UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: March 31, 2022

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period From to

Commission File Number: 1-1063

Dana Incorporated

(Exact name of registrant as specified in its charter)

Delaware	26-1531856
(State of incorporation)	(IRS Employer Identification Number)

3939 Technology Drive, Maumee, OH	43537
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (419) 887-3000

Securities registered pursuant to Section 12(b) of the Act:

Common stock $0.01 par value	DAN	New York Stock Exchange
(Title of each class)	(Trading Symbol)	(Name of exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  ☐    No  ☑

There were 143,334,271 shares of the registrant’s common stock outstanding at April 15, 2022.

DANA INCORPORATED – FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

TABLE OF CONTENTS

		10-Q Pages
PART I – FINANCIAL INFORMATION
Item 1	Financial Statements	3
	Consolidated Statement of Operations (Unaudited)	3
	Consolidated Statement of Comprehensive Income (Unaudited)	4
	Consolidated Balance Sheet (Unaudited)	5
	Consolidated Statement of Cash Flows (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4	Controls and Procedures	37
PART II – OTHER INFORMATION
Item 1	Legal Proceedings	38
Item 1A	Risk Factors	38
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6	Exhibits	38
Signatures		39

2

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dana Incorporated

Consolidated Statement of Operations (Unaudited)

(In millions, except per share amounts)

	Three Months Ended
	March 31,
	2022			2021
Net sales	$	2,480		$	2,263
Costs and expenses
Cost of sales		2,283			2,012
Selling, general and administrative expenses		130			119
Amortization of intangibles		4			4
Restructuring charges, net		(1	)		1
Other income (expense), net		2			(19	)
Earnings before interest and income taxes		66			108
Interest income		2			2
Interest expense		31			34
Earnings before income taxes		37			76
Income tax expense		18			22
Equity in earnings of affiliates		1			14
Net income		20			68
Less: Noncontrolling interests net income		4			1
Less: Redeemable noncontrolling interests net loss		(1	)		(4	)
Net income attributable to the parent company	$	17		$	71
Net income per share available to common stockholders
Basic	$	0.12		$	0.49
Diluted	$	0.12		$	0.48
Weighted-average common shares outstanding
Basic		144.2			144.9
Diluted		145.3			146.4

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

3

Dana Incorporated

Consolidated Statement of Comprehensive Income (Unaudited)

(In millions)

	Three Months Ended
	March 31,
	2022			2021
Net income	$	20		$	68
Other comprehensive income (loss), net of tax:
Currency translation adjustments		39			(5	)
Hedging gains and losses		(4	)		(17	)
Defined benefit plans		1			3
Other comprehensive income (loss)		36			(19	)
Total comprehensive income		56			49
Less: Comprehensive (income) loss attributable to noncontrolling interests		(4	)		1
Less: Comprehensive loss attributable to redeemable noncontrolling interests		1			3
Comprehensive income attributable to the parent company	$	53		$	53

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

4

Dana Incorporated

Consolidated Balance Sheet (Unaudited)

(In millions, except share and per share amounts)

	March 31,			December 31,
	2022			2021
Assets
Current assets
Cash and cash equivalents	$	259		$	268
Marketable securities		19			17
Accounts receivable
Trade, less allowance for doubtful accounts of $7 in 2022 and $7 in 2021		1,625			1,321
Other		250			220
Inventories		1,631			1,564
Other current assets		210			196
Total current assets		3,994			3,586
Goodwill		479			482
Intangibles		225			233
Deferred tax assets		603			580
Other noncurrent assets		128			131
Investments in affiliates		175			174
Operating lease assets		244			247
Property, plant and equipment, net		2,205			2,199
Total assets	$	8,053		$	7,632
Liabilities and equity
Current liabilities
Short-term debt	$	301		$	23
Current portion of long-term debt		8			8
Accounts payable		1,717			1,571
Accrued payroll and employee benefits		207			184
Taxes on income		55			41
Current portion of operating lease liabilities		39			43
Other accrued liabilities		293			304
Total current liabilities		2,620			2,174
Long-term debt, less debt issuance costs of $25 in 2022 and $26 in 2021		2,376			2,386
Noncurrent operating lease liabilities		211			209
Pension and postretirement obligations		390			398
Other noncurrent liabilities		269			292
Total liabilities		5,866			5,459
Commitments and contingencies (Note 14)
Redeemable noncontrolling interests		200			198
Parent company stockholders' equity
Preferred stock, 50,000,000 shares authorized, $0.01 par value, no shares outstanding		—			—
Common stock, 450,000,000 shares authorized, $0.01 par value, 143,334,271 and 144,238,660 shares outstanding		2			2
Additional paid-in capital		2,431			2,427
Retained earnings		664			662
Treasury stock, at cost (13,466,902 and 11,661,591 shares)		(216	)		(184	)
Accumulated other comprehensive loss		(949	)		(985	)
Total parent company stockholders' equity		1,932			1,922
Noncontrolling interests		55			53
Total equity		1,987			1,975
Total liabilities, redeemable noncontrolling interests and equity	$	8,053		$	7,632

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

5

Dana Incorporated

Consolidated Statement of Cash Flows (Unaudited)

(In millions)

	Three Months Ended
	March 31,
	2022			2021
Operating activities
Net income	$	20		$	68
Depreciation		91			88
Amortization		6			7
Amortization of deferred financing charges		1			2
Earnings of affiliates, net of dividends received		(1	)		(14	)
Stock compensation expense		4			5
Deferred income taxes		(25	)		(6	)
Pension expense, net		(1	)
Change in working capital		(211	)		(133	)
Other, net		(5	)		10
Net cash provided by (used in) operating activities		(121	)		27
Investing activities
Purchases of property, plant and equipment		(116	)		(53	)
Acquisition of businesses, net of cash acquired					(17	)
Purchases of marketable securities		(5	)		(11	)
Proceeds from sales and maturities of marketable securities		2			6
Other, net		2			2
Net cash used in investing activities		(117	)		(73	)
Financing activities
Net change in short-term debt		278			(1	)
Proceeds from long-term debt		2			2
Repayment of long-term debt		(3	)		(1	)
Deferred financing payments					(2	)
Dividends paid to common stockholders		(14	)		(14	)
Repurchases of common stock		(25	)
Distributions to noncontrolling interests		(1	)
Contributions from redeemable noncontrolling interests		2			1
Payments to acquire noncontrolling interests		(3	)
Other, net		(7	)		(1	)
Net cash provided by (used in) financing activities		229			(16	)
Net decrease in cash, cash equivalents and restricted cash		(9	)		(62	)
Cash, cash equivalents and restricted cash – beginning of period		287			567
Effect of exchange rate changes on cash balances		2			(12	)
Cash, cash equivalents and restricted cash – end of period (Note 5)	$	280		$	493
Non-cash investing activity
Purchases of property, plant and equipment held in accounts payable	$	74		$	56

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

6

Dana Incorporated

Index to Notes to Consolidated Financial Statements

1.	Organization and Summary of Significant Accounting Policies
2.	Acquisitions
3.	Goodwill and Other Intangible Assets
4.	Restructuring of Operations
5.	Supplemental Balance Sheet and Cash Flow Information
6.	Stockholders' Equity
7.	Redeemable Noncontrolling Interests
8.	Earnings per Share
9.	Stock Compensation
10.	Pension and Postretirement Benefit Plans
11.	Marketable Securities
12.	Financing Agreements
13.	Fair Value Measurements and Derivatives
14.	Commitments and Contingencies
15.	Warranty Obligations
16.	Income Taxes
17.	Other Income (Expense), Net
18.	Revenue from Contracts with Customers
19.	Segments
20.	Equity Affiliates

7

Notes to Consolidated Financial Statements (Unaudited)

(In millions, except share and per share amounts)

Note 1. Organization and Summary of Significant Accounting Policies

General

Dana Incorporated (Dana) is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. As a global provider of high technology driveline (axles, driveshafts and transmissions); sealing and thermal-management products; and motors, power inverters, and control systems for electric vehicles our customer base includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets.

The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.

Summary of significant accounting policies

Basis of presentation — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. These statements are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The results reported in these consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2021 (the 2021 Form 10-K). Certain prior year amounts have been reclassified to conform to the current presentation.

During the first quarter of 2022, we identified an error related to certain intercompany inventory transfers that were not appropriately eliminated and recorded an adjustment of $8 to cost of sales. A portion of this adjustment relates to prior periods. We concluded that the correction of this error is not material to the financial statements for the quarter ended March 31, 2022 or any prior periods.  

Recently issued accounting pronouncements

In October 2021, the FASB issued Accounting Standards Update (ASU) 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The guidance is intended to provide clarification on how to account for contract assets acquired via business combination, which will generally be at the same value as recognized by the acquiree assuming the acquiree followed US GAAP. The guidance becomes effective January 1, 2023. We do not expect adoption of this guidance to have a material impact on our consolidated financial statements.

In November 2021, the FASB issued ASU 2021-10, Disclosures by Business Entities about Government Assistance. This guidance requires annual disclosures about the nature of certain government assistance received, the accounting policy used to account for the transactions, the location in the financial statements where such transactions were recorded and significant terms and conditions associated with such transactions. The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted. We do not expect adoption of this guidance to have a material impact on our consolidated financial statements. 

Note 2. Acquisitions

Pi Innovo Holding Limited — On March 1, 2021, we acquired the remaining 51% ownership interest in Pi Innovo Holding Limited (Pi Innovo). Pi Innovo designs, develops and manufactures electronic control units spanning a range of applications and industries. The acquisition of the remaining ownership interest provided us with a 100% ownership interest in Pi Innovo. The total purchase consideration of $35 is comprised of $18 of cash paid at closing and the $17 fair value of our previously held equity method investment in Pi Innovo. The results of operations of the business are reported within our Commercial Vehicle operating segment. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented.

Note 3. Goodwill and Other Intangible Assets

Goodwill — Our goodwill is tested for impairment annually as of October 31 for all of our reporting units, and more frequent if events or circumstances warrant such a review. We did not identify any events or circumstances during the first quarter of 2022 that required an interim impairment test. We expect that the fair value of our reporting units will continue to exceed their carrying values in future periods.

8

 

The change in the carrying amount of goodwill in 2022 is due to currency fluctuation.

Changes in the carrying amount of goodwill by segment — 

	Light Vehicle		Commercial Vehicle		Off-Highway			Power Technologies		Total
Balance, December 31, 2021	$	—	$	201	$	281		$	—	$	482
Currency impact				2		(5	)				(3	)
Balance, March 31, 2022	$	—	$	203	$	276		$	—	$	479

Components of other intangible assets — 

		March 31, 2022							December 31, 2021
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount
Amortizable intangible assets
Core technology	8	$	160	$	(111	)	$	49	$	161	$	(110	)	$	51
Trademarks and trade names	13		30		(12	)		18		31		(12	)		19
Customer relationships	8		514		(430	)		84		519		(431	)		88
Non-amortizable intangible assets
Trademarks and trade names			74					74		75					75
		$	778	$	(553	)	$	225	$	786	$	(553	)	$	233

The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at  March 31, 2022 were as follows: Light Vehicle — $19, Commercial Vehicle — $74, Off-Highway — $126 and Power Technologies — $6.

Amortization expense related to amortizable intangible assets — 

	Three Months Ended
	March 31,
	2022		2021
Charged to cost of sales	$	2	$	3
Charged to amortization of intangibles		4		4
Total amortization	$	6	$	7

The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on March 31, 2022 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.

	Remainder of 2022		2023		2024		2025		2026
Amortization expense	$	17	$	23	$	21	$	20	$	18

9

 

Note 4. Restructuring of Operations

Our restructuring activities have historically included rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. In recent years our focus has been primarily headcount reduction initiatives to reduce operating costs, including actions taken at acquired businesses to rationalize cost structures and achieve operating synergies. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including certain operating costs of facilities that we are in the process of closing.

Accrued restructuring costs and activity —

	Employee Termination Benefits			Exit Costs		Total
Balance, December 31, 2021	$	11		$	—	$	11
Charges to restructuring							—
Adjustments of accruals		(1	)				(1	)
Cash payments		(1	)				(1	)
Balance, March 31, 2022	$	9		$	—	$	9

At March 31, 2022, the accrued employee termination benefits include costs to reduce approximately 100 employees to be completed over the next year.

Note 5. Supplemental Balance Sheet and Cash Flow Information

Inventory components at —

	March 31, 2022			December 31, 2021
Raw materials	$	699		$	651
Work in process and finished goods		1,029			1,000
Inventory reserves		(97	)		(87	)
Total	$	1,631		$	1,564

Cash, cash equivalents and restricted cash at —

	March 31, 2022		December 31, 2021		March 31, 2021		December 31, 2020
Cash and cash equivalents	$	259	$	268	$	483	$	559
Restricted cash included in other current assets		9		9		7		5
Restricted cash included in other noncurrent assets		12		10		3		3
Total cash, cash equivalents and restricted cash	$	280	$	287	$	493	$	567

10

 

Note 6. Stockholders’ Equity

Common stock — Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first quarter of 2022. Dividends accrue on restricted stock units (RSUs) granted under our stock compensation program and will be paid in cash or additional units when the underlying units vest.

Share repurchase program — On February 16, 2021 our Board of Directors approved an extension of our existing common stock share repurchase program through December 31, 2023. Under the program, we spent $25 to repurchase 1,483,742 shares of our common stock during the first quarter of 2022 through open market transactions. Approximately $102 remained available for future share repurchases as of March 31, 2022.

Changes in equity —

2022	Common Stock		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total Equity
Balance, December 31, 2021	$	2	$	2,427	$	662		$	(184	)	$	(985	)	$	53		$	1,975
Net income						17									4			21
Other comprehensive income (loss)												36						36
Common stock dividends and dividend equivalents						(14	)											(14	)
Common stock share repurchases									(25	)								(25	)
Distributions to noncontrolling interests															(1	)		(1	)
Purchase of noncontrolling interests															(1	)		(1	)
Redeemable noncontrolling interests adjustment to redemption value						(1	)											(1	)
Stock compensation				4														4
Stock withheld for employees taxes									(7	)								(7	)
Balance, March 31, 2022	$	2	$	2,431	$	664		$	(216	)	$	(949	)	$	55		$	1,987

2021	Common Stock		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total Equity
Balance, December 31, 2020	$	2	$	2,408	$	530		$	(156	)	$	(1,026	)	$	76		$	1,834
Net income						71									1			72
Other comprehensive income (loss)												(18	)		(2	)		(20	)
Common stock dividends and dividend equivalents						(14	)											(14	)
Redeemable noncontrolling interests adjustment to redemption value						(4	)											(4	)
Stock compensation				7														7
Stock withheld for employees taxes									(5	)								(5	)
Balance, March 31, 2021	$	2	$	2,415	$	583		$	(161	)	$	(1,044	)	$	75		$	1,870

11

 

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

	Parent Company Stockholders
2022	Foreign Currency Translation			Hedging			Defined Benefit Plans			Accumulated Other Comprehensive Loss
Balance, December 31, 2021	$	(809	)	$	4		$	(180	)	$	(985	)
Other comprehensive income (loss):
Currency translation adjustments		39									39
Holding gains and losses					19						19
Reclassification of amount to net income (a)					(22	)					(22	)
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)								2			2
Tax expense					(1	)		(1	)		(2	)
Other comprehensive income (loss)		39			(4	)		1			36
Balance, March 31, 2022	$	(770	)	$	—		$	(179	)	$	(949	)

	Parent Company Stockholders
2021	Foreign Currency Translation			Hedging			Defined Benefit Plans			Accumulated Other Comprehensive Loss
Balance, December 31, 2020	$	(802	)	$	9		$	(233	)	$	(1,026	)
Other comprehensive income (loss):
Currency translation adjustments		(4	)								(4	)
Holding gains and losses					32						32
Reclassification of amount to net income (a)					(50	)					(50	)
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)								4			4
Tax (expense) benefit					1			(1	)		—
Other comprehensive income (loss)		(4	)		(17	)		3			(18	)
Balance, March 31, 2021	$	(806	)	$	(8	)	$	(230	)	$	(1,044	)

(a) Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments treated as cash flow hedges are reclassified from AOCI into the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. See Note 13 for additional details.

(b) See Note 10 for additional details.

12

 

Note 7. Redeemable Noncontrolling Interests

Hydro-Québec holds 45% redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 USA, LLC, Dana (Beijing) Electric Motor Co., Ltd., Dana TM4 Italia S.r.l., Ashwoods Innovations Ltd., Dana TM4 India Private Limited and Dana TM4 (Sweden) AB (together Dana TM4). Hydro-Québec may put all, and not less than all, of its ownership interests in Dana TM4 to Dana at fair value. 

Redeemable noncontrolling interests reflected as of the balance sheet date are the greater of the redeemable noncontrolling interest balances adjusted for comprehensive income items and distributions or the redemption values. 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
	March 31,
	2022			2021
Balance, beginning of period	$	198		$	180
Capital contribution from redeemable noncontrolling interest		2			1
Adjustment to redemption value		1			4
Comprehensive income (loss) adjustments:
Net loss attributable to redeemable noncontrolling interests		(1	)		(4	)
Other comprehensive income (loss) attributable to redeemable noncontrolling interests					1
Balance, end of period	$	200		$	182

Note 8. Earnings per Share

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

	Three Months Ended
	March 31,
	2022		2021
Net income available to common stockholders - Numerator basic and diluted	$	17	$	71
Denominator:
Weighted-average common shares outstanding - Basic		144.2		144.9
Employee compensation-related shares, including stock options		1.1		1.5
Weighted-average common shares outstanding - Diluted		145.3		146.4

The share count for diluted earnings per share is computed on the basis of the weighted-average number of common shares outstanding plus the effects of dilutive common stock equivalents (CSEs) outstanding during the period. We excluded 0.4 million and 0.9 million CSEs from the calculation of diluted earnings per share for the first quarters of 2022 and 2021 as the effect of including them would have been anti-dilutive.

13

 

Note 9. Stock Compensation

The Compensation Committee of our Board of Directors approved the grant of RSUs and performance share units (PSUs) shown in the table below during 2022. 

	Granted		Grant Date
	(In millions)		Fair Value*
RSUs		0.9	$	22.45
PSUs		0.3	$	24.69

* Weighted-average per share

We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The number of PSUs that ultimately vest is contingent on achieving specified financial targets and specified total shareholder return targets relative to peer companies. For the portion of the award based on financial metrics, we estimated the fair value of the PSUs at grant date based on the closing market price of our common stock at the date of grant adjusted for the value of assumed dividends over the period because the awards are not dividend protected. For the portion of the award based on shareholder returns, we estimated the fair value of the PSUs at grant date using various assumptions as part of a Monte Carlo simulation. The expected term represents the period from the grant date to the end of the three-year performance period. The risk-free interest rate of 1.78% was based on U.S. Treasury constant maturity rates at the grant date. The dividend yield of 1.67% was calculated using our historical approach calculated by dividing the expected annual dividend by the average stock price over the prior year. The estimated volatility of 63.9% was based on observed historical volatility of daily stock returns for the 3-year period preceding the grant date. 

During 2022, we paid $4 of cash to settle RSUs and issued 0.8 million and 0.1 million shares of common stock based on the vesting of RSUs and PSUs, respectively. We recognized stock compensation expense of $4 and $5 during the first quarters of 2022 and 2021. At March 31, 2022, the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $39. This cost is expected to be recognized over a weighted-average period of 2.2 years.

Note 10. Pension and Postretirement Benefit Plans

We have a number of defined contribution and defined benefit, qualified and nonqualified, pension plans covering eligible employees. Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.

Components of net periodic benefit cost (credit) — 

	Pension											OPEB
	2022						2021					2022			2021
Three Months Ended March 31,	U.S.			Non-U.S.			U.S.			Non-U.S.		Non-U.S.			Non-U.S.
Interest cost	$	4		$	2		$	3		$	1	$	—		$	1
Expected return on plan assets		(7	)		(1	)		(7	)
Service cost					2						2
Amortization of net actuarial loss		2			1			2			2		(1	)
Net periodic benefit cost (credit)	$	(1	)	$	4		$	(2	)	$	5	$	(1	)	$	1

The service cost components of net periodic pension and OPEB costs are included in cost of sales and selling, general and administrative expenses as part of compensation cost and are eligible for capitalization in inventory and other assets. The non-service components are reported in other income (expense), net and are not eligible for capitalization.

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Note 11.  Marketable Securities

	March 31, 2022						December 31, 2021
			Unrealized		Fair				Unrealized		Fair
	Cost		Gains (Losses)		Value		Cost		Gains (Losses)		Value
Certificates of deposit - Current marketable securities	$	19	$	—	$	19	$	17	$	—	$	17

Certificates of deposit maturing in one year or less total $19 at  March 31, 2022.

Note 12. Financing Agreements

Long-term debt at —

	Interest Rate		March 31, 2022			December 31, 2021
Senior Notes due April 15, 2025	5.750%	*	$	400		$	400
Senior Notes due November 15, 2027	5.375%			400			400
Senior Notes due June 15, 2028	5.625%			400			400
Senior Euro Notes due July 15, 2029	3.000%			360			370
Senior Notes due September 1, 2030	4.250%			400			400
Senior Notes due February 15, 2032	4.500%			350			350
Other indebtedness				99			100
Debt issuance costs				(25	)		(26	)
				2,384			2,394
Less: Current portion of long-term debt				8			8
Long-term debt, less debt issuance costs			$	2,376		$	2,386

* In conjunction with the issuance of the April 2025 Notes we entered into 8-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the April 2025 Notes to euro-denominated debt at a fixed rate of 3.850%. See Note 13 for additional information.

Interest on the senior notes is payable semi-annually. Other indebtedness includes the note payable to the former owners of SME S.p.A., borrowings from various financial institutions, and finance lease obligations.

Senior notes activity — On May 13, 2021, we redeemed $254 of our December 2024 Notes pursuant to a tender offer at a weighted average price equal to 102.000% plus accrued and unpaid interest. On May 17, 2021, we called the remaining $171 of our December 2024 Notes at a price equal to 101.833% plus accrued and unpaid interest. The $8 loss on extinguishment of debt recorded in May 2021 includes the redemption premium of $8 and the write-off of $3 of previously deferred financing costs associated with the December 2024 Notes. These charges were partially offset by the recognition of $3 related to an unamortized fair value adjustment associated with a fixed-to-floating interest rate swap that was terminated in 2015.

On May 13, 2021, we completed the sale of $400 in senior unsecured notes (the September 2030 Notes) at 4.25%. The September 2030 Notes rank equally with Dana's other unsecured senior notes. Interest on the notes is payable on March 1 and September 1 of each year, beginning on September 1, 2021. The September 2030 Notes will mature on September 1, 2030. Net proceeds of the offering totaled $395. Financing costs of $5 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. Proceeds from the offering will be used to finance or refinance, in whole or in part, recently completed or future eligible green projects related to clean transportation, renewable energy, sustainable water and wastewater management, and green buildings.

On May 28, 2021, Dana Financing Luxembourg S.à r.l. (Dana Financing), a wholly-owned subsidiary of Dana, completed the sale of €325 ($396 as of May 28, 2021) in senior unsecured notes ( July 2029 Notes) at 3.000%. The July 2029 Notes are fully and unconditionally guaranteed by Dana. The July 2029 Notes rank equally with Dana's other unsecured senior notes. Interest on the notes is payable on January 15 and July 15 of each year, beginning on January 15, 2022. The July 2029 Notes will mature on July 15, 2029. Net proceeds of the offering totaled €320 ($391 as of May 28, 2021). Financing costs of €5 ($6 as of May 28, 2021) were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The proceeds from the offering were used to redeem all of our June 2026 Notes. On June 10, 2021 we redeemed all of our June 2026 Notes at a price equal to 103.25% plus accrued and unpaid interest. The $16 loss on extinguishment of debt includes the $12 redemption premium and the $4 write-off of previously deferred financing costs associated with the June 2026 Notes.

On November 24, 2021, we completed the sale of $350 in senior unsecured notes (the February 2032 Notes) at 4.5%. The February 2032 Notes rank equally with Dana’s other unsecured senior notes. Interest on the notes is payable on February 15 and August 15 of each year, beginning on August 15, 2022. The February 2032 Notes will mature on February 15, 2032. Net proceeds of the offering totaled $345. Financing costs of $5 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. Proceeds from the offering, along with cash on hand, were used to fully pay down the Term B Facility. See credit agreement discussion below.

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Senior notes redemption provisions — We may redeem some or all of the senior notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period commencing on the anniversary date of the senior notes in the year set forth below:

	Redemption Price
	April			November			June			July			September			February
Year	2025 Notes			2027 Notes			2028 Notes			2029 Notes			2030 Notes			2032 Notes
2022		101.438	%		102.688	%
2023		100.000	%		101.344	%		102.813	%
2024		100.000	%		100.000	%		101.406	%		101.500	%
2025					100.000	%		100.000	%		100.750	%
2026					100.000	%		100.000	%		100.000	%		102.125	%
2027								100.000	%		100.000	%		101.417	%		102.250	%
2028											100.000	%		100.708	%		101.500	%
2029														100.000	%		100.750	%
2030																	100.000	%
2031																	100.000	%

At any time prior to November 15, 2022, we may redeem up to 35% of the aggregate principal amount of the November 2027 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the original aggregate principal amount of the November 2027 Notes remains outstanding after the redemption. Prior to November 15, 2022, we may redeem some or all of the November 2027 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

At any time prior to June 15, 2023, we may redeem up to 35% of the aggregate principal amount of the June 2028 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the original aggregate principal amount of the June 2028 Notes remains outstanding after the redemption. Prior to June 15, 2023, we may redeem some or all of the June 2028 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

At any time prior to July 15, 2024, we may redeem up to 40% of the aggregate principal amount of the July 2029 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 103.000% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the aggregate principal amount of the July 2029 Notes remain outstanding after the redemption.  Prior to July 15, 2024, we may also redeem some or all of the July 2029 Notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

At any time prior to May 1, 2024, we may redeem up to 40% of the aggregate principal amount of the September 2030 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.250% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided that at least 50% of the aggregate principal amount of the September 2030 Notes remains outstanding after the redemption. Prior to May 1, 2026, we may redeem some or all of the September 2030 Notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

At any time prior to February 15, 2025, we may redeem up to 40% of the aggregate principal amount of the February 2032 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.500% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, provided that at least 50% of the aggregate principal amount of the February 2032 Notes remains outstanding after the redemption. Prior to February 15, 2027, we may redeem some or all of the February 2032 Notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

Credit agreement — On March 25, 2021, we amended our credit and guaranty agreement, increasing the Revolving Facility to $1,150 and extending the maturity to March 25, 2026. We recorded deferred fees of $2 related to the amendment. The deferred fees are being amortized over the life of the applicable facilities. On November 30, 2021, we fully paid down the Term B Facility. Deferred financing costs on our Revolving Facility are included in other noncurrent assets. 

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

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

	Margin
Total Net Leverage Ratio	Base Rate			Eurodollar Rate
Less than or equal to 1.00:1.00		0.25	%		1.25	%
Greater than 1.00:1.00 but less than or equal to 2.00:1.00		0.50	%		1.50	%
Greater than 2.00:1.00		0.75	%		1.75	%

Commitment fees are applied based on the average daily unused portion of the available amounts under the Revolving Facility as set forth below:

Total Net Leverage Ratio	Commitment Fee
Less than or equal to 1.00:1.00		0.250	%
Greater than 1.00:1.00 but less than or equal to 2.00:1.00		0.375	%
Greater than 2.00:1.00		0.500	%

Up to $275 of the Revolving Facility may be applied to letters of credit, which reduces availability. We pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable margin for Eurodollar rate advances based on a quarterly average availability under issued and undrawn letters of credit under the Revolving Facility and a per annum fronting fee of 0.125%, payable quarterly.

At  March 31, 2022, we had $265 of outstanding borrowings under the Revolving Facility and had utilized $21 for letters of credit. We had availability at March 31, 2022 under the Revolving Facility of $864 after deducting outstanding borrowings and the letters of credit.

Debt covenants — At March 31, 2022, we were in compliance with the covenants of our financing agreements. Under the Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types and, in the case of the Revolving Facility, a maintenance covenant tested on the last day of each fiscal quarter requiring us to maintain a first lien net leverage ratio not to exceed 2.00 to 1.00.

Note 13. Fair Value Measurements and Derivatives

In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate. Our valuation techniques include a combination of observable and unobservable inputs.

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

			Fair Value
Category	Balance Sheet Location	Fair Value Level	March 31, 2022		December 31, 2021
Certificates of deposit	Marketable securities	2	$	19	$	17
Currency forward contracts
Cash flow hedges	Accounts receivable - Other	2		14		7
Cash flow hedges	Other accrued liabilities	2				1
Undesignated	Accounts receivable - Other	2		2		2
Undesignated	Other accrued liabilities	2		6
Currency swaps
Cash flow hedges	Other noncurrent liabilities