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, 2024

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 were144,963,217 shares of the registrant’s common stock outstanding at April 17, 2024.

DANA INCORPORATED – FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

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	24
Item 3	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4	Controls and Procedures	35
PART II – OTHER INFORMATION
Item 1	Legal Proceedings	36
Item 1A	Risk Factors	36
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 5	Other Information	36
Item 6	Exhibits	36
Signatures		37

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,
	2024			2023
Net sales	$	2,735		$	2,644
Costs and expenses
Cost of sales		2,491			2,415
Selling, general and administrative expenses		139			140
Amortization of intangibles		3			3
Restructuring charges, net		5			1
Loss on disposal group held for sale		(29	)
Other income (expense), net		2			5
Earnings before interest and income taxes		70			90
Interest income		4			4
Interest expense		39			34
Earnings before income taxes		35			60
Income tax expense		37			30
Equity in earnings of affiliates		2			1
Net income		—			31
Less: Noncontrolling interests net income		5			4
Less: Redeemable noncontrolling interests net loss		(8	)		(1	)
Net income attributable to the parent company	$	3		$	28
Net income per share available to common stockholders
Basic	$	0.02		$	0.19
Diluted	$	0.02		$	0.19
Weighted-average common shares outstanding
Basic		144.8			143.9
Diluted		144.8			144.3

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,
	2024			2023
Net income	$	—		$	31
Other comprehensive income (loss), net of tax:
Currency translation adjustments		(20	)		25
Hedging gains and losses		(2	)		15
Defined benefit plans		1			1
Other comprehensive income (loss)		(21	)		41
Total comprehensive income (loss)		(21	)		72
Less: Comprehensive income attributable to noncontrolling interests		(4	)		(4	)
Less: Comprehensive loss attributable to redeemable noncontrolling interests		11
Comprehensive income (loss) attributable to the parent company	$	(14	)	$	68

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,
	2024			2023
Assets
Current assets
Cash and cash equivalents	$	351		$	529
Accounts receivable
Trade, less allowance for doubtful accounts of $14 in 2024 and $16 in 2023		1,526			1,371
Other		251			280
Inventories		1,625			1,676
Other current assets		287			247
Current assets of disposal group held for sale		62
Total current assets		4,102			4,103
Goodwill		257			263
Intangibles		169			182
Deferred tax assets		507			516
Other noncurrent assets		158			140
Investments in affiliates		123			123
Operating lease assets		315			327
Property, plant and equipment, net		2,226			2,311
Total assets	$	7,857		$	7,965
Liabilities, redeemable noncontrolling interests and equity
Current liabilities
Short-term debt	$	39		$	22
Current portion of long-term debt		8			35
Accounts payable		1,697			1,756
Accrued payroll and employee benefits		316			288
Taxes on income		90			86
Current portion of operating lease liabilities		41			42
Other accrued liabilities		352			373
Current liabilities of disposal group held for sale		22
Total current liabilities		2,565			2,602
Long-term debt, less debt issuance costs of $23 in 2024 and $24 in 2023		2,580			2,598
Noncurrent operating lease liabilities		271			284
Pension and postretirement obligations		318			334
Other noncurrent liabilities		318			319
Noncurrent liabilities of disposal group held for sale		4
Total liabilities		6,056			6,137
Commitments and contingencies (Note 13)
Redeemable noncontrolling interests		197			191
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, 144,954,645 and 144,386,484 shares outstanding		2			2
Additional paid-in capital		2,260			2,255
Retained earnings		297			317
Treasury stock, at cost (821,207 and 474,981 shares)		(13	)		(9	)
Accumulated other comprehensive loss		(1,007	)		(990	)
Total parent company stockholders' equity		1,539			1,575
Noncontrolling interests		65			62
Total equity		1,604			1,637
Total liabilities, redeemable noncontrolling interests and equity	$	7,857		$	7,965

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,
	2024			2023
Operating activities
Net income	$	—		$	31
Depreciation		101			92
Amortization		5			5
Amortization of deferred financing charges		1			1
Earnings of affiliates, net of dividends received		(2	)		(1	)
Stock compensation expense		6			6
Deferred income taxes		2			(8	)
Pension expense, net		(7	)
Change in working capital		(251	)		(304	)
Loss on disposal group held for sale		29
Other, net		14			8
Net cash used in operating activities		(102	)		(170	)
Investing activities
Purchases of property, plant and equipment		(70	)		(120	)
Proceeds from sale of property, plant and equipment		4			2
Settlements of undesignated derivatives		(1	)
Other, net		4
Net cash used in investing activities		(63	)		(118	)
Financing activities
Net change in short-term debt		17			269
Repayment of long-term debt		(27	)		(2	)
Deferred financing payments					(2	)
Dividends paid to common stockholders		(15	)		(15	)
Distributions to noncontrolling interests		(3	)		(1	)
Collection of note receivable from noncontrolling interest		11
Contributions from redeemable noncontrolling interests		9			10
Other, net		9			(4	)
Net cash provided by financing activities		1			255
Net decrease in cash, cash equivalents and restricted cash		(164	)		(33	)
Cash, cash equivalents and restricted cash – beginning of period		563			442
Effect of exchange rate changes on cash balances		(12	)		10
Cash, cash equivalents and restricted cash – end of period (Note 5)	$	387		$	419
Non-cash investing activity
Purchases of property, plant and equipment held in accounts payable	$	44		$	72

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.	Disposal Group Held for Sale
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.	Financing Agreements
12.	Fair Value Measurements and Derivatives
13.	Commitments and Contingencies
14.	Warranty Obligations
15.	Income Taxes
16.	Other Income (Expense), Net
17.	Revenue from Contracts with Customers
18.	Segments
19.	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. Dana is a global provider of high technology driveline (axles, driveshafts and transmissions); sealing and thermal-management products; and motors, power inverters, and control systems for electric vehicles with a customer base that includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets.

The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. 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, 2023 (the 2023 Form 10-K). Certain prior year amounts have been reclassified to conform to the current presentation.

Recently adopted accounting pronouncements

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

Recently issued accounting pronouncements

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

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280). The guidance enhances reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of the guidance on our financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. This guidance requires disaggregated income tax disclosures on the rate reconciliation and income taxes paid. The guidance becomes effective for annual periods beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the impact of the guidance on our financial statement disclosures.

8

 

Note 2. Disposal Group Held for Sale

In February 2024, we entered into a definitive agreement to sell our European hydraulics business to HPIH S.à r.l. for approximately $40. The sale price is subject to adjustment based on net working capital and net financial position balances as of the closing date. The results of operations of the European hydraulics business are reported within our Off-Highway operating segment. We classified the disposal group as held for sale, recognizing a $29 loss to adjust the carrying value of net assets to fair value less estimated costs to sell. The sale is expected to close during the second quarter of 2024. The carrying amounts of the major classes of assets and liabilities of our European hydraulics business are as follows:

	March 31,
	2024
Accounts receivable - Trade	$	17
Accounts receivable - Other		1
Inventories		44
Current assets of disposal group held for sale	$	62
Accounts payable	$	14
Accrued payroll and employee benefits		4
Current portion of operating lease liabilities		1
Other accrued liabilities		3
Current liabilities of disposal group held for sale	$	22
Noncurrent operating lease liabilities	$	1
Pension and postretirement obligations		2
Other noncurrent liabilities		1
Noncurrent liabilities of disposal group held for sale	$	4

Note 3. Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill by segment — 

	Off-Highway
Balance, December 31, 2023	$	263
Reclassified to disposal group held for sale		(2	)
Currency impact		(4	)
Balance, March 31, 2024	$	257

Components of other intangible assets — 

			March 31, 2024							December 31, 2023
	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	$	158	$	(127	)	$	31	$	159	$	(126	)	$	33
Trademarks and trade names		13		25		(14	)		11		29		(15	)		14
Customer relationships		8		492		(437	)		55		503		(441	)		62
Non-amortizable intangible assets
Trademarks and trade names				72					72		73					73
			$	747	$	(578	)	$	169	$	764	$	(582	)	$	182

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

	March 31, 2024
Light Vehicle	$	13
Commercial Vehicle		56
Off-Highway		96
Power Technologies		4
	$	169

Amortization expense related to amortizable intangible assets — 

	Three Months Ended
	March 31,
	2024		2023
Charged to cost of sales	$	2	$	2
Charged to amortization of intangibles		3		3
Total amortization	$	5	$	5

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. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs. During the first quarter of 2024, our restructuring charges were primarily comprised of separation costs related to the rationalization of the global administrative and functional services that support our manufacturing and assembly facilities and technical centers. 

Accrued restructuring costs and activity —

	Employee Termination Benefits			Exit Costs			Total
Balance, December 31, 2023	$	10		$	—		$	10
Charges to restructuring		2			3			5
Cash payments		(2	)		(3	)		(5	)
Balance, March 31, 2024	$	10		$	—		$	10

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

Note 5. Supplemental Balance Sheet and Cash Flow Information

Supplier finance programs —

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

Inventory components —

	March 31, 2024		December 31, 2023
Raw materials	$	679	$	681
Work in process and finished goods		946		995
Total	$	1,625	$	1,676

Cash, cash equivalents and restricted cash —

	March 31, 2024		December 31, 2023		March 31, 2023		December 31, 2022
Cash and cash equivalents	$	351	$	529	$	401	$	425
Restricted cash included in other current assets		25		23		7		7
Restricted cash included in other noncurrent assets		11		11		11		10
Total cash, cash equivalents and restricted cash	$	387	$	563	$	419	$	442

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 2024. Dividends accrue on restricted stock units (RSUs) granted under our stock compensation program and will be paid in cash or additional units when the underlying units vest.

10

 

Changes in equity —

2024	Common Stock		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total Equity
Balance, December 31, 2023	$	2	$	2,255	$	317		$	(9	)	$	(990	)	$	62		$	1,637
Net income						3									5			8
Other comprehensive loss												(17	)		(1	)		(18	)
Common stock dividends and dividend equivalents						(15	)											(15	)
Distributions to noncontrolling interests															(1	)		(1	)
Redeemable noncontrolling interest adjustment to redemption value						(8	)											(8	)
Stock compensation				5														5
Stock withheld for employee taxes									(4	)								(4	)
Balance, March 31, 2024	$	2	$	2,260	$	297		$	(13	)	$	(1,007	)	$	65		$	1,604

2023	Common Stock		Additional Paid-In Capital		Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non-controlling Interests			Total Equity
Balance, December 31, 2022	$	2	$	2,229	$	321		$	—		$	(1,001	)	$	52		$	1,603
Net income						28									4			32
Other comprehensive income												40						40
Common stock dividends and dividend equivalents						(15	)											(15	)
Distributions to noncontrolling interests															(1	)		(1	)
Redeemable noncontrolling interest adjustment to redemption value						(1	)											(1	)
Stock compensation				8														8
Stock withheld for employee taxes									(8	)								(8	)
Balance, March 31, 2023	$	2	$	2,237	$	333		$	(8	)	$	(961	)	$	55		$	1,658

11

 

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

	Parent Company Stockholders
2024	Foreign Currency Translation			Hedging			Defined Benefit Plans			Accumulated Other Comprehensive Loss
Balance, December 31, 2023	$	(868	)	$	20		$	(142	)	$	(990	)
Currency translation adjustments		(16	)								(16	)
Holding gains and losses					9						9
Reclassification of amount to net income (a)					(11	)					(11	)
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)								1			1
Tax expense											—
Other comprehensive income (loss)		(16	)		(2	)		1			(17	)
Balance, March 31, 2024	$	(884	)	$	18		$	(141	)	$	(1,007	)

	Parent Company Stockholders
2023	Foreign Currency Translation			Hedging			Defined Benefit Plans			Accumulated Other Comprehensive Loss
Balance, December 31, 2022	$	(895	)	$	21		$	(127	)	$	(1,001	)
Currency translation adjustments		24									24
Holding gains and losses					16						16
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)								1			1
Tax expense					(1	)					(1	)
Other comprehensive income (loss)		24			15			1			40
Balance, March 31, 2023	$	(871	)	$	36		$	(126	)	$	(961	)

(a) Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments treated as cash flow hedges are reclassified from AOCI into the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. See Note 12 for additional details.

(b) See Note 10 for additional details.

12

 

Note 7. Redeemable Noncontrolling Interests

Hydro-Québec owns a 45% redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC. The terms of the joint venture agreement provide Hydro-Québec with the right to put all, and not less than all, of its ownership interests in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC to Dana at fair value.

Redeemable noncontrolling interests reflected as of the balance sheet date are the greater of the redeemable noncontrolling interest balances adjusted for comprehensive income (loss) items and distributions or the redemption value. Redeemable noncontrolling interest adjustments of redemption value are recorded in retained earnings. We estimate the fair value of the redemption value using an income-based approach based on discounted cash flow projections. In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected EBITDA, discount rates, and terminal growth rates. 

Reconciliation of changes in redeemable noncontrolling interests —

	Three Months Ended
	March 31,
	2024			2023
Balance, beginning of period	$	191		$	195
Capital contribution from redeemable noncontrolling interests		9			10
Adjustment to redemption value		8			1
Comprehensive income (loss) adjustments:
Net loss attributable to redeemable noncontrolling interests		(8	)		(1	)
Other comprehensive income (loss) attributable to redeemable noncontrolling interests		(3	)		1
Balance, end of period	$	197		$	206

Note 8. Earnings per Share

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

	Three Months Ended
	March 31,
	2024		2023
Net income available to common stockholders - Numerator basic and diluted	$	3	$	28
Denominator:
Weighted-average common shares outstanding - Basic		144.8		143.9
Employee compensation-related shares		—		0.4
Weighted-average common shares outstanding - Diluted		144.8		144.3

The share count for diluted earnings per share is computed on the basis of the weighted-average number of common shares outstanding plus the effects of dilutive common stock equivalents (CSEs) outstanding during the period. We excluded 2.2 million and 0.2 million CSEs from the calculation of diluted earnings per share for the first quarters of 2024 and 2023 as the effect of including them would have been anti-dilutive.

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 2024. 

	Granted		Grant Date
	(In millions)		Fair Value*
RSUs		1.6	$	13.23
PSUs		0.7	$	13.31

* 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 4.39% was based on U.S. Treasury constant maturity rates at the grant date. The dividend yield of 2.7% was calculated using our historical approach calculated by dividing the expected annual dividend by the average stock price over the prior year. The estimated volatility of 47.7% was based on observed historical volatility of daily stock returns for the 3-year period preceding the grant date. 

During 2024, we paid $2 of cash to settle RSUs and issued 0.9 million shares of common stock based on the vesting of RSUs. We recognized stock compensation expense of $6 in both the first quarter of 2024 and 2023. At March 31, 2024, the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $49. This cost is expected to be recognized over a weighted-average period of 2.1 years.

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
	2024						2023						2024			2023
Three Months Ended March 31,	U.S.			Non-U.S.			U.S.			Non-U.S.			Non-U.S.			Non-U.S.
Interest cost	$	7		$	3		$	7		$	3		$	1		$	1
Expected return on plan assets		(7	)		(1	)		(8	)		(1	)
Service cost					2						1
Amortization of net actuarial (gain) loss		2						2						(1	)		(1	)
Net periodic benefit cost	$	2		$	4		$	1		$	3		$	—		$	—

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

14

 

Note 11. Financing Agreements

Long-term debt at —

	Interest Rate		March 31, 2024			December 31, 2023
Senior Notes due April 15, 2025	5.750%	*	$	200		$	200
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%			351			359
Senior Notes due September 1, 2030	4.250%			400			400
Senior Euro Notes due July 15, 2031	8.500%			459			469
Senior Notes due February 15, 2032	4.500%			350			350
Other indebtedness				51			79
Debt issuance costs				(23	)		(24	)
				2,588			2,633
Less: Current portion of long-term debt				8			35
Long-term debt, less debt issuance costs			$	2,580		$	2,598

* In conjunction with the issuance of the April 2025 Notes, we entered into 8-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the April 2025 Notes to euro-denominated debt at a fixed rate of 3.850%. See Note 12 for additional information.

Interest on the senior notes is payable semi-annually. Other indebtedness includes borrowings from various financial institutions and finance lease obligations.

15

 

Senior notes activity — On May 24, 2023, Dana Financing Luxembourg S.à.r.l. (Dana Financing), a wholly-owned subsidiary of Dana, completed the sale of €425 ($458 as of May 24, 2023) in senior unsecured notes ( July 2031 Notes) at 8.500%. The July 2031 Notes are fully and unconditionally guaranteed by Dana. The July 2031 Notes were issued through a private placement and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act). The July 2031 Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and, outside the United States, only to non-U.S. investors in reliance on Regulation S under the Securities Act. The July 2031 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, 2024. The July 2031 Notes will mature on July 15, 2031. Net proceeds of the offering totaled €419 ($451 as of May 24, 2023). Financing costs of €6 ($7 as of May 24, 2023) were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The proceeds from the offering were used to redeem $200 of our April 2025 Notes and to make payments against borrowings on our Revolving Facility. On June 9, 2023 we redeemed $200 of our April 2025 Notes at a price equal to 100.00% plus accrued and unpaid interest. The $1 loss on extinguishment of debt is comprised of the write-off of previously deferred financing costs associated with the April 2025 Notes.

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

	Redemption Price
	April			November			June			July			September			July			February
Year	2025 Notes			2027 Notes			2028 Notes			2029 Notes			2030 Notes			2031 Notes			2032 Notes
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	%		104.250	%
2027								100.000	%		100.000	%		101.417	%		102.125	%		102.250	%
2028											100.000	%		100.708	%		100.000	%		101.500	%
2029														100.000	%		100.000	%		100.750	%
2030																	100.000	%		100.000	%
2031																				100.000	%

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

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 July 15, 2026, we may redeem up to 40% of the aggregate principal amount of the July 2031 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 108.500% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the aggregate principal amount of the July 2031 Notes remain outstanding after the redemption.  Prior to July 15, 2026, we may also redeem some or all of the July 2031 Notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” 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 14, 2023, we amended our credit and guaranty agreement, extending its maturity to March 14, 2028. We recorded deferred fees of $2 related to the amendment. The deferred fees are being amortized over the life of the Revolving Facility. Deferred financing costs on our Revolving Facility are included in other noncurrent assets. 

The 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.

16

 

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

	Margin
Total Net Leverage Ratio	Base Rate			SOFR 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 SOFR rate advances based on a quarterly average availability under issued and undrawn letters of credit under the Revolving Facility and a per annum fronting fee of 0.125%, payable quarterly.

At  March 31, 2024, we had $15 of outstanding borrowings under the Revolving Facility and had utilized $9 for letters of credit. We had availability at March 31, 2024 under the Revolving Facility of $1,126 after deducting the outstanding letters of credit.

Debt covenants — At March 31, 2024, we were in compliance with the covenants of our financing agreements. Under the Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types and, in the case of the Revolving Facility, a maintenance covenant tested on the last day of each fiscal quarter requiring us to maintain a first lien net leverage ratio not to exceed 2.00 to 1.00.

Note 12. 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 sheets at fair value are as follows:

			Fair Value
Category	Balance Sheet Location	Fair Value Level	March 31, 2024		December 31, 2023
Currency forward contracts
Cash flow hedges	Accounts receivable - Other	2	$	25	$	43
Cash flow hedges	Other accrued liabilities	2		1		7
Undesignated	Accounts receivable - Other	2		3		3
Undesignated	Other accrued liabilities	2		2		5
Currency swaps
Cash flow hedges	Other noncurrent assets	2		4
Cash flow hedges	Other noncurrent liabilities	2				11
Undesignated	Other noncurrent liabilities	2		8		9

Fair Value Level 2 assets and liabilities reflect the use of significant other observable inputs.

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

			March 31, 2024				December 31, 2023
	Fair Value Level		Carrying Value		Fair Value		Carrying Value		Fair Value
Long-term debt		2	$	2,540	$	2,465	$	2,582	$	2,495

17

 

Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory, as well as currency swaps associated with certain recorded external notes payable and intercompany loans receivable and payable. Periodically, our foreign currency derivatives also include net investment hedges of certain of our investments in foreign operations.

We have executed fixed-to-fixed cross-currency swaps in conjunction with the issuance of certain notes to eliminate the variability in the functional-currency-equivalent cash flows due to changes in exchange rates associated with the forecasted principal and interest payments. All of the underlying designated financial instruments have been designated as the hedged items in each respective cash flow hedge relationship, as shown in the table below. Designated as cash flow hedges of the forecasted principal and interest payments of the underlying designated financial instruments, all of the swaps economically convert the underlying designated financial instruments into the functional currency of each respective holder. The impact of the interest rate differential between the inflow and outflow rates on fixed-to-fixed cross-currency swaps is recognized during each period as a component of interest expense for hedges of external debt and as a component of other income (expense), net for hedges of intercompany debt.

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

Underlying Financial Instrument							Derivative Financial Instrument
Description	Type	Face Amount		Rate			Notional Amount		Traded Amount		Inflow Rate			Outflow Rate
April 2025 Notes	Payable	$	200		5.75	%	$	200	€	185		5.75	%		3.85	%
Luxembourg Intercompany Notes	Receivable	€	93		3.85	%	$	100	€	93		5.75	%		3.85	%
Luxembourg Intercompany Notes	Receivable	€	278		3.70	%	€	278	$	300		5.38	%		3.70	%
Undesignated 2026 Swap							$	188	€	169		6.50	%		5.14	%