UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
CURRENT REPORT
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Items 2.02 and 7.01 Results of Operations and Financial Condition and Regulation FD Disclosure
Dana Incorporated today issued a news release announcing its results for the quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
The information in this report is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, is not subject to the liabilities of that section and is not deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits. The following item is furnished with this report.
| Exhibit No. |
Description | |
| 99.1 | Dana Incorporated Press Release dated July 31, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL) | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DANA INCORPORATED | ||||||
| Date: July 31, 2024 | By: | /s/ Douglas H. Liedberg | ||||
| Name: | Douglas H. Liedberg | |||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||
3
Exhibit 99.1
IMMEDIATE
Dana Incorporated Reports 2024 Second-Quarter Financial Results
with Increased Adjusted EBITDA and Adjusted EBITDA Margin,
Raises Full-Year Free Cash Flow Guidance
| • | Sales of $2.74 billion |
| • | Net income of $16 million |
| • | Adjusted EBITDA of $244 million, an increase of $1 million over last year |
| • | Adjusted EBITDA margin of 8.9 percent, a 10-basis-point improvement compared with 2023 |
| • | Free cash flow of $104 million |
| • | Full-year free cash flow guidance increased to $100 million |
MAUMEE, Ohio, July 31, 2024 – Dana Incorporated (NYSE: DAN) today announced financial results for the second quarter of 2024.
“In the second quarter, Dana’s strong end-to-end execution delivered steady profit and improved margin despite continued future program development costs,” said James Kamsickas, Chairman and Chief Executive Officer.
“The Dana team continues to successfully achieve efficiencies while optimizing asset management by leveraging advanced core processes and systems across the company. As we look forward, our more flexible cost structure can better adjust to demand volatility as we support internal combustion, hybrid, and electric-vehicle propulsion technologies across all mobility markets.”
Sales for the second quarter of 2024 totaled $2.74 billion, compared with $2.75 billion in the same period of 2023.
Adjusted EBITDA for the second quarter of 2024 was $244 million or 8.9 percent of sales, compared with $243 million or 8.8 percent of sales for the same period in 2023. Company-wide efficiency improvements continue to offset the margin impact of inflation and spending on development for electric-vehicle products.
Net income attributable to Dana was $16 million, or $0.11 per share, compared with $30 million, or $0.21 per share, in the second quarter of 2023.
Adjusted net income attributable to Dana was $45 million, and diluted adjusted earnings per share were $0.31 for the second quarter of 2024, compared with adjusted net income of $54 million and $0.37 per share in 2023
Operating cash flow in the second quarter of 2024 was $215 million, compared with $256 million in the same period of 2023. Free cash flow was $104 million, $30 million lower than the second quarter of 2023 due to the timing of working capital requirements.
“While our outlook for sales is lower due to weakening demand for electric vehicles and in some of our traditional markets, Dana is maintaining guidance for Adjusted EBITDA, while raising profit margin and again increasing the free-cash-flow range,” said Timothy Kraus, Senior Vice President and Chief Financial Officer. “As we look to the second half of the year, we anticipate company-wide cost management and production efficiencies will continue to offset the impact of softer end-market demand, and lower capital requirements will drive higher free cash flow.”
1
Revised 2024 Financial Targets
| • | Sales of $10.45 to $10.95 billion; |
| • | Adjusted EBITDA of $875 to $975 million, an implied adjusted EBITDA margin of approximately 8.6 percent at the midpoint of the range; |
| • | Operating cash flow of approximately $500 to $550 million; and |
| • | Free cash flow of $75 to $125 million; |
| • | Diluted EPS of $0.35 to $0.85; |
| • | Diluted Adjusted EPS of $0.80 to $1.30. |
Dana to Host Conference Call at 9 a.m., Wednesday, July 31
Dana will discuss its second-quarter results in a conference call at 9 a.m. EDT on Wednesday, July 31. The conference call can be accessed by telephone from both domestic and international locations using the information provided below:
Conference ID: 9943139
Participant Toll-Free Dial-In Number: 1 (888) 440-5873
Participant Toll Dial-In Number: 1 (646) 960-0319
Audio streaming and slides will be available online via a link provided on the Dana investor website: www.dana.com/investors. Phone registration will be available beginning at 8:30 a.m. EDT.
A webcast replay can be accessed via Dana’s investor website following the call.
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for earnings (loss) before income taxes, net income (loss) or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Adjusted net income (loss) attributable to the parent company is a non-GAAP financial measure which we have defined as net income (loss) attributable to the parent company, excluding any discrete income tax items, restructuring charges, amortization expense and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to net income (loss) attributable to the parent company reported by other companies. Adjusted net income (loss) attributable to the parent company is neither intended to represent nor be an alternative measure to net income (loss) attributable to the parent company reported in accordance with GAAP.
2
Diluted adjusted EPS is a non-GAAP financial measure which we have defined as adjusted net income (loss) attributable to the parent company divided by adjusted diluted shares. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income (loss) attributable to the parent company. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported in accordance with GAAP.
Free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. We believe 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. Free cash flow is not intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported in accordance with GAAP. Free cash flow may not be comparable to similarly titled measures reported by other companies.
The accompanying financial information provides reconciliations of adjusted EBITDA, diluted adjusted EPS and free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have not provided a reconciliation of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income (loss) and diluted EPS. Providing net income (loss) and diluted EPS 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) and diluted EPS, 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.
Forward-Looking Statements
Certain statements and projections contained in this news release are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates, and projections about our industry and business, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” and similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties, and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Dana’s Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this news release speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason.
About Dana Incorporated
Dana is a leader in the design and manufacture of highly efficient propulsion and energy-management solutions that power vehicles and machines in all mobility markets across the globe. The company is shaping sustainable progress through its conventional and clean-energy solutions that support nearly every vehicle manufacturer with drive and motion systems; electrodynamic technologies, including software and controls; and thermal, sealing, and digital solutions.
3
Based in Maumee, Ohio, USA, the company reported sales of $10.6 billion in 2023 with 42,000 people in 31 countries across six continents. With a history dating to 1904, Dana was named among the “World’s Most Ethical Companies” for 2023 and 2024 by Ethisphere and as one of “America’s Most Responsible Companies 2023” by Newsweek. The company is driven by a high-performance culture that focuses on valuing others, inspiring innovation, growing responsibly, and winning together, earning it global recognition as a top employer. Learn more at dana.com.
###
Contact: Craig Barber
+1-419-887-5166
craig.barber@dana.com
4
DANA INCORPORATED
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| (In millions, except per share amounts) | Three Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net sales |
$ | 2,738 | $ | 2,748 | ||||
| Costs and expenses |
||||||||
| Cost of sales |
2,483 | 2,477 | ||||||
| Selling, general and administrative expenses |
132 | 144 | ||||||
| Amortization of intangibles |
4 | 4 | ||||||
| Restructuring charges, net |
12 | 3 | ||||||
| Loss on disposal group held for sale |
(1 | ) | ||||||
| Other income (expense), net |
(2 | ) | 4 | |||||
|
|
|
|
|
|||||
| Earnings before interest and income taxes |
104 | 124 | ||||||
| Loss on extinguishment of debt |
— | (1 | ) | |||||
| Interest income |
2 | 5 | ||||||
| Interest expense |
39 | 39 | ||||||
|
|
|
|
|
|||||
| Earnings before income taxes |
67 | 89 | ||||||
| Income tax expense |
54 | 55 | ||||||
| Equity in earnings of affiliates |
3 | 2 | ||||||
|
|
|
|
|
|||||
| Net income |
16 | 36 | ||||||
| Less: Noncontrolling interests net income |
5 | 5 | ||||||
| Less: Redeemable noncontrolling interests net income (loss) |
(5 | ) | 1 | |||||
|
|
|
|
|
|||||
| Net income attributable to the parent company |
$ | 16 | $ | 30 | ||||
|
|
|
|
|
|||||
| Net income per share available to common stockholders |
||||||||
| Basic |
$ | 0.11 | $ | 0.21 | ||||
| Diluted |
$ | 0.11 | $ | 0.21 | ||||
| Weighted-average shares outstanding - Basic |
145.0 | 144.3 | ||||||
| Weighted-average shares outstanding - Diluted |
145.1 | 144.4 | ||||||
DANA INCORPORATED
Consolidated Statement of Operations (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| (In millions, except per share amounts) | Six Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net sales |
$ | 5,473 | $ | 5,392 | ||||
| Costs and expenses |
||||||||
| Cost of sales |
4,974 | 4,892 | ||||||
| Selling, general and administrative expenses |
271 | 284 | ||||||
| Amortization of intangibles |
7 | 7 | ||||||
| Restructuring charges, net |
17 | 4 | ||||||
| Loss on disposal group held for sale |
(30 | ) | ||||||
| Other income (expense), net |
9 | |||||||
|
|
|
|
|
|||||
| Earnings before interest and income taxes |
174 | 214 | ||||||
| Loss on extinguishment of debt |
(1 | ) | ||||||
| Interest income |
6 | 9 | ||||||
| Interest expense |
78 | 73 | ||||||
|
|
|
|
|
|||||
| Earnings before income taxes |
102 | 149 | ||||||
| Income tax expense |
91 | 85 | ||||||
| Equity in earnings of affiliates |
5 | 3 | ||||||
|
|
|
|
|
|||||
| Net income |
16 | 67 | ||||||
| Less: Noncontrolling interests net income |
10 | 9 | ||||||
| Less: Redeemable noncontrolling interests net loss |
(13 | ) | ||||||
|
|
|
|
|
|||||
| Net income attributable to the parent company |
$ | 19 | $ | 58 | ||||
|
|
|
|
|
|||||
| Net income per share available to common stockholders |
||||||||
| Basic |
$ | 0.13 | $ | 0.40 | ||||
| Diluted |
$ | 0.13 | $ | 0.40 | ||||
| Weighted-average shares outstanding - Basic |
144.9 | 144.1 | ||||||
| Weighted-average shares outstanding - Diluted |
144.9 | 144.3 | ||||||
DANA INCORPORATED
Consolidated Statement of Comprehensive Income (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| (In millions) | Three Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net income |
$ | 16 | $ | 36 | ||||
| Other comprehensive income (loss), net of tax: |
||||||||
| Currency translation adjustments |
(46 | ) | (7 | ) | ||||
| Hedging gains and losses |
(26 | ) | 3 | |||||
| Defined benefit plans |
4 | |||||||
|
|
|
|
|
|||||
| Other comprehensive loss |
(68 | ) | (4 | ) | ||||
|
|
|
|
|
|||||
| Total comprehensive income (loss) |
(52 | ) | 32 | |||||
| Less: Comprehensive income attributable to noncontrolling interests |
(5 | ) | (5 | ) | ||||
| Less: Comprehensive loss attributable to redeemable noncontrolling interests |
6 | — | ||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) attributable to the parent company |
$ | (51 | ) | $ | 27 | |||
|
|
|
|
|
|||||
DANA INCORPORATED
Consolidated Statement of Comprehensive Income (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| (In millions) | Six Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net income |
$ | 16 | $ | 67 | ||||
| Other comprehensive income (loss), net of tax: |
||||||||
| Currency translation adjustments |
(66 | ) | 18 | |||||
| Hedging gains and losses |
(28 | ) | 18 | |||||
| Defined benefit plans |
5 | 1 | ||||||
|
|
|
|
|
|||||
| Other comprehensive income (loss) |
(89 | ) | 37 | |||||
|
|
|
|
|
|||||
| Total comprehensive income (loss) |
(73 | ) | 104 | |||||
| Less: Comprehensive income attributable to noncontrolling interests |
(9 | ) | (9 | ) | ||||
| Less: Comprehensive loss attributable to redeemable noncontrolling interests |
17 | |||||||
|
|
|
|
|
|||||
| Comprehensive income (loss) attributable to the parent company |
$ | (65 | ) | $ | 95 | |||
|
|
|
|
|
|||||
DANA INCORPORATED
Consolidated Balance Sheet (Unaudited)
As of June 30, 2024 and December 31, 2023
| (In millions, except share and per share amounts) | June 30, 2024 |
December 31, 2023 |
||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 419 | $ | 529 | ||||
| Accounts receivable |
||||||||
| Trade, less allowance for doubtful accounts of $12 in 2024 and $16 in 2023 |
1,501 | 1,371 | ||||||
| Other |
240 | 280 | ||||||
| Inventories |
1,602 | 1,676 | ||||||
| Other current assets |
253 | 247 | ||||||
| Current assets of disposal group held for sale |
61 | |||||||
|
|
|
|
|
|||||
| Total current assets |
4,076 | 4,103 | ||||||
| Goodwill |
256 | 263 | ||||||
| Intangibles |
163 | 182 | ||||||
| Deferred tax assets |
499 | 516 | ||||||
| Other noncurrent assets |
171 | 140 | ||||||
| Investments in affiliates |
123 | 123 | ||||||
| Operating lease assets |
300 | 327 | ||||||
| Property, plant and equipment, net |
2,220 | 2,311 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 7,808 | $ | 7,965 | ||||
|
|
|
|
|
|||||
| Liabilities, redeemable noncontrolling interests and equity |
||||||||
| Current liabilities |
||||||||
| Short-term debt |
$ | 19 | $ | 22 | ||||
| Current portion of long-term debt |
211 | 35 | ||||||
| Accounts payable |
1,767 | 1,756 | ||||||
| Accrued payroll and employee benefits |
247 | 288 | ||||||
| Taxes on income |
84 | 86 | ||||||
| Current portion of operating lease liabilities |
42 | 42 | ||||||
| Other accrued liabilities |
367 | 373 | ||||||
| Current liabilities of disposal group held for sale |
21 | |||||||
|
|
|
|
|
|||||
| Total current liabilities |
2,758 | 2,602 | ||||||
| Long-term debt, less debt issuance costs of $22 in 2024 and $24 in 2023 |
2,386 | 2,598 | ||||||
| Noncurrent operating lease liabilities |
262 | 284 | ||||||
| Pension and postretirement obligations |
311 | 334 | ||||||
| Other noncurrent liabilities |
338 | 319 | ||||||
| Noncurrent liabilities of disposal group held for sale |
4 | |||||||
|
|
|
|
|
|||||
| Total liabilities |
6,059 | 6,137 | ||||||
|
|
|
|
|
|||||
| Commitments and contingencies |
||||||||
| Redeemable noncontrolling interests |
205 | 191 | ||||||
| Parent company stockholders’ equity |
||||||||
| Preferred stock, 50,000,000 shares authorized, $0.01 par value, no shares outstanding |
— | — | ||||||
| Common stock, 450,000,000 shares authorized, $0.01 par value, 144,975,329 and 144,386,484 shares outstanding |
2 | 2 | ||||||
| Additional paid-in capital |
2,267 | 2,255 | ||||||
| Retained earnings |
293 | 317 | ||||||
| Treasury stock, at cost (829,822 and 474,981 shares) |
(13 | ) | (9 | ) | ||||
| Accumulated other comprehensive loss |
(1,074 | ) | (990 | ) | ||||
|
|
|
|
|
|||||
| Total parent company stockholders’ equity |
1,475 | 1,575 | ||||||
| Noncontrolling interests |
69 | 62 | ||||||
|
|
|
|
|
|||||
| Total equity |
1,544 | 1,637 | ||||||
|
|
|
|
|
|||||
| Total liabilities, redeemable noncontrolling interests and equity |
$ | 7,808 | $ | 7,965 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| (In millions) | Three Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Operating activities |
||||||||
| Net income |
$ | 16 | $ | 36 | ||||
| Depreciation |
106 | 94 | ||||||
| Amortization |
6 | 6 | ||||||
| Amortization of deferred financing charges |
2 | 2 | ||||||
| Write-off of deferred financing costs |
1 | |||||||
| Earnings of affiliates, net of dividends received |
(1 | ) | (2 | ) | ||||
| Stock compensation expense |
8 | 8 | ||||||
| Deferred income taxes |
27 | (22 | ) | |||||
| Pension expense, net |
3 | 2 | ||||||
| Change in working capital |
56 | 132 | ||||||
| Loss on disposal group held for sale |
1 | |||||||
| Other, net |
(9 | ) | (1 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
215 | 256 | ||||||
|
|
|
|
|
|||||
| Investing activities |
||||||||
| Purchases of property, plant and equipment |
(111 | ) | (122 | ) | ||||
| Settlements of undesignated derivatives |
(3 | ) | (4 | ) | ||||
| Other, net |
(1 | ) | ||||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(114 | ) | (127 | ) | ||||
|
|
|
|
|
|||||
| Financing activities |
||||||||
| Net change in short-term debt |
(21 | ) | (286 | ) | ||||
| Proceeds from long-term debt |
458 | |||||||
| Repayment of long-term debt |
(3 | ) | (202 | ) | ||||
| Deferred financing payments |
(7 | ) | ||||||
| Dividends paid to common stockholders |
(14 | ) | (14 | ) | ||||
| Distributions to noncontrolling interests |
(2 | ) | (2 | ) | ||||
| Contributions from redeemable noncontrolling interests |
9 | 7 | ||||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
(31 | ) | (46 | ) | ||||
|
|
|
|
|
|||||
| Net increase in cash, cash equivalents and restricted cash |
70 | 83 | ||||||
| Cash, cash equivalents and restricted cash—beginning of period |
387 | 419 | ||||||
| Effect of exchange rate changes on cash balances |
(17 | ) | 1 | |||||
|
|
|
|
|
|||||
| Cash, cash equivalents and restricted cash—end of period |
$ | 440 | $ | 503 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Consolidated Statement of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| (In millions) | Six Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Operating activities |
||||||||
| Net income |
$ | 16 | $ | 67 | ||||
| Depreciation |
207 | 186 | ||||||
| Amortization |
11 | 11 | ||||||
| Amortization of deferred financing charges |
3 | 3 | ||||||
| Write-off of deferred financing costs |
1 | |||||||
| Earnings of affiliates, net of dividends received |
(3 | ) | (3 | ) | ||||
| Stock compensation expense |
14 | 14 | ||||||
| Deferred income taxes |
29 | (30 | ) | |||||
| Pension expense, net |
(4 | ) | 2 | |||||
| Change in working capital |
(195 | ) | (172 | ) | ||||
| Loss on disposal group held for sale |
30 | |||||||
| Other, net |
5 | 7 | ||||||
|
|
|
|
|
|||||
| Net cash provided by operating activities |
113 | 86 | ||||||
|
|
|
|
|
|||||
| Investing activities |
||||||||
| Purchases of property, plant and equipment |
(181 | ) | (242 | ) | ||||
| Proceeds from sale of property, plant and equipment |
4 | 2 | ||||||
| Settlements of undesignated derivatives |
(4 | ) | (4 | ) | ||||
| Other, net |
4 | (1 | ) | |||||
|
|
|
|
|
|||||
| Net cash used in investing activities |
(177 | ) | (245 | ) | ||||
|
|
|
|
|
|||||
| Financing activities |
||||||||
| Net change in short-term debt |
(4 | ) | (17 | ) | ||||
| Proceeds from long-term debt |
458 | |||||||
| Repayment of long-term debt |
(30 | ) | (204 | ) | ||||
| Deferred financing payments |
(9 | ) | ||||||
| Dividends paid to common stockholders |
(29 | ) | (29 | ) | ||||
| Distributions to noncontrolling interests |
(5 | ) | (3 | ) | ||||
| Collection of note receivable from noncontrolling interest |
11 | |||||||
| Contributions from redeemable noncontrolling interests |
18 | 17 | ||||||
| Other, net |
9 | (4 | ) | |||||
|
|
|
|
|
|||||
| Net cash provided by (used in) financing activities |
(30 | ) | 209 | |||||
|
|
|
|
|
|||||
| Net increase (decrease) in cash, cash equivalents and restricted cash |
(94 | ) | 50 | |||||
| Cash, cash equivalents and restricted cash—beginning of period |
563 | 442 | ||||||
| Effect of exchange rate changes on cash balances |
(29 | ) | 11 | |||||
|
|
|
|
|
|||||
| Cash, cash equivalents and restricted cash—end of period |
$ | 440 | $ | 503 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow (Unaudited)
| (In millions) | Three Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities |
$ | 215 | $ | 256 | ||||
| Purchases of property, plant and equipment |
(111 | ) | (122 | ) | ||||
|
|
|
|
|
|||||
| Free cash flow |
$ | 104 | $ | 134 | ||||
|
|
|
|
|
|||||
| (In millions) | Six Months Ended June 30, |
|||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities |
$ | 113 | $ | 86 | ||||
| Purchases of property, plant and equipment |
(181 | ) | (242 | ) | ||||
|
|
|
|
|
|||||
| Free cash flow |
$ | (68 | ) | $ | (156 | ) | ||
|
|
|
|
|
|||||
DANA INCORPORATED
Segment Sales and Segment EBITDA (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| Three Months Ended | ||||||||
| (In millions) | June 30, | |||||||
| 2024 | 2023 | |||||||
| Sales |
||||||||
| Light Vehicle |
$ | 1,132 | $ | 1,066 | ||||
| Commercial Vehicle |
527 | 526 | ||||||
| Off-Highway |
746 | 842 | ||||||
| Power Technologies |
333 | 314 | ||||||
|
|
|
|
|
|||||
| Total Sales |
$ | 2,738 | $ | 2,748 | ||||
|
|
|
|
|
|||||
| Segment EBITDA |
||||||||
| Light Vehicle |
$ | 84 | $ | 66 | ||||
| Commercial Vehicle |
23 | 28 | ||||||
| Off-Highway |
116 | 131 | ||||||
| Power Technologies |
22 | 19 | ||||||
|
|
|
|
|
|||||
| Total Segment EBITDA |
245 | 244 | ||||||
| Corporate expense and other items, net |
(1 | ) | (1 | ) | ||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ | 244 | $ | 243 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Segment Sales and Segment EBITDA (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| Six Months Ended | ||||||||
| (In millions) | June 30, | |||||||
| 2024 | 2023 | |||||||
| Sales |
||||||||
| Light Vehicle |
$ | 2,230 | $ | 2,028 | ||||
| Commercial Vehicle |
1,051 | 1,048 | ||||||
| Off-Highway |
1,527 | 1,684 | ||||||
| Power Technologies |
665 | 632 | ||||||
|
|
|
|
|
|||||
| Total Sales |
$ | 5,473 | $ | 5,392 | ||||
|
|
|
|
|
|||||
| Segment EBITDA |
||||||||
| Light Vehicle |
$ | 151 | $ | 115 | ||||
| Commercial Vehicle |
40 | 45 | ||||||
| Off-Highway |
231 | 249 | ||||||
| Power Technologies |
49 | 42 | ||||||
|
|
|
|
|
|||||
| Total Segment EBITDA |
471 | 451 | ||||||
| Corporate expense and other items, net |
(4 | ) | (4 | ) | ||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
$ | 467 | $ | 447 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| Three Months Ended | ||||||||
| (In millions) | June 30, | |||||||
| 2024 | 2023 | |||||||
| Segment EBITDA |
$ | 245 | $ | 244 | ||||
| Corporate expense and other items, net |
(1 | ) | (1 | ) | ||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
244 | 243 | ||||||
| Depreciation |
(106 | ) | (94 | ) | ||||
| Amortization |
(6 | ) | (6 | ) | ||||
| Non-service cost components of pension and OPEB costs |
(2 | ) | (3 | ) | ||||
| Restructuring charges, net |
(12 | ) | (3 | ) | ||||
| Stock compensation expense |
(8 | ) | (8 | ) | ||||
| Strategic transaction expenses |
(2 | ) | (1 | ) | ||||
| Distressed supplier costs |
(4 | ) | ||||||
| Loss on disposal group held for sale |
(1 | ) | ||||||
| Other items |
(3 | ) | ||||||
|
|
|
|
|
|||||
| Earnings before interest and income taxes |
104 | 124 | ||||||
| Loss on extinguishment of debt |
(1 | ) | ||||||
| Interest income |
2 | 5 | ||||||
| Interest expense |
39 | 39 | ||||||
|
|
|
|
|
|||||
| Earnings before income taxes |
67 | 89 | ||||||
| Income tax expense |
54 | 55 | ||||||
| Equity in earnings of affiliates |
3 | 2 | ||||||
|
|
|
|
|
|||||
| Net income |
$ | 16 | $ | 36 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| Six Months Ended | ||||||||
| (In millions) | June 30, | |||||||
| 2024 | 2023 | |||||||
| Segment EBITDA |
$ | 471 | $ | 451 | ||||
| Corporate expense and other items, net |
(4 | ) | (4 | ) | ||||
|
|
|
|
|
|||||
| Adjusted EBITDA |
467 | 447 | ||||||
| Depreciation |
(207 | ) | (186 | ) | ||||
| Amortization |
(11 | ) | (11 | ) | ||||
| Non-service cost components of pension and OPEB costs |
(6 | ) | (6 | ) | ||||
| Restructuring charges, net |
(17 | ) | (4 | ) | ||||
| Stock compensation expense |
(14 | ) | (14 | ) | ||||
| Strategic transaction expenses |
(4 | ) | (2 | ) | ||||
| Distressed supplier costs |
(12 | ) | ||||||
| Loss on disposal group held for sale |
(30 | ) | ||||||
| Other items |
(4 | ) | 2 | |||||
|
|
|
|
|
|||||
| Earnings before interest and income taxes |
174 | 214 | ||||||
| Loss on extinguishment of debt |
(1 | ) | ||||||
| Interest income |
6 | 9 | ||||||
| Interest expense |
78 | 73 | ||||||
|
|
|
|
|
|||||
| Earnings before income taxes |
102 | 149 | ||||||
| Income tax expense |
91 | 85 | ||||||
| Equity in earnings of affiliates |
5 | 3 | ||||||
|
|
|
|
|
|||||
| Net income |
$ | 16 | $ | 67 | ||||
|
|
|
|
|
|||||
DANA INCORPORATED
Reconciliation of Net Income Attributable to the Parent Company to
Adjusted Net Income Attributable to the Parent Company and
Diluted Adjusted EPS (Unaudited)
For the Three Months Ended June 30, 2024 and 2023
| (In millions, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| Net income attributable to the parent company |
$ | 16 | $ | 30 | ||||
| Items impacting income before income taxes: |
||||||||
| Amortization |
5 | 5 | ||||||
| Restructuring charges, net |
12 | 3 | ||||||
| Strategic transaction expenses |
2 | 1 | ||||||
| Distressed supplier costs |
4 | |||||||
| Loss on disposal group held for sale |
1 | |||||||
| Other items |
1 | |||||||
| Items impacting income taxes: |
||||||||
| Net income tax expense on items above |
(6 | ) | (4 | ) | ||||
| Income tax expense attributable to various discrete tax matters |
15 | 14 | ||||||
|
|
|
|
|
|||||
| Adjusted net income attributable to the parent company |
$ | 45 | $ | 54 | ||||
|
|
|
|
|
|||||
| Diluted shares - as reported |
145.1 | 144.4 | ||||||
| Adjusted diluted shares |
145.1 | 144.4 | ||||||
| Diluted adjusted EPS |
$ | 0.31 | $ | 0.37 | ||||
DANA INCORPORATED
Reconciliation of Net Income Attributable to the Parent Company to
Adjusted Net Income Attributable to the Parent Company and
Diluted Adjusted EPS (Unaudited)
For the Six Months Ended June 30, 2024 and 2023
| (In millions, except per share amounts) | ||||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2024 | 2023 | |||||||
| Net income attributable to the parent company |
$ | 19 | $ | 58 | ||||
| Items impacting income before income taxes: |
||||||||
| Amortization |
10 | 10 | ||||||
| Restructuring charges, net |
17 | 4 | ||||||
| Strategic transaction expenses |
4 | 2 | ||||||
| Distressed supplier costs |
12 | |||||||
| Loss on disposal group held for sale |
30 | |||||||
| Other items |
(3 | ) | ||||||
| Items impacting income taxes: |
||||||||
| Net income tax expense on items above |
(19 | ) | (10 | ) | ||||
| Income tax expense attributable to various discrete tax matters |
24 | 14 | ||||||
|
|
|
|
|
|||||
| Adjusted net income attributable to the parent company |
$ | 82 | $ | 90 | ||||
|
|
|
|
|
|||||
| Diluted shares - as reported |
144.9 | 144.3 | ||||||
| Adjusted diluted shares |
144.9 | 144.3 | ||||||
| Diluted adjusted EPS |
$ | 0.57 | $ | 0.62 | ||||
2024 Second-Quarter Earnings Conference Call July 31, 2024 Value Others | Inspire Innovation | Grow Responsibly | Win Together
© 2024 Dana Safe Harbor Statement Certain statements and projections contained in this presentation are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. Dana’s Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this presentation speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason. 2
© 2024 Dana Agenda Craig Barber James Kamsickas Timothy Kraus Senior Director, Investor Chairman and Senior Vice President and Relations and Corporate Chief Financial Officer Chief Executive Officer Communications 3 Introduction Business Review Financial Review
© 2024 Dana Highlights Q2 Financial Results Key Highlights 73% sales § Conversion on traditional Company-wide organic sales through H1 efficiency § Supports full-year In Line conversion target improvements with prior year ~$130M adjusted EBITDA § Organic Sales growth End-market through H1 demand $1 million § Weaking demand for EVs, & from prior year some ICE programs ~$100M free cash flow § Revised full-year FCF outlook Financial outlook § 33% increase from remains strong; $30 million prior guide from prior year higher free cash flow 4 Company-Wide Efficiency and Capital Investment Improvements Driving Cash Flow Growth
© 2024 Dana Business Environment 2024 Outlook End-Market Outlook • Improved customer production stability increasing productivity Market From last year Update Company-Wide • Continued production costs reductions Efficiencies Slight Agriculture Softening • Efficiency improvements in all areas of the enterprise No Change Construction • Net commodities expected to be sales and profit headwind Supply Mining No Change • Steel prices expected to be mostly flat through 2024 Chain • Commodity recoveries reversing as input costs decline Slight Light Truck Softening Medium-Duty Truck • Refreshed, conquest, and new business growth No Change End-Market • Share gains partially offsetting market in Commercial Vehicle Demand Heavy-Duty Truck Slight Softening • Some softening demand across markets and EVs Cost Inflation Moderating OEM Production Stable EV Demand Lower Industry Trends 5
© 2024 Dana Dana Innovations Power Everything that Moves HY BRI D I CE EV Medium-Duty Truck Construction Light-Duty Truck ® Spicer Electric Torque Hub ® ® Spicer Front and Rear Axles Spicer eS9000r e-Axle and On-Engine Generator 6 Strong Balance of ICE, Hybrid, and Electric Vehicle Development Across Mobility Markets
© 2024 Dana Drivers of Continued Profit Expansion: H1 Comparison Adjusted EBITDA Impact End-to-End Execution $135M Winning Team: +41% Organization and Talent $467M $447M Sustained Financial Improvement Business Commercial Effectiveness and Growth Priorities $332M Common / Core Processes and Systems Operational Excellence and Execution Operating Cost Reduction and Asset Management Priorities Leverage Company Synergies and Centers of Excellence Balanced Portfolio: Energy-Source Agnostic H1 2022 H1 2023 H1 2024 See appendix for comments regarding the presentation of non-GAAP measures. 7 End-to-End Business Execution Continues Drive Toward Long-Term Profit Targets
© 2024 Dana Financial Review 8
© 2024 Dana 2024 Q2 and YTD Financial Results Changes from Prior Year § Lower sales driven by currency impacts and lower commodity recoveries ($ in millions, except EPS) Q2 ‘24 Q2 ‘23 Change YTD ‘24 YTD ‘23 Change § Increased production efficiency, company-wide cost Sales $ 2,738 $ 2,748 $ (10) $ 5,473 $ 5,392 $ 81 improvement actions, and more stable customer order Adjusted EBITDA 244 243 1 467 447 20 patterns drove higher profitability Margin 8.9% 8.8% 10 bps 8.5% 8.3% 20 bps § Net income impacted by higher restructuring and the Loss on Business Held for Sale (1) (1) (30) (30) previously announced divestiture of the European EBIT 104 124 (20) 174 214 (40) hydraulics business within the Off-Highway segment that is Interest Expense, Net 37 34 3 72 64 8 expected close in H2 Income Tax Expense 54 55 (1) 91 85 6 (attributable to Dana) Net Income 16 30 (14) 19 58 (39) GAAP Diluted EPS $ 0.11 $ 0.21 $ (0.10) $ 0.13 $ 0.40 $ (0.27) Diluted Adjusted EPS $ 0.31 $ 0.37 $ (0.06) $ 0.57 $ 0.62 $ (0.05) Operating Cash Flow 215 256 (41) 113 86 27 See appendix for comments regarding the presentation of non-GAAP measures 9 Sales and Profit Improvement while Continuing to Build for Future Growth
© 2024 Dana 2024 Q2 Sales and Profit Changes Sales § Higher organic sales driven by renewed vehicle programs, new $19M $11M $2,748M $2,738M business, and market share ($2M) ($22M) ($16M) gains, offset by lower demand in off-highway end markets § End-to-end business execution and production efficiency more than offset inflation § Higher demand for battery cooling products driving increased EV sales 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Organic § Positive contribution of current EV programs offset by Adjusted EBITDA engineering and development spending for future programs $40M $0M $244M $243M ($19M) § Minimal margin impact from ($3M) ($17M) currency translation § Lower commodity costs resulted in lower sales recoveries; profit benefit of 8.8% 8.9% ~150 bps ~(80) bps ~0 bps ~0 bps ~(60) bps lower input cost is more than Margin Margin offset by the cost true-ups with customers 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Organic See appendix for comments regarding the presentation of non-GAAP measures 10 Strong Performance Driven by End-to-End Business Execution
© 2024 Dana 2024 Q2 Free Cash Flow § Higher cash taxes due to Changes from Prior Year timing of payments and ($ in millions) jurisdictional mix § Working capital requirements increased primarily due to the Q2 ‘24 Q2 ‘23 Change timing of payments Adjusted EBITDA $ 244 $ 243 $ 1 § Reduced capital spending 1 required to support new One-Time Costs (7) (4) (3) business backlog and replacement business due to a Interest, Net (26) (38) 12 more normal launch cadence and timing of investment for Taxes (40) (27) (13) future EV programs Working Capital / Other² 44 82 (38) Capital Spending (111) (122) 11 Free Cash Flow $ 104 $ 134 $ (30) 1 2 Includes costs associated with business acquisitions and divestitures and restructuring. Changes in working capital relating to interest, taxes, restructuring, and transaction costs are included in those respective categories. See appendix for comments regarding the presentation of non- GAAP measures. 11 Strong FCF Driven by Lower Capital Spending and Continued Focus on Working Capital
© 2024 Dana 2024 FY Financial Guide § Sales growth driven by new Guidance Ranges business backlog, improved end-market demand, new / Change from Change from refreshed programs, and Prior Guide Prior Year market share gains ~$10,700M § Weakening demand for electric -$200M +$145M vehicles driving lower sales ± ~1% $250M Sales compared to prior outlook Lower EV Sales § Company-wide efficiency ~$925M +$80M improvements drive higher ~2% ± $50M Adjusted EBITDA margins § YOY free cash flow +10 bps +60 bps improvement driven by higher ~8.3% - 8.8% Implied Profit Margin profit, improved working capital efficiency, and lower capital ~$100M spending +$25M +$125M $190 ± $25M Free Cash Flow § Free cash flow improvement from prior guidance driven by ~$0.60 lower capital expenditures -$0.10 +$0.34 ± $0.25 Diluted EPS § Reintroducing adjusted EPS guidance to provide comparable measure with prior ~$1.05 New periods due to significant one- +$0.21 Guidance ± $0.25 Diluted Adjusted EPS Measure time items related to strategic actions and restructuring 12 See appendix for comments regarding the presentation of non-GAAP measures End-to-End Execution and Improved Operating Environment Driving Margin Growth
© 2024 Dana 2024 FY Sales and Profit Changes Sales § Organic growth driven by strong sales, pricing, and ~$65M ~$230M ~$10,700M market share gains ~$10,555M ~($40M) ~($45M) ~($65M) § Strong conversion on organic growth due to improved efficiencies and cost savings actions § Cost recovery actions expected to mostly offset inflation 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Target § Positive profit contribution on Organic EV sales offset by investment in new program development Adjusted EBITDA § Announced divestiture of non- ~$145M core hydraulics business. ~$925M ~($20M) ~$0M ~($5M) Anticipated closing in H2 ~($40M) ~$845M Managing EV § Translation of foreign currency investment on expected to be slightly less of lower sales a headwind to sales than previously forecasted 8.0% 8.6% ~120 bps ~(25) bps ~0 bps ~0 bps ~(35) bps Margin Margin § Lower commodity costs resulting in lower sales recoveries; profit benefit of 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Target lower input cost is more than Organic offset by the cost true-ups with See appendix for comments regarding the presentation of non-GAAP measures 13 customers Sales Growth with Improved Profit Driven by Company-Wide Efficiencies and Cost Savings
© 2024 Dana 2024 FY Free Cash Flow § Raising full-year guidance due Changes from Prior Year to lower capital spending ($ in millions) § Higher profit and lower capital investment requirements driving improvement over last 2024 2023 Change year Adjusted EBITDA $ ~925 $ 845 $ ~80 § Increase in net interest 1 payments due to higher rates One-Time Costs (30) (20) (10) and payment timing from refinancing Interest, Net (150) (116) (35) Taxes (170) (148) (20) Working Capital / Other² (50) (85) 35 Capital Spending (425) (501) 75 Free Cash Flow $ ~100 $ (25) $ ~125 1 2 Includes costs associated with business acquisitions and divestitures and restructuring. Changes in working capital relating to interest, taxes, restructuring, and transaction costs are included in those respective categories. See appendix for comments regarding the presentation of non- GAAP measures. 14 Positive Free Cash Flow Driven by Higher Profit, Lower Capex, and Improved Working Capital
© 2024 Dana Appendix 15
© 2024 Dana 2024 Q2 Sales and Profit Change by Segment Light Vehicle Drive Systems Off-Highway Drive and Motion Systems $842M $60M $8M $4M $1,132M $746M $1,066M ($57)M ($13)M ($2)M ($8)M ($6)M ($16)M Sales Sales 2023 Traditional EV Organic Currency Commodities 2024 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Organic Organic $37M $131M $1M $116M $0M $84M ($2)M ($1)M $66M ($13)M ($17)M ($1)M ($1)M Adjusted 10.1% Adjusted 10.3% 10.1% 10.3% EBITDA 6.3% EBITDA 15.6% 15.5% 6.2% 7.4% 2023 Traditional EV Organic Currency Commodities 2024 2023 Traditional EV Organic Divestiture Currency Commodities 2024 Organic Organic Commercial Vehicle Drive and Motion Systems Power Technologies $27M $31M $1M $333M $526M $527M $314M ($2)M ($15)M ($6)M ($5)M ($11)M Sales Sales 2023 Traditional EV Organic Currency Commodities 2024 2023 Traditional EV Organic Currency Commodities 2024 Organic Organic $3M $22M $19M $5M $28M $0M $23M ($5)M ($1)M $7M Adjusted Adjusted 11.9% 13.5% ($6)M ($5)M 10.3% 10.3% EBITDA EBITDA 5.3% 4.4% 6.1% 6.6% 16 2023 Traditional EV Organic Currency Commodities 2024 2023 Traditional EV Organic Currency Commodities 2024 Organic Organic See appendix for comments regarding the presentation of non-GAAP measures
© 2024 Dana Segment Profiles Light Vehicle Commercial Vehicle Off-Highway Power Drive Systems Drive and Motion Systems Drive and Motion Systems Technologies Year to Date 6/30/2024 Year to Date 6/30/2024 Year to Date 6/30/2024 Year to Date 6/30/2024 Deere Other GM 9% 13% PACCAR AGCO 17% 22% 7% Renault / Oshkosh Nissan 6% 6% Ford Other 48% 37% Tata Ford CNHi 6% 15% 6% Traton Other Toyota 51% 18% Manitou 7% 5% Cummins Other 6% 67% Stellantis Stellantis* Ford 6% 5% Daimler 20% Volvo VW 7% 11% 5% * Includes sales to systems integrations for driveline products that support Stellantis vehicles Asia Pacific North South Asia Pacific Asia Pacific 12% Asia Pacific America 6% America 7% 21% 11% 2% North South America North North America 68% America America 6% 57% South South 56% America America 22% 1% Europe 14% Europe 35% Europe Europe 67% 15% 17 REGIONAL SALES CUSTOMER SALES
© 2024 Dana Diluted Adjusted EPS DANA INCORPORATED DANA INCORPORATED Reconciliation of Net Income Attributable to the Parent Company to Reconciliation of Net Income Attributable to the Parent Company to Adjusted Net Income Attributable to the Parent Company and Adjusted Net Income Attributable to the Parent Company and Diluted Adjusted EPS (Unaudited) Diluted Adjusted EPS (Unaudited) For the Three Months Ended June 30, 2024 and 2023 For the Six Months Ended June 30, 2024 and 2023 (In millions, except per share amounts) (In millions, except per share amounts) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net income attributable to the parent company $ 16 $ 30 Net income attributable to the parent company $ 19 $ 58 Items impacting income before income taxes: Items impacting income before income taxes: Amortization 5 5 Amortization 10 10 Restructuring charges, net 12 3 Restructuring charges, net 17 4 Strategic transaction expenses 2 1 Strategic transaction expenses 4 2 Distressed supplier costs 4 Distressed supplier costs 12 Loss on disposal group held for sale 1 Loss on disposal group held for sale 30 Other items 1 Other items (3) Items impacting income taxes: Items impacting income taxes: Net income tax expense on items above (6) (4) Net income tax expense on items above (19) (10) Income tax expense attributable to various discrete tax matters 15 14 Income tax expense attributable to various discrete tax matters 24 14 Adjusted net income attributable to the parent company $ 45 $ 54 Adjusted net income attributable to the parent company $ 82 $ 90 Diluted shares - as reported 145.1 144.4 Diluted shares - as reported 144.9 144.3 Adjusted diluted shares 145.1 144.4 Adjusted diluted shares 144.9 144.3 18 Diluted adjusted EPS $ 0.31 $ 0.37 Diluted adjusted EPS $ 0.57 $ 0.62
© 2024 Dana Segment Data DANA INCORPORATED DANA INCORPORATED Segment Sales and Segment EBITDA (Unaudited) Segment Sales and Segment EBITDA (Unaudited) For the Three Months Ended June 30, 2024 and 2023 For the Six Months Ended June 30, 2024 and 2023 Three Months Ended Six Months Ended (In millions) June 30, (In millions) June 30, 2024 2023 2024 2023 Sales Sales Light Vehicle $ 1,132 $ 1,066 Light Vehicle $ 2,230 $ 2,028 Commercial Vehicle 527 526 Commercial Vehicle 1,051 1,048 Off-Highway 746 842 Off-Highway 1,527 1,684 Power Technologies 333 314 Power Technologies 665 632 Total Sales $ 2,738 $ 2,748 Total Sales $ 5,473 $ 5,392 Segment EBITDA Segment EBITDA Light Vehicle $ 84 $ 66 Light Vehicle $ 151 $ 115 Commercial Vehicle 23 28 Commercial Vehicle 40 45 Off-Highway 116 131 Off-Highway 231 249 Power Technologies 22 19 Power Technologies 49 42 Total Segment EBITDA 245 244 Total Segment EBITDA 471 451 Corporate expense and other items, net (1) (1) Corporate expense and other items, net (4) (4) Adjusted EBITDA $ 244 $ 243 Adjusted EBITDA $ 467 $ 447 19
© 2024 Dana Segment Data Continued DANA INCORPORATED DANA INCORPORATED Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited) Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited) For the Three Months Ended June 30, 2024 and 2023 For the Six Months Ended June 30, 2024 and 2023 Three Months Ended Six Months Ended (In millions) June 30, (In millions) June 30, 2024 2023 2024 2023 Segment EBITDA $ 245 $ 244 Segment EBITDA $ 471 $ 451 Corporate expense and other items, net (1) (1) Corporate expense and other items, net (4) (4) Adjusted EBITDA 244 243 Adjusted EBITDA 467 447 Depreciation (106) (94) Depreciation (207) (186) Amortization (6) (6) Amortization (11) ( 11) Non-service cost components of pension and OPEB costs (2) (3) Non-service cost components of pension and OPEB costs (6) (6) Restructuring charges, net (12) (3) Restructuring charges, net ( 17) (4) Stock compensation expense (8) (8) Stock compensation expense (14) (14) Strategic transaction expenses (2) (1) Strategic transaction expenses (4) (2) Distressed supplier costs (4) Distressed supplier costs (12) Loss on disposal group held for sale (1) Loss on disposal group held for sale ( 30) Other items (3) Other items (4) 2 Earnings before interest and income taxes 104 124 Earnings before interest and income taxes 174 214 Loss on extinguishment of debt (1) Loss on extinguishment of debt (1) Interest income 2 5 Interest income 6 9 Interest expense 39 39 Interest expense 78 73 Earnings before income taxes 67 89 Earnings before income taxes 102 149 Income tax expense 54 55 Income tax expense 91 85 Equity in earnings of affiliates 3 2 Equity in earnings of affiliates 5 3 Net income $ 16 $ 36 Net income $ 16 $ 67 20
© 2024 Dana Cash Flow DANA INCORPORATED Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow (Unaudited) Three Months Ended (In millions) June 30, 2024 2023 Net cash provided by operating activities $ 215 $ 256 Purchases of property, plant and equipment ( 111) (122) Free cash flow $ 104 $ 134 Six Months Ended (In millions) June 30, 2024 2023 Net cash provided by operating activities $ 113 $ 86 Purchases of property, plant and equipment ( 181) (242) Free cash flow $ ( 68) $ (156) 21
© 2024 Dana Non-GAAP Financial Information Adjusted EBITDA is a non-GAAP financial measure which we have defined as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for earnings (loss) before income taxes, net income (loss) or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Adjusted net income (loss) attributable to the parent company is a non-GAAP financial measure which we have defined as net income (loss) attributable to the parent company, excluding any discrete income tax items, restructuring charges, amortization expense and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to net income (loss) attributable to the parent company reported by other companies. Adjusted net income (loss) attributable to the parent company is neither intended to represent nor be an alternative measure to net income (loss) attributable to the parent company reported in accordance with GAAP. Diluted adjusted EPS is a non-GAAP financial measure which we have defined as adjusted net income (loss) attributable to the parent company divided by adjusted diluted shares. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income (loss) attributable to the parent company. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported in accordance with GAAP. Free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities less purchases of property, plant and equipment. We believe 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. Free cash flow is not intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported in accordance with GAAP. Free cash flow may not be comparable to similarly titled measures reported by other companies. The accompanying financial information provides reconciliations of adjusted EBITDA, diluted adjusted EPS and free cash flow to the most directly comparable financial measures calculated and presented in accordance with GAAP. We have not provided a reconciliation of our adjusted EBITDA and diluted adjusted EPS outlook to the most comparable GAAP measures of net income (loss) and diluted EPS. Providing net income (loss) and diluted EPS 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) and diluted EPS, 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 22 periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.
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