What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-30 compared with 2023-10-27 · 288 added, 519 removed, 464 unchanged (63% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Costs and expenses

3 unchanged sentences

Restructuring charges, net

Impairment of goodwill

Loss on disposal group held for sale

Other income (expense), net

Earnings (loss) before interest and income taxes

Loss on extinguishment of debt

Earnings before interest and income taxes

Interest income

Interest expense

Earnings (loss) before income taxes

Earnings before income taxes

Income tax expense

Equity in earnings (loss) of affiliates

Net income (loss)

Equity in earnings of affiliates

Noncontrolling interests net income

Redeemable noncontrolling interests net loss

Net income (loss) attributable to the parent company

Net income (loss) per share available to common stockholders

Net income attributable to the parent company

Net income per share available to common stockholders

Weighted-average common shares outstanding

4 unchanged sentences

Three 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 loss

Other comprehensive income (loss)

Total comprehensive income (loss)

2 unchanged sentences

Comprehensive income (loss) attributable to the parent company

$ ( 14 ) $ 68

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

2 unchanged sentences

(In millions, except share and per share amounts)

September 30,

Current assets

3 unchanged sentences

Other current assets

Current assets of disposal group held for sale

Total current assets

4 unchanged sentences

Property, plant and equipment, net

$ 7,937  

$ 7,449  

$ 7,857 $ 7,965

Liabilities, redeemable noncontrolling interests and equity

7 unchanged sentences

Other accrued liabilities

Current liabilities of disposal group held for sale

Total current liabilities

3 unchanged sentences

Other noncurrent liabilities

Noncurrent liabilities of disposal group held for sale

Total liabilities

6 unchanged sentences

Retained earnings

Treasury stock, at cost ( 450,729 and zero shares)

Treasury stock, at cost ( 821,207 and 474,981 shares)

Accumulated other comprehensive loss

( 1,007 )  

( 1,007 ) ( 990 )

Total parent company stockholders' equity

1 unchanged sentence

Total liabilities, redeemable noncontrolling interests and equity

$ 7,937  

$ 7,449  

$ 7,857 $ 7,965

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

2 unchanged sentences

(In millions)

Nine Months Ended

September 30,

Three Months Ended

Operating activities

Net income (loss)

Amortization of deferred financing charges

Write-off of deferred financing costs

Earnings of affiliates, net of dividends received

2 unchanged sentences

Pension expense, net

Impairment of goodwill

Change in working capital

Net cash provided by operating activities

Loss on disposal group held for sale

Net cash used in operating activities

Investing activities

Purchases of property, plant and equipment

Acquisition of business, net of cash acquired

Purchases of marketable securities

Proceeds from sales of marketable securities

Proceeds from sale of property, plant and equipment

Settlements of undesignated derivatives

2 unchanged sentences

Net change in short-term debt

Proceeds from long-term debt

Repayment of long-term debt

1 unchanged sentence

Dividends paid to common stockholders

Repurchases of common stock

Distributions to noncontrolling interests

Collection of note receivable from noncontrolling interest

Contributions from redeemable noncontrolling interests

Payments to acquire noncontrolling interests

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash –

beginning of period

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash – beginning of period

Effect of exchange rate changes on cash balances

Cash, cash equivalents and restricted cash –

end of period (Note 4)

Cash, cash equivalents and restricted cash – end of period (Note 5)

Non-cash investing activity

4 unchanged sentences

Organization and Summary of Significant Accounting Policies

Disposal Group Held for Sale

Goodwill and Other Intangible Assets

17 unchanged sentences

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);

Dana is 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.

and motors, power inverters, and control systems for electric vehicles with a customer base that 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.

1 unchanged sentence

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.

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,  

2022 (the 

2022 Form 10 -K).

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, 2023 (the 2023 Form 10 -K).

Certain prior year amounts have been reclassified to conform to the current presentation.

On January 1, 2023 we adopted 

Accounting Standards Update (ASU) 2022 - 04, Supplier Finance Programs which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services.

Adoption of this new standard did not affect the recognition, measurement or financial statement presentation of supplier finance program obligations.

Certain of our subsidiaries have entered into paying agency agreements with third -party administrators.

These voluntary supply chain finance programs generally give participating suppliers the ability to sell, or otherwise pledge as collateral, their receivables from Dana to the participating financial institutions, at the sole discretion of both the suppliers and financial institutions.

Dana is not a party to the arrangements between the suppliers and the financial institutions.

Dana’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by the suppliers’

decisions to sell, or otherwise pledge as collateral, amounts under these arrangements.

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

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

ASU 2021 - 08

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers  

January 1, 2023

Recently adopted accounting pronouncements

We did not adopt any new accounting pronou ncements during the three months ended March 31, 2024 .

Recently issued accounting pronouncements

We do not expect any recently issued accounting pronouncements to have a material effect on our financial statements.

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023 - 07, Segment Reporting (Topic 280 ).

The guidance enhances reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the guidance on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023 - 09, Improvements to Income Tax Disclosures.

This guidance requires disaggregated income tax disclosures on the rate reconciliation and income taxes paid.

The guidance becomes effective for annual periods beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the impact of the guidance on our financial statement disclosures.

Disposal Group Held for Sale

In February 2024, we entered into a definitive agreement to sell our European hydraulics business to HPIH S.à r.l.

for approximately $ 40 .

The sale price is subject to adjustment based on net working capital and net financial position balances as of the closing date.

The results of operations of the European hydraulics business are reported within our Off-Highway operating segment.

We classified the disposal group as held for sale, recognizing a $ 29 loss to adjust the carrying value of net assets to fair value less estimated costs to sell.

The sale is expected to close during the second quarter of 2024.

The carrying amounts of the major classes of assets and liabilities of our European hydraulics business are as follows:

Accounts receivable - Trade

Accounts receivable - Other 1

Inventories 44

Current assets of disposal group held for sale $ 62

Accounts payable $ 14

Accrued payroll and employee benefits 4

Current portion of operating lease liabilities 1

Other accrued liabilities 3

Current liabilities of disposal group held for sale $ 22

Noncurrent operating lease liabilities $ 1

Pension and postretirement obligations 2

Other noncurrent liabilities 1

Noncurrent liabilities of disposal group held for sale $ 4

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill by segment 

— 

Changes in the carrying amount of goodwill by segment —

Balance, December 31, 2023

Reclassified to disposal group held for sale

Currency impact

Balance, September 30, 2023

Components of other intangible assets — 

September 30, 2023

Balance, March 31, 2024

Components of other intangible assets —

March 31, 2024

December 31, 2023

8 unchanged sentences

Core technology

$ ( 122 )  

$ ( 116 )  

8 $ 158 $ ( 127 ) $ 31 $ 159 $ ( 126 ) $ 33

Trademarks and trade names

( 15 )  

( 13 )  

13 25 ( 14 ) 11 29 ( 15 ) 14

Customer relationships

( 431 )  

( 425 )  

8 492 ( 437 ) 55 503 ( 441 ) 62

Non-amortizable intangible assets

Trademarks and trade names

$ ( 568 )  

$ ( 554 )  

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

September 30, 2023 were as follows:

Light Vehicle —

$ 14 , Commercial Vehicle —

$ 61 , Off-Highway —

$ 105  and Power Technologies —

Amortization expense related to amortizable intangible assets — 

$ 747 $ ( 578 ) $ 169 $ 764 $ ( 582 ) $ 182

Net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments—

March 31, 2024

Light Vehicle

Commercial Vehicle

Power Technologies

Amortization expense related to amortizable intangible assets —

Three 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 —

During the first quarter of 2024 , our restructuring charges were 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, June 30, 2023

Charges to restructuring

Cash payments

Balance, September 30, 2023

Balance, December 31, 2023

$ 10 $ — $ 10

Charges to restructuring

Cash payments

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.

( 2 ) ( 3 ) ( 5 )

Balance, March 31, 2024

$ 10 $ — $ 10

At March 31, 2024 , the accrued employee termination benefits include costs to reduce approximately 300 employees to be complet ed over the next year.

Supplemental Balance Sheet and Cash Flow Information

Inventory components at —

September 30, 2023

Supplier finance programs —

As of March 31, 2024 and December 31, 2023, we had $ 74 and $ 69 , respectively, of confirmed obligations subject to supplier finance programs presented as accounts payable within total current liabilities on the consolidated balance sheet.

Inventory components —

March 31, 2024

December 31, 2023

1 unchanged sentence

Work in process and finished goods

$ 1,713  

$ 1,609  

Cash, cash equivalents and restricted cash at —

September 30, 2023

$ 1,625 $ 1,676

Cash, cash equivalents and restricted cash —

March 31, 2024

December 31, 2023

September 30, 2022

March 31, 2023

December 31, 2022

Cash and cash equivalents

$ 351 $ 529 $ 401 $ 425

Restricted cash included in other current assets

1 unchanged sentence

Total cash, cash equivalents and restricted cash

Stockholders’

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 2023.

$ 387 $ 563 $ 419 $ 442

Stockholders’ Equity

Common stock — Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first quarter of 2024.

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, 2023 .

Changes in equity —

Additional Paid-In Capital

4 unchanged sentences

Balance, December 31, 2023

$ 2,229  

$ ( 1,001 )  

$ 1,603  

Other comprehensive income

Common stock dividends and dividend equivalents

( 15 )  

Distributions to noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Stock compensation

Stock withheld for employees taxes

Balance, March 31, 2023

( 961 )  

Other comprehensive loss

Common stock dividends and dividend equivalents

( 14 )  

Distributions to noncontrolling interests

Stock compensation

Balance, June 30, 2023

( 964 )  

$ 2 $ 2,255 $ 317 $ ( 9 ) $ ( 990 ) $ 62 $ 1,637

Other comprehensive loss

( 43 )  

( 17 ) ( 1 ) ( 18 )

Common stock dividends and dividend equivalents

( 15 )  

( 15 ) ( 15 )

Distributions to noncontrolling interests

Redeemable noncontrolling interest adjustment to redemption value

Stock compensation

Balance, September 30, 2023

$ 2,249  

$ ( 8 )  

$ ( 1,007 )  

$ 1,647  

Stock withheld for employee taxes

Balance, March 31, 2024

$ 2 $ 2,260 $ 297 $ ( 13 ) $ ( 1,007 ) $ 65 $ 1,604

Additional Paid-In Capital

4 unchanged sentences

Balance, December 31, 2022

$ 2,427  

$ ( 184 )  

$ ( 985 )  

$ 1,975  

$ 2 $ 2,229 $ 321 $ — $ ( 1,001 ) $ 52 $ 1,603

Other comprehensive income

Common stock dividends and dividend equivalents

( 14 )  

Common stock repurchases

( 25 )  

( 15 ) ( 15 )

Distributions to noncontrolling interests

Purchases of noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Redeemable noncontrolling interest adjustment to redemption value

Stock compensation

Stock withheld for employees taxes

Stock withheld for employee taxes

Balance, March 31, 2023

( 216 )  

( 949 )  

Other comprehensive loss

( 79 )  

Common stock dividends and dividend equivalents

( 15 )  

Distributions to noncontrolling interests

Purchases of noncontrolling interests

Redeemable noncontrolling interests adjustment to redemption value

Stock compensation

Balance, June 30, 2022

( 216 )  

( 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 —

$ 2 $ 2,237 $ 333 $ ( 8 ) $ ( 961 ) $ 55 $ 1,658

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

Parent Company Stockholders

3 unchanged sentences

Balance, December 31, 2023

$ ( 895 )  

$ ( 127 )  

Currency translation adjustments

Holding gains and losses

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

Other comprehensive income

Balance, March 31, 2023

( 871 )  

( 126 )  

$ ( 868 ) $ 20 $ ( 142 ) $ ( 990 )

Currency translation adjustments

( 16 ) ( 16 )

Holding gains and losses

Reclassification of amount to net income (a)

( 11 ) ( 11 )

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

Other comprehensive income (loss)

Balance, June 30, 2023

( 877 )  

( 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 )  

( 16 ) ( 2 ) 1 ( 17 )

Balance, March 31, 2024

$ ( 884 ) $ 18 $ ( 141 ) $ ( 1,007 )

Parent Company Stockholders

3 unchanged sentences

Balance, December 31, 2022

$ ( 809 )  

$ ( 180 )  

$ ( 895 ) $ 21 $ ( 127 ) $ ( 1,001 )

Currency translation adjustments

Holding gains and losses

Reclassification of amount to net income (a)

( 22 )  

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

1 unchanged sentence

Balance, March 31, 2023

( 770 )  

( 179 )  

Currency translation adjustments

( 83 )  

Holding gains and losses

Reclassification of amount to net income (a)

( 39 )  

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

Other comprehensive income (loss)

( 83 )  

Balance, June 30, 2022

( 853 )  

( 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 )  

$ ( 871 ) $ 36 $ ( 126 ) $ ( 961 )

(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 11  for additional details.

(b) See Note 9  for additional details.

See Note 12 for additional details.

(b) See Note 10 for additional details.

Redeemable Noncontrolling Interests

Hydro-Québec owns a 45 % redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC.

The terms of the joint venture agreement provide Hydro-Québec with the right to put all, and not less than all, of its ownership interests in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC to Dana at fair value.

Hydro-Québec owns a 45 % redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC.

Redeemable noncontrolling interests reflected as of the balance sheet date are the greater of the redeemable noncontrolling interest balances adjusted for comprehensive income (loss) 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 —

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,

Balance, beginning of period

3 unchanged sentences

Net loss attributable to redeemable noncontrolling interests

( 79 )  

Other comprehensive loss attributable to redeemable noncontrolling interests

( 10 )  

Other comprehensive income (loss) attributable to redeemable noncontrolling interests

Balance, end of period

Earnings per Share

Reconciliation of the numerators and denominators of the earnings per share calculations — 

Three Months Ended

Nine Months Ended

September 30,

Net income available to common stockholders - Numerator basic and diluted

$ ( 88 )  

Weighted-average common shares outstanding - Basic

Employee compensation-related shares, including stock options

Employee compensation-related shares

Weighted-average common shares outstanding - Diluted

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 .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 0.1  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.

We excluded 2.2 million and 0.2 million CSEs from the calculation of diluted earnings per share for the first quarters of 2024 and 2023 as the effect of including them would have been anti-dilutive.

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 2023 . 

The Compensation Committee of our Board of Directors approved the grant of RSUs and performance share units (PSUs) shown in the table below during 2024 .

(In millions)

$ 18.41  

$ 19.56  

* Weighted-average per share

1 unchanged sentence

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.

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.

1 unchanged sentence

Treasury constant maturity rates at the grant date.

The dividend yield of 2.5 % 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 67.0 % was based on observed historical volatility of daily stock returns for the 3 -year period preceding the grant date. 

During 2023, we paid $ 5  of cash to settle RSUs and issued 1.2 million shares of common stock based on the vesting of RSUs.

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

third quarters of 

2023 and 

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.

The dividend yield of 2.7 % 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 47.7 % was based on observed historical volatility of daily stock returns for the 3 -year period preceding the grant date.

During 2024 , we paid $ 2 of cash to settle RSUs and issued 0.9 million shares of common stock based on the vesting of RSUs.

We recognized stock compensation expense of $ 6 in both the first quarter of 2024 and 2023 .

At March 31, 2024 , the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $ 49 .

This cost is expected to be recognized over a weighted-average period of 2.1 years.

Pension and Postretirement Benefit Plans

1 unchanged sentence

Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.

Components of net periodic benefit cost (credit) — 

Three Months Ended September 30,

Interest cost

Expected return on plan assets

Amortization of net actuarial (gain) loss

Net periodic benefit cost (credit)

$ ( 1 )  

Nine Months Ended September 30,

Components of net periodic benefit cost (credit) —

Three Months Ended March 31,

Interest cost

$ 7 $ 3 $ 7 $ 3 $ 1 $ 1

Expected return on plan assets

( 23 )  

( 21 )  

( 7 ) ( 1 ) ( 8 ) ( 1 )

Amortization of net actuarial (gain) loss

Net periodic benefit cost (credit)

$ ( 3 )  

$ ( 1 )  

2 2 ( 1 ) ( 1 )

Net periodic benefit cost

$ 2 $ 4 $ 1 $ 3 $ — $ —

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.

1 unchanged sentence

Financing Agreements

Long-term debt at —

Interest Rate

September 30, 2023

March 31, 2024

December 31, 2023

Senior Notes due April 15, 2025

* $ 200 $ 200

Senior Notes due November 15, 2027

6 unchanged sentences

Debt issuance costs

( 25 )  

( 23 ) ( 24 )

Current portion of long-term debt

Long-term debt, less debt issuance costs

$ 2,563  

$ 2,348  

$ 2,580 $ 2,598

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 %.

See Note 11  for additional information.

See Note 12 for additional information.

Interest on the senior notes is payable semi-annually.

Other indebtedness includes a $ 24  note payable to the former shareholders of SME S.p.A., borrowings from various financial institutions and finance lease obligations.

Senior notes activity 

— On May 24, 2023, Dana Financing Luxembourg S.à.r.l.

(Dana Financing), a wholly-owned subsidiary of Dana, completed the sale of €425 ($ 458 as of May 24, 2023) in senior unsecured notes ( July 2031 Notes) at 8.500 %.

Other indebtedness includes borrowings from various financial institutions and finance lease obligations.

Senior notes activity — On May 24, 2023, Dana Financing Luxembourg S.à.r.l.

(Dana Financing), a wholly-owned subsidiary of Dana, completed the sale of €425 ($ 458 as of May 24, 2023) in senior unsecured notes ( July 2031 Notes) at 8.500 %.

The July 2031 Notes are fully and unconditionally guaranteed by Dana.

6 unchanged sentences

The July 2031 Notes will mature on July 15, 2031.

Net proceeds of the offering totaled €419 ($ 451  as of May 24, 2023).

Financing costs of €6 ($ 7  as of May 24, 2023) 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 $ 200 of our April 2025 Notes and to make payments against borrowings on our Revolving Facility.

Net proceeds of the offering totaled €419 ($ 451 as of May 24, 2023).

Financing costs of €6 ($ 7 as of May 24, 2023) 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 $ 200 of our April 2025 Notes and to make payments against borrowings on our Revolving Facility.

On June 9, 2023 we redeemed $ 200 of our April 2025 Notes at a price equal to 100.00 % plus accrued and unpaid interest.

The $ 1 loss on extinguishment of debt is comprised of the write-off of previously deferred financing costs associated with the April 2025 Notes.

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:

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

101.438 %  

102.688 %  

100.000 %  

101.344 %  

102.813 %  

100.000 %  

101.406 %  

101.500 %  

100.000 %  

100.750 %  

100.000 %  

102.125 %  

104.250 %  

100.000 %  

101.417 %  

102.125 %  

100.000 %  

100.708 %  

100.000 %  

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.

100.000 % 101.344 % 102.813 %

100.000 % 100.000 % 101.406 % 101.500 %

100.000 % 100.000 % 100.750 %

100.000 % 100.000 % 100.000 % 102.125 % 104.250 %

100.000 % 100.000 % 101.417 % 102.125 % 102.250 %

100.000 % 100.708 % 100.000 % 101.500 %

100.000 % 100.000 % 100.750 %

100.000 % 100.000 %

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”

At any time prior to July 15, 2026, we may redeem up to 40% of the aggregate principal amount of the July 2031 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 108.500 % 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 2031 Notes remain outstanding after the redemption. 

Prior to July 15, 2026, we may also redeem some or all of the July 2031 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”

At any time prior to February 15, 2025, we may redeem up to 40% of the aggregate principal amount of the February 2032 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.500 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided that at least 50 % of the aggregate principal amount of the February 2032 Notes remains outstanding after the redemption.

Prior to February 15, 2027, we may redeem some or all of the February 2032 Notes at a redemption price equal to 100 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole”

Credit agreement —

On March 14, 2023, we amended our credit and guaranty agreement, extending its maturity to March 14, 2028.

Credit agreement — On March 14, 2023, we amended our credit and guaranty agreement, extending its maturity to March 14, 2028.

We recorded deferred fees of $ 2 related to the amendment.

The deferred fees are being amortized over the life of the Revolving Facility. Deferred financing costs on our Revolving Facility are included in other noncurrent assets. 

The deferred fees are being amortized over the life of the Revolving Facility.

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

The Revolving Facility is guaranteed by all of our wholly-owned domestic subsidiaries subject to certain exceptions (the guarantors) and are secured by a first -priority lien on substantially all of the assets of Dana and the guarantors, subject to certain exceptions.

Advances under the Revolving Facility bear interest at a floating rate based on, at our option, the base rate or the Term Secured Overnight Financing Rate ("SOFR") (each as described in the credit agreement) plus a margin as set forth below:

Advances under the Revolving Facility bear interest at a floating rate based on, at our option, the base rate or the Term Secured Overnight Financing Rate ("SOFR") (each as described in the credit agreement) plus a margin as set forth below:

Total Net Leverage Ratio

Less than or equal to 1.00:1.00

0.25 %  

0.25 % 1.25 %

Greater than 1.00:1.00 but less than or equal to 2.00:1.00

0.50 %  

0.50 % 1.50 %

Greater than 2.00:1.00

0.75 %  

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:

5 unchanged sentences

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 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.

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 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.

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.

At March 31, 2024 , we had $ 15 of outstanding borrowings under the Revolving Facility and had utilized $ 9 for letters of credit.

We had availability at March 31, 2024 under the Revolving Facility of $ 1,126 after deducting the outstanding letters of credit.

Debt covenants — At March 31, 2024 , we were in compliance with the covenants of our financing agreements.

Under the Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types and, in the case of the Revolving Facility, a maintenance covenant tested on the last day of each fiscal quarter requiring us to maintain a first lien net leverage ratio not to exceed 2.00 to 1.00.

Fair Value Measurements and Derivatives

1 unchanged sentence

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 measurements on a recurring basis — Assets and liabilities that are carried in our balance sheets at fair value are as follows:

Balance Sheet Location

Fair Value Level

September 30, 2023  

December 31, 2022  

March 31, 2024 December 31, 2023

Currency forward contracts

8 unchanged sentences

Other noncurrent assets

Cash flow hedges

Other noncurrent liabilities

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, 2023

Fair value of financial instruments — The financial instruments that are not carried in our balance sheets at fair value are as follows:

March 31, 2024

December 31, 2023

3 unchanged sentences

Long-term debt

$ 2,546  

$ 2,248  

$ 2,304  

$ 2,010  

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.

2 $ 2,540 $ 2,465 $ 2,582 $ 2,495

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.

3 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 September 30, 2023 :

The following fixed-to-fixed cross-currency swaps were outstanding at March 31, 2024 :

Underlying Financial Instrument

Derivative Financial Instrument

Notional Amount  

Traded Amount

Notional Amount Traded Amount

April 2025 Notes

5.75 %  

$ 200 5.75 % $ 200 € 185 5.75 % 3.85 %

Luxembourg Intercompany Notes

3.85 %  

5.75 %  

€ 93 3.85 % $ 100 € 93 5.75 % 3.85 %

Luxembourg Intercompany Notes

3.70 %  

5.38 %  

€ 278 3.70 % € 278 $ 300 5.38 % 3.70 %

Undesignated 2026 Swap

6.50 %  

$ 188 € 169 6.50 % 5.14 %

Undesignated Offset 2026 Swap

3.13 %  

€ 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.

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 10  for additional information about the April 2025 Notes.

See Note 11 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.

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 :

The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $ 947 at March 31, 2024 and $ 776 at December 31, 2023 .

The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $ 970 at March 31, 2024 and $ 981 at December 31, 2023 .

The following currency derivatives were outstanding at March 31, 2024 :

Notional Amount (U.S.

2 unchanged sentences

Traded Currency

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, Singapore dollar, South African rand

Mexican peso, Thai baht, Indian rupee

$ 307 $ 36 $ 343 Mar-2025

dollar, Australian dollar, Swiss franc, Chinese renminbi, British pound, Hungarian forint, Indian rupee, Mexican peso, Norwegian krone, Swedish krona, South African rand

291 18 309 Sep-2027

British pound

4 5 9 Dec-2024

South African rand

dollar, euro, Thai baht

11 11 May-2024

26 26 Apr-2024

Canadian dollar

3 19 22 Oct-2024

Brazilian real

75 10 85 Mar-2025

dollar, euro, British pound

129 129 Jun-2025

Chinese renminbi

1 unchanged sentence

Total forward contracts

300 182 482 Nov-2027

300 188 488 Jun-2026

Total currency swaps

Total currency derivatives

$ 1,048  

$ 1,591  

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.

$ 1,280 $ 637 $ 1,917

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.

4 unchanged sentences

Deferred Gain (Loss) in AOCI

September 30, 2023

March 31, 2024

December 31, 2023

Gain (loss) expected to be reclassified into income in one year or less  

Forward Contracts

$ 19 $ 20 $ 19

Cross-Currency Swaps

$ 19 $ 21 $ 19

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,

Derivatives Designated as Cash Flow Hedges

Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded

$ 2,669  

$ 2,535  

$ 8,061  

$ 7,601  

$ 2,735 $ 2,644

Cost of sales

4 unchanged sentences

Cost of sales

( 11 )  

( 24 )  

Other income (expense), net

2 unchanged sentences

Other income (expense), net

( 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

Nine Months Ended

September 30,

Derivatives Not Designated as Hedging Instruments

Gain or (loss) recognized in income

Gain (loss) recognized in income

Foreign currency forward contracts

1 unchanged sentence

Other income (expense), net

$ ( 2 )  

$ ( 1 )  

$ ( 9 )  

Net investment hedges —

We periodically designate derivative contracts or underlying non-derivative financial instruments as net investment hedges.

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.

1 unchanged sentence

Commitments and Contingencies

Product liabilities —

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 September 30, 2023 and $ 8  at December 31,  

Environmental liabilities — Accrued environmental liabilities were $ 6 both at March 31, 2024 and December 31, 2023 .

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.

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.

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 the eventual outcome of these matters.

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.

4 unchanged sentences

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,

Balance, beginning of period

2 unchanged sentences

Settlements of warranty claims

( 13 )  

( 40 )  

( 12 ) ( 17 )

Currency impact

2 unchanged sentences

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.

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.

1 unchanged sentence

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

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.

We reported i ncome tax expense of $ 37 and $ 30 for the first quarter of 2024 and 2023, respectively.

Our effective tax rates were 106 % and 50 % for the first three months ended March 31, 2024 and 2023 .

During the first quarter of 2024, we recorded tax expense of $ 11 for valuation allowances related to foreign locations.

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

federal statutory rate of 21 % due to establishment, release, and adjustment of valuation allowances in several countries, nondeductible expenses and deemed income, local tax incentives in several countries outside the U.S., different statutory tax rates outside the U.S.

and withholding taxes related to repatriations of international earnings.

The effective income tax rate may vary significantly due to fluctuations in the amounts and sources, both foreign and domestic, of pretax income and changes in the amounts of non-deductible expenses.

Other Income (Expense), Net  

Three Months Ended

Nine Months Ended

September 30,

Non-service cost components of pension and OPEB costs

$ ( 4 )  

$ ( 10 )  

$ ( 4 ) $ ( 3 )

Government assistance

3 unchanged sentences

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 2023 and 2022 were primarily attributable to investigating potential acquisitions and business ventures and other strategic initiatives.

Strategic transaction expenses in the three months ended March 31, 2024 and 2023 were primarily attributable to investigating potential acquisitions and business ventures and other strategic initiatives.

Revenue from Contracts with Customers

6 unchanged sentences

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 $ 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 .

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 evaluate the amounts capitalized each period for recoverability and expense any amounts that are no longer expected to be recovered.

We had $ 5 and $ 5 recorded in other current assets and $ 33 and $ 34 recorded in other noncurrent assets at March 31, 2024 and December 31, 2023 .

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.

Refund liabilities are included in other accrued liabilities on our consolidated balance sheets.

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 13  for additional information.

See Note 14 for additional information.

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 $ 47  and $ 48  at September 30, 2023 and December 31,  

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

Disaggregation of revenue —

Contract liabilities were $ 57 and $ 50 at March 31, 2024 and December 31, 2023 .

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

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,

Light Vehicle

North America

$ 2,065  

$ 2,245  

South America

$ 1,084  

$ 1,047  

$ 3,112  

$ 3,060  

$ 1,098 $ 962

Commercial Vehicle

1 unchanged sentence

South America

$ 1,583  

$ 1,475  

North America

South America

$ 2,423  

$ 2,206  

Power Technologies

2 unchanged sentences

North America

$ 1,240  

$ 1,250  

$ 3,689  

$ 1,327 $ 1,183

South America

$ 2,669  

$ 2,535  

$ 8,061  

$ 7,601  

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);

$ 2,735 $ 2,644

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.

electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates);

sealing solutions (gaskets, seals, cam covers, and oil pan modules);

thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding);

and digital solutions (active and passive system controls and descriptive and predictive analytics).

We serve our global light vehicle, medium/heavy vehicle and off-highway markets through four operating segments – Light Vehicle Drive Systems (Light Vehicle), Commercial Vehicle Drive and Motion Systems (Commercial Vehicle), Off-Highway Drive and Motion Systems (Off-Highway), and Power Technologies, which is the center of excellence for sealing and thermal-management technologies that span all customers in our on-highway and off-highway markets.

These operating segments have global responsibility and accountability for business commercial activities and financial performance.

Dana evaluates the performance of its operating segments based on external sales and segment EBITDA. Segment EBITDA is a primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns.

Our segments are charged for corporate and other shared administrative costs. Segment EBITDA may not be comparable to similarly titled measures reported by other companies.

Segment information —

Three Months Ended September 30,

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 —

Three Months Ended March 31,

External Sales

5 unchanged sentences

Light Vehicle

$ 1,084  

$ 1,047  

Commercial Vehicle

Power Technologies

Eliminations and other

( 101 )  

( 84 )  

$ 2,669  

$ 2,535  

Nine Months Ended September 30,

Light Vehicle

$ 3,112  

$ 3,060  

$ 1,098 $ 51 $ 67 $ 962 $ 52 $ 49

Commercial Vehicle

524 29 17 522 32 17

781 17 115 842 17 118

Power Technologies

332 6 27 318 8 23

Eliminations and other

( 309 )  

( 280 )  

$ 8,061  

$ 7,601  

Reconciliation of segment EBITDA to consolidated net income 

( 103 ) ( 109 )

$ 2,735 $ — $ 226 $ 2,644 $ — $ 207

Reconciliation of segment EBITDA to consolidated net income —

Three Months Ended

Nine Months Ended

September 30,

Segment EBITDA

Corporate expense and other items, net

( 101 )  

( 88 )  

( 287 )  

( 17 )  

( 101 ) ( 92 )

Non-service cost components of pension and OPEB costs

( 10 )  

Restructuring charges, net

( 17 )  

( 21 )  

Stock compensation expense

( 19 )  

Strategic transaction expenses

Distressed supplier costs

( 14 )  

( 26 )  

Impairment of goodwill

( 191 )  

Earnings (loss) before interest and income taxes

( 101 )  

Loss on extinguishment of debt

Loss on disposal group held for sale

Earnings before interest and income taxes

Interest income

Interest expense

Earnings (loss) before income taxes

( 131 )  

Earnings before income taxes

Income tax expense

Equity in earnings (loss) of affiliates

Net income (loss)

$ ( 163 )  

Equity in earnings of affiliates

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, 2023 — 

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 March 31, 2024 —

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