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Item 1A. Risk Factors

2026-02-27 compared with 2025-02-20 · 32 added, 19 removed, 216 unchanged (19% of the section changed)

We are impacted by events and conditions that affect the light vehicle, commercial vehicle and off-highway markets that we serve, as well as by factors specific to Dana.

We are impacted by events and conditions that affect the light vehicle and commercial vehicle markets that we serve, as well as by factors specific to Dana.

Among the risks that could materially adversely affect our business, financial condition or results of operations are the following, many of which are interrelated.

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Our sales may also be adversely impacted if tariffs are assessed directly on the products we produce or on our customers’ products containing content sourced from us.

Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S.

tariffs is unclear.

On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA").

Following the Supreme Court’s decision, the U.S.

presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs.

There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on Dana's business.

These and future changes in tariffs, trade policies, trade actions, or retaliatory trade measures in response, have resulted and may continue to result in additional costs and pricing pressures, supply chain disruptions, volatile or unpredictable customer spending patterns, and increased economic or geopolitical risks, which could adversely impact Dana's future sales, business, financial condition, and results of operations, materially or in ways that Dana cannot predict.

We may be adversely impacted by the strength of the U.S.

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We may not realize any or all of our estimated cost savings, which would have a negative effect on our results of operations.

On November 25, 2024, we announced cost reduction actions that include substantial reductions in selling, general and administrative costs across all the company’s businesses and engineering expenses.

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 $325 through 2026.

Approximately $260 of annualized savings was realized through 2025 with an additional $65 to be realized in 2026.

Any cost savings that we realize from such efforts may differ materially from our estimates, which involve risks, uncertainties, assumptions and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such estimates.

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Additionally, inability on the part of our partners to satisfy their contractual obligations under the agreements could adversely impact our results of operations and financial position.

Certain of our joint venture partners have the ability to put their ownership interests to Dana at fair value.

If a joint venture partner were to put its ownership interest to Dana, it could cause Dana to outlay significant amounts of cash to purchase the joint venture partner's ownership interest in addition to increased future cash outlays required to fund 100% of the operations on a go-forward basis, reducing available funds for other strategic initiatives and capital investments.

(See Note 8 to our consolidated financial statements in Item 8 for additional information on redeemable noncontrolling interests.)

We may fail to consummate or realize the value of dispositions and other strategic initiatives and such transactions and initiatives may be disruptive to our operations and adversely impact our results.

We announced on November 25, 2024 strategic initiatives that included initiating the sale process for our Off-Highway business, however, there can be no assurance that the sale process for our Off-Highway business will result in a transaction.

Factors that could cause this event not to occur include, but are not limited to, a failure to obtain necessary regulatory approvals, a deterioration in the Dana’s business or prospects, adverse developments in key markets, adverse developments in the U.S.

or global capital markets, credit markets or economies generally or a failure to execute a sale of the Off-Highway business on acceptable terms.

Moreover, any sale and separation process, including complex carve-out and transition activities, may be time consuming and disruptive to Dana’s business operations, could divert the attention of management and the Board from Dana’s business, could impair Dana’s ability to attract, retain and motivate key employees, could impact

Dana’s relationships with suppliers and/or customers, could negatively affect Dana’s credit ratings and ability raise future capital and could expose Dana to potential litigation in connection with the sale process and the standalone business.

If we are unable to effectively manage these risks, our results may be adversely affected.

We could be adversely impacted by the costs of environmental, health, safety and product liability compliance.

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We recognize the increasing volume of cyber attacks and employ commercially practical efforts to provide reasonable assurance that the risks of such attacks are appropriately mitigated.

Challenges such as malware, unauthorized access and cyber attacks, including those that use advanced artificial intelligence, phishing campaigns that target our associates, as well as other disruptions, continue to evolve and may surpass our current safeguards.

Each year, we evaluate the threat profile of our industry to stay abreast of trends and to provide reasonable assurance our existing countermeasures will address any new threats identified.

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Additionally, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future.

Our current and potential use of artificial intelligence (AI) and machine learning (ML) and other emerging technologies may expose us to operational, legal and regulatory risks that could adversely affect our business and reputation.

Our use of AI and machine learning presents risks that could adversely affect our business, financial condition and results of operations.

We currently incorporate AI-powered tools, in certain instances, into certain internal business operations, including elements of production processes and certain administrative functions.

AI algorithms may be flawed or perform unpredictably, and datasets may be insufficient, inaccurate, biased or otherwise problematic, which could lead to errors, operational disruptions, unintended outcomes or suboptimal decisions.

The rapid evolution and increased adoption of AI technologies may increase the risk of technical disruptions to our operations and the processes and functions for which the technology is deployed.

The use of AI tools also raises risks related to privacy and inadvertent disclosure of sensitive information.

AI systems may access, process or expose personal, confidential or proprietary data in ways that we do not intend or anticipate.

In addition, evolving AI and data-governance laws, regulations and standards may impose additional requirements or restrictions on our development and use of AI, increase compliance costs or limit certain use cases.

Constraints in hardware (such as GPU availability), power capacity or other supply chain elements may limit our ability to scale AI responsibly.

We also face competitive risk if other companies develop or adopt AI capabilities more effectively, at lower cost or more rapidly than we do.

Because our AI capabilities currently depend in part on third-party providers of models, cloud services and infrastructure, changes in their performance, pricing, licensing terms or availability could materially increase our costs or reduce availability.

Collectively, these risks could adversely affect our financial condition, operating results, cash flows and reputation.

See also our risk factor titled "A failure of our information technology infrastructure could adversely impact our business and operations" for cybersecurity risks, including AI-enabled threats.

We participate in certain multi-employer pension plans which are not fully funded.

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Developments in the financial markets or downgrades to Dana's credit rating could restrict our access to capital and increase financing costs.

At December 31, 2024, Dana had consolidated debt obligations of $2,630, with cash and cash equivalents of $494 and unused revolving credit capacity of $1,140.

At January 31, 2026, Dana had consolidated debt obligations of $1,315, with cash and cash equivalents of $659 and unused revolving credit capacity of $1,140.

Our ability to grow the business and satisfy debt service obligations is dependent, in part, on our ability to gain access to capital at competitive costs.

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Increased scrutiny from the public, investors, and others regarding our environmental, social, and governance ("ESG") practices could impact our reputation.

We have a board committee and an executive officer position with responsibility for sustainability, additional dedicated employee resources, a cross-functional/business sustainability leadership team to further develop and implement an enterprise-wide sustainability strategy, and we have published a sustainability report.

Our sustainability report includes our policies and practices on a variety of ESG matters, including the value creation opportunities provided by our products;

diversity, equity, and inclusion;

employee health and safety;

community giving;

and human capital management.

We have established board and executive officer oversight of sustainability matters, with additional dedicated employee resources and a cross-functional/business sustainability leadership team to further develop and implement an enterprise-wide sustainability strategy, and we have published a sustainability report.

Our sustainability report includes our policies and practices on a variety of ESG matters, including GHG emission targets and performance;

safety management system goals and performance;

standards of business conduct;

and supplier code of business conduct.

These efforts may result in increased investor, media, employee, and other stakeholder attention to such initiatives, and such stakeholders may not be satisfied with our ESG practices or initiatives.

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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-K

Item 1A. Risk Factors