What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-11 compared with 2025-04-30 · 260 added, 171 removed, 192 unchanged (69% of the section changed)

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All forward-looking statements speak only as of the date made and we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances that may arise after the date of this report.

Recent Strategic Actions

Cost reduction initiatives — During the fourth quarter of 2024, we announced further actions to support sustained long-term profitability and enhanced cash flow generation.

This includes substantial reduction in selling, general and administrative costs and aligning engineering expenses to match current industry dynamics, including the ongoing delay in the adoption of electric vehicles.

We expect to deliver annualized savings of $310 through 2026.

Approximately $235 of annualized savings is expected be realized through 2025 with an additional $75 realized in 2026.

See Note 5 of our consolidated financial statements in Item 1 of Part I for additional information.

Segment realignment — Through December 2024, we managed our operations globally through four operating segments.

Our Light Vehicle and Power Technologies segments primarily supported light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars.

Our Commercial Vehicle segment supported the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supported OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications).

In the first quarter of 2025, our Power Technologies segment was integrated into our Light Vehicle and Commercial Vehicle segments, streamlining the business, enhancing our go-to-market approach and serving our customers more efficiently.

The OEM-facing business was integrated into our Light Vehicle segment while the aftermarket business was integrated into our Commercial Vehicle segment.

See Note 19 of our consolidated financial statements in Item 1 of Part I for additional information.

Divestiture of Off-Highway Business — Dana has embarked on a strategic plan to focus on our core on-highway markets, creating a more focused and nimble Dana through the planned divestiture of our Off-Highway business.

In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc.

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

The transaction is currently expected to close during the fourth quarter of 2025, subject to satisfaction of regulatory approvals and other customary conditions.

We analyzed the quantitative and qualitative factors relevant to the pending divestiture of our Off-Highway business and determined that the conditions for discontinued operations presentation have been met.

As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying consolidated financial statements.

Prior period amounts have been recast to reflect discontinued operations presentation.

See Note 1 and Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Capital Structure Initiatives — Net cash proceeds from the Off-Highway business divestiture will be used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders.

On June 8, 2025, Dana’s board of directors approved a program to provide up to a $1,000 return of capital to shareholders through common stock share repurchases and/or special dividends through the end of 2027.

Management Overview

Dana, with history dating back to 1904, is headquartered in Maumee, Ohio.

We are a world leader in providing power-conveyance and energy-management solutions for vehicles and machinery.

The company's portfolio improves the efficiency, performance, and sustainability of light vehicles, commercial vehicles, and off-highway equipment.

Our technologies include drive systems (axles, driveshafts, transmissions, and wheel and track drives);

motion systems (winches, slew drives, and hub drives);

We are a world leader in providing power-conveyance and energy-management solutions for on-highway vehicles.

The company's portfolio improves the efficiency, performance, and sustainability of light and commercial vehicles.

Our technologies include drive systems (axles, driveshafts and transmissions);

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

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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 three business units – Light Vehicle Systems (Light Vehicle), Commercial Vehicle Systems (Commercial Vehicle) and Off-Highway Drive and Motion Systems (Off-Highway).

We have a diverse customer base and geographic footprint which minimizes our exposure to individual market and segment declines.

At March 31, 2025, we employed approximately 39,300 people and operated in 31 countries.

External sales by operating segment for the periods ended March 31, 2025 and 2024 are as follows:

Three Months Ended March 31,

We serve our global light vehicle and medium/heavy vehicle markets through two business units – Light Vehicle Systems (Light Vehicle) and Commercial Vehicle Systems (Commercial Vehicle).

At June 30, 2025, excluding the Off-Highway business which is presented as a discontinued operation, we employed approximately 28,000 people and operated in 26 countries.

External sales by operating segment for the periods ended June 30, 2025 and 2024 are as follows:

Three Months Ended June 30,

Six Months Ended June 30,

Light Vehicle

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The inclusion of our website address in this report is an inactive textual reference only and is not intended to include or incorporate by reference the information on our website into this report.

Operational and Strategic Initiatives

Our strategy builds on our strong technology foundation and leverages our resources across the organization while driving a customer-centric focus, expanding our global markets, and delivering innovative solutions for the mobility markets we serve.

Central to our strategy is leveraging our core operations.

This foundational element enables us to infuse strong operational disciplines throughout the strategy, making it practical, actionable, and effective.

We are achieving improved profitability by actively improving our cost structure and gaining efficiencies across all of our operations and functions.

Our customers remain at the center of our value system.

These relationships are strengthened as we are physically located where we need to be in order to provide unparalleled service.

We prioritize our customers’ needs as we engineer solutions that differentiate their products while making it easier to do business by streamlining our commercial organization.

Our customer-centric focus has uniquely positioned us to win more than our fair share of new business and capitalize on future customer outsourcing initiatives.

Dana has embarked on a strategic plan to focus on core on-highway markets and accelerate value creation by improving its cost structure, increasing its efficiency, and creating a more focused and nimble Dana through the planned divestiture of our Off-Highway business.

Capital Structure Initiatives

In addition to investing in our business, we plan to prioritize a balanced allocation of capital while maintaining a strong balance sheet.

Shareholder return actions — When evaluating capital structure initiatives, we balance our growth opportunities with maintaining a strong balance sheet and returning capital to shareholders via dividends and share repurchases.

Except for three quarters in 2020, when we temporarily suspended dividends to common shareholders in response to the global COVID pandemic, we have paid quarterly dividends to our common shareholders since the first quarter of 2012.

We also utilize share repurchases to provide returns to our shareholders.

Financing actions — Our current portfolio of unsecured senior notes is structured such that no more than $460 of senior notes comes due in any calendar year, with no maturities until the second quarter of 2025.

Our $1,150 revolving credit facility matures on March 14, 2028.

See Note 11 to our consolidated financial statements in Item 1 of Part I for additional information.

Cost Reduction Initiatives

During the fourth quarter of 2024, we announced further actions to support sustained long-term profitability and enhanced cash flow generation.

We expect to deliver annualized savings of $300 through 2026.

Approximately $100 of the annualized savings is expected to come from headcount reduction actions, with approximately $75 of the headcount-related savings being realized through 2025.

See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Other Initiatives

Aftermarket opportunities — We have a global group dedicated to identifying and developing aftermarket growth opportunities that leverage the capabilities within our existing businesses – targeting increased future aftermarket sales.

Powered by recognized brands such as Dana®, Spicer®, Spicer Electrified™, Victor Reinz®, Glaser®, GWB®, Thompson®, Tru-Cool®, SVL®, and Transejes™, Dana delivers a broad range of aftermarket solutions – including genuine, all makes, and value lines – servicing passenger, commercial, and off-highway vehicles across the globe.

Selective acquisitions — Although transformational opportunities will be considered when strategically and economically attractive, our acquisition focus is principally directed at “bolt-on” or adjacent acquisition opportunities that have a strategic fit with our existing core businesses, particularly opportunities that support our enterprise strategy and enhance the value proposition of our product offerings.

Any potential acquisition will be evaluated in the same manner we currently consider customer program opportunities and other uses of capital – with a disciplined financial approach designed to ensure profitable growth and increased shareholder value.

Through December 2024, we managed our operations globally through four operating segments.

Our Light Vehicle and Power Technologies segments primarily support light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars.

Our Commercial Vehicle segment supports the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supports OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications).

The OEM-facing business was integrated into our Light Vehicle segment while the aftermarket business was integrated into our Commercial Vehicle segment.

Trends in Our Markets

We serve our customers in three core global end markets:

light vehicle, primarily full frame trucks and SUVs; commercial vehicle, including medium-and heavy-duty trucks and busses; and off-highway, including construction, mining, and agriculture equipment.

We serve our customers in two core global end markets:

light vehicle, primarily full frame trucks and SUVs; and commercial vehicle, including medium-and heavy-duty trucks and busses.

Each of our end-markets has unique cyclical dynamics and market drivers.

These cycles are impacted by periods of investment where end-user vehicle fleets are refreshed or expanded in reaction to demand usage patterns, regulatory changes, or when the age of vehicles in service reach their useful life.

Key market drivers include regional economic growth rates; cost and availability of end customer financing; industrial output; commodity production and pricing; and residential and nonresidential construction rates.

Our multi-market coverage and broad customer base help provide stability across the cycles while mitigating secular variability.

Key market drivers include regional economic growth rates; cost and availability of end customer financing and industrial output.

The current tariff environment has resulted in increased uncertainty in the markets we serve.

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Medium-duty truck production in North America experienced a modest 4% year-over-year increase from 2023.

The outlook for 2025 is for a moderate decrease in production from the prior year.

The outlook for 2025 is for a significant decrease in production from the prior year.

Outside of North America, production of medium- and heavy-duty trucks in South America increased 41% over 2023, reflecting improved economic conditions in the region.

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The 2025 outlook for Asia Pacific is for a modest increase in production from the prior year.

Off-highway markets — Our off-highway business has a large presence outside of North America, with 65% of its 2024 sales coming from products manufactured in Europe; however, a large portion of these products are utilized in vehicle production outside the region.

The construction equipment segment of the off-highway market is closely related to global economic growth and infrastructure investment.

The global construction equipment market softened in 2024 with production declining 5% from 2023.

The outlook for 2025 is for continued market weakness, with moderate production declines in North America and Europe and relative stability in Asia Pacific compared to the prior year.

End-user investment in the mining equipment segment is driven by prices for commodity products produced by underground mining.

The global mining equipment market has been mostly stable over the past several years as industry participants have maintained vehicle inventory levels to match commodity output.

The outlook for 2025 is for a modest decline in global production from the prior year.

The agriculture equipment market is the third of our key off-highway segments.

Like the underground mining segment, investment in agriculture equipment is primarily driven by prices for farm commodities.

Farm commodity price decreases in 2024 spurred a 8% decrease in agriculture equipment production.

The outlook for 2025 is for a moderate decrease in global end-market demand relative to the prior year.

Foreign currency — With 55% of our first quarter 2025 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations.

Foreign currency — With 44% of our first half of 2025 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations.

The euro zone countries accounted for 31% of our year-to-date 2025 non-U.S.

sales, while India, Brazil and China accounted for 11%, 9% and 8%, respectively.

sales, while Brazil, India, Thailand and China accounted for 14%, 9%, 9% and 7%, respectively.

Although sales in South Africa are less than 6% of our non-U.S.

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International currencies weakened against the U.S.

dollar in the first quarter of 2025, decreasing sales by $53, with the effects of a weaker euro, Brazilian real and Indian rupee, being partially offset by a stronger Thai baht.

dollar in the first half of 2025, decreasing sales by $24, with the effects of a weaker Brazilian real, Indian rupee, Mexican peso and Canadian dollar being partially offset by a stronger Thai baht and euro.

Argentina has experienced significant inflationary pressures the past few years, contributing to significant devaluation of its currency among other economic challenges.

Our Argentine operation supports our Light Vehicle operating segment.

Our sales in Argentina for the first quarter of 2025 of approximately $49 are 2% of our consolidated sales and our net asset exposure related to Argentina was approximately $53, including $21 of net fixed assets, at March 31, 2025.

Our sales in Argentina for the first half of 2025 of approximately $110 are 3% of our consolidated sales and our net asset exposure related to Argentina was approximately $52, including $21 of net fixed assets, at June 30, 2025.

During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy.

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Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes.

Higher year-over-year commodity prices decreased earnings during the first quarter of 2025 by $1.

Material cost recovery pricing actions decreased earnings in the first quarter of 2025 by $10.

Lower year-over-year commodity prices increased earnings during the first six months of 2025 by $7.

Material cost recovery pricing actions decreased earnings in the first six months of 2025 by $12.

Sales, Earnings and Cash Flow Outlook

$9,525 - $10,025

Adjusted EBITDA

$925 - $1,025

Net cash provided by operating activities

Purchases of property, plant and equipment

Adjusted free cash flow

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The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.

On November 25, 2024, we announced that we are pursuing a sale of our Off-Highway business.

In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc.

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

The transaction is currently expected to close during the fourth quarter of 2025, subject to satisfaction of regulatory approvals and other customary conditions.

While the sale process continues to advance, there can be no assurance that it will result in a transaction.

Our 2025 outlook includes a full twelve months of operations for our Off-Highway business.

Our 2025 sales outlook is $9,525 to $10,025, reflecting declining global market demand and currency headwinds, partially offset by $150 of net new business backlog.

Based on our current sales and exchange rate outlook for 2025, we expect international currencies to be a modest headwind to sales primarily due to a weaker euro.

At sales levels in our current outlook for 2025, a 5% movement on the euro would impact our annual sales by approximately $90.

A 5% change on the Chinese renminbi, Indian rupee or Brazilian real rates would impact our annual sales in each of those countries by approximately $20.

At our current sales outlook for 2025, we expect full year 2025 adjusted EBITDA to approximate $925 to $1,025.

Adjusted EBITDA margin is 10.0% at the midpoint of our guidance range, a 140 basis-point improvement over 2024, reflecting the impact of significant cost savings actions and improved operational performance, partially offset by the impact of lower end-market demand and net material cost recoveries.

Our current guidance reflects tariff related cost impacts being largely recovered from our customers.

With commodity costs continuing to abate during 2025, Adjusted EBITDA margin will be negatively impacted by net material cost recoveries on both a dollar and percentage basis.

We expect to generate adjusted free cash flow of $225 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA, lower capital spending and improved working capital efficiency.

Summary Consolidated Results of Operations (First Quarter, 2025 versus 2024)

Three Months Ended March 31,

Summary Consolidated Results of Operations (Second Quarter, 2025 versus 2024)

Three Months Ended June 30,

% of Net Sales

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Other income (expense), net

Earnings before interest and income taxes

Earnings (loss) from continuing operations before interest and income taxes

Interest income

Interest expense

Earnings before income taxes

Loss from continuing operations before income taxes

Income tax expense

Equity in earnings of affiliates

Noncontrolling interests net income

Redeemable noncontrolling interests net loss

Net loss from continuing operations

Net income from discontinued operations

Noncontrolling interests net income from continuing operations

Redeemable noncontrolling interests net loss from continuing operations

Net income attributable to the parent company

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South America

Sales in the first quarter of 2025 were $383 lower than in 2024.

Weaker international currencies decreased sales by $53, principally due to a weaker euro, Brazilian real and Indian rupee, partially offset by a stronger Thai baht.

The organic sales decrease of $330, or 12%, primarily resulted from declining global construction/mining and agricultural equipment markets and lower light-truck and medium/heavy-truck production volumes in North America and Europe, partially offset by the conversion of sale backlog.

Pricing actions and recoveries, including material commodity price and inflationary costs adjustments, increased sales by $17.

The North America organic sales decrease of 15% was driven principally by lower full-frame light-truck and medium- and heavy-duty truck production volumes, partially offset by the conversion of sales backlog and net customer pricing and cost recovery actions.

First quarter 2025 full-frame light-truck production was down 9%, Class 8 production was down 22% and Classes 5-7 was down 24% compared to 2024.

Excluding currency effects, sales in Europe were down 14% compared with 2024.

With our significant Off-Highway presence in the region, weaker construction/mining and agricultural equipment markets were a major factor.

Organic sales in this operating segment were down 18% compared with 2024.

Excluding currency effects, sales in South America were up 2% compared to 2024, reflecting improved medium/heavy-duty truck production volumes.

Excluding currency effects, sales in Asia Pacific decreased 2% compared to 2024, reflecting declining off-highway markets, partially offset by modestly improving light- and medium/heavy-truck production.

Cost of sales and gross margin — Cost of sales for the first quarter of 2025 decreased $359 when compared to 2024.

Sales in the second quarter of 2025 were $112 lower than 2024.

Stronger international currencies increased sales by $11, principally due to a stronger euro and Thai baht, partially offset by a weaker Brazilian real.

The organic sales decrease of $122, or 6%, primarily resulted from lower full-frame light-truck production in North America and lower medium/heavy-truck production volumes in North America and Europe, partially offset by the conversion of sales backlog.

Pricing actions and recoveries, including material commodity price and tariff and inflationary costs adjustments, increased sales by $55.

The North America organic sales decrease of 8% was driven principally by lower full-frame light-truck and medium- and heavy-truck production volumes, partially offset by the conversion of sales backlog and net customer pricing and tariff and cost recovery actions.

Second quarter 2025 full-frame light-truck production was down 4%, Class 8 production was down 28% and Classes 5-7 was down 31% compared to 2024.

Excluding currency effects, sales in Europe were down 4% compared with 2024, reflecting lower electric-vehicle product orders.

Excluding currency effects, sales in South America were flat compared to 2024, reflecting flat medium/heavy-duty production volumes.

Excluding currency effects, sales in Asia Pacific decreased 4% compared to 2024, reflecting lower electric vehicle related product orders, partially offset by modestly improving medium/heavy-truck production.

Cost of sales and gross margin — Cost of sales for the second quarter of 2025 decreased $133 when compared to 2024.

Cost of sales as a percent of sales was 140 basis points lower than in the previous year.

Incremental margins from cost reduction initiatives of $37, higher material cost savings of $28, operational efficiencies of $18, lower incentive compensation expense of $3 and lower premium freight costs of $1 were partially offset by unfavorable product mix, non-material inflation of $34, tariff-related impacts of $6, higher warranty expense of $3, higher spending on electrification initiatives of $1, higher commodity costs of $1 and higher program launch costs of $1.

Incremental margins from cost reduction initiatives of $52, higher material cost savings of $31, operational efficiencies of $23, lower premium freight costs of $9, lower commodity costs of $8, lower warranty expense of $6 and lower program launch costs of $1 were partially offset by unfavorable product mix, tariff-related impacts of $46, non-material inflation of $39, higher incentive compensation expense of $4 and higher spending on electrification initiatives of $3.

Commodity costs are primarily driven by certain grades of steel and aluminum.

Non-material inflation includes higher labor, energy and transportation rates.

Gross margin of $220 for the first quarter of 2025 decreased $24 from 2024.

Gross margin as a percent of sales was 9.4% in the first quarter of 2025, 50 basis points higher than in 2024.

Gross margin of $138 for the second quarter of 2025 increased $21 from 2024.

Gross margin as a percent of sales was 7.1% in the second quarter of 2025, 140 basis points higher than in 2024.

The improvement in gross margin as a percent of sales was driven principally by the cost of sales factors referenced above.

Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days.

With commodity costs remaining relatively flat during the first quarter of 2025, gross margin was negatively impacted by net material cost recoveries on both a dollar and percentage basis.

With commodity costs decreasing during the second quarter of 2025, gross margin was positively impacted by net material cost recoveries on both a dollar and percentage basis.

The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

Selling, general and administrative expenses (SG&A) — SG&A expenses in the first quarter of 2025 were $132 (5.6% of sales) as compared to $139 (5.1% of sales) in the first quarter of 2024.

SG&A expenses were $7 lower in the first quarter of 2025 primarily due to lower salary and employee benefit costs and lower travel and discretionary spending, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024.

Amortization of intangibles — Amortization expense was $3 in both the first quarter of 2025 and the first quarter of 2024.

Selling, general and administrative expenses (SG&A) — SG&A expenses in the second quarter of 2025 were $99 (5.1% of sales) as compared to $108 (5.3% of sales) in the second quarter of 2024.

SG&A expenses were $9 lower in the second quarter of 2025 primarily due to lower salary and employee benefit costs and lower travel and discretionary spending, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024.

Amortization of intangibles — Amortization expense was $2 in both the second quarter of 2025 and the second quarter of 2024.

See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Restructuring charges, net — Net restructuring charges were $5 in both the first quarter of 2025 and the first quarter of 2024.

Restructuring charges, net — Net restructuring charges were $11 in both the second quarter of 2025 and the second quarter of 2024.

See Note 5 of our consolidated financial statements in Item 1 of Part I for additional information.

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Strategic transaction expenses

Loss on sale of property, plant and equipment

Loss on divestiture of ownership interests

Other income (expense), net

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.

On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction.

See Note 17 of our consolidated financial statements in Item 1 of Part I for additional information.

Interest income and interest expense — Interest income was $3 in the second quarter of 2025 and $1 in the second quarter of 2024.

Interest expense increased from $40 in the second quarter of 2024 to $44 in the second quarter of 2025, reflecting higher average outstanding borrowings in 2025.

Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.8% in both the second quarter of 2025 and the second quarter of 2024.

Income tax expense — We reported income tax expense of $10 and $12 for the second quarter of 2025 and 2024, respectively.

Our effective tax rates were (43)% and (23)% for the second quarter of 2025 and 2024, respectively.

During the second quarter of 2025, we recorded tax expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment.

During the second quarter of 2024, we recorded tax expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions.

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 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 nondeductible expenses.

Equity in earnings of affiliates — Net earnings from equity investments was $23 in the second quarter of 2025 and $3 in the second quarter of 2024.

Net earnings from Dongfeng Dana Axle Co., Ltd.

(DDAC) were $4 in the second quarter of 2025 and $1 in the second quarter of 2024.

On April 25, 2025, we sold our ownership interest in Axles India Limited, recognizing a $19 pre-tax gain on the transaction.

See Note 20 of our consolidated financial statements in Item 1 of Part I for additional information.

Net income from discontinued operations — Net income from discontinued operations in the second quarter of 2025 was $34 lower than the second quarter of 2024.

The year-over-year second quarter decrease was primarily due to lower sales resulting from weaker global construction/mining equipment and agricultural equipment markets, especially in Europe, and Off-Highway business divesture related costs incurred during the second quarter of 2025.

Year-over-year second quarter construction/mining equipment and agricultural equipment production in Europe were down 10% and 5%, respectively.

During the second quarter of 2025, $14 of Off-Highway business divesture transaction related costs were attributed to discontinued operations.

Summary Consolidated Results of Operations (Year-to-Date, 2025 versus 2024)

Six Months Ended June 30,

% of Net Sales

Increase/ (Decrease)

Cost of sales

Selling, general and administrative expenses

Amortization of intangibles

Restructuring charges, net

Loss on disposal group previously held for sale

Other income (expense), net

Earnings (loss) from continuing operations before interest and income taxes

Interest income

Interest expense

Loss from continuing operations before income taxes

Income tax expense

Equity in earnings of affiliates

Net loss income from continuing operations

Net income from discontinued operations

Noncontrolling interests net income from continuing operations

Redeemable noncontrolling interests net loss from continuing operations

Net income attributable to the parent company

Sales — The following table shows changes in our sales by geographic region.

Six Months Ended

Amount of Change Due To

Increase/ (Decrease)

Currency Effects

(Divestitures)

Organic Change

North America

South America

Sales in the first six months of 2025 were $346 lower than 2024.

Weaker international currencies decreased sales by $24, principally due to a weaker Brazilian real, Indian rupee, Mexican peso and Canadian dollar, partially offset by a stronger Thai baht and euro.

The organic sales decrease of $321, or 8%, primarily resulted from lower full-frame light-truck production volumes in North America and lower medium/heavy-truck production volumes in North America and Europe, partially offset by the conversion of sales backlog.

Pricing actions and recoveries, including material commodity price and tariff and inflationary costs adjustments, increased sales by $72.

The North America organic sales decrease of 12% was driven principally by lower full-frame light-truck and medium- and heavy-truck production volumes, partially offset by the conversion of sales backlog and net customer pricing and tariff and cost recovery actions.

First six months 2025 full-frame light-truck production was down 6%, Class 8 production was down 22% and Classes 5-7 was down 25% compared to 2024.

Excluding currency effects, sales in Europe were down 4% compared with 2024, reflecting lower electric-vehicle product orders.

Excluding currency effects, sales in South America were up 1% compared to 2024, reflecting flat medium/heavy-duty production volumes.

Excluding currency effects, sales in Asia Pacific were flat compared to 2024, reflecting modestly improving medium/heavy-truck production partially offset by lower electric-vehicle related product orders.

Cost of sales and gross margin — Cost of sales for the first six months of 2025 decreased $373 when compared to 2024.

Cost of sales as a percent of sales was 130 basis points lower than in the pervious year.

Incremental margins from cost reduction initiatives of $90, higher material cost savings of $59, operational efficiencies of $37, lower premium freight costs of $10, lower commodity costs of $7 and lower warranty expense of $3 were partially offset by unfavorable product mix, tariff-related impacts of $52, non-material inflation of $72, higher spending on electrification initiatives of $4 and higher incentive compensation expense of $1.

Commodity costs are primarily driven by certain grades of steel and aluminum.

Non-material inflation includes higher labor, energy and transportation rates.

Gross margin of $256 for first six months 2025 increased $27 from 2024.

Gross margin as a percent of sales was 6.9% in the first six months of 2025, 130 basis points higher than in 2024.

The improvement in gross margin as a percent of sales was driven principally by the cost of sales factors referenced above.

Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days.

Despite commodity costs decreasing during the first six months of 2025, gross margin was negatively impacted by net material cost recoveries on both a dollar and percentage basis.

The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

Selling, general and administrative expenses (SG&A) — SG&A expenses in the first six months of 2025 were $204 (5.5% of sales) as compared to $222 (5.5% of sales) in the first six months of 2024.

SG&A expenses were $18 lower in the first six months of 2025 primarily due to lower salary and employee benefit costs and lower travel and discretionary spending, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024.

Amortization of intangibles — Amortization expense was $4 in both the first six months of 2025 and the first six months of 2024.

See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Restructuring charges, net — Net restructuring charges were $13 in the first six months of 2025 and $16 in the first six months in 2024.

See Note 5 of our consolidated financial statements in Item 1 of Part I for additional information.

Loss on disposal group previously held for sale — In February 2024, we entered into a definitive agreement to sell our European hydraulics business to HPIH S.à r.l.

We classified the disposal group as held for sale in the first quarter of 2024.

The transaction was not completed by the date set forth in the definitive agreement.

The disposal group is no longer held for sale.

See Note 3 of our consolidated financial statements in Item 1 of Part I for additional information.

Other income (expense), net — The following table shows the major components of other income (expense), net.

Six Months Ended

Non-service cost components of pension and OPEB costs

Government assistance

Foreign exchange gain (loss)

Strategic transaction expenses

Gain (loss) on sale of property, plant and equipment

Loss on divestiture of ownership interests

Other income (expense), net

Strategic transaction expenses during the three months ended March 31, 2025 were primarily attributable to investigating the potential sale of our Off-Highway business.

Interest income and interest expense — Interest income was $3 in the first quarter of 2025 and $4 in the first quarter of 2024.

Interest expense was $39 in both the first quarter of 2025 and the first quarter of 2024, reflecting higher average outstanding borrowings in 2025 being offset by lower average interest rates.

Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.5% in the first quarter of 2025 and 5.8% in the first quarter of 2024.

Income tax expense — We reported income tax expense of $8 and $37 for the first quarter of 2025 and 2024, respectively.

Our effective tax rates were 22% and 106% for the first quarter of 2025 and 2024, respectively.

During the first quarter of 2025, we recorded a tax benefit of $19 due to a basis difference in a foreign subsidiary as a result of a change in tax status and $9 of tax expense for income tax reserves associated with prior tax years in foreign jurisdictions.

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

On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction.

See Note 17 of our consolidated financial statements in Item 1 of Part I for additional information.

Interest income and interest expense — Interest income was $5 in the first six months of 2025 and $4 in the first six months of 2024.

Interest expense increased from $79 in the first six months of 2024 to $83 in the first six months of 2025, reflecting higher average outstanding borrowings in 2025 being partially offset by lower average interest rates.

Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.6% in the first six months of 2025 and 5.8% in the first six months of 2024.

Income tax expense — We reported income tax expense of $0 and $5 for the first six months of 2025 and 2024, respectively.

Our effective tax rates were 0% and (4)% for the first six months of 2025 and 2024, respectively.

During the first six months of 2025, we recorded a tax benefit of $19 due to a basis difference in a foreign subsidiary as a result of a change in tax status, $9 of tax expense for income tax reserves associated with prior tax years in foreign jurisdictions and expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment.

During the first six months of 2024, we recorded tax expense of $11 for valuation allowances related to foreign jurisdictions and expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions.

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

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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 nondeductible expenses.

Equity in earnings of affiliates — Net earnings from equity investments was $2 in both the first quarter of 2025 and the first quarter of 2024 .

Equity in earnings of affiliates — Net earnings from equity investments was $25 in the first six months of 2025 and $5 in the first six months of 2024.

Net earnings from Dongfeng Dana Axle Co., Ltd.

(DDAC) were de minimis in both the first quarter of 2025 and the first quarter of 2024.

(DDAC) were $4 in the first six months of 2025 and $1 in the first six months of 2024.

On April 25, 2025, we sold our ownership interest in Axles India Limited, recognizing a $19 pre-tax gain on the transaction.

See Note 20 of our consolidated financial statements in Item 1 of Part I for additional information.

Net income from discontinued operations — Net income from discontinued operations in the first half of 2025 was $52 lower than the first half of 2024.

The year-over-year first half decrease was primarily due to lower sales resulting from weaker global construction/mining equipment and agricultural equipment markets, especially in Europe, and Off-Highway business divesture related costs incurred during the second quarter of 2025.

Year-over-year second quarter construction/mining equipment and agricultural equipment production in Europe were down 10% and 5%, respectively.

During the first half of 2025, $34 of Off-Highway business divesture transaction related costs were attributed to discontinued operations.

Segment Results of Operations (2025 versus 2024)

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Segment EBITDA Margin

Segment EBITDA

Segment EBITDA Margin

Volume and mix

Currency effects

Light Vehicle sales in the first quarter of 2025, exclusive of currency effects, were 10% lower than 2024 reflecting lower production volumes in North America and Europe partially offset by the benefit of net customer pricing and cost recovery actions and the conversion of sales backlog.

Year-over-year North America full-frame light-truck production decreased 9% and year-over-year light-truck production in Europe decreased 5%.

Net customer pricing and cost recovery actions increased year-over-year sales by $14.

Light Vehicle segment EBITDA decreased by $10 compared to the prior year.

Lower sales volumes decreased year-over-year earnings by $36 (24% decremental margin).

The year-over-year performance-related earnings increase was driven by cost reduction initiatives of $17, net customer pricing and cost recovery actions of $14, higher material cost savings of $12, lower incentive compensation expense of $4 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $7.

Partially offsetting these performance-related earnings increases were inflationary cost increases of $20, tariff-related impacts of $4, higher premium freight costs of $2, higher program launch costs of $1 and higher warranty expense of $1.

Light Vehicle sales in the second quarter of 2025, exclusive of divestiture and currency effects, were 5% lower than 2024 reflecting lower production volumes in North America and lower electric-vehicle product orders in Europe and Asia Pacific partially offset by the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog.

Year-over-year North America full-frame light-truck production decreased 4% in this year’s second quarter while light-truck production in Asia Pacific increased 6%.

Light-truck production in Europe was flat compared with last year’s second quarter.

Light Vehicles sales in the first half of 2025, exclusive of divestiture and currency effects, were 8% lower than 2024 reflecting lower production volumes in North America and lower electric-vehicle product orders in Europe and Asia Pacific partially offset by the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog.

Year-over-year North America full-frame light-truck production decreased 6% in this year’s first half while light-truck production in Asia Pacific increased 8%.

Light-truck production in Europe was flat compared with last year’s first half.

Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $41 and $55 in this year’s second quarter and first half, respectively.

Light Vehicle second-quarter and first-half 2025 segment EBITDA increased $22 and $12, respectively, from the comparable periods of 2024.

Lower sales volumes decreased year-over-year earnings by $31 (26% decremental margin) in the second quarter of 2025.

Lower sales volumes decreased year-over-year earnings by $67 (25% decremental margin) in the first half of 2025.

The year-over-year performance-related earnings increase in the second quarter of 2025 was driven by net customer pricing and cost and tariff recovery actions of $41, cost reduction initiatives of $22, higher material cost savings of $16, lower premium freight costs of $8, commodity cost decreases of $6 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $17.

Partially offsetting these performance-related earnings increases were higher tariff-related costs of $32, inflationary cost increases of $24, higher incentive compensation expense of $1 and higher warranty expense of $1.

The year-over-year performance-related earnings increase in the first half of 2025 was driven by net customer pricing and cost and tariff recovery actions of $55, cost reduction initiatives of $39, higher material cost savings of $28, lower premium freight costs of $6, commodity cost decreases of $6, lower incentive compensation expense of $2 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $25.

Partially offsetting these performance-related earnings increases were inflationary cost increases of $44, higher tariff-related costs of $36, higher warranty expense of $2 and higher program launch costs of $1.

Commercial Vehicle

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Segment EBITDA Margin

Volume and mix

Currency effects

Commercial Vehicle sales in the first quarter of 2025, exclusive of currency effects, were 9% lower than 2024 reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost recovery actions.

Year-over-year Class 8 production in North America was down 22% while Classes 5-7 was down 24% in this year’s first quarter.

Year-over-year medium/heavy-truck production in Europe was down 11% while year-over-year medium/heavy-truck production in South America and Asia Pacific were up 7% and 4%, respectively.

Net customer pricing and cost recovery actions increased year-over-year sales by $6.

Commercial Vehicle segment EBITDA increased by $11 compared to the prior year.

Lower sales volumes decreased year-over-year earnings by $19 (30% decremental margin).

The year-over-year performance-related earnings increase was driven by cost reduction initiatives of $11, higher material cost savings of $8, net customer pricing and cost recovery actions of $6, lower premium freight costs of $2, lower incentive compensation expense of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $17.

Partially offsetting these performance-related earnings increases were inflationary cost increases of $8, commodity cost increases of $2, tariff-related impacts of $2 and higher spending on electrification initiatives of $1.

Segment EBITDA

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Currency effects

Off-Highway sales in the first quarter of 2025, exclusive of currency effects, were 18% lower than 2024 reflecting weaker global markets and the impact of net customer pricing and cost recovery actions partially offset by the conversion of sales backlog.

Year-over-year global construction/mining equipment and agricultural equipment markets continued to soften, especially in Europe.

Year-over-year first quarter construction/mining equipment and agricultural equipment production in Europe were down 10% and 5%, respectively.

Net customer pricing and cost recovery actions decreased year-over-year sales by $3.

Off-Highway segment EBITDA decreased by $36 compared to the prior year.

Lower sales volumes decreased year-over-year earnings by $35 (26% decremental margin).

The year-over-year performance-related earnings increase was driven by higher material cost savings of $8, lower commodity costs of $1, lower incentive compensation expense of $1, lower premium freight cost of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $3.

Largely offsetting these performance-related earnings increases were inflationary cost increases of $8, net customer pricing and cost recovery actions of $3 and higher warranty expense of $2.

Commercial Vehicle sales in the second quarter of 2025, exclusive of currency effects, were 7% lower than 2024 reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions.

Year-over-year Class 8 production in North America was down 28% while Classes 5-7 was down 31% in this year’s second quarter.

Year-over-year medium/heavy-truck production in Europe and South America were down 2% and 1%, respectively, while medium/heavy-truck production in Asia Pacific was up 13%.

Commercial Vehicle sales in the first half of 2025, exclusive of currency effects, were 8% lower than 2024 reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions.

Year-over-year Class 8 production in North America was down 22% while Classes 5-7 was down 25% in this year’s first half.

Year-over-year medium/heavy truck production in Europe was down 9% while medium/heavy truck production in South America and Asia Pacific were up 3% and 9%, respectively.

Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $16 and $22 in this year’s second quarter and first half, respectively.

Commercial Vehicle second-quarter and first-half 2025 segment EBITDA increased $8 and $16, respectively, from the comparable periods of 2024.

Lower sales volumes decreased year-over-year earnings by $20 (32% decremental margin) in the second quarter of 2025.

Lower sales volumes decreased year-over-year earnings by $42 (33% decremental margin) in the first half of 2025.

The year-over-year performance-related earnings increase in the second quarter of 2025 was driven by net customer pricing and cost and tariff recovery actions of $16, cost reduction initiatives of $10, higher material cost savings of $7, lower warranty expense of $4, lower premium freights costs of $2, lower program launch costs of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $10.

Partially offsetting these performance-related earnings increases were higher tariff-related costs of $9, inflationary costs increases of $8, higher spending on electrification initiatives of $3 and higher incentives compensation expense of $2.

The year-over-year performance-related earnings increase in the first half of 2025 was driven by net customer pricing and cost and tariff recovery actions of $22, cost reduction initiatives of $21, higher material costs savings of $15, lower warranty expense of $4, lower premium freight costs of $4, lower program launch costs of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $27.

Partially offsetting these performance-related earnings increases were inflationary cost increases of $16, higher tariff-related costs of $11, higher spending on electrification initiatives of $4, commodity cost increases of $2 and higher incentive compensation expense of $1.

Non-GAAP Financial Measures

Adjusted EBITDA

We have defined adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits (OPEB) costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.).

We have defined adjusted EBITDA as net income (loss) from continuing operations before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits (OPEB) costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.).

Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns.

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Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table provides a reconciliation of net income to adjusted EBITDA.

The following table provides a reconciliation of net loss from continuing operations to adjusted EBITDA.

Three Months Ended

Six Months Ended

Net loss from continuing operations

Equity in earnings of affiliates

Income tax expense

Earnings before income taxes

Loss from continuing operations before income taxes

Depreciation and amortization

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Interest expense, net

Loss on divestiture of ownership interests

Supplier capacity charge adjustment

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Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

The following table reconciles net cash flows provided by operating activities to adjusted free cash flow.

The following table reconciles net cash flows provided by (used in) operating activities to adjusted free cash flow.

Three Months Ended

Net cash used in operating activities

Purchases of property, plant and equipment

Proceeds from sale of property, plant and equipment

Six Months Ended

Net cash provided by (used in) operating activities

Purchases of property, plant and equipment - Continuing operations

Purchases of property, plant and equipment - Discontinued operations

Proceeds from sale of property, plant and equipment - Continuing operations

Proceeds from sale of property, plant and equipment - Discontinued operations

Adjusted free cash flow

The following table provides a reconciliation of cash and cash equivalents to liquidity, a non-GAAP measure, at March 31, 2025:

The following table provides a reconciliation of cash and cash equivalents to liquidity, a non-GAAP measure, at June 30, 2025:

Cash and cash equivalents

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Total liquidity

We had availability of $1,025 at March 31, 2025 under our Revolving Facility after deducting $115 of outstanding borrowings and $10 of outstanding letters of credit.

The components of our March 31, 2025 consolidated cash balance were as follows:

We had availability of $615 at June 30, 2025 under our Revolving Facility after deducting $525 of outstanding borrowings and $10 of outstanding letters of credit.

The components of our June 30, 2025 consolidated cash balance were as follows:

Cash and cash equivalents

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Beyond these restrictions, there are practical limitations on repatriation of cash from certain subsidiaries because of the resulting tax withholdings and subsidiary by-law restrictions which could limit our ability to access cash and other assets.

At March 31, 2025, we were in compliance with the covenants of our financing agreements.

At June 30, 2025, we were in compliance with the covenants of our financing agreements.

Under the Revolving Facility and our senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types.

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There can be no assurance that we will pursue any such transactions in the future, as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our financing and governance documents.

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand and (iii) borrowings from our Revolving Facility.

In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc.

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

The transaction is currently expected to close during the fourth quarter of 2025, subject to satisfaction of regulatory approvals and other customary conditions.

Net cash proceeds from the Off-Highway business divestiture will be used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders.

On July 31, 2025, we amended our credit and guaranty agreement to include a $250 Term A Facility.

The Term A Facility matures at the earlier of five days after the consummation of the Off-Highway business sale or July 30, 2026.

We are required to make quarterly installments on the Term A facility on the last day of each quarter commencing on December 31, 2025 in an amount equal to 10% of the original amount borrowed adjusted for any prepayments.

On July 31, 2025, we fully drew the Term A Facility and used the proceeds to pay down outstanding borrowings on our Revolving Facility.

See Note 12 of our consolidated financial statements in Item 1 of Part I for additional information

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand, (iii) borrowings from our Revolving Facility and (iv) net cash proceeds from the sale of the Off-Highway business.

We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital, debt obligations and other commitments during the next twelve months.

While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity.

In November 2024, we announced we are exploring the divestiture of our Off-Highway business.

We expect that a portion of any cash proceeds received from a sale transaction would be used to repay or redeem a portion of our outstanding indebtedness.

The following table summarizes our consolidated statement of cash flows:

Three Months Ended

Cash used for changes in working capital

Other cash provided by operations

Net cash used in operating activities

Six Months Ended

Net cash provied by (used in) operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Net decrease in cash, cash equivalents and restricted cash

Operating activities — Exclusive of working capital, other cash provided by operations was $104 in 2025 and $149 in 2024.

The year-over-year decrease is primarily attributable to lower operating earnings in 2025.

Working capital used cash of $141 and $251 in 2025 and 2024.

Operating activities — Exclusive of working capital, other cash provided by continuing operations was $171 in 2025 and $113 in 2024.

The year-over-year increase is primarily attributable to higher operating earnings in 2025.

Continuing operations working capital used cash of $202 and $181 in 2025 and 2024.

Cash of $134 and $164 was used to finance receivables in 2025 and 2024.

Cash of $37 and $18 was used to fund higher inventory levels in 2025 and 2024.

Increases in accounts payable and other net liabilities provided cash of $77 in 2025 while decreases in accounts payable and other net liabilities used cash of $64 in 2024.

Investing activities — Expenditures for property, plant and equipment were $75 and $70 in 2025 and 2024.

The increase in capital spending during 2025 is primarily due to the year-over-year calendarization of capital spending being higher in this year’s first quarter.

Financing activities — During 2025 and 2024, we had net borrowings on our Revolving Facility of $115 and $15, respectively.

Lower inventory levels provided cash of $48 in 2025 while cash of $45 was used to fund higher inventory levels in 2024.

Decrease in accounts payable and other net liabilities used cash of $116 in 2025 while increases in accounts payable and other net liabilities provided cash of $28 in 2024.

Operating activities of discontinued operations generated cash of $26 and $181 in 2025 and 2024.

Investing activities — Expenditures for property, plant and equipment by continuing operations were $104 and $161 in 2025 and 2024.

The decrease in capital spending during 2025 is primarily due to lower year-over-year program launches and a continued focus on rationalizing capital investments.

On April 25, 2025, we sold our ownership interest in Axles India Limited for $43.

On June 6, 2025, we sold our ownership interest in Switch Mobility Limited for $10.

Investing activities of discontinued operations used cash of $22 and $16 in 2025 and 2024.

Financing activities — During 2025, we had net borrowings on our Revolving Facility of $525.

During 2025, we redeemed the remaining $200 of our April 2025 Notes.

During 2024, we paid the $25 note payable due to the former owners of SME S.p.A.

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Distributions to noncontrolling interests totaled $3 in 2025 and $5 in 2024.

During 2025, we used cash of $257 to repurchase common shares under our share repurchase program.

During 2025, we used cash of $14 to settle swaps associated with our April 2025 Notes.

Hydro-Québec made cash contributions to Dana TM4 of $18 in 2024.

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Off-Balance Sheet Arrangements

There have been no material changes at March 31, 2025 in our off-balance sheet arrangements from those reported or estimated in the disclosures in Item 7 of our 2024 Form 10-K.

There have been no material changes at June 30, 2025 in our off-balance sheet arrangements from those reported or estimated in the disclosures in Item 7 of our 2024 Form 10-K.

Contractual Obligations

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See Item 7 in our 2024 Form 10-K for a description of our critical accounting estimates and Note 1 to our consolidated financial statements in Item 8 of our 2024 Form 10-K for our significant accounting policies.

There were no changes to our critical accounting estimates in the three months ended March 31, 2025.

See Note 1 to our consolidated financial statements in this Form 10-Q for a discussion of new accounting guidance adopted during the first three months of 2025.

There were no changes to our critical accounting estimates in the six months ended June 30, 2025.

See Note 1 to our consolidated financial statements in this Form 10-Q for a discussion of new accounting guidance adopted during the first six months of 2025.

Quantitative and Qualitative Disclosures About Market Risk

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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 2. Management’s Discussion and Analysis