What changed in this filing

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Item 1. Financial Statements

2023-10-27 compared with 2023-07-28 · 169 added, 78 removed, 814 unchanged (23% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Costs and expenses

3 unchanged sentences

Restructuring charges, net

Impairment of goodwill

Other income (expense), net

Earnings before interest and income taxes

Earnings (loss) before interest and income taxes

Loss on extinguishment of debt

1 unchanged sentence

Interest expense

Earnings before income taxes

Earnings (loss) before income taxes

Income tax expense

Equity in earnings (loss) of affiliates

Net income (loss)

Noncontrolling interests net income

Redeemable noncontrolling interests net income (loss)

Net income attributable to the parent company

Net income per share available to common stockholders

Redeemable noncontrolling interests net loss

Net income (loss) attributable to the parent company

Net income (loss) per share available to common stockholders

Weighted-average common shares outstanding

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

Other comprehensive income (loss), net of tax:

2 unchanged sentences

Defined benefit plans

Other comprehensive income (loss)

Other comprehensive loss

Total comprehensive income (loss)

6 unchanged sentences

(In millions, except share and per share amounts)

September 30,

Current assets

45 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

September 30,

Operating activities

Net income (loss)

Amortization of deferred financing charges

4 unchanged sentences

Pension expense, net

Impairment of goodwill

Change in working capital

2 unchanged sentences

Purchases of property, plant and equipment

Proceeds from sale of property, plant and equipment

Acquisition of business, net of cash acquired

68 unchanged sentences

Dana's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices.

June 30, 2023 and December 31, 2022, we had $ 65  and $ 81 , respectively, of confirmed obligations presented as accounts payable within total current liabilities on the consolidated balance sheet. 

We also adopted the following standard during the first six  months of 2023, which did not have a material impact on our financial statements or financial statement disclosures:

September 30, 2023  and December 31, 2022 , we had $ 69  and $ 81 , respectively, of confirmed obligations presented as accounts payable within total current liabilities on the consolidated balance sheet. 

We also adopted the following standard during the first nine  months of 2023, which did not have a material impact on our financial statements or financial statement disclosures:

Effective Date

7 unchanged sentences

Currency impact

Balance, June 30, 2023

Balance, September 30, 2023

Components of other intangible assets — 

June 30, 2023

September 30, 2023

December 31, 2022

21 unchanged sentences

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

June 30, 2023 were as follows:

September 30, 2023 were as follows:

Light Vehicle —

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Charged to cost of sales

4 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.

During the third quarter of 2023, we recorded restructuring charges of $ 17 , primarily comprised of separation costs related to the rationalization of the global administrative and functional services that support our manufacturing and assembly facilities and technical centers. 

Accrued restructuring costs and activity —

Employee Termination Benefits

Balance, March 31, 2023

Balance, June 30, 2023

Charges to restructuring

Cash payments

Balance, June 30, 2023

Balance, September 30, 2023

Balance, December 31, 2022

1 unchanged sentence

Cash payments

Balance, June 30, 2023

At June 30, 2023 , the accrued employee termination benefits include costs to reduce less than approximately 100 employees to be completed over the next year.

Balance, September 30, 2023

At September 30, 2023 , the accrued employee termination benefits include costs to reduce approximately 500 employees to be completed over the next year.

Supplemental Balance Sheet and Cash Flow Information

Inventory components at —

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

Cash, cash equivalents and restricted cash at —

June 30, 2023

September 30, 2023

December 31, 2022

June 30, 2022

September 30, 2022

December 31, 2021

5 unchanged sentences

Common stock —

Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first and second  quarters of 2023.

Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first, second and third quarters of 2023.

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.

3 unchanged sentences

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 June 30, 2023 .

Approximately $ 102  remained available for future share repurchases as of September 30, 2023 .

Changes in equity —

21 unchanged sentences

Distributions to noncontrolling interests

Purchase of noncontrolling interests

Stock compensation

1 unchanged sentence

( 964 )  

Other comprehensive loss

( 43 )  

Common stock dividends and dividend equivalents

( 15 )  

Distributions to noncontrolling interests

Stock compensation

Balance, September 30, 2023

$ 2,249  

$ ( 8 )  

$ ( 1,007 )  

$ 1,647  

Additional Paid-In Capital

32 unchanged sentences

( 1,028 )  

Net income (loss)

( 88 )  

Other comprehensive loss

( 67 )  

Common stock dividends and dividend equivalents

( 14 )  

Distributions to noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

( 63 )  

Stock compensation

Balance, September 30, 2022

$ 2,440  

$ ( 216 )  

$ ( 1,095 )  

$ 1,671  

Changes in each component of accumulated other comprehensive income (loss) (AOCI) of the parent —

21 unchanged sentences

( 126 )  

Currency translation adjustments

( 21 )  

Holding gains and losses

Reclassification of amount to net income (a)

( 30 )  

Other comprehensive loss

( 21 )  

Balance, September 30, 2023

$ ( 898 )  

$ ( 127 )  

Parent Company Stockholders

20 unchanged sentences

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

Other comprehensive income

Other comprehensive income (loss)

( 83 )  

2 unchanged sentences

( 176 )  

Currency translation adjustments

( 69 )  

Holding gains and losses

Reclassification of amount to net income (a)

( 42 )  

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

Other comprehensive income (loss)

( 69 )  

Balance, September 30, 2022

$ ( 922 )  

$ ( 175 )  

(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.

9 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Balance, beginning of period

Capital contribution from redeemable noncontrolling interest

Capital contribution from redeemable noncontrolling interests

Adjustment to redemption value

Comprehensive income (loss) adjustments:

Net income (loss) attributable to redeemable noncontrolling interests

Net loss attributable to redeemable noncontrolling interests

( 79 )  

Other comprehensive loss attributable to redeemable noncontrolling interests

( 10 )  

Balance, end of period

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income available to common stockholders - Numerator basic and diluted

$ ( 88 )  

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 2 .0  million and 0.6  million CSEs from the calculation of diluted earnings per share for the second quarters of 

We excluded 0 .1  million and 0.4  million CSEs from the calculation of diluted earnings per share for the third quarters of 

2023 and 

2022  and excluded 0.3 million and 0.4 million of CSEs for the respective year-to-date periods as the effect of including them would have been anti-dilutive.

2022  and excluded 0.1  million and 0.2  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 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.

Stock Compensation

14 unchanged sentences

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

second quarters of 

third quarters of 

2023 and 

2022  and expense of $ 14 and $ 8 during the respective year-to-date periods.

At June 30, 2023 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 39 .

2022  and expense of $ 19  and $ 13  during the respective year-to-date periods.

At September 30, 2023 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 32 .

This cost is expected to be recognized over a weighted-average period of 1.9  years.

3 unchanged sentences

Components of net periodic benefit cost (credit) — 

Three Months Ended June 30,

Three Months Ended September 30,

Interest cost

Expected return on plan assets

Amortization of net actuarial loss

Amortization of net actuarial (gain) loss

Net periodic benefit cost (credit)

$ ( 1 )  

Six Months Ended June 30,

Nine Months Ended September 30,

Interest cost

2 unchanged sentences

( 21 )  

Amortization of net actuarial loss

Amortization of net actuarial (gain) loss

Net periodic benefit cost (credit)

6 unchanged sentences

Interest Rate

June 30, 2023

September 30, 2023

December 31, 2022

96 unchanged sentences

We pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable margin for SOFR 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.

June 30, 2023 , we had no  outstanding borrowings under the Revolving Facility but we had utilized $ 16  for letters of credit.

We had availability at June 30, 2023 under the Revolving Facility of $ 1,134  after deducting the outstanding letters of credit.

September 30, 2023 , we had no  outstanding borrowings under the Revolving Facility but we had utilized $ 9  for letters of credit.

We had availability at September 30, 2023 under the Revolving Facility of $ 1,141  after deducting the outstanding letters of credit.

Debt covenants —

At June 30, 2023 , we were in compliance with the covenants of our financing agreements.

At September 30, 2023 , 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.

6 unchanged sentences

Fair Value Level

June 30, 2023  

September 30, 2023  

December 31, 2022  

13 unchanged sentences

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

June 30, 2023

September 30, 2023

December 31, 2022

14 unchanged sentences

The impact of the interest rate differential between the inflow and outflow rates on fixed-to-fixed cross-currency swaps is recognized during each period as a component of interest expense for hedges of external debt and as a component of other income (expense), net for hedges of intercompany debt.

The following fixed-to-fixed cross-currency swaps were outstanding at June 30, 2023 :

The following fixed-to-fixed cross-currency swaps were outstanding at September 30, 2023 :

Underlying Financial Instrument

21 unchanged sentences

To the extent the swaps are no longer effective, changes in their fair values will be recorded in earnings.

The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $ 662 at June 30, 2023 and $ 608 at December 31,  

The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 975  at June 30, 2023 and $ 967 at December 31,  

The following currency derivatives were outstanding at June 30, 2023 :

The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $ 630 at September 30, 2023 and $ 608 at December 31,  

The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 961 at September 30, 2023 and $ 967 at December 31,  

The following currency derivatives were outstanding at September 30, 2023 :

Notional Amount (U.S.

3 unchanged sentences

Mexican peso, Thai baht

dollar, Australian dollar, 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

British pound

6 unchanged sentences

dollar, euro, Canadian dollar

Australian dollar

Total forward contracts

6 unchanged sentences

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.

Changes in the 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.

2 unchanged sentences

Deferred Gain (Loss) in AOCI

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Derivatives Designated as Cash Flow Hedges

11 unchanged sentences

( 11 )  

( 24 )  

Other income (expense), net

3 unchanged sentences

( 19 )  

( 38 )  

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.

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Derivatives Not Designated as Hedging Instruments

12 unchanged sentences

Product liabilities —

Accrued product liability costs were de minimis at June 30, 2023 and de minimis at December 31,  

Amounts recognized as recoverable from third parties were de minimis at June 30, 2023 and de minimis 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.

Accrued product liability costs were $ 1 at September 30, 2023 and de minimis at December 31,  

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 $ 6  at June 30, 2023 and $ 8  at December 31,  

Accrued environmental liabilities were $ 6  at September 30, 2023 and $ 8  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

Six Months Ended

Nine Months Ended

September 30,

Balance, beginning of period

13 unchanged sentences

Net interest expense for the periods presented herein is not significant.

We reported income tax expense of $ 55  and $ 18  for the second quarters of 2023  and 2022 and income tax expense of $ 85 and $ 36 for the respective year-to-date periods.

Our effective tax rates were 57 % and 55 % for the first six months of 2023  and 2022.

 During the second quarter of 2023, we recorded tax expense of $ 19 for income tax reserves associated with prior tax years in foreign jurisdictions. 

Excluding this item, the effective tax rate would have been 44 % for the 2023 six -month period. 

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

We reported income tax expense of $ 33  and $ 31  for the third  quarters of 2023  and 2022 and income tax expense of $ 118  and $ 67  for the respective year-to-date periods.

Our effective tax rates were 58 % and ( 103 )% for the first nine  months of 2023  and 2022.

 During the second quarter of 2023, we recorded tax expense of $ 19 for income tax reserves associated with prior tax years in foreign jurisdictions.

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 outside the U.S., different statutory tax rates outside the U.S.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Non-service cost components of pension and OPEB costs

1 unchanged sentence

$ ( 10 )  

$ ( 6 )  

Government assistance

19 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 $ 6  and $ 7  recorded in other current assets and $ 36  and $ 28  recorded in other noncurrent assets at June 30, 2023  and December 31, 2022 .

We had $ 5  and $ 7  recorded in other current assets and $ 35  and $ 28  recorded in other noncurrent assets at September 30, 2023  and December 31, 2022 .

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 $ 48  and $ 48  at June 30, 2023 and December 31,  

Contract liabilities were $ 47  and $ 48  at September 30, 2023 and December 31,  

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

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Light Vehicle

11 unchanged sentences

$ 1,583  

$ 1,475  

North America

29 unchanged sentences

Segment information —

Three Months Ended June 30,

Three Months Ended September 30,

External Sales

14 unchanged sentences

$ 2,535  

Six Months Ended June 30,

Nine Months Ended September 30,

Light Vehicle

10 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Segment EBITDA

5 unchanged sentences

Non-service cost components of pension and OPEB costs

( 10 )  

Restructuring charges, net

( 17 )  

( 21 )  

Stock compensation expense

3 unchanged sentences

( 14 )  

Earnings before interest and income taxes

( 26 )  

Impairment of goodwill

( 191 )  

Earnings (loss) before interest and income taxes

( 101 )  

Loss on extinguishment of debt

1 unchanged sentence

Interest expense

Earnings before income taxes

Earnings (loss) before income taxes

( 131 )  

Income tax expense

Equity in earnings (loss) of affiliates

Net income (loss)

$ ( 163 )  

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 June 30, 2023 — 

Equity method investments at September 30, 2023 — 

Ownership Percentage

8 unchanged sentences

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