DANA Inc

Previous 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 July 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 June 30, 2026, we have spent $819 to repurchase 39,943,730 shares under the approved stock repurchase program. See Note 6 of our consolidated financial statements in Item 1 of Part I for additional information.

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 July 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 our 2025 Term A Facility and the $390 of outstanding borrowings on our Revolving Facility. On July 28, 2026, we drew $500 on our 2026 Term A Facility. On July 31, 2026, we redeemed all of our outstanding July 2031 Notes at a price equal to 104.25% plus accrued and unpaid interest. 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 September 30, 2026, we have spent $1,020 to repurchase 46,509,080 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

Eaton Mobility Business — On June 10, 2026, Dana entered into definitive agreements with Eaton Corporation plc (Eaton) and certain wholly owned subsidiaries of Eaton, including Mobility (USA) Corporation (the SpinCo), to acquire Eaton’s Vehicle and eMobility business segments (Mobility business). The structure of the transaction is a Reverse Morris Trust. Following the separation of the Mobility business from Eaton, a subsidiary of SpinCo will merge with and into Dana, and Dana will survive the merger as a wholly owned subsidiary of SpinCo. Following the merger, each outstanding share of Dana will be converted into the right to receive one SpinCo share. Prior to or at the closing, a subsidiary of Eaton will sell to Dana 100% of the stock in Royal Precision Holdings Corp. in exchange for cash consideration (the Royal Precision Purchase Price). In the event of an election by Dana, certain specified assets (as defined in the separation agreement) will be purchased by Dana from Eaton and certain of its subsidiaries. When the transaction is completed, former Eaton shareholders will own at least 50.1% and former Dana shareholders will own no more than 49.9% of the outstanding shares of SpinCo common stock on a fully diluted basis. Under the terms of the agreement, Eaton will receive a cash distribution of approximately $1,100, subject to adjustment for cash and indebtedness and reduced by the Royal Precision and other specified assets Purchase Price. The transaction has been unanimously approved by the Boards of Directors of both Dana and Eaton. No vote by Eaton shareholders is required. The transaction is intended to be tax-free to Dana and Eaton shareholders for U.S. federal income tax purposes. The transaction is anticipated to close in the first quarter of 2027, subject to approval by Dana's shareholders and customary closing conditions, including receipt of regulatory approvals. The agreements contain certain customary termination rights for Dana and Eaton, including, without limitation, a right for either party to terminate if the transaction is not completed on or before June 10, 2027. Termination resulting from Dana shareholders voting against the transaction would result in Dana having to reimburse Eaton for certain expenses in an amount not to exceed $20. Termination under specified circumstances would require Dana to pay Eaton a termination fee of $159. In anticipation of the transaction, Mobility (USA) Corporation and Dana became parties to a $2,600 bridge facility, a $350 secured term loan A commitment and a $1,200 secured revolving credit facility commitment. See Note 10 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Eaton Mobility Business — On June 10, 2026, Dana entered into definitive agreements with Eaton Corporation plc (Eaton) and certain wholly owned subsidiaries of Eaton, including Mobility (USA) Corporation (the SpinCo), to acquire Eaton’s Vehicle and eMobility business segments (Mobility business). The structure of the transaction is a Reverse Morris Trust. Following the separation of the Mobility business from Eaton, a subsidiary of SpinCo will merge with and into Dana, and Dana will survive this merger as a direct wholly owned subsidiary of SpinCo. Immediately following this merger, and as part of the same overall transaction, Dana, as the surviving corporation, will merge with and into another direct wholly owned subsidiary of SpinCo, with that subsidiary surviving as a directly wholly owned subsidiary of SpinCo. In the merger, each outstanding share of Dana will be converted into the right to receive one SpinCo share. Prior to or at the closing, a subsidiary of Eaton will sell to Dana 100% of the stock in Royal Precision Holdings Corp. in exchange for cash consideration (the Royal Precision Purchase Price). In addition, certain subsidiaries of Eaton will sell certain specified assets (as defined in the Separation Agreement) to Dana in exchange for cash consideration (the Specified Assets Purchase Price). When the transaction is completed, former Eaton shareholders will own, in the aggregate, 50.1% and former Dana shareholders will own, in the aggregate, 49.9% of the outstanding shares of SpinCo common stock on a fully diluted basis. Under the terms of the agreement, Eaton will receive a cash distribution of approximately $1,100, subject to adjustment for cash and indebtedness, reduced by the Royal Precision Purchase Price and the Specified Assets Purchase Price, and increased as a result of any pre-closing share repurchases by Dana pursuant to the Share Buyback Side Letter. The transaction has been unanimously approved by the Boards of Directors of both Dana and Eaton. No vote by Eaton shareholders is required. The transaction is intended to be tax-free to Dana and Eaton shareholders for U.S. federal income tax purposes. The transaction is anticipated to close in the second quarter of 2027, subject to approval by Dana's shareholders and customary closing conditions, including receipt of regulatory approvals. The agreements contain certain customary termination rights for Dana and Eaton, including, without limitation, a right for either party to terminate if the transaction is not completed on or before June 10, 2027. Termination resulting from Dana shareholders voting against the transaction would result in Dana having to reimburse Eaton for certain expenses in an amount not to exceed $20. Termination under specified circumstances would require Dana to pay Eaton a termination fee of $159. In anticipation of the transaction, Mobility (USA) Corporation and Dana became parties to a $2,600 bridge facility, a $350 secured term loan A commitment and …

Excerpt shortened here; the source contains the full paragraph.

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 June 30, 2026, we employed approximately 27,300 people and operated in 24 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 September 30, 2026, we employed approximately 27,500 people and operated in 24 countries.

Previous wording

Foreign currency — With 44% of our first six months 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, China, Argentina and South Africa accounted for 14%, 9%, 7%, 7%, 7% and 6%, respectively. International currencies strengthened against the U.S. dollar during the first six months of 2026, increasing sales by $88, with the effects of a stronger euro, Brazilian real, South African rand and Thai baht being partially offset by a weaker Indian rupee.

Current wording

Foreign currency — With 43% of our first nine months 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 32% of our year-to-date 2026 non-U.S. sales, while Brazil, India, Thailand, China, Argentina and South Africa accounted for 15%, 10%, 7%, 7%, 7% and 6%, respectively. International currencies strengthened against the U.S. dollar during the first nine months of 2026, increasing sales by $93, with the effects of a stronger euro, Brazilian real, South African rand, Chinese renminbi and Mexican peso 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 six months of 2026 of approximately $111 are 3% of our consolidated sales and our net asset exposure related to Argentina was approximately $79, including $21 of net fixed assets, at June 30, 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.

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 nine months of 2026 of approximately $173 are 3% of our consolidated sales and our net asset exposure related to Argentina was approximately $74, including $20 of net fixed assets, at September 30, 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 second quarter and first half of 2026 by $15 and $23, respectively. Material cost recovery pricing actions increased earnings in the second quarter and first half of 2026 by $12 and $18, respectively.

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 third quarter and first nine months of 2026 by $17 and $40, respectively. Material cost recovery pricing actions increased earnings in the third quarter and first nine months of 2026 by $17 and $35, respectively.

Previous wording

Adjusted EBITDA and adjusted free cash flow are non-GAAP financial measures. See the Non-GAAP Financial Measures discussion below for definitions of our non-GAAP financial measures and reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures. We have not provided a reconciliation of our adjusted EBITDA outlook to the most comparable GAAP measure of net income. Providing net income guidance is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items that are included in net income, including restructuring actions, asset impairments and certain income tax adjustments. The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.

Current wording

Adjusted EBITDA and adjusted free cash flow are non-GAAP financial measures. See the Non-GAAP Financial Measures discussion below for definitions of our non-GAAP financial measures and reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures. We have not provided a reconciliation of our adjusted EBITDA outlook to the most comparable GAAP measure of net income (loss) from continuing operations. Providing net income (loss) from continuing operations guidance is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items that are included in net income (loss) from continuing operations, including restructuring actions, asset impairments and certain income tax adjustments. The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.

Previous wording

Our 2026 sales outlook is $7,650 to $7,850, reflecting relatively stable global market demand, $200 of net new business backlog, dissipation of the tariff recovery lag experienced in 2025 and currency tailwinds. Based on our current sales and exchange rate outlook for 2026, we expect international currencies to be a modest tailwind to sales primarily due to a stronger euro. At sales levels in our current outlook for 2026, a 5% movement on the euro would impact our annual sales by approximately $65. A 5% change on the Indian rupee or Brazilian real rates would impact our annual sales in each of those countries by approximately $15. A 5% change on the Chinese renminbi rate would impact our annual sales by approximately $10. At our current sales outlook for 2026, we expect full year 2026 adjusted EBITDA to approximate $800 to $850. Adjusted EBITDA margin is expected to be 10.6% at the midpoint of our guidance range, a 250 basis-point improvement over 2025, reflecting the impact of significant cost savings actions, improved operational performance and favorable product mix, partially offset by the impact of net material cost recoveries and net inflationary cost recoveries. We expect to generate free cash flow of $325 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA and lower income tax and interest payments, partially offset by higher capital spending.

Current wording

Our 2026 sales outlook is $7,750 to $7,850, reflecting relatively stable global market demand, $200 of net new business backlog, dissipation of the tariff recovery lag experienced in 2025 and currency tailwinds. Based on our current sales and exchange rate outlook for 2026, we expect international currencies to be a modest tailwind to sales primarily due to a stronger euro. At sales levels in our current outlook for 2026, a 5% movement on the euro would impact our annual sales by approximately $15 and a 5% change on the Brazilian real would impact our annual sales by approximately $5. At our current sales outlook for 2026, we expect full year 2026 adjusted EBITDA to approximate $800 to $850. Adjusted EBITDA margin is expected to be 10.6% at the midpoint of our guidance range, a 250 basis-point improvement over 2025, reflecting the impact of significant cost savings actions, improved operational performance and favorable product mix, partially offset by the impact of net material cost recoveries and net inflationary cost recoveries. We expect to generate adjusted free cash flow of $325 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA and lower income tax and interest payments, partially offset by higher capital spending.

Previous wording

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

Current wording

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

Previous wording

Sales in the second quarter of 2026 were $75 higher than 2025. Stronger international currencies increased sales by $24, principally due to a stronger Brazilian real, euro and South African rand, partially offset by a weaker India rupee. The organic sales increase of $51 primarily resulted from pricing actions and recoveries, including material commodity, tariff and inflationary costs adjustments, higher full-frame light-truck production volumes in North America 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, tariff and inflationary costs adjustments, increased sales by $45.

Current wording

Sales in the third quarter of 2026 were $121 higher than 2025. Stronger international currencies increased sales by $5, principally due to a stronger Brazilian real and South African rand, partially offset by a weaker India rupee. The organic sales increase of $116 primarily resulted from pricing actions and recoveries, including material commodity, tariff and inflationary costs adjustments, higher full-frame light-truck and heavy-truck production volumes in North America and the conversion of sales backlog, partially offset by lower electric-vehicle product orders in Europe and Asia Pacific. Pricing actions and recoveries, including material commodity, tariff and inflationary costs adjustments, increased sales by $29.

Previous wording

The North America organic sales increase of 4% was driven principally by net customer pricing, tariff and cost recovery actions, higher full-frame light-truck production volumes and the conversion of sales backlog, partially offset by lower medium- and heavy-truck production volumes. Second quarter 2026 full-frame light-truck production was up 6%. Second quarter 2026 Class 8 and Classes 5-7 production were down 8% and 10%, respectively. Excluding currency effects, sales in Europe were up 3% compared to 2025, reflecting net customer pricing and cost recovery actions. Excluding currency effects, sales in South America were up 2% compared to 2025, reflecting higher year-over-year medium/heavy-truck production volumes. 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 second quarter medium/heavy-truck production volumes.

Current wording

The North America organic sales increase of 5% was driven principally by net customer pricing, tariff and cost recovery actions, higher full-frame light-truck and heavy-truck production volumes and the conversion of sales backlog. Third quarter 2026 full-frame light-truck production was up 3%. Third quarter 2026 Class 8 production was up 32% while Classes 5-7 production was down 2%. Excluding currency effects, sales in Europe were up 8% compared to 2025, reflecting higher light-truck production volumes and net customer pricing and cost recovery actions. Excluding currency effects, sales in South America were up 7% compared to 2025, reflecting higher year-over-year medium/heavy-truck production volumes. Excluding currency effects, sales in Asia Pacific increased 11% reflecting a modest improvement in year-over-year third quarter light-truck and medium/heavy-truck production volumes, partially offset by lower electric vehicle-related product orders.

Previous wording

Cost of sales and gross margin — Cost of sales for the second quarter of 2026 increased $3 when compared to 2025. Cost of sales as a percent of sales was 330 basis points lower than in the previous year. Incremental margins from cost reduction initiatives of $18, higher material cost savings of $24, operational efficiencies of $6, lower incentive compensation expense of $3, lower premium freight costs of $2 and favorable product mix were partially offset by non-material inflation of $26, commodity cost increases of $15, higher spending on electrification initiatives of $7, higher warranty expense of $1 and higher program launch costs of $1. 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 third quarter of 2026 increased $86 when compared to 2025. Cost of sales as a percent of sales was 120 basis points lower than in the previous year. Incremental margins from operational efficiencies, including cost recoveries associated with a terminated customer program, of $62, higher material cost savings of $22, cost reduction initiatives of $6, lower premium freight costs of $4, lower product launch costs of $1 and favorable product mix were partially offset by non-material inflation of $31, commodity cost increases of $17, a union ratification bonus charge of $17 in 2026, tariff-related impacts of $15, higher warranty expense of $10 and higher incentive compensation expense $3. 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 $210 for the second quarter of 2026 increased $72 from 2025. Gross margin as a percent of sales was 10.4% in the second quarter of 2026, 330 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.

Current wording

Gross margin of $201 for the third quarter of 2026 increased $35 from 2025. Gross margin as a percent of sales was 9.9% in the third quarter of 2026, 120 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 second quarter of 2026 were $104 (5.2% of sales) as compared to $99 (5.1% of sales) in the second quarter of 2025. SG&A expenses were $5 higher in the second quarter of 2026 primarily due to higher legal and professional services costs.

Current wording

Selling, general and administrative expenses (SG&A) — SG&A expenses in the third quarter of 2026 were $97 (4.8% of sales) as compared to $87 (4.5% of sales) in the third quarter of 2025. SG&A expenses were $10 higher in the third quarter of 2026 primarily due to higher legal and professional services costs, higher incentive compensation expense and higher costs associated with information technology initiatives.

Previous wording

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

Current wording

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

Previous wording

Restruct uring charges, net —Net restructuring charges were $9 in the second quarter of 2026 and $11 in the second quarter of 2025. See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Restructuring charges, net —Net restructuring charges were $5 in the third quarter of 2026 and $4 in the third 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. Strategic transaction expenses in 2026 were primarily attributable to the potential acquisition of Eaton's Mobility business. See Note 1 of our consolidated financial statements in Item 1 of Part I for additional information. During the second quarter of 2026, we recorded $3 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 to our consolidated financial statements in Item 1 of Part I for additional information. On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction. See Note 18 to 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. Strategic transaction expenses in 2026 were primarily attributable to the potential acquisition of Eaton's Mobility business. See Note 1 of our consolidated financial statements in Item 1 of Part I for additional information. 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 to our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Interest income and interest expense— Interest income was $4 in the second quarter of 2026 and $3 in the second quarter of 2025. Interest expense decreased from $44 in the second quarter of 2025 to $21 in the second 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 6.2% in the second quarter of 2026 and 5.8% in the second quarter of 2025.

Current wording

Interest income and interest expense— Interest income was $4 in the third quarter of 2026 and $3 in the third quarter of 2025. Interest expense decreased from $47 in the third quarter of 2025 to $20 in the third 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 5.3% in the third quarter of 2026 and 5.4% in the third quarter of 2025.

Previous wording

Income tax expense — We reported income tax expense of $54 and $10 for the second quarters of 2026 and 2025, respectively. Our effective tax rates were 92% and (40)% for the second quarters of 2026 and 2025, respectively. During the second quarter of 2025, we recorded tax expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment. 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.

Current wording

Income tax expense — We reported income tax expense of $64 and income tax benefit of ($2) for the third quarters of 2026 and 2025, respectively. Our effective tax rates were 123% and (22)% for the third quarters of 2026 and 2025, respectively. During the third quarter of 2026, we recorded $29 of income tax expense resulting from the settlement of an income tax audit in a foreign jurisdiction and income tax benefit of $12 associated with a change in tax status for a foreign entity. During the third quarter of 2025, we recorded income tax benefit of ($27) resulting from the release of valuation allowance on certain U.S. federal attributes and $6 of income tax expense 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, 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 $6 in the second quarter of 2026 and $23 in the second quarter of 2025. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $5 in the second quarter of 2026 and $4 in the second quarter of 2025. On April 25, 2025, we sold our ownership interest in Axles India Limited, recognizing a $19 pre-tax gain on the transaction. See Note 18 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 $2 in the third quarter of 2026 and $2 in the third quarter of 2025. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $2 in the third quarter of 2026 and $1 in the third quarter of 2025. See Note 18 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Net income from discontinued operations — Net income (loss) from discontinued operations was a loss of $11 in the second quarter of 2026 and income of $43 in the second quarter of 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. See Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Net income from discontinued operations — Net income from discontinued operations was $29 in the third quarter of 2026 and $74 in the third quarter of 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. See Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Summary Consolidated Results of Operations (Year-to-Date Quarter, 2026 versus 2025)

Current wording

Summary Consolidated Results of Operations (Year-to-Date, 2026 versus 2025)

Previous wording

Sales in the first six months of 2026 were $162 higher than 2025. Stronger international currencies increased sales by $88, 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 $74 primarily resulted from pricing actions and recoveries, including material commodity, 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, tariff and inflationary costs adjustments, increased sales by $101.

Current wording

Sales in the first nine months of 2026 were $283 higher than 2025. Stronger international currencies increased sales by $93, principally due to a stronger euro, Brazilian real, South African rand, Chinese renminbi, and Mexican peso, partially offset by a weaker India rupee. The organic sales increase of $190 primarily resulted from pricing actions and recoveries, including material commodity, 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, tariff and inflationary costs adjustments, increased sales by $130.

Previous wording

The North America organic sales increase of 3% was driven principally by net customer pricing, tariff and cost recovery actions and the conversion of sales backlog, partially offset by lower medium- and heavy-truck production volumes. First six months 2026 Class 8 and Classes 5-7 production were down 17% and 16%, respectively. Excluding currency effects, sales in Europe were up 2% compared to 2025, reflecting net customer pricing and cost recovery actions and a modest improvement in year-over-year first six months medium/heavy-truck production volumes. Excluding currency effects, sales in South America were down 1% 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-half medium/heavy-truck production volumes.

Current wording

The North America organic sales increase of 4% was driven principally by net customer pricing, tariff and cost recovery actions and the conversion of sales backlog, partially offset by lower medium- and heavy-truck production volumes. First nine months 2026 Class 8 and Classes 5-7 production were down 3% and 7%, respectively. Excluding currency effects, sales in Europe were up 4% compared to 2025, reflecting net customer pricing and cost recovery actions and an improvement in year-over-year first nine months light-truck and medium/heavy-truck production volumes. Excluding currency effects, sales in South America were up 2% compared to 2025, reflecting higher year-over-year medium/heavy-truck product sales. Excluding currency effects, sales in Asia Pacific increased 1% reflecting a modest improvement in year-over-year medium/heavy-truck production volumes, partially offset by lower electric vehicle-related product orders.

Previous wording

Cost of sales and gross margin — Cost of sales for the first six months of 2026 increased $39 when compared to 2025. Cost of sales as a percent of sales was 290 basis points lower than in the previous year. Incremental margins from cost reduction initiatives of $51, higher material cost savings of $47, operational efficiencies of $20, lower premium freight costs of $12, lower incentive compensation expense of $2 and favorable product mix were partially offset by tariff-related impacts of $50, non-material inflation of $49, commodity cost increases of $23, higher spending on electrification initiatives of $13 and higher warranty expense of $3. 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 nine months of 2026 increased $125 when compared to 2025. Cost of sales as a percent of sales was 230 basis points lower than in the previous year. Incremental margins from operational efficiencies, including cost recoveries associated with a terminated customer program, of $99, higher material cost savings of $69, cost reduction initiatives of $57, lower premium freight costs of $16, lower product launch costs of $1 and favorable product mix were partially offset by non-material inflation of $81, tariff-related impacts of $65, commodity cost increases of $40, a union ratification bonus charge of $17 in 2026, higher spending on electrification initiatives of $13 and higher warranty expense of $13. 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 $379 for the first six months of 2026 increased $123 from 2025. Gross margin as a percent of sales was 9.8% in the first six months of 2026, 290 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.

Current wording

Gross margin of $580 for the first nine months of 2026 increased $158 from 2025. Gross margin as a percent of sales was 9.8% in the first nine months of 2026, 230 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 first six months of 2026 were $206 (5.3% of sales) as compared to $204 (5.5% of sales) in the first six months of 2025. SG&A expenses were $2 higher in the first six months of 2026 primarily due to higher legal and professional services costs.

Current wording

Selling, general and administrative expenses (SG&A) — SG&A expenses in the first nine months of 2026 were $303 (5.1% of sales) as compared to $291 (5.2% of sales) in the first nine months of 2025. SG&A expenses were $12 higher in the first nine months of 2026 primarily due to higher legal and professional services costs, higher incentive compensation expense and higher costs associated with information technology initiatives.

Previous wording

Amortization of intangibles — Amortization expensewas $3 in the first six months of 2026 and $4 in the first six months of 2025. See Note 3 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Amortization of intangibles — Amortization expensewas $4 in the first nine months of 2026 and $6 in the first nine months 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 $15 in the first six months of 2026 and $13 in the first six months of 2025. See Note 4 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Restructuring charges, net —Net restructuring charges were $20 in the first nine months of 2026 and $17 in the first nine months 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. Strategic transaction expenses in 2026 were primarily attributable to the potential acquisition of Eaton's Mobility business. See Note 1 of our consolidated financial statements in Item 1 of Part I for additional information. During the first six months of 2026, we recorded $59 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 of our consolidated financial statements in Item 1 of Part I 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. On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction. See Note 18 to 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. Strategic transaction expenses in 2026 were primarily attributable to the potential acquisition of Eaton's Mobility business. See Note 1 of our consolidated financial statements in Item 1 of Part I for additional information. During the first nine months of 2026, we recorded $60 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 of our consolidated financial statements in Item 1 of Part I 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. On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction. See Note 18 to our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Loss on extinguishment of debt— The $7 loss on extinguishment of debt is comprised of the write-off of deferred financing costs associated with purchases and redemptions of certain of our senior notes and the repayment of our Term A Facility during the first quarter of 2026. See Note 10 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Loss on extinguishment of debt— The $31 loss on extinguishment of debt in 2026 is comprised of a $20 redemption premium and the write-off of $11 of deferred financing costs associated with purchases and redemptions of certain of our senior notes. See Note 10 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Interest income and interest expense— Interest income was $10 in the first six months of 2026 and $5 in the first six months of 2025. Interest expense decreased from $83 in the first six months of 2025 to $43 in the first six months 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 6.4% in the first six months of 2026 and 5.6% in the first six months of 2025.

Current wording

Interest income and interest expense— Interest income was $14 in the first nine months of 2026 and $8 in the first nine months of 2025. Interest expense decreased from $130 in the first nine months of 2025 to $63 in the first nine months 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 6.0% in the first nine months of 2026 and 5.4% in the first nine months of 2025.

Previous wording

Income tax expense — We reported income tax expense of $68 and $0 for the first six months of 2026 and 2025, respectively. Our effective tax rates were 124% and 0% for the first six months of 2026 and 2025, respectively. During the first six months of 2026, we recorded $12 of tax expense due to revisions in our assertions on unremitted earnings in foreign jurisdictions. During the first six months of 2025, we recorded a tax benefit of $19 due to a basis difference in a foreign subsidiary as a result of a change in tax status, $9 of tax expense for income tax reserves associated with prior tax years in foreign jurisdictions and tax expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment. 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.

Current wording

Income tax expense — We reported income tax expense of $132 and income tax benefit of ($2) for the first nine months of 2026 and 2025, respectively. Our effective tax rates were 123% and 4% for the first nine months of 2026 and 2025, respectively. During the first nine months of 2026, we recorded $29 of income tax expense resulting from the settlement of an income tax audit in a foreign jurisdiction, income tax benefit of $12 associated with a change in tax status for a foreign entity, and $12 of income tax expense due to revisions in our assertions on unremitted earnings in foreign jurisdictions. During the first nine months of 2025, we recorded income tax benefit of $27 to release valuation allowance on certain U.S. federal attributes, $19 of income tax benefit due to a basis difference in a foreign subsidiary as a result of a change in tax status, $9 of income tax expense for income tax reserves associated with prior tax years in foreign jurisdictions, $6 of income tax expense due to revisions in our assertions on unremitted earnings in foreign jurisdictions and income tax expense of $6 resulting from the sale of Dana's ownership interest in an equity method investment. 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 $9 in the first six months of 2026 and $25 in the first six months of 2025. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $7 in the first six months of 2026 and $4 in the first six months of 2025. On April 25, 2025, we sold our ownership interest in Axle India Limited, recognizing a $19 pre-tax gain on the transaction. See Note 18 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 $11 in the first nine months of 2026 and $27 in the first nine months of 2025. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $9 in the first nine months of 2026 and $5 in the first nine months of 2025. On April 25, 2025, we sold our ownership interest in Axle India Limited, recognizing a $19 pre-tax gain on the transaction. See Note 18 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Net income from discontinued operations — Net income from discontinued operations was $1,095 in the first six months of 2026 and $90 in the first six months of 2025. The Off-Highway business sale transaction closed on January 1, 2026, with a $1,186 pre-tax gain being recognized in net income from discontinued operations during the first six months of 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. See Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Current wording

Net income from discontinued operations — Net income from discontinued operations was $1,124 in the first nine months of 2026 and $164 in the first nine months of 2025. The Off-Highway business sale transaction closed on January 1, 2026, with a $1,224 pre-tax gain being recognized in net income from discontinued operations during the first nine months of 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. See Note 2 of our consolidated financial statements in Item 1 of Part I for additional information.

Previous wording

Light Vehicle sales in the second quarter of 2026, exclusive of currency effects, were 3% 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 South America and Asia Pacific increased 11% and 6%, respectively. Year-over-year light-truck production in Europe decreased 1%. Year-over-year light-vehicle engine production was flat in North America and Asia Pacific. Year-over-year light-vehicle engine production increased 2% in South America and decreased 7% in Europe. Net customer pricing and cost and tariff recovery actions increased year-over-year second quarter sales by $35. Light Vehicle sales in the first half of 2026, exclusive of currency effects, were 3% 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, South America and Asia Pacific increased 3%, 10% and 5%, respectively. Year-over-year light-vehicle engine production was flat in North America and Asia Pacific. Year-over-year light-vehicle engine production increased 5% in South America and decreased 5% in Europe. Net customer pricing and cost and tariff recovery actions increased year-over-year first-half sales by $71.

Current wording

Light Vehicle sales in the third quarter of 2026, exclusive of currency effects, were 1% 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 3% and light-truck production in Europe, South America and Asia Pacific increased 4%, 14% and 6%, respectively. Year-over-year light-vehicle engine production was flat in North America, South America and Asia Pacific, while light-vehicle engine production in Europe decreased 5%. Net customer pricing and cost and tariff recovery actions increased year-over-year third quarter sales by $5. Light Vehicle sales in the first nine months 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, South America and Asia Pacific increased 5%, 14% and 7%, respectively. Year-over-year light-vehicle engine production was flat in North America, South America and Asia Pacific, while light-vehicle engine production in Europe decreased 3%. Net customer pricing and cost and tariff recovery actions increase year-over-year sales by $76 in this year's first nine months.

Previous wording

Light Vehicle second-quarter and first-half EBITDA increased $31 and $75, respectively, from the comparable periods of 2025. Higher sales volumes, favorable product mix and improved pricing on electric vehicle programs increased second-quarter EBITDA by $14. Favorable product mix and improved pricing on electric vehicle programs was partially offset by lower sales volumes, increasing first-half EBITDA by $45. The year-over-year performance-related earnings increase in the second quarter of 2026 was driven by net customer pricing and cost and tariff recovery actions of $35, higher material cost savings of $16, lower premium freight costs of $5, cost reduction initiatives of $3, lower incentive compensation expense of $3 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $4. Partially offsetting these performance-related earnings increases were inflationary cost increases of $20, commodity cost increases of $11, higher tariff-related costs of $10, net foreign currency transaction losses of $7 and higher program launch costs of $1. The year-over-year performance-related earnings increase in the first half of 2026 was driven by net customer pricing and cost and tariff recovery actions of $71, higher material cost savings of $30, lower premium freight costs of $13, cost reduction initiatives of $8, lower incentive compensation expense of $3 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $17. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $46, inflationary cost increases of $39, commodity cost increases of $17, net foreign currency transaction losses of $7, higher warranty expense of $3 and higher program launch costs of $1.

Current wording

Light Vehicle third-quarter and first nine months segment EBITDA increased $25 and $100, respectively, from the comparable periods of 2025. Higher sales volumes, driven primarily by the conversion of sales backlog, increased third-quarter segment EBITDA by $6 (46% incremental margin). Favorable product mix, improved pricing on electric vehicle programs and higher sales volumes, driven by the conversion of sales backlog, increased first nine months segment EBITDA by $46. The year-over-year performance-related earnings increase in the third quarter of 2026 was driven by higher material cost savings of $16, net customer pricing and cost and tariff recovery actions of $5, lower premium freight costs of $4 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives and cost recoveries associated with a terminated customer program of $51. Partially offsetting these performance-related earnings increases were inflationary cost increases of $21, commodity cost increases of $16, a union ratification bonus charge of $14 in 2026, higher tariff-related costs of $3, higher warranty expense of $2 and higher incentive compensation expense of $1. The year-over-year performance-related earnings increase for the first nine months of 2026 was driven by net customer pricing and cost and tariff recovery actions of $76, higher material cost savings of $46, lower premium freight costs of $17, higher savings from cost reduction initiatives of $8, lower incentive compensation expense of $2 and operational efficiencies, including lower corporate allocations resulting from costs reduction initiatives and cost recoveries associated with a terminated customer program of $66. Partially offsetting these performance-related earnings increases were inflationary cost increases of $60, higher tariff-related costs of $49, commodity cost increases of $33, a union ratification bonus charge of $14 in 2026, higher warranty expense of $5 and higher program launch costs of $1.

Previous wording

Commercial Vehicle sales in the second quarter of 2026, exclusive of currency effects, were 2% higher than 2025 reflecting a stronger Asia Pacific market, the conversion of sales backlog and net customer pricing and cost and tariff recovery actions, partially offset by a weakening North America market. Year-over-year Class 8 production in North America was down 8% while Classes 5-7 was down 10% in this year’s second quarter. Year-over-year medium/heavy-truck production in South America and Asia Pacific were up 6% and 12%, respectively, while Europe was down 3% in this year’s second quarter. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $10 in this year’s second quarter. Commercial Vehicle sales in the first half of 2026, exclusive of currency effects, were 1% higher than 2025 reflecting a stronger Asia Pacific market, the conversion of sales backlog and net customer pricing and cost and tariff recovery actions, partially offset by a weakening North America market. Year-over-year Class 8 production in North America was down 17% while Classes 5-7 was down 16% in this year's first half. Year-over-year medium/heavy-truck production in Europe, South America and Asia Pacific were up 3%, 1% and 11%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $30 in this year's first half.

Current wording

Commercial Vehicle sales in the third quarter of 2026, exclusive of currency effects, were 17% higher than 2025 reflecting overall stronger global markets, 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 up 32% while Classes 5-7 was down 2%. Year-over-year medium/heavy-truck production in Europe, South America and Asia Pacific were up 31%, 9% and 9%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $24 in this year's third quarter. Commercial Vehicle sales in the first nine months of 2026, exclusive of currency effects, were 6% higher than 2025 reflecting a stronger Asia Pacific market, the conversion of sales backlog and net customer pricing and cost and tariff recovery actions, partially offset by a weakening North America market. Year-over-year Class 8 production in North America was down 3% while Classes 5-7 was down 7% in this year's first nine months. Year-over-year medium/heavy-truck production in Europe and Asia Pacific were up 18% and 14%, respectively, while medium/heavy-truck production in South America was down 3%. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $54 in this year's first nine months.

Previous wording

Commercial Vehicle second-quarter and first-half 2026 segment EBITDA increased $21 and $43, respectively, from the comparable periods of 2025. The EBITDA benefit of higher sales volumes was offset by unfavorable product mix in the second quarter of 2026. Lower sales volumes decreased year-over-year earnings by $8 (40% decremental margin) in the first half of 2026. Unfavorable product mix in the first half of 2026 contributed to the decremental margin. The year-over-year performance-related earnings increase in the second quarter of 2026 was driven by net customer pricing and cost and tariff recovery actions of $10, net tariff refunds of $10, higher material cost savings of $8, cost reduction initiatives of $3, net foreign currency transaction gains of $3, lower incentive compensation expense of $2 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $7. Partially offsetting these performance-related earnings increases were higher spending on electrification initiatives of $7, inflationary cost increases of $5, commodity cost increases of $4, higher premium freight costs of $3 and higher warranty expense of $1. The year-over-year performance-related earnings increase in the first half of 2026 was driven by net customer pricing and cost and tariff recovery actions of $30, higher material cost savings of $17, cost reduction initiatives of $6, net foreign currency transaction gains of $3, lower incentive compensation expense of $1, lower program launch costs of $1 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $20. Partially offsetting these performance-related earnings increases were higher spending on electrification initiatives of $13, inflationary cost increases of $9, commodity cost increases of $6, higher tariff-related costs of $4 and higher premium freight costs of $1.

Current wording

Commercial Vehicle third-quarter and first nine months segment EBITDA increased $18 and $61, respectively, from the comparable periods of 2025. Higher sales volumes increased year-over-year third quarter segment EBITDA by $18 (24% incremental margin). The impact of higher sales volumes was partially offset by unfavorable product mix, increasing year-over-year first nine months segment EBITDA by $7 (13% incremental margin). The year-over-year performance-related earnings increase in the third quarter of 2026 was driven by net customer pricing and cost and tariff recovery actions of $24, higher material cost savings of $6, lower program launch costs of $1 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $6. Offsetting these performance-related earnings increases were higher tariff-related costs of $12, inflationary cost increases of $10, higher warranty expense of $8, a union ratification bonus charge of $2 in 2026, higher incentive compensation expense of $2, lower year-over-year savings from cost reduction initiatives of $2 and commodity cost increases of $1. The year-over-year performance-related earnings increase for the first nine months of 2026 was driven by net customer pricing and cost and tariff recovery actions of $54, higher material costs savings of $23, higher savings from cost reduction initiatives of $4, lower program launch costs of $2 and operational efficiencies, including lower corporate allocations resulting from cost reduction initiatives of $32. Partially offsetting these performance-related earnings increases were inflationary cost increases of $19, higher tariff-related costs of $16, higher spending on electrification initiatives of $13, higher warranty expense of $8, commodity cost increases of $7, a union ratification bonus charge of $2 in 2026, higher premium freight costs of $1 and higher incentive compensation expense of $1.

Previous wording

We had availability of $1,140 at June 30, 2026 under our Revolving Facility after deducting $10 of outstanding letters of credit.

Current wording

We had availability of $930 at September 30, 2026 under our Revolving Facility after deducting $210 of outstanding borrowings and $10 of outstanding letters of credit.