DANA Inc

Previous wording

Cost reduction initiatives — During the fourth quarter of 2024, we announced further actions to support sustained long-term profitability and enhanced cash flow generation. This includes substantial reduction in selling, general and administrative costs and aligning engineering expenses to match current industry dynamics, including the ongoing delay in the adoption of electric vehicles. We expect to deliver annualized savings of $310 through 2026. Approximately $245 of annualized savings is expected be realized through 2025 with an additional $65 realized in 2026. See Note 5 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Cost reduction initiatives — During the fourth quarter of 2024, we announced further actions to support sustained long-term profitability and enhanced cash flow generation. This includes substantial reduction in selling, general and administrative costs and aligning engineering expenses to match current industry dynamics, including the ongoing delay in the adoption of electric vehicles. We expect to deliver annualized savings of $325 through 2026. Approximately $260 of annualized savings was realized through 2025 with an additional $65 to be realized in 2026. See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Segment realignment — Through December 2024, we managed our operations globally through four operating segments. Our Light Vehicle and Power Technologies segments primarily supported light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars. Our Commercial Vehicle segment supported the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supported OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications). In the first quarter of 2025, our Power Technologies segment was integrated into our Light Vehicle and Commercial Vehicle segments, streamlining the business, enhancing our go-to-market approach and serving our customers more efficiently. The OEM-facing business was integrated into our Light Vehicle segment while the aftermarket business was integrated into our Commercial Vehicle segment. See Note 19 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Segment realignment — Through December 2024, we managed our operations globally through four operating segments. Our Light Vehicle and Power Technologies segments primarily supported light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars. Our Commercial Vehicles segment supported the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supported OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications). In the first quarter of 2025, our Power Technologies segment was integrated into our Light Vehicle and Commercial Vehicle segments, streamlining the business, enhancing our go-to-market approach and serving our customers more efficiently. The OEM-facing business was integrated into our Light Vehicle segment while the aftermarket business was integrated into our Commercial Vehicle segment. See Note 17 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Divestiture of Off-Highway Business — Dana has embarked on a strategic plan to focus on our core on-highway markets, creating a more focused and nimble Dana through the planned divestiture of our Off-Highway business. In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc. for $2,732. The sale price is subject to adjustment based on net working capital and net indebtedness balances as of the closing date. The transaction is currently expected to close during the fourth quarter of 2025, subject to satisfaction of regulatory approvals and other customary conditions. We analyzed the quantitative and qualitative factors relevant to the pending divestiture of our Off-Highway business and determined that the conditions for discontinued operations presentation have been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying consolidated financial statements. Prior period amounts have been recast to reflect discontinued operations presentation. See Note 1 and Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Divestiture of Off-Highway Business — Dana has embarked on a strategic plan to focus on our core on-highway markets, creating a more focused and nimble Dana through the divestiture of our Off-Highway business. In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc. We analyzed the quantitative and qualitative factors relevant to the pending divestiture of our Off-Highway business and determined that the conditions for discontinued operations presentation have been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying consolidated financial statements. Prior period amounts have been recast to reflect discontinued operations presentation. See Note 1 and Note 2 of our consolidated financial statements in Item 1 of Part I for additional information. The transaction closed on January 1, 2026, with Dana receiving initial cash proceeds of $2,664. The sale price is subject to adjustment based on net working capital and net indebtedness balances as of the closing date.

Previous wording

Capital Structure Initiatives — Net cash proceeds from the Off-Highway business divestiture will be used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders. On June 8, 2025, Dana’s board of directors approved a program to provide up to a $1,000 return of capital to shareholders through common stock share repurchases and/or special dividends through the end of 2027.

Current wording

Capital Structure Initiatives — Net cash proceeds from the Off-Highway business divestiture were used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders. On January 7, 2026, we purchased, via a net proceeds tender offer, $138 of our November 2027 Notes, $142 of our June 2028 Notes, €141 of our July 2029 Notes ($164 as of January 7, 2026), $173 of our September 2030 Notes, €9 of our 2031 Notes ($10 as of January 7, 2026) and $152 of our February 2032 Notes at prices equal to 100.00% plus accrued and unpaid interest. On January 8, 2026, we redeemed the remaining $262 of our November 2027 Notes and the remaining $258 of our June 2028 Notes at prices equal to 100.00% plus accrued and unpaid interest. In addition, on January 2, 2026, we repaid the $225 outstanding balance on the Term A Facility and the $390 of outstanding borrowings on our Revolving Facility. See Note 10 of our consolidated financial statements in Item 1 of Part I for additional information. On June 8, 2025, Dana’s board of directors approved a program to provide up to a $1,000 return of capital to shareholders through common stock share repurchases and/or special dividends through the end of 2027. On February 11, 2026, Dana's board of directors increased and extended the share repurchase program to a total of $2,000 through the end of 2030. Through March 31, 2026, we have spent $775 to repurchase 38,702,872 shares under the approved stock repurchase program. See Note 6 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Dana, with history dating back to 1904, is headquartered in Maumee, Ohio. We are a world leader in providing power-conveyance and energy-management solutions for on-highway vehicles. The company's portfolio improves the efficiency, performance, and sustainability of light and commercial vehicles. Our technologies include drive systems (axles, driveshafts and transmissions); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle and medium/heavy vehicle markets through two business units – Light Vehicle Systems (Light Vehicle) and Commercial Vehicle Systems (Commercial Vehicle). At September 30, 2025, excluding the Off-Highway business which is presented as a discontinued operation, we employed approximately 28,000 people and operated in 26 countries.

Current wording

Dana, with history dating back to 1904, is headquartered in Maumee, Ohio. We are a world leader in providing power-conveyance and energy-management solutions for on-highway vehicles. The company's portfolio improves the efficiency, performance, and sustainability of light and commercial vehicles. Our technologies include drive systems (axles, driveshafts and transmissions); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle and medium/heavy vehicle markets through two business units – Light Vehicle Systems (Light Vehicle) and Commercial Vehicle Systems (Commercial Vehicle). At March 31, 2026, we employed approximately 26,900 people and operated in 24 countries.

Previous wording

We serve our customers in two core global end markets: light vehicle, primarily full frame trucks and SUVs; and commercial vehicle, including medium-and heavy-duty trucks and busses. Each of our end-markets has unique cyclical dynamics and market drivers. These cycles are impacted by periods of investment where end-user vehicle fleets are refreshed or expanded in reaction to demand usage patterns, regulatory changes, or when the age of vehicles in service reach their useful life. Key market drivers include regional economic growth rates; cost and availability of end customer financing and industrial output. The current tariff environment has resulted in increased uncertainty in the markets we serve.

Current wording

We serve our customers in two core global end markets: light vehicle, primarily full frame trucks and SUVs; and commercial vehicle, including medium-and heavy-duty trucks and busses. Each of our end-markets has unique cyclical dynamics and market drivers. These cycles are impacted by periods of investment where end-user vehicle fleets are refreshed or expanded in reaction to demand usage patterns, regulatory changes, or when the age of vehicles in service reach their useful life. Key market drivers include regional economic growth rates; cost and availability of end customer financing; and industrial output. Our multi-market coverage and broad customer base help provide stability across the cycles while mitigating secular variability.

Previous wording

Light vehicle markets — Our driveline business is weighted more heavily to the truck and SUV segments of the light-vehicle market versus the passenger-car segment. Our vehicle content is greater on rear-wheel drive, four-wheel drive, and all-wheel drive vehicles, as well as hybrid and electric vehicles. During 2024, light-truck markets showed marginal improvement across all regions except Europe, which was down slightly from 2023. The outlook for 2025 reflects global light-truck near-term production being relatively stable across all regions with demand risk due to tariff impacts.

Current wording

Light vehicle markets — Our driveline business is weighted more heavily to the truck and SUV segments of the light-vehicle market versus the passenger-car segment. Our vehicle content is greater on rear-wheel drive, four-wheel drive, and all-wheel drive vehicles, as well as hybrid and electric vehicles. During 2025, light-truck markets showed marginal improvement across all regions except North America, which was flat compared to 2024. The outlook for 2026 reflects global light-truck production being relatively stable in North America and Asia Pacific, while Europe and South America reflect marginal improvement, in comparison with the prior year.

Previous wording

Commercial vehicle markets — Our primary business is driveline systems for medium and heavy-duty trucks and busses, including the emerging market for hybrid and electric vehicles. Key regional markets are North America, South America (primarily Brazil) and Asia Pacific. During 2024, production of Class-8 trucks in North America decreased 3% from 2023 reflecting lower demand driven by lower freight volumes and rates. Medium-duty truck production in North America experienced a modest 4% year-over-year increase from 2023. The outlook for 2025 is for a significant decrease in production from the prior year. Outside of North America, production of medium- and heavy-duty trucks in South America increased 41% over 2023, reflecting improved economic conditions in the region. The 2025 outlook for South America reflects a moderate decrease in production compared to the prior year. Production of medium- and heavy-duty trucks in Asia Pacific, driven by China and India, decreased 5% in 2024. The 2025 outlook for Asia Pacific is for a moderate increase in production from the prior year.

Current wording

Commercial vehicle markets — Our primary business is driveline systems for medium and heavy-duty trucks and busses, including the emerging market for hybrid and electric vehicles. Key regional markets are North America, South America (primarily Brazil) and Asia Pacific. During 2025, production of Class-8 and Classes 5-7 trucks in North America both decreased 23% compared to 2024. The outlook for 2026 is for a modest decrease in production of Classes 5-7 trucks and a modest increase in Class-8 truck production compared to the prior year. Outside of North America, production of medium- and heavy-duty trucks in South America decreased 7% compared to 2024, reflecting relatively stable economic conditions in the region. The 2026 outlook for South America reflects medium- and heavy-duty production being relatively flat compared to the prior year. Production of medium- and heavy-duty trucks in Asia Pacific, driven by China and India, increased 12% in 2025. The 2026 outlook for Asia Pacific is for a modest increase in production from the prior year.

Previous wording

Foreign currency — With 43% of our sales for the first nine months of 2025 coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations. The euro zone countries accounted for 31% of our year-to-date 2025 non-U.S. sales, while Brazil, India, Thailand and China accounted for 14%, 8%, 8% and 7%, respectively. International currencies weakened against the U.S. dollar during the first nine months of 2025, decreasing sales by $3, with the effects of a weaker Brazilian real, Indian rupee, Mexican peso and Canadian dollar being partially offset by a stronger euro, Thai baht and South Africa rand.

Current wording

Foreign currency — With 44% of our first quarter 2026 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations. The euro zone countries accounted for 33% of our year-to-date 2026 non-U.S. sales, while Brazil, India, Thailand and China accounted for 14%, 10%, 8% and 7%, respectively. International currencies strengthened against the U.S. dollar during the first quarter of 2026, increasing sales by $64, with the effects of a stronger euro, Brazilian real, South African rand and Thai baht being partially offset by a weaker Indian rupee.

Previous wording

Argentina has experienced significant inflationary pressures the past few years, contributing to significant devaluation of its currency among other economic challenges. Our Argentine operation supports our Light Vehicle operating segment. Our sales in Argentina for the first nine months of 2025 of approximately $169 are 3% of our consolidated sales and our net asset exposure related to Argentina was approximately $58, including $20 of net fixed assets, at September 30, 2025. During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy. In assessing Argentina's economy as highly inflationary we considered its three-year cumulative inflation rate along with other factors. As a result, effective July 1, 2018, the U.S. dollar is the functional currency for our Argentine operations, rather than the Argentine peso. Beginning July 1, 2018, peso-denominated monetary assets and liabilities are remeasured into U.S. dollars using current Argentine peso exchange rates with resulting translation gains or losses included in results of operations. Nonmonetary assets and liabilities are remeasured into U.S. dollar using historic Argentine peso exchange rates.

Current wording

Argentina has experienced significant inflationary pressures the past few years, contributing to significant devaluation of its currency among other economic challenges. Our Argentine operation supports our Light Vehicle operating segment. Our sales in Argentina for the first quarter of 2026 of approximately $45 are 2% of our consolidated sales and our net asset exposure related to Argentina was approximately $68, including $18 of net fixed assets, at March 31, 2026. During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy. In assessing Argentina's economy as highly inflationary we considered its three-year cumulative inflation rate along with other factors. As a result, effective July 1, 2018, the U.S. dollar is the functional currency for our Argentine operations, rather than the Argentine peso. Beginning July 1, 2018, peso-denominated monetary assets and liabilities are remeasured into U.S. dollars using current Argentine peso exchange rates with resulting translation gains or losses included in results of operations. Nonmonetary assets and liabilities are remeasured into U.S. dollar using historic Argentine peso exchange rates.

Previous wording

Commodity costs — The cost of our products may be significantly impacted by changes in raw material commodity prices, the most important to us being those of various grades of steel, aluminum, copper, brass and rare earth materials. The effects of changes in commodity prices are reflected directly in our purchases of commodities and indirectly through our purchases of products such as castings, forgings, bearings, batteries and component parts that include commodities. Most of our major customer agreements provide for the sharing of significant commodity price changes with those customers based on the movement in various published commodity indexes. Where such formal agreements are not present, we have historically been successful implementing price adjustments that largely compensate for the inflationary impact of material costs. Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes. Higher year-over-year commodity prices decreased earnings during the first nine months of 2025 by $3. Material cost recovery pricing actions increased earnings in the first nine months of 2025 by $3.

Current wording

Commodity costs — The cost of our products may be significantly impacted by changes in raw material commodity prices, the most important to us being those of various grades of steel, aluminum, copper, brass and rare earth materials. The effects of changes in commodity prices are reflected directly in our purchases of commodities and indirectly through our purchases of products such as castings, forgings, bearings, batteries and component parts that include commodities. Most of our major customer agreements provide for the sharing of significant commodity price changes with those customers based on the movement in various published commodity indexes. Where such formal agreements are not present, we have historically been successful implementing price adjustments that largely compensate for the inflationary impact of material costs. Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes. Higher year-over-year commodity prices decreased earnings during the first quarter of 2026 by $8. Material cost recovery pricing actions increased earnings in the first quarter of 2026 by $6.

Previous wording

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

Current wording

Summary Consolidated Results of Operations (First Quarter, 2026 versus 2025)

Previous wording

Sales in the third quarter of 2025 were $20 higher than 2024. Stronger international currencies increased sales by $21, principally due to a stronger euro, Thai baht and Brazilian real, partially offset by a weaker India rupee. The organic sales decrease of $1 primarily resulted from lower medium/heavy-truck production volumes in North America and South America and lower electric-vehicle product orders in Europe and Asia Pacific, partially offset by higher full-frame light-truck production volumes in North America and the conversion of sales backlog. Pricing actions and recoveries, including material commodity and tariff and inflationary cost adjustments, increased sales by $65.

Current wording

Sales in the first quarter of 2026 were $87 higher than 2025. Stronger international currencies increased sales by $64, principally due to a stronger euro, Brazilian real, South African rand and Thai baht, partially offset by a weaker India rupee. The organic sales increase of $23 primarily resulted from pricing actions and recoveries, including material commodity and tariff and inflationary costs adjustments, and the conversion of sales backlog, partially offset by lower medium/heavy-truck production volumes in North America and lower electric-vehicle product orders in Europe and Asia Pacific. Pricing actions and recoveries, including material commodity and tariff and inflationary cost adjustments, increased sales by $56.

Previous wording

The North America organic sales increase of 6% was driven principally by higher full-frame light-truck production volumes, the conversion of sales backlog and net customer pricing and tariff and cost recovery actions, partially offset by lower medium- and heavy-truck production volumes. Third quarter 2025 full-frame light-truck production was up 6%, while Class 8 and Classes 5-7 production were down 28% and 23%, respectively. Excluding currency effects, sales in Europe were down 6% compared to 2024, reflecting lower electric-vehicle product orders. Excluding currency effects, sales in South America were down 7% compared to 2024, reflecting lower medium/heavy-truck production. Excluding currency effects, sales in Asia Pacific decreased 15% reflecting lower electric vehicle-related product orders.

Current wording

The North America organic sales increase of 3% was driven principally by net customer pricing and tariff and cost recovery actions and the conversion of sales backlog, partially offset by lower medium- and heavy-truck production volumes. First quarter 2026 Class 8 and Classes 5-7 production were down 25% and 20%, respectively. Excluding currency effects, sales in Europe were up 1% compared to 2025, reflecting a modest improvement in year-over-year first quarter medium/heavy-truck production volumes. Excluding currency effects, sales in South America were down 4% compared to 2025, reflecting lower year-over-year medium/heavy-truck product sales. Excluding currency effects, sales in Asia Pacific decreased 3% reflecting lower electric vehicle-related product orders, partially offset by a modest improvement in year-over-year first quarter medium/heavy-truck production volumes.

Previous wording

Cost of sales and gross margin — Cost of sales for the third quarter of 2025 decreased $24 when compared to 2024. Cost of sales as a percent of sales was 230 basis points lower than in the previous year. Incremental margins from cost reduction initiatives of $66, higher material cost savings of $25, operational efficiencies of $10, lower premium freight costs of $6 and lower warranty expense of $3 were partially offset by unfavorable product mix, tariff-related impacts of $50, non-material inflation of $32, commodity cost increases of $7 and higher incentive compensation expense of $2. Commodity costs are primarily driven by certain grades of steel and aluminum. Non-material inflation includes higher labor, energy and transportation rates.

Current wording

Cost of sales and gross margin — Cost of sales for the first quarter of 2026 increased $36 when compared to 2025. Cost of sales as a percent of sales was 240 basis points lower than in the previous year. Incremental margins from cost reduction initiatives of $33, higher material cost savings of $23, operational efficiencies of $14, lower premium freight costs of $10, lower program launch costs of $1 and favorable product mix were partially offset by tariff-related impacts of $50, non-material inflation of $24, commodity cost increases of $8, higher spending on electrification initiatives of $6 and higher warranty expense of $2. Commodity costs are primarily driven by certain grades of steel and aluminum. Non-material inflation includes higher labor, energy and transportation rates.

Previous wording

Gross margin of $166 for the third quarter of 2025 increased $44 from 2024. Gross margin as a percent of sales was 8.7% in the third quarter of 2025, 230 basis points higher than in 2024. The improvement in gross margin as a percent of sales was driven principally by the cost of sales factors referenced above. Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days. The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

Current wording

Gross margin of $169 for the first quarter of 2026 increased $51 from 2025. Gross margin as a percent of sales was 9.0% in the first quarter of 2026, 240 basis points higher than in 2025. The improvement in gross margin as a percent of sales was driven principally by the cost of sales factors referenced above. Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days. The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

Previous wording

Selling, general and administrative expenses (SG&A) — SG&A expenses in the third quarter of 2025 were $87 (4.5% of sales) as compared to $106 (5.6% of sales) in the third quarter of 2024. SG&A expenses were $19 lower in the third quarter of 2025 primarily due to lower salary and employee benefit costs and lower travel and discretionary spending, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024.

Current wording

Selling, general and administrative expenses (SG&A) — SG&A expenses in the first quarter of 2026 were $102 (5.5% of sales) as compared to $105 (5.9% of sales) in the first quarter of 2025. SG&A expenses were $3 lower in the first quarter of 2026 primarily due to lower salary and employee benefit costs, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024.

Previous wording

Amortization of intangibles — Amortization expensewas $2 in both the third quarter of 2025 and the third quarter of 2024. See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Amortization of intangibles — Amortization expensewas $2 in both the first quarter of 2026 and the first quarter of 2025. See Note 3 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Restructuring charges, net —Net restructuring charges were $4 in the third quarter of 2025 and $20 in the third quarter of 2024. See Note 5 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Restructuring charges, net —Net restructuring charges were $6 in the first quarter of 2026 and $2 in the first quarter of 2025. See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs, and other strategic initiatives. During the third quarter of 2024, we received a transaction break fee related to the failed sale of our European hydraulics business to HPIH S.à.r.l. See Note 17 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs, and other strategic initiatives. During the first quarter of 2026, we recorded $56 of charges, including impairment and loss on disposition of property, plant and equipment, associated with certain electric vehicle programs that were either cancelled by the customer or that have experienced a precipitous decline in program volumes. On January 1, 2026, we sold our Off-Highway business to Allison Transmission Holdings, Inc. (Allison). At closing, Dana entered into a transition services agreement and an engineering services agreement with Allison. Services to be provided by Dana under the transition services agreement include finance, information technology, human resources and certain other administrative services for periods up to 24 months. See Note 2 for additional information. On January 30, 2026, we sold our wholly-owned subsidiary Pi Innovo LLC, recognizing a $8 pre-tax loss on the transaction.

Previous wording

Interest income and interest expense— Interest income was $3 in the third quarter of 2025 and $5 in the third quarter of 2024. Interest expense increased from $38 in the third quarter of 2024 to $47 in the third quarter of 2025, reflecting higher average outstanding borrowings partially offset by lower average interest rates. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.4% in the third quarter of 2025 and 5.7% in the third quarter of 2024.

Current wording

Interest income and interest expense— Interest income was $6 in the first quarter of 2026 and $2 in the first quarter of 2025. Interest expense decreased from $39 in the first quarter of 2025 to $22 in the first quarter of 2026, reflecting lower average outstanding borrowings. See Note 10 of our consolidated financial statements in Item 1 of Part I for additional information. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 6.6% in the first quarter of 2026 and 5.5% in the first quarter of 2025.

Previous wording

Income tax benefit — We reported income tax benefit of $2 and $13 for the first nine months of 2025 and 2024, respectively. Our effective tax rates were 4% and 8% for the first nine months of 2025 and 2024, respectively. During the first nine months of 2025, we recorded a tax benefit of $27 to release valuation allowance on certain U.S. federal attributes, $19 of tax benefit due to a basis difference in a foreign subsidiary as a result of a change in tax status, $9 of tax expense for income tax reserves associated with prior tax years in foreign jurisdictions, $6 of tax expense due to revisions in our assertions on unremitted earnings in foreign jurisdictions and expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment. During the first nine months of 2024, we recorded tax expense of $11 for valuation allowances related to foreign jurisdictions and expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions. Our effective income tax rates vary from the U.S. federal statutory rate of 21% due to establishment, release and adjustment of valuation allowances in several countries outside the U.S., different statutory tax rates outside the U.S. and withholding taxes related to repatriations of international earnings. The effective income tax rate may vary significantly due to fluctuations in the amounts and sources, both foreign and domestic, of pretax income and changes in the amounts of nondeductible expenses.

Current wording

Income tax benefit — We reported income tax expense of $14 and benefit of $(10) for the first quarters of 2026 and 2025, respectively. Our effective tax rates were (350)% and 34% for the first quarters of 2026 and 2025. During the first quarter of 2026, we recorded $12 of tax expense due to revisions in our assertions on unremitted earnings in foreign jurisdictions. During the first quarter of 2025, we recorded a tax benefit of $19 due to a basis difference in a foreign subsidiary as a result of a change in tax status and $9 of tax expense for income tax reserves associated with prior tax years in foreign jurisdictions. Our effective income tax rates vary from the U.S. federal statutory rate of 21% due to establishment, release, and adjustment of valuation allowances in several countries, nondeductible expenses and deemed income, local tax incentives in several countries outside the U.S., different statutory tax rates outside the U.S. and withholding taxes related to repatriations of international earnings. The effective income tax rate may vary significantly due to fluctuations in the amounts and sources, both foreign and domestic, of pretax income and changes in the amounts of non-deductible expenses.

Previous wording

Equity in earnings of affiliates — Net earnings from equity investments was $2 in both the third quarter of 2025 and the third quarter of 2024. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $1 in the third quarter of 2025 and de minimis in the third quarter of 2024. See Note 20 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Equity in earnings of affiliates — Net earnings from equity investments was $3 in the first quarter of 2026 and $2 in the first quarter of 2025. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $2 in the first quarter of 2026 and de minimis in the first quarter of 2025. See Note 18 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Light Vehicle sales in the third quarter of 2025, exclusive of currency effects, were 5% higher than 2024 reflecting higher production volumes in North America, the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog, partially offset by lower electric-vehicle product orders in Europe and Asia Pacific. Year-over-year North America full-frame light-truck production increased 6% and light-truck production in Asia Pacific increased 5%. Light-truck production in Europe was flat compared with last year’s third quarter. Light Vehicle sales in the first nine months of 2025, exclusive of divestiture and currency effects, were 4% lower than 2024 reflecting lower production volumes in North America and lower electric-vehicle product orders in Europe and Asia Pacific partially offset by the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog. Year-over-year North America full-frame light-truck production decreased 2% in this year’s first nine months while light-truck production in Asia Pacific and Europe increased 8% and 2%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $54 and $109 in this year’s third quarter and first nine months, respectively.

Current wording

Light Vehicle sales in the first quarter of 2026, exclusive of currency effects, were 2% higher than 2025 reflecting the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog partially offset by lower global electric-vehicle product orders. Year-over-year North America full-frame light-truck production increased 6% and light-truck production in Europe increased 5%. Light-truck production in Asia Pacific was flat compared with last year’s first quarter. Year-over-year light-vehicle engine production decreased in North America, Europe and Asia Pacific by 1%, 5% and 4%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year first quarter sales by $36.

Previous wording

Light Vehicle third quarter and first nine months 2025 segment EBITDA increased $44 and $56, respectively, from the comparable periods of 2024. The EBITDA benefit of higher sales volumes was offset by unfavorable product mix in the third quarter of 2025. Lower sales volumes decreased year-over-year earnings by $86 (32% decremental margin) in the first nine months of 2025. The year-over-year performance-related earnings increase in the third quarter of 2025 was driven by net customer pricing and cost and tariff recovery actions of $54, cost reduction initiatives of $35, higher material cost savings of $18, lower premium freight costs of $3 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $26. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $41, inflationary cost increases of $25, commodity cost increases of $5, higher incentive compensation expense of $1 and higher warranty expense of $1. The year-over-year performance-related earnings increase in the first nine months of 2025 was driven by net customer pricing and cost and tariff recovery actions of $109, cost reduction initiatives of $74, higher material cost savings of $46, lower premium freight costs of $9, commodity cost decreases of $1, lower incentive compensation expense of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $51. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $77, inflationary cost increases of $69, higher warranty expense of $3 and higher program launch costs of $1.

Current wording

Light Vehicle first quarter 2026 segment EBITDA increased $44 from the comparable period of 2025. Favorable product mix and improved pricing on electric vehicle programs was partially offset by lower sales volumes. The year-over-year performance-related earnings increase was driven by net customer pricing and cost and tariff recovery actions of $36, higher material cost savings of $14, lower premium freight costs of $8, cost reduction initiatives of $5 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $13. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $36, inflationary cost increases of $19, commodity cost increases of $6 and higher warranty expense of $3.

Previous wording

Commercial Vehicle sales in the third quarter of 2025, exclusive of currency effects, were 10% lower than 2024 reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions. Year-over-year Class 8 production in North America was down 28% while Classes 5-7 was down 23% in this year’s third quarter. Year-over-year medium/heavy-truck production in South America was down 16% while production in Europe was up 9% in this year’s third quarter. Commercial Vehicle sales in the first nine months of 2025, exclusive of currency effects, were 9% lower than 2024, reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions. Year-over-year Class 8 production in North America was down 21% while Classes 5-7 was down 25% in this year’s first nine months. Year-over-year medium/heavy truck production in Europe and South America were down 1% and 4%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $11 and $33 in this year’s third quarter and first nine months, respectively.

Current wording

Commercial Vehicle sales in the first quarter of 2026, exclusive of currency effects, were 1% lower than 2025 reflecting a weakening North American market partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions. Year-over-year Class 8 production in North America was down 25% while Classes 5-7 was down 20% in this year’s first quarter. Year-over-year medium/heavy-truck production in Europe, South America and Asia Pacific were up 10%, 2% and 9%, respectively, this year’s first quarter. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $20 in this year’s first quarter.

Previous wording

Commercial Vehicle third quarter and first nine months 2025 segment EBITDA increased $6 and $22, respectively, from the comparable periods of 2025. Lower sales volumes decreased year-over-year earnings by $16 (22% decremental margin) in the third quarter of 2025. Lower sales volumes decreased year-over-year earnings by $58 (29% decremental margin) in the first nine months of 2025. The year-over-year performance-related earnings increase in the third quarter of 2025 was driven by cost reduction initiatives of $17, net customer pricing and cost and tariff recovery actions of $11, higher material cost savings of $7, lower warranty expense of $4 and lower premium freight costs of $3. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $9, inflationary cost increases of $8, commodity cost increases of $2 and operational inefficiencies of $3, inclusive of lower corporate allocations resulting from cost reduction initiatives. The year-over-year performance-related earnings increase in the first nine months of 2025 was driven by cost reduction initiatives of $38, net customer pricing and cost and tariff recovery actions of $33, higher material costs savings of $22, lower warranty expense of $8, lower premium freight costs of $7, lower program launch costs of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $24. Partially offsetting these performance-related earnings increases were inflationary cost increases of $24, higher tariff-related costs of $20, higher spending on electrification initiatives of $4, commodity cost increases of $4 and higher incentive compensation expense of $1.

Current wording

Commercial Vehicle first quarter 2026 segment EBITDA increased $22 from the comparable period of 2025. Lower sales volumes decreased year-over-year earnings by $4 (17% decremental margin) in the first quarter of 2026. The year-over-year performance-related earnings increase was driven by net customer pricing and cost and tariff recovery actions of $20, higher material cost savings of $9, cost reduction initiatives of $3, lower premium freight costs of $2, lower warranty expense of $1, lower program launch costs of $1 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $13. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $14, higher spending on electrification initiatives of $6, inflationary cost increases of $4, commodity cost increases of $2 and higher incentive compensation expense of $1.

Previous wording

We have defined adjusted free cash flow as cash provided by (used in) operating activities less purchases of property, plant and equipment plus proceeds from sale of property, plant and equipment plus cash paid for Off-Highway business divestiture related activities. We believe adjusted free cash flow is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Adjusted free cash flow is not intended to represent nor be an alternative to the measure of net cash provided by operating activities reported in accordance with GAAP. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

Current wording

We have defined adjusted free cash flow as cash provided by (used in) operating activities less purchases of property, plant and equipment plus proceeds from sale of property, plant and equipment plus cash paid for purchases of leased facilities plus cash paid for Off-Highway business divestiture related activities. We believe adjusted free cash flow is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Adjusted free cash flow is not intended to represent nor be an alternative to the measure of net cash provided by operating activities reported in accordance with GAAP. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

Previous wording

We had availability of $765 at September 30, 2025 under our Revolving Facility after deducting $375 of outstanding borrowings and $10 of outstanding letters of credit.

Current wording

We had availability of $1,140 at March 31, 2026 under our Revolving Facility after deducting $10 of outstanding letters of credit.

Previous wording

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand, (iii) borrowings from our Revolving Facility and (iv) net cash proceeds from the sale of the Off-Highway business. We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital, debt obligations and other commitments during the next twelve months. While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity.

Current wording

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand and (iii) borrowings from our Revolving Facility. We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital, debt obligations and other commitments during the next twelve months. While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity.

Previous wording

Operating activities — Exclusive of working capital, other cash provided by continuing operations was $153 in 2025 and $175 in 2024. Continuing operations working capital used cash of $212 and $219 in 2025 and 2024. Cash of $219 and $112 was used to finance receivables in 2025 and 2024. Cash of $18 and $71 was used to fund higher inventory levels in 2025 and 2024. Increases in accounts payable and other net liabilities provided cash of $25 in 2025 while decreases in accounts payable and other net liabilities used cash of $36 in 2024. Operating activities of discontinued operations generated cash of $165 and $192 in 2025 and 2024.

Current wording

Operating activities — Exclusive of working capital, other cash provided by continuing operations was $118 in 2026 and $53 in 2025. The year-over-year improvement is primarily attributable to the impact of higher year-over-year operating earnings from continuing operations. Continuing operations working capital used cash of $252 and $418 in 2026 and 2025. Cash of $295 and $259 was used to finance receivables in 2026 and 2025. Cash of $18 was provided by lower inventory levels in 2026, while cash of $176 was used to fund higher inventory levels in 2025. Increases in accounts payable and other net liabilities provided cash of $25 and $17 in 2026 and 2025. The Off-Highway business sale transaction closed on January 1, 2026. The Off-Highway business's Mexican operations continue to be presented as discontinued operations, as those operations have not yet legally transferred to the buyer. Operating activities of discontinued operations used cash of $61 in 2026 and generated cash of $328 in 2025.

Previous wording

The preparation of our consolidated financial statements in accordance with GAAP requires us to use estimates and make judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. See Item 7 in our 2024 Form 10-K for a description of our critical accounting estimates and Note 1 to our consolidated financial statements in Item 8 of our 2024 Form 10-K for our significant accounting policies. There were no changes to our critical accounting estimates in the nine months ended September 30, 2025. See Note 1 to our consolidated financial statements in this Form 10-Q for a discussion of new accounting guidance adopted during the first nine months of 2025.

Current wording

The preparation of our consolidated financial statements in accordance with GAAP requires us to use estimates and make judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosures. See Item 7 in our 2025 Form 10-K for a description of our critical accounting estimates and Note 1 to our consolidated financial statements in Item 8 of our 2025 Form 10-K for our significant accounting policies. There were no changes to our critical accounting estimates in the three months ended March 31, 2026. See Note 1 to our consolidated financial statements in this Form 10-Q for a discussion of new accounting guidance adopted during the first three months of 2026.