 )     ( 25 ) Proceeds from sales of marketable securities             30   Proceeds from maturities of marketable securities     18       27   Settlement of terminated fixed-to-fixed cross currency swap             ( 22 ) Settlements of undesignated derivatives     ( 6 )     ( 2 ) Other, net     7       5   Net cash used in investing activities     ( 297 )     ( 260 ) Financing activities                 Net change in short-term debt     212       43   Proceeds from long-term debt     2       802   Repayment of long-term debt     ( 19 )     ( 805 ) Redemption premium on debt             ( 21 ) Deferred financing payments             ( 13 ) Dividends paid to common stockholders     ( 43 )     ( 44 ) Repurchases of common stock     ( 25 )     ( 23 ) Distributions to noncontrolling interests     ( 8 )     ( 10 ) Contributions from redeemable noncontrolling interests     30       6   Deconsolidation of non-wholly owned subsidiary             ( 6 ) Payments to acquire noncontrolling interests     ( 4 )         Other, net     ( 7 )         Net cash provided by (used in) financing activities     138       ( 71 ) Net increase (decrease) in cash, cash equivalents and restricted cash     148       ( 312 ) Cash, cash equivalents and restricted cash – beginning of period     287       567   Effect of exchange rate changes on cash balances     ( 45 )     ( 16 ) Cash, cash equivalents and restricted cash – end of period (Note 5)   $ 390     $ 239                     Non-cash investing activity                 Purchases of property, plant and equipment held in accounts payable   $ 65     $ 75     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,   2021 (the  2021 Form 10 -K). Certain prior year amounts have been reclassified to conform to the current presentation.   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 was  not material to the financial statements for the quarter ended March 31, 2022 or any prior periods.     Recently issued accounting pronouncements   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.    In September 2022, the FASB issued ASU  2022 - 04,   Supplier Finance Programs . This guidance enhances the transparency of supplier finance programs which includes disclosing information about the key terms of the program, outstanding confirmed amounts as of the end of the period, a rollforward of such amounts during each annual period, and a description of where in the financial statements outstanding amounts are presented. The guidance becomes effective January 1, 2023. We are currently assessing the impact of the guidance on our consolidated financial statements.   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 provided 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.     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 frequently if events or circumstances warrant such a review. We estimate the fair value of the reporting units using discounted cash flow projections. In determining the fair value of the reporting units, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected segment EBITDA, discount rates, and terminal growth rates. If the estimated fair value of the reporting unit exceeds its carrying value, the goodwill is considered  not to be impaired. If the carrying value of the reporting unit exceeds its estimated fair value, a goodwill impairment charge is recorded for the difference, with the impairment loss limited to the total amount of goodwill allocated to that reporting unit.   8 Table of Contents   We evaluated macro-economic conditions during the third quarter of 2022, including the impact of the Federal Reserve further increasing the risk-free interest rate, as well as the negative impact of sustained higher commodity costs, non-material cost increases and operational inefficiencies attributable to continued global supply chain disruptions. We believe that these conditions were factors in our market capitalization falling below the book value of net assets as of September 30, 2022. Accordingly, we concluded a triggering event had occurred and performed interim goodwill impairment analyses for our Commercial Vehicle and Off-Highway reporting units.   Based on the results of our interim impairment analyses, we concluded that the carrying value exceeded fair value of our Commercial Vehicle reporting unit and we recorded a goodwill impairment charge of $ 191 , representing a full impairment of goodwill assigned to the Commercial Vehicle reporting unit. Our analysis for the Off-Highway reporting unit indicated that the fair value continues to exceed the carrying value by a substantial amount and, accordingly,  no  impairment charge was required. There was no impairment of indefinite-lived intangible assets in any of the periods presented.    The remaining change in the carrying amount of goodwill in 2022 was due to currency fluctuation.   Changes in the carrying amount of goodwill by segment  —        Light Vehicle     Commercial Vehicle     Off-Highway     Power Technologies     Total   Balance, December 31, 2021   $ —     $ 201     $ 281     $ —     $ 482   Impairment             ( 191 )                     ( 191 ) Currency impact             ( 10 )     ( 35 )             ( 45 ) Balance, September 30, 2022   $ —     $ —     $ 246     $ —     $ 246     Components of other intangible assets —              September 30, 2022     December 31, 2021       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     $ 152     $ ( 111 )   $ 41     $ 161     $ ( 110 )   $ 51   Trademarks and trade names   13       28       ( 12 )     16       31       ( 12 )     19   Customer relationships   8       489       ( 415 )     74       519       ( 431 )     88   Non-amortizable intangible assets                                                       Trademarks and trade names           69               69       75               75             $ 738     $ ( 538 )   $ 200     $ 786     $ ( 553 )   $ 233     The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at  September 30, 2022 were as follows: Light Vehicle — $ 17 , Commercial Vehicle — $ 67 , Off-Highway — $ 111  and Power Technologies — $ 5 .   Amortization expense related to amortizable intangible assets —        Three Months Ended     Nine Months Ended       September 30,     September 30,       2022     2021     2022     2021   Charged to cost of sales   $ 3     $ 2     $ 7     $ 7   Charged to amortization of intangibles     3       4       10       11   Total amortization   $ 6     $ 6     $ 17     $ 18     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, 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.       Remainder of 2022     2023     2024     2025     2026   Amortization expense   $ 5     $ 22     $ 20     $ 19     $ 17     9 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.   Accrued restructuring costs and activity —       Employee Termination Benefits     Exit Costs     Total   Balance, June 30, 2022   $ 7     $ —     $ 7   Charges to restructuring           1       1   Adjustments of accruals     ( 2 )             ( 2 ) Cash payments             ( 1 )     ( 1 ) Currency impact     ( 1 )             ( 1 ) Balance, September 30, 2022   $ 4     $ —     $ 4                             Balance, December 31, 2021   $ 11     $ —     $ 11   Charges to restructuring     2       1       3   Adjustments of accruals     ( 4 )             ( 4 ) Cash payments     ( 4 )     ( 1 )     ( 5 ) Currency impact     ( 1 )             ( 1 ) Balance, September 30, 2022   $ 4     $ —     $ 4     At September 30, 2022 , the accrued employee termination benefits include costs to reduce approximately 100 employees to be completed over the next year.     Note 5. Supplemental Balance Sheet and Cash Flow Information   Inventory components at —       September 30, 2022     December 31, 2021   Raw materials   $ 674     $ 651   Work in process and finished goods     1,030       1,000   Inventory reserves     ( 101 )     ( 87 ) Total   $ 1,603     $ 1,564     Cash, cash equivalents and restricted cash at —       September 30, 2022     December 31, 2021     September 30, 2021     December 31, 2020   Cash and cash equivalents   $ 371     $ 268     $ 220     $ 559   Restricted cash included in other current assets     9       9       8       5   Restricted cash included in other noncurrent assets     10       10       11       3   Total cash, cash equivalents and restricted cash   $ 390     $ 287     $ 239     $ 567       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 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.   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 $ 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 September 30, 2022 .   10 Table of Contents   Changes in equity —   2022   Common Stock     Additional Paid-In Capital     Retained Earnings     Treasury Stock     Accumulated Other Comprehensive Loss     Non-controlling Interests     Total Equity   Balance, December 31, 2021   $ 2     $ 2,427     $ 662     $ ( 184 )   $ ( 985 )   $ 53     $ 1,975   Net income                     17                       4       21   Other comprehensive income                                     36               36   Common stock dividends and dividend equivalents                     ( 14 )                             ( 14 ) Common stock share repurchases                             ( 25 )                     ( 25 ) Distributions to noncontrolling interests                                             ( 1 )     ( 1 ) Purchase of noncontrolling interests                                             ( 1 )     ( 1 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 1 )                             ( 1 ) Stock compensation             4                                       4   Stock withheld for employees taxes                             ( 7 )                     ( 7 ) Balance, March 31, 2022     2       2,431       664       ( 216 )     ( 949 )     55       1,987   Net income                     8                       3       11   Other comprehensive loss                                     ( 79 )     ( 2 )     ( 81 ) Common stock dividends and dividend equivalents                     ( 15 )                             ( 15 ) Distributions to noncontrolling interests                                             ( 1 )     ( 1 ) Purchase of noncontrolling interests                                             ( 1 )     ( 1 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 1 )                             ( 1 ) Stock compensation             4                                       4   Balance, June 30, 2022     2       2,435       656       ( 216 )     ( 1,028 )     54       1,903   Net income (loss)                     ( 88 )                     4       ( 84 ) Other comprehensive loss                                     ( 67 )     ( 3 )     ( 70 ) Common stock dividends and dividend equivalents                     ( 14 )                             ( 14 ) Distributions to noncontrolling interests                                             ( 6 )     ( 6 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 63 )                             ( 63 ) Stock compensation             5                                       5   Balance, September 30, 2022   $ 2     $ 2,440     $ 491     $ ( 216 )   $ ( 1,095 )   $ 49     $ 1,671     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                     71                       1       72   Other comprehensive loss                                     ( 18 )     ( 2 )     ( 20 ) Common stock dividends and dividend equivalents                     ( 14 )                             ( 14 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 4 )                             ( 4 ) Stock compensation             7                                       7   Stock withheld for employees taxes                             ( 5 )                     ( 5 ) Balance, March 31, 2021     2       2,415       583       ( 161 )     ( 1,044 )     75       1,870   Net income                     53                       4       57   Other comprehensive income (loss)                                     37       ( 9 )     28   Common stock dividends and dividend equivalents                     ( 15 )                             ( 15 ) Distributions to noncontrolling interests                                             ( 2 )     ( 2 ) Sale of noncontrolling interests                                             ( 1 )     ( 1 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 4 )                             ( 4 ) Other                                             1       1   Stock compensation             5                                       5   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 and dividend equivalents                     ( 15 )                             ( 15 ) Common stock share repurchases                             ( 23 )                     ( 23 ) Distributions to noncontrolling interests                                             ( 8 )     ( 8 ) Redeemable noncontrolling interests adjustment to redemption value                     ( 2 )                             ( 2 ) Deconsolidation of non-wholly owned subsidiary                                             ( 8 )     ( 8 ) Stock compensation             5                                       5   Balance, September 30, 2021   $ 2     $ 2,425     $ 648     $ ( 184 )   $ ( 1,035 )   $ 56     $ 1,912     11 Table of Contents   Changes in each component of accumulated other comprehensive income (loss) (AOCI) of the parent —       Parent Company Stockholders   2022   Foreign Currency Translation     Hedging     Defined Benefit Plans     Accumulated Other Comprehensive Loss   Balance, December 31, 2021   $ ( 809 )   $ 4     $ ( 180 )   $ ( 985 ) Currency translation adjustments     39                       39   Holding gains and losses             19               19   Reclassification of amount to net income (a)             ( 22 )             ( 22 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     2       2   Tax expense             ( 1 )     ( 1 )     ( 2 ) Other comprehensive income (loss)     39       ( 4 )     1       36   Balance, March 31, 2022     ( 770 )     —       ( 179 )     ( 949 ) Currency translation adjustments     ( 83 )                     ( 83 ) Holding gains and losses             42               42   Reclassification of amount to net income (a)             ( 39 )             ( 39 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     4       4   Tax expense             ( 2 )     ( 1 )     ( 3 ) Other comprehensive income (loss)     ( 83 )     1       3       ( 79 ) Balance, June 30, 2022     ( 853 )     1       ( 176 )     ( 1,028 ) Currency translation adjustments     ( 69 )                     ( 69 ) Holding gains and losses             44               44   Reclassification of amount to net income (a)             ( 42 )             ( 42 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     2       2   Tax expense             ( 1 )     ( 1 )     ( 2 ) Other comprehensive income (loss)     ( 69 )     1       1       ( 67 ) Balance, September 30, 2022   $ ( 922 )   $ 2     $ ( 175 )   $ ( 1,095 )       Parent Company Stockholders   2021   Foreign Currency Translation     Hedging     Defined Benefit Plans     Accumulated Other Comprehensive Loss   Balance, December 31, 2020   $ ( 802 )   $ 9     $ ( 233 )   $ ( 1,026 ) Currency translation adjustments     ( 4 )                     ( 4 ) Holding gains and losses             32               32   Reclassification of amount to net income (a)             (50 )             (50 ) Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     4       4   Tax (expense) benefit             1       ( 1 )     —   Other comprehensive income (loss)     ( 4 )     ( 17 )     3       ( 18 ) Balance, March 31, 2021     ( 806 )     ( 8 )     ( 230 )     ( 1,044 ) Currency translation adjustments     17                       17   Holding gains and losses             ( 4 )             ( 4 ) Reclassification of amount to net income (a)             23               23   Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)                     5       5   Tax expense             ( 3 )     ( 1 )     ( 4 ) Other comprehensive income     17       16       4       37   Balance, June 30, 2021     ( 789 )     8       ( 226 )     ( 1,007 ) 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 )     (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.   12 Table of Contents     Note 7. Redeemable Noncontrolling Interests   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 value. 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 and terminal growth rates.    Reconciliation of changes in redeemable noncontrolling interests —       Three Months Ended     Nine Months Ended       September 30,     September 30,       2022     2021     2022     2021   Balance, beginning of period   $ 199     $ 194     $ 198     $ 180   Capital contribution from redeemable noncontrolling interest     23       3       30       6   Adjustment to redemption value     63       2       65       10   Other                             ( 1 ) Comprehensive income (loss) adjustments:                                 Net loss attributable to redeemable noncontrolling interests     ( 79 )     ( 2 )     ( 81 )     ( 10 ) Other comprehensive income (loss) attributable to redeemable noncontrolling interests     ( 10 )     ( 2 )     ( 16 )     10   Balance, end of period   $ 196     $ 195     $ 196     $ 195       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,       2022     2021     2022     2021   Net income (loss) available to common stockholders - Numerator basic and diluted   $ ( 88 )   $ 48     $ ( 63 )   $ 172                                     Denominator:                                 Weighted-average common shares outstanding - Basic     143.4       144.8       143.6       145.0   Employee compensation-related shares, including stock options     —       1.4       —       1.4   Weighted-average common shares outstanding - Diluted     143.4       146.2       143.6       146.4     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 0.4  million and 0.6  million CSEs from the calculation of diluted earnings per share for the third quarters of  2022 and  2021  and excluded 0.2 million and 0.8  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 and 0.7 million for the third quarter and year-to-date periods of 2022 because the net loss position made these anti-dilutive.   13 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 2022 .        Granted     Grant Date       (In millions)     Fair Value*   RSUs     0.9     $ 22.23   PSUs     0.3     $ 24.69   * 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 1.78 % was based on U.S. Treasury constant maturity rates at the grant date. 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 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 $ 5  and $ 6  during the  third quarters of  2022 and  2021  and expense of $ 13  and $ 15  during the respective year-to-date periods. At September 30, 2022 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 26 . This cost is expected to be recognized over a weighted-average period of 1.8  years.     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       2022     2021     2022     2021   Three Months Ended September 30,   U.S.     Non-U.S.     U.S.     Non-U.S.     Non-U.S.     Non-U.S.   Interest cost   $ 4     $ 2     $ 3     $ 1     $ —     $ 1   Expected return on plan assets     ( 7 )     ( 1 )     ( 7 )     ( 1 )                 Service cost             2               3                   Amortization of net actuarial loss     2       1       3       2       ( 1 )         Net periodic benefit cost (credit)   $ ( 1 )   $ 4     $ ( 1 )   $ 5     $ ( 1 )   $ 1                                                     Nine Months Ended September 30,                                                 Interest cost   $ 12     $ 5     $ 10     $ 3     $ 1     $ 2   Expected return on plan assets     ( 21 )     ( 2 )     ( 20 )     ( 2 )                 Service cost             6               7                   Amortization of net actuarial loss     6       4       7       7       ( 2 )         Net periodic benefit cost (credit)   $ ( 3 )   $ 13     $ ( 3 )   $ 15     $ ( 1 )   $ 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.   14 Table of Contents     Note   11.    Marketable Securities       September 30, 2022     December 31, 2021               Unrealized     Fair             Unrealized     Fair       Cost     Gains (Losses)     Value     Cost     Gains (Losses)     Value   Certificates of deposit - Current marketable securities   $ 13     $ —     $ 13     $ 17     $ —     $ 17     Certificates of deposit maturing in  one  year or less total $ 13  at  September 30, 2022 .       Note 12. Financing Agreements   Long-term debt at —     Interest Rate     September 30, 2022     December 31, 2021   Senior Notes due April 15, 2025 5.750 % *   $ 400     $ 400   Senior Notes due November 15, 2027 5.375 %       400       400   Senior Notes due June 15, 2028 5.625 %       400       400   Senior Euro Notes due July 15, 2029 3.000 %       319       370   Senior Notes due September 1, 2030 4.250 %       400       400   Senior Notes due February 15, 2032 4.500 %       350       350   Other indebtedness         74       100   Debt issuance costs         ( 22 )     ( 26 )           2,321       2,394   Less: Current portion of long-term debt         7       8   Long-term debt, less debt issuance costs       $ 2,314     $ 2,386     * 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 %. On April 25, 2022, we settled existing fixed-to-fixed cross-currency swaps on $ 100 of the April 2025 Notes. 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 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.   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.   15 Table of Contents   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:       Redemption Price       April     November     June     July     September     February   Year   2025 Notes     2027 Notes     2028 Notes     2029 Notes     2030 Notes     2032 Notes   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 %     102.250 % 2028                             100.000 %     100.708 %     101.500 % 2029                                     100.000 %     100.750 % 2030                                             100.000 % 2031                                             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. 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.   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 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 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” 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.   Credit agreement — 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 Revolving Facility. 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.   16 Table of Contents   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 %   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, 2022 , we had $ 195  of outstanding borrowings under the Revolving Facility and had utilized $ 21 for letters of credit. We had availability at September 30, 2022 under the Revolving Facility of $ 934  after deducting outstanding borrowings and the letters of credit.   Debt covenants — At September 30, 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.     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, 2022     December 31, 2021   Certificates of deposit   Marketable securities   2     $ 13     $ 17   Currency forward contracts                           Cash flow hedges   Accounts receivable - Other   2       5       7   Cash flow hedges   Other accrued liabilities   2       2       1   Undesignated   Accounts receivable - Other   2       14       2   Undesignated   Other accrued liabilities   2       4           Currency swaps                           Cash flow hedges   Other noncurrent assets   2       60           Cash flow hedges   Other noncurrent liabilities   2               34   Undesignated   Other noncurrent liabilities   2       12       17     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, 2022     December 31, 2021       Fair Value Level   Carrying Value     Fair Value     Carrying Value     Fair Value   Long-term debt     2     $ 2,276     $ 1,835     $ 2,338     $ 2,412     17 Table of Contents   Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory, 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.   The following fixed-to-fixed cross-currency swaps were outstanding at September 30, 2022 :   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 %   $ 300     € 278       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 $ 505 at September 30, 2022 and $ 449 at December 31,   2021 . The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 926 at September 30, 2022 and $ 1,096 at December 31,   2021 .   The following currency derivatives were outstanding at September 30, 2022 :           Notional Amount (U.S. Dollar Equivalent)       Functional Currency   Traded Currency   Designated     Undesignated     Total     Maturity U.S. dollar   Mexican peso   $ 136     $ —     $ 136     Sep-2023 Euro   U.S. dollar, Australian dollar, Brazilian real, Canadian dollar, Swiss franc, Chinese renminbi, British pound, Hungarian forint, Indian rupee, Japanese yen, Mexican peso, Norwegian krone, New Zealand dollar, Swedish krona, South African rand     67       108       175     Jan-2024 British pound   U.S. dollar, euro             1       1     Oct-2022 South African rand   U.S. dollar, euro, Thai baht             10       10     Nov-2022 Brazilian real   U.S. dollar, euro     60       12       72     Jul-2023 Indian rupee   U.S. dollar, euro, British pound             102       102     Sep-2023 Chinese renminbi   U.S. dollar, Canadian dollar             8       8     Oct-2022 Australian dollar   U.S. dollar, euro             1       1     Oct-2022 Total forward contracts         263       242       505                                         U.S. dollar   euro     272       166       438     Nov-2027 Euro   U.S. dollar     300       188       488     Jun-2026 Total currency swaps         572       354       926       Total currency derivatives       $ 835     $ 596     $ 1,431         18 Table of Contents   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.   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, 2022     December 31, 2021     Gain (loss) expected to be reclassified into income in one year or less   Forward Contracts   $ 3     $ ( 1 )   $ 3   Cross-Currency Swaps     1       2           Total   $ 4     $ 1     $ 3     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     Nine Months Ended       September 30,     September 30,   Derivatives Designated as Cash Flow Hedges   2022     2021     2022     2021   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                                 Net sales   $ 2,535     $ 2,204     $ 7,601     $ 6,672   Cost of sales     2,332       1,998       7,018       5,963   Other income (expense), net     3       ( 4 )     15       ( 33 ) (Gain) or loss on cash flow hedging relationships                                 Foreign currency forwards                                 Amount of (gain) loss reclassified from AOCI into income                                 Cost of sales     ( 2 )     ( 3 )     ( 4 )     ( 8 ) Other income (expense), net     ( 2 )     ( 1 )     ( 6 )     ( 3 ) Cross-currency swaps                                 Amount of (gain) loss reclassified from AOCI into income                                 Other income (expense), net     ( 38 )     ( 21 )     ( 93 )     ( 40 )   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.   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.       Three Months Ended     Nine Months Ended       September 30,     September 30,   Derivatives Not Designated as Hedging Instruments   2022     2021     2022     2021   Gain or (loss) recognized in income                                 Foreign currency forward contracts                                 Cost of sales   $ —     $ 1     $ 1     $ 1   Other income (expense), net   $ ( 1 )   $ 2     $ ( 10 )   $ ( 14 )   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.   19 Table of Contents     Note 14. Commitments and Contingencies   Product liabilities — Accrued product liability costs were $ 1  at September 30, 2022 and $ 2  at December 31,   2021 . We had also recognized amounts recoverable from third parties of $ 17  at September 30, 2022 and $ 13  at December 31,   2021 . 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 $ 8  at September 30, 2022 and $ 10  at December 31,   2021 . 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.     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,       2022     2021     2022     2021   Balance, beginning of period   $ 100     $ 95     $ 107     $ 98   Amounts accrued for current period sales     11       9       31       28   Adjustments of prior estimates             ( 2 )     ( 4 )         Settlements of warranty claims     ( 13 )     ( 7 )     ( 33 )     ( 20 ) Divestitures                             ( 10 ) Currency impact     ( 3 )             ( 6 )     ( 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 $ 200  related to U.S. federal credits and attributes will be recorded 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 income tax expense of $ 31 and $ 20 for the third quarters of 2022 and 2021 and income tax expense of $ 67 and $ 56 for the respective year-to-date periods. Our effective tax rates were ( 103 )% and 28 % for the first nine months of 2022 and 2021. During the third quarter of 2022, we recorded a pre-tax goodwill impairment charge of $ 191 with an associated income tax benefit of $ 2 . In addition, we recorded a tax benefit of $ 32 for U.S. tax credits generated. Also, during the third quarter of 2022, we recorded tax expense of $ 31 for valuation allowances related to U.S. states driven by differences between our federal and state tax profile. 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, 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.   20 Table of Contents     Note 17. Other Income (Expense), Net         Three Months Ended     Nine Months Ended       September 30,     September 30,       2022     2021     2022     2021   Non-service cost components of pension and OPEB costs   $ —     $ ( 2 )   $ ( 3 )   $ ( 7 ) Foreign exchange gain             1       4       2   Strategic transaction expenses     ( 1 )     ( 3 )     ( 6 )     ( 11 ) 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     4       6       20       19   Other income (expense), net   $ 3     $ ( 4 )   $ 15     $ ( 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, and other strategic initiatives. 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.   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.   In conjunction with our acquisition of Oerlikon Drive Systems, 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.   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.     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 $ 9 and $ 8  recorded in other current assets and $ 30  and $ 38 recorded in other noncurrent assets at September 30, 2022  and December 31, 2021 .   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.   21 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 $ 34 at September 30, 2022 and December 31,   2021 . 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     Nine Months Ended       September 30,     September 30,       2022     2021     2022     2021   Light Vehicle                                 North America   $ 756     $ 667     $ 2,245     $ 1,999   Europe     95       83       292       324   South America     64       47       158       122   Asia Pacific     132       121       365       354   Total   $ 1,047     $ 918     $ 3,060     $ 2,799                                     Commercial Vehicle                                 North America   $ 248     $ 181     $ 729     $ 564   Europe     62       59       203       192   South America     143       116       391       286   Asia Pacific     52       40       152       90   Total   $ 505     $ 396     $ 1,475     $ 1,132                                     Off-Highway                                 North America   $ 90     $ 80     $ 268     $ 218   Europe     435       391       1,452       1,248   South America     4       4       13       10   Asia Pacific     165       152       473       455   Total   $ 694     $ 627     $ 2,206     $ 1,931                                     Power Technologies                                 North America   $ 156     $ 122     $ 447     $ 376   Europe     106       118       339       372   South America     8       7       22       16   Asia Pacific     19       16       52       46   Total   $ 289     $ 263     $ 860     $ 810                                     Total                                 North America   $ 1,250     $ 1,050     $ 3,689     $ 3,157   Europe     698       651       2,286       2,136   South America     219       174       584       434   Asia Pacific     368       329       1,042       945   Total   $ 2,535     $ 2,204     $ 7,601     $ 6,672       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.   22 Table of Contents   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.   Segment information —       2022     2021   Three Months Ended September 30,   External Sales     Inter-Segment Sales     Segment EBITDA     External Sales     Inter-Segment Sales     Segment EBITDA   Light Vehicle   $ 1,047     $ 38     $ 60     $ 918     $ 39     $ 54   Commercial Vehicle     505       26       18       396       25       20   Off-Highway     694       12       91       627       16       100   Power Technologies     289       8       21       263       6       38   Eliminations and other             ( 84 )                     ( 86 )         Total   $ 2,535     $ —     $ 190     $ 2,204     $ —     $ 212                                                     Nine Months Ended September 30,                                                 Light Vehicle   $ 3,060     $ 126     $ 124     $ 2,799     $ 126     $ 241   Commercial Vehicle     1,475       84       38       1,132       73       53   Off-Highway     2,206       49       291       1,931       52       276   Power Technologies     860       21       71       810       18       111   Eliminations and other             ( 280 )                     ( 269 )         Total   $ 7,601     $ —     $ 524     $ 6,672     $ —     $ 681     Reconciliation of segment EBITDA to consolidated net income  —       Three Months Ended     Nine Months Ended       September 30,     September 30,       2022     2021     2022     2021   Segment EBITDA   $ 190     $ 212     $ 524     $ 681   Corporate expense and other items, net     2       ( 2 )             ( 4 ) Depreciation     ( 88 )     ( 92 )     ( 270 )     ( 272 ) Amortization     ( 6 )     ( 6 )     ( 17 )     ( 18 ) Non-service cost components of pension and OPEB costs             ( 2 )     ( 3 )     ( 7 ) Restructuring charges, net     1       ( 1 )     1       ( 2 ) Stock compensation expense     ( 5 )     ( 6 )     ( 13 )     ( 15 ) Strategic transaction expenses     ( 1 )     ( 3 )     ( 6 )     ( 11 ) Loss on investment in Hyliion             ( 6 )             ( 20 ) Impairment of goodwill     ( 191 )             ( 191 )         Loss on disposal group held for sale                             ( 7 ) Loss on de-designation of fixed-to-fixed cross currency swaps                             ( 9 ) Other items     ( 3 )             ( 1 )     ( 1 ) Earnings (loss) before interest and income taxes     ( 101 )     94       24       315   Loss on extinguishment of debt                             ( 24 ) Interest income     2       2       6       6   Interest expense     32       31       95       99   Earnings (loss) before income taxes     ( 131 )     65       ( 65 )     198   Income tax expense     31       20       67       56   Equity in earnings (loss) of affiliates     ( 1 )     5       ( 1 )     29   Net income (loss)   $ ( 163 )   $ 50     $ ( 133 )   $ 171     23 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 at September 30, 2022 —        Ownership Percentage   Investment   Dongfeng Dana Axle Co., Ltd.   50 %   $ 65   ROC-Spicer, Ltd.   50 %     19   Axles India Limited   48 %     10   Tai Ya Investment (HK) Co., Limited   50 %     4   All others as a group         6   Investments in equity affiliates         104   Investments in affiliates carried at cost         24   Investments in affiliates       $ 128     24 Table of Contents