8-K
DANA Inc (DAN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 2022
Dana Incorporated
(Exact name of registrant as specified in its charter)
| Delaware | 1-1063 | 26-1531856 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification Number) |
3939 Technology Drive, Maumee, Ohio 43537
(Address of principal executive offices) (Zip Code)
(419) 887-3000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
|---|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| --- | --- | |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| --- | --- | |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
| --- | --- | |
| Title of Each Class | Trading<br> <br>Symbol | Name of Each Exchange<br> <br>on which Registered |
| --- | --- | --- |
| Common Stock, $.01 par value | DAN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| 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 December 31, 2021. 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<br>No. | Description |
|---|---|
| 99.1 | Dana Incorporated Press Release dated February 23, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL |
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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: February 23, 2022 | By: | /s/ Douglas H. Liedberg |
| Name: | Douglas H. Liedberg | |
| Title: | Senior Vice President, General Counsel and Secretary |
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EX-99.1
Exhibit 99.1
IMMEDIATE
Dana Incorporated Reports 2021 Financial Results,
Issues Guidance for 2022
Company Announces Strong Three-year Sales Backlog of $ 800 Million, ****
Half from Electrified-vehicle Programs
Full-year Results
| • | Sales of $8.9 billion, an increase of$ 1.8 billion |
|---|---|
| • | Net income attributable to Dana of $ 197 million, an increase of$228 million |
| --- | --- |
| • | Diluted EPS of $ 1.35, an increase of $1.56 |
| --- | --- |
| • | Adjusted EBITDA of $ 795 million; margin of 8.9 percent ofsales |
| --- | --- |
| • | Diluted adjusted EPS of $1 .66, an improvement of $1.27 |
| --- | --- |
| • | Operating cash flow of $ 158 million |
| --- | --- |
MAUMEE, Ohio, Feb. 23, 2022 – Dana Incorporated (NYSE: DAN) today announced financial results for the fourth quarter and full-year 2021.
“Despite a year of unprecedented challenges impacting the global mobility industry, including substantial supply-chain constraints and cost inflation,Dana had significantly stronger sales, Adjusted EBITDA, and Adjusted EPS in 2021,” said James Kamsickas, Dana chairman and CEO. “As we look forward to 2022, we expect to see some easing later this year of the challenges that have hinderedour customers’ ability to produce vehicles, and we are well positioned to benefit from simultaneous recovery in all three of our end markets. In addition to this market recovery and cyclical growth, about half of our $800 million of newbusiness sales backlog is coming online this year, representing above-market growth, with half of our backlog coming from electrification.”
Fourth-quarter 2021 Financial Results
Salesfor the fourth quarter of 2021 totaled $2.27 billion, compared with $2.11 billion in the same period of 2020, representing a $165 million increase driven by strong customer demand in our heavy-vehicle markets and the recovery ofcommodity cost inflation.
Net income attributable to Dana was $25 million for the fourth quarter of 2021, compared with $40 million inthe same period of 2020. The year-over-year decline was due to higher input costs for commodities, transportation, labor, and energy combined with production inefficiencies driven by inconsistent customer order patterns. The impact of theperiod cost related to our new U.S. labor agreement was offset by lower restructuring charges. The fourth quarter of 2021 benefited from a $51 million gain resulting from a facility sale-leaseback transaction.
Reported diluted earnings per share were $0.18, compared with diluted earnings per share of $0.27 in the fourth quarter of 2020.
Adjusted EBITDA for the fourth quarter of 2021 was $118 million, compared with $192 million for the same period in 2020. Profit margincompression in the fourth quarter of 2021 was primarily driven by higher input costs, including higher commodity costs, and the $17 million of period cost related to our new U.S. labor agreement.
Diluted adjusted earnings per share, which do not include the benefit of the sale-leaseback transaction, were negligible in the fourth quarter of 2021,compared with $0.24 in the same period of the prior year. The lower year-over-year comparison was primarily due to lower earnings resulting from higher input costs and the period cost related to a new U.S. labor agreement.
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Operating cash flow in the fourth quarter of 2021 was $139 million, compared with $191 millionin the same period of 2020. Free cash flow was a use of $2 million, compared with free cash flow of $46 million in the fourth quarter of 2020. Cash flow use in this year’s fourth quarter was driven by higher working capitalrequirements, primarily inventory, resulting from customer schedule disruptions and supply-chain challenges.
Full-year 2021 Financial Results
Sales for 2021 were $8.9 billion, compared with $7.1 billion in 2020. The increase of $1.8 billion is primarilyattributable to stronger demand across all mobility markets.
The net income attributable to Dana was $197 million, compared with a net lossof $31 million in 2020.
Reported diluted earnings per share were a gain of $1.35, compared with a net loss of $0.21 in 2020.
Adjusted EBITDA for 2021 was $795 million or 8.9 percent of sales, compared with $593 million or 8.3 percent of sales in 2020.Margin headwinds were driven by higher commodity costs, production inefficiencies caused by OEM supply chain disruptions, and cost inflation in transportation, energy, and labor.
Diluted adjusted earnings per share for 2021 were $1.66, compared with $0.39 in 2020.
The company reported operating cash flow of $158 million in 2021. Free cash flow was a use of $211 million, compared with free cash flow of$60 million in 2020. Cash flow use in this year was driven by higher inventory requirements resulting from customer schedule disruptions and supply-chain challenges, compared with lower inventory levels in 2020 due primarily to actions taken toreduce inventory levels, preserving working capital, in response to the COVID pandemic.
“Global supply-chain disruptions, high commoditycosts, and labor and semiconductor shortages have continued to disrupt our customers’ production patterns that, in turn, have pressured our margins and limited free cash flow over the past year,” said Timothy Kraus, Dana senior vicepresident and chief financial officer. “We carried higher levels of inventory in 2021 to protect our ability to supply our customers and mitigate ongoing global supply-chain disruptions and labor shortages. As these challenges begin to subside,we anticipate a sustained recovery period as low end-market inventory levels, combined with strong end-consumer demand, drive higher sales and a more stable productionenvironment, allowing us to drastically reduce our inventory as well as improve margins.”
2022 Financial Targets^1^
| • | Sales of $9.6 to $10.1 billion; |
|---|---|
| • | Adjusted EBITDA of $900 million to $1.0 billion, an implied adjusted EBITDA margin of approximately9.6 percent at the midpoint of the range; |
| --- | --- |
| • | Diluted adjusted EPS of $2.05 to $2.55; |
| --- | --- |
| • | Operating cash flow of approximately 6.5 to 7.5 percent of sales; and |
| --- | --- |
| • | Free cash flow of approximately 2.5 to 3.5 percent of sales. |
| --- | --- |
| ^1^ | Net income and diluted EPS guidance are not provided, as discussed below inNon-GAAP Financial Information. |
| --- | --- |
Dana to Host Conference Call at 9 a.m. Wednesday,Feb. 23
Dana will discuss its fourth-quarter and full-year results in a conference call at 9 a.m. EST on Wednesday, Feb. 23. Participants maylisten to the audio portion of the conference call either through audio streaming online or by telephone. Slide viewing is available online via a link provided on the Dana investor website: www.dana.com/investors. U.S. and Canadian locations shoulddial 1-888-311-4590 and international locations should call 1-706-758-0054. Please enter conference I.D. 2493396 ask for the “Dana Incorporated’s Financial Webcast and Conference Call.” Phone registration will be available beginning at 8:30 a.m.EST.
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An audio recording of the webcast will be available after 5 p.m. EST on Feb. 23 by dialing 1-855-859-2056 (U.S. or Canada) or1-404-537-3406 (international) and entering conference I.D. 2493396. A webcast replay will also be available after 5 p.m. EST andmay be accessed via Dana’s investor website.
Non-GAAP Financial Information
This release refers to adjusted EBITDA, a non-GAAP financial measure which we have defined as net income beforeinterest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefit costs, and other adjustments not relatedto 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 useadjusted 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 adjustedEBITDA 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 income beforeincome taxes, net income or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.
Diluted adjusted EPS is a non-GAAP financial measure, which we have defined as adjusted net income divided byadjusted diluted shares. We define adjusted net income as net income (loss) attributable to the parent company, excluding any nonrecurring income tax items, restructuring charges, amortization expense, and other adjustments not related to ourcore operations (as used in adjusted EBITDA), net of any associated income tax effects. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income. This measure is considereduseful 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 neitherintended to represent nor be an alternative measure to diluted EPS reported under GAAP.
Free cash flow is anon-GAAP financial measure which we have defined as net cash provided by (used in) operating activities less purchases of property, plant, and equipment. Adjusted free cash flow is a non-GAAP financial measure which we have defined as net cash provided by (used in) operating activities excluding voluntary pension contributions less purchases of property, plant, and equipment. We believe thesemeasures are useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow and adjusted free cash flow are not intended to represent nor be an alternative tothe measure of net cash provided by (used in) operating activities reported under GAAP. Free cash flow and adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.
We have not provided reconciliations of preliminary and projected adjusted EBITDA and diluted adjusted EPS to the most comparable GAAP measures of netincome and diluted EPS. Providing net income and diluted EPS guidance is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operatingitems that are included in net income and diluted EPS, including restructuring actions, asset impairments, and income tax valuation adjustments. Reconciliations of these non-GAAP measures with the mostcomparable GAAP measures for historical periods are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Please reference the “Non-GAAP Financial Information” accompanying our quarterly earnings conference call presentations on our website at www.dana.com/investors for our GAAP results and the reconciliations of these measures,were used, to the comparable GAAP measures.
Forward-Looking Statements
Certain statements and projections contained in this news release are, by their nature, forward-looking within the meaning of the Private SecuritiesLitigation 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 aresubject 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,”
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“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 Form10-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 ofoperations 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 inthe 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 andclean-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.
Based in Maumee, Ohio, USA, the company reported sales of $8.9 billion in 2021 with 40,000 associates in 32 countries across six continents. Foundedin 1904, Dana was named one of “America’s Most Responsible Companies 2022” by Newsweek for its emphasis on sustainability and social responsibility. 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.
###
MediaContact: Jeff Cole
+1-419-887-3535
jeff.cole@dana.com
Investor Contact: Craig Barber
+1-419-887-5166
craig.barber@dana.com
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DANA INCORPORATED
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended December 31, 2021 and 2020
| (In millions, except per share amounts) | Three Months Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net sales | $ | 2,273 | $ | 2,108 | ||
| Costs and expenses | ||||||
| Cost of sales | 2,145 | 1,897 | ||||
| Selling, general and administrative expenses | 112 | 122 | ||||
| Amortization of intangibles | 3 | 3 | ||||
| Restructuring charges, net | (2 | ) | 13 | |||
| Other income (expense), net | 65 | 27 | ||||
| Earnings before interest and income taxes | 80 | 100 | ||||
| Loss on extinguishment of debt | (5 | ) | (3 | ) | ||
| Interest income | 3 | 2 | ||||
| Interest expense | 32 | 39 | ||||
| Earnings before income taxes | 46 | 60 | ||||
| Income tax expense | 16 | 24 | ||||
| Equity in earnings of affiliates | (1 | ) | 3 | |||
| Net income | 29 | 39 | ||||
| Less: Noncontrolling interests net income | 5 | 4 | ||||
| Less: Redeemable noncontrolling interests net loss | (1 | ) | (5 | ) | ||
| Net income attributable to the parent company | $ | 25 | $ | 40 | ||
| Net income per share available to common stockholders | ||||||
| Basic | $ | 0.18 | $ | 0.28 | ||
| Diluted | $ | 0.18 | $ | 0.27 | ||
| Weighted-average shares outstanding - Basic | 144.3 | 144.6 | ||||
| Weighted-average shares outstanding - Diluted | 145.8 | 145.7 |
DANA INCORPORATED
Consolidated Statement of Operations
For the Year Ended December 31, 2021 and 2020
| (In millions, except per share amounts) | Year Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net sales | $ | 8,945 | $ | 7,106 | ||
| Costs and expenses | ||||||
| Cost of sales | 8,108 | 6,485 | ||||
| Selling, general and administrative expenses | 460 | 421 | ||||
| Amortization of intangibles | 14 | 13 | ||||
| Restructuring charges, net | 34 | |||||
| Impairment of goodwill | (51 | ) | ||||
| Other income (expense), net | 32 | 22 | ||||
| Earnings before interest and income taxes | 395 | 124 | ||||
| Loss on extinguishment of debt | (29 | ) | (8 | ) | ||
| Interest income | 9 | 9 | ||||
| Interest expense | 131 | 138 | ||||
| Earnings (loss) before income taxes | 244 | (13 | ) | |||
| Income tax expense | 72 | 58 | ||||
| Equity in earnings of affiliates | 28 | 20 | ||||
| Net income (loss) | 200 | (51 | ) | |||
| Less: Noncontrolling interests net income | 14 | 10 | ||||
| Less: Redeemable noncontrolling interests net loss | (11 | ) | (30 | ) | ||
| Net income (loss) attributable to the parent company | $ | 197 | $ | (31 | ) | |
| Net income (loss) per share available to common stockholders | ||||||
| Basic | $ | 1.36 | $ | (0.21 | ) | |
| Diluted | $ | 1.35 | $ | (0.21 | ) | |
| Weighted-average shares outstanding - Basic | 144.8 | 144.5 | ||||
| Weighted-average shares outstanding - Diluted | 146.2 | 144.5 |
DANA INCORPORATED
Consolidated Statement of Comprehensive Income (Unaudited)
For the Three Months Ended December 31, 2021 and 2020
| (In millions) | Three Months Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net income | $ | 29 | $ | 39 | ||
| Other comprehensive income (loss), net of tax: | ||||||
| Currency translation adjustments | 2 | 56 | ||||
| Hedging gains and losses | 5 | (1 | ) | |||
| Defined benefit plans | 42 | (2 | ) | |||
| Other comprehensive income | 49 | 53 | ||||
| Total comprehensive income | 78 | 92 | ||||
| Less: Comprehensive income attributable to noncontrolling interests | (4 | ) | (20 | ) | ||
| Less: Comprehensive loss attributable to redeemable noncontrolling interests | 1 | 11 | ||||
| Comprehensive income attributable to the parent company | $ | 75 | $ | 83 |
DANA INCORPORATED
Consolidated Statement of Comprehensive Income
For the Year Ended December 31, 2021 and 2020
| (In millions) | Year Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net income (loss) | $ | 200 | $ | (51 | ) | |
| Other comprehensive income (loss), net of tax: | ||||||
| Currency translation adjustments | (9 | ) | (77 | ) | ||
| Hedging gains and losses | (5 | ) | 39 | |||
| Defined benefit plans | 53 | 9 | ||||
| Other comprehensive income (loss) | 39 | (29 | ) | |||
| Total comprehensive income (loss) | 239 | (80 | ) | |||
| Less: Comprehensive income attributable to noncontrolling interests | (2 | ) | (27 | ) | ||
| Less: Comprehensive loss attributable to redeemable noncontrolling interests | 1 | 36 | ||||
| Comprehensive income (loss) attributable to the parent company | $ | 238 | $ | (71 | ) |
DANA INCORPORATED
Consolidated Balance Sheet
Asof December 31, 2021 and December 31, 2020
| (In millions, except share and per share amounts) | December 31,<br>2020 | ||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 268 | $ | 559 | ||
| Marketable securities | 17 | 21 | |||
| Accounts receivable | |||||
| Trade, less allowance for doubtful accounts of 7 in 2021 and 7 in 2020 | 1,321 | 1,201 | |||
| Other | 220 | 231 | |||
| Inventories | 1,564 | 1,149 | |||
| Other current assets | 196 | 127 | |||
| Total current assets | 3,586 | 3,288 | |||
| Goodwill | 482 | 479 | |||
| Intangibles | 233 | 236 | |||
| Deferred tax assets | 580 | 611 | |||
| Other noncurrent assets | 131 | 169 | |||
| Investments in affiliates | 174 | 152 | |||
| Operating lease assets | 247 | 190 | |||
| Property, plant and equipment, net | 2,199 | 2,251 | |||
| Total assets | 7,632 | $ | 7,376 | ||
| Liabilities and equity | |||||
| Current liabilities | |||||
| Short-term debt | 23 | $ | 26 | ||
| Current portion of long-term debt | 8 | 8 | |||
| Accounts payable | 1,571 | 1,331 | |||
| Accrued payroll and employee benefits | 184 | 190 | |||
| Taxes on income | 41 | 35 | |||
| Current portion of operating lease liabilities | 43 | 43 | |||
| Other accrued liabilities | 304 | 308 | |||
| Total current liabilities | 2,174 | 1,941 | |||
| Long-term debt, less debt issuance costs of 26 in 2021 and 27 in 2020 | 2,386 | 2,420 | |||
| Noncurrent operating lease liabilities | 209 | 154 | |||
| Pension and postretirement obligations | 398 | 479 | |||
| Other noncurrent liabilities | 292 | 368 | |||
| Total liabilities | 5,459 | 5,362 | |||
| Commitments and contingencies | |||||
| Redeemable noncontrolling interests | 198 | 180 | |||
| 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, 144,238,660 and 144,515,658 shares<br>outstanding | 2 | 2 | |||
| Additional paid-in capital | 2,427 | 2,408 | |||
| Retained earnings | 662 | 530 | |||
| Treasury stock, at cost (11,661,591 and 10,442,582 shares) | (184 | ) | (156 | ) | |
| Accumulated other comprehensive loss | (985 | ) | (1,026 | ) | |
| Total parent company stockholders’ equity | 1,922 | 1,758 | |||
| Noncontrolling interests | 53 | 76 | |||
| Total equity | 1,975 | 1,834 | |||
| Total liabilities, redeemable noncontrolling interests and equity | 7,632 | $ | 7,376 |
All values are in US Dollars.
DANA INCORPORATED
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended December 31, 2021 and 2020
| (In millions) | Three Months<br>Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Operating activities | ||||||
| Net income | $ | 29 | $ | 39 | ||
| Depreciation | 93 | 88 | ||||
| Amortization | 6 | 5 | ||||
| Amortization of deferred financing charges | 1 | 2 | ||||
| Write-off of deferred financing costs | 5 | 3 | ||||
| Earnings of affiliates, net of dividends received | 1 | 2 | ||||
| Stock compensation expense | 2 | 9 | ||||
| Deferred income taxes | (9 | ) | (7 | ) | ||
| Pension expense, net | (1 | ) | ||||
| Gain on sale leaseback | (66 | ) | ||||
| Change in working capital | 46 | 97 | ||||
| Change in other noncurrent assets and liabilities | (1 | ) | (22 | ) | ||
| Other, net | 33 | (25 | ) | |||
| Net cash provided by operating activities | 139 | 191 | ||||
| Investing activities | ||||||
| Purchases of property, plant and equipment | (141 | ) | (145 | ) | ||
| Proceeds from sale of property, plant and equipment | 81 | 1 | ||||
| Investments in affiliates | (17 | ) | ||||
| Purchases of marketable securities | (7 | ) | (8 | ) | ||
| Proceeds from maturities of marketable securities | 8 | 9 | ||||
| Proceeds from sale of equity affiliate | 29 | 21 | ||||
| Settlements of undesignated derivatives | (2 | ) | ||||
| Other, net | (1 | ) | 5 | |||
| Net cash used in investing activities | (33 | ) | (134 | ) | ||
| Financing activities | ||||||
| Net change in short-term debt | (46 | ) | 11 | |||
| Proceeds from long-term debt | 355 | (4 | ) | |||
| Repayment of long-term debt | (351 | ) | (468 | ) | ||
| Deferred financing payments | (5 | ) | ||||
| Dividends paid to common stockholders | (14 | ) | ||||
| Distributions to noncontrolling interests | (5 | ) | (1 | ) | ||
| Sale of interest to noncontrolling shareholder | 2 | |||||
| Contributions from noncontrolling interests | 8 | 1 | ||||
| Deconsolidation of non-wholly owned subsidiary | (14 | ) | ||||
| Payments to acquire noncontrolling interests | (6 | ) | ||||
| Other, net | 2 | 1 | ||||
| Net cash used in financing activities | (56 | ) | (478 | ) | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 50 | (421 | ) | |||
| Cash, cash equivalents and restricted cash – beginning of period | 239 | 966 | ||||
| Effect of exchange rate changes on cash balances | (2 | ) | 22 | |||
| Cash, cash equivalents and restricted cash – end of period | $ | 287 | $ | 567 |
DANA INCORPORATED
Consolidated Statement of Cash Flows
For the YearEnded December 31, 2021 and 2020
| (In millions) | Year Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Operating activities | ||||||
| Net income (loss) | $ | 200 | $ | (51 | ) | |
| Depreciation | 365 | 345 | ||||
| Amortization | 24 | 20 | ||||
| Amortization of deferred financing charges | 6 | 8 | ||||
| Redemption premium on debt | 21 | |||||
| Write-off of deferred financing costs | 8 | 8 | ||||
| Earnings of affiliates, net of dividends received | (10 | ) | 7 | |||
| Stock compensation expense | 17 | 14 | ||||
| Deferred income taxes | (1 | ) | (35 | ) | ||
| Pension expense, net | (1 | ) | 3 | |||
| Gain on sale leaseback | (66 | ) | ||||
| Impairment of goodwill | 51 | |||||
| Change in working capital | (455 | ) | 47 | |||
| Change in other noncurrent assets and liabilities | (3 | ) | (20 | ) | ||
| Other, net | 53 | (11 | ) | |||
| Net cash provided by operating activities | 158 | 386 | ||||
| Investing activities | ||||||
| Purchases of property, plant and equipment | (369 | ) | (326 | ) | ||
| Proceeds from sale of property, plant and equipment | 85 | 11 | ||||
| Acquisition of businesses, net of cash acquired | (18 | ) | (6 | ) | ||
| Investments in affiliates | (23 | ) | (21 | ) | ||
| Proceeds from sale of subsidiary, net of cash disposed | (4 | ) | ||||
| Purchases of marketable securities | (32 | ) | (44 | ) | ||
| Proceeds from sales of marketable securities | 30 | 5 | ||||
| Proceeds from maturities of marketable securities | 35 | 36 | ||||
| Proceeds from sale of equity affiliate | 29 | 21 | ||||
| Settlement of terminated<br>fixed-to-fixed cross currency swap | (22 | ) | ||||
| Settlements of undesignated derivatives | (4 | ) | (5 | ) | ||
| Other, net | 2 | |||||
| Net cash used in investing activities | (293 | ) | (327 | ) | ||
| Financing activities | ||||||
| Net change in short-term debt | (3 | ) | 9 | |||
| Proceeds from long-term debt | 1,157 | 508 | ||||
| Repayment of long-term debt | (1,156 | ) | (480 | ) | ||
| Redemption premium on debt | (21 | ) | ||||
| Deferred financing payments | (18 | ) | (13 | ) | ||
| Dividends paid to common stockholders | (58 | ) | (15 | ) | ||
| Distributions to noncontrolling interests | (15 | ) | (11 | ) | ||
| Sale of interest to noncontrolling shareholder | 9 | |||||
| Contributions from noncontrolling interests | 14 | 4 | ||||
| Deconsolidation of non-wholly owned subsidiary | (6 | ) | (14 | ) | ||
| Payments to acquire noncontrolling interests | (7 | ) | ||||
| Repurchases of common stock | (23 | ) | ||||
| Other, net | 2 | (2 | ) | |||
| Net cash used in financing activities | (127 | ) | (12 | ) | ||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (262 | ) | 47 | |||
| Cash, cash equivalents and restricted cash - beginning of period | 567 | 518 | ||||
| Effect of exchange rate changes on cash balances | (18 | ) | 2 | |||
| Cash, cash equivalents and restricted cash - end of period | $ | 287 | $ | 567 |
DANA INCORPORATED
Reconciliation of Net Cash Provided By (Used In) Operating Activities to
Free Cash Flow and Adjusted Free Cash Flow (Unaudited)
| (In millions) | Three Months Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Net cash provided by (used in) operating activities | $ | 139 | $ | 191 | ||
| Purchase of property, plant and equipment | (141 | ) | (145 | ) | ||
| Free cash flow | (2 | ) | 46 | |||
| Discretionary pension contributions | ||||||
| Adjusted free cash flow | $ | (2 | ) | $ | 46 | |
| (In millions) | Year Ended<br>December 31, | |||||
| --- | --- | --- | --- | --- | --- | --- |
| 2021 | 2020 | |||||
| Net cash provided by operating activities | $ | 158 | $ | 386 | ||
| Purchase of property, plant and equipment | (369 | ) | (326 | ) | ||
| Free cash flow | (211 | ) | 60 | |||
| Discretionary pension contributions | ||||||
| Adjusted free cash flow | $ | (211 | ) | $ | 60 |
DANA INCORPORATED
Segment Sales and Segment EBITDA (Unaudited)
For theThree Months Ended December 31, 2021 and 2020
| (In millions) | Three Months Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Sales | ||||||
| Light Vehicle | $ | 974 | $ | 980 | ||
| Commercial Vehicle | 400 | 333 | ||||
| Off-Highway | 662 | 531 | ||||
| Power Technologies | 237 | 264 | ||||
| Total Sales | $ | 2,273 | $ | 2,108 | ||
| Segment EBITDA | ||||||
| Light Vehicle | $ | 33 | $ | 99 | ||
| Commercial Vehicle | (5 | ) | 8 | |||
| Off-Highway | 77 | 58 | ||||
| Power Technologies | 12 | 31 | ||||
| Total Segment EBITDA | 117 | 196 | ||||
| Corporate expense and other items, net | 1 | (4 | ) | |||
| Adjusted EBITDA | $ | 118 | $ | 192 |
DANA INCORPORATED
Segment Sales and Segment EBITDA
For the Year EndedDecember 31, 2021 and 2020
| (In millions) | Year Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Sales | ||||||
| Light Vehicle | $ | 3,773 | $ | 3,038 | ||
| Commercial Vehicle | 1,532 | 1,185 | ||||
| Off-Highway | 2,593 | 1,966 | ||||
| Power Technologies | 1,047 | 917 | ||||
| Total Sales | $ | 8,945 | $ | 7,106 | ||
| Segment EBITDA | ||||||
| Light Vehicle | $ | 274 | $ | 239 | ||
| Commercial Vehicle | 48 | 40 | ||||
| Off-Highway | 353 | 230 | ||||
| Power Technologies | 123 | 94 | ||||
| Total Segment EBITDA | 798 | 603 | ||||
| Corporate expense and other items, net | (3 | ) | (10 | ) | ||
| Adjusted EBITDA | $ | 795 | $ | 593 |
DANA INCORPORATED
Reconciliation of Segment and Adjusted EBITDA to Net Income (Unaudited)
For the Three Months Ended December 31, 2021 and 2020
| (In millions) | Three Months Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Segment EBITDA | $ | 117 | $ | 196 | ||
| Corporate expense and other items, net | 1 | (4 | ) | |||
| Adjusted EBITDA | 118 | 192 | ||||
| Depreciation | (93 | ) | (88 | ) | ||
| Amortization | (6 | ) | (5 | ) | ||
| Non-service cost components of pension and OPEB<br>costs | (3 | ) | (2 | ) | ||
| Restructuring charges, net | 2 | (13 | ) | |||
| Stock compensation expense | (2 | ) | (9 | ) | ||
| Strategic transaction expenses | (2 | ) | (5 | ) | ||
| Amounts attributable to previously divested/closed operations | (1 | ) | (1 | ) | ||
| Gain on investment in Hyliion | 33 | |||||
| Gain on sale leaseback | 66 | |||||
| Other items | 1 | (2 | ) | |||
| Earnings before interest and income taxes | 80 | 100 | ||||
| Loss on extinguishment of debt | (5 | ) | (3 | ) | ||
| Interest income | 3 | 2 | ||||
| Interest expense | 32 | 39 | ||||
| Earnings before income taxes | 46 | 60 | ||||
| Income tax expense | 16 | 24 | ||||
| Equity in earnings of affiliates | (1 | ) | 3 | |||
| Net income | $ | 29 | $ | 39 |
DANA INCORPORATED
Reconciliation of Segment and Adjusted EBITDA to Net Income (Loss)
For the Year Ended December 31, 2021 and 2020
| (In millions) | Year Ended<br>December 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| Segment EBITDA | $ | 798 | $ | 603 | ||
| Corporate expense and other items, net | (3 | ) | (10 | ) | ||
| Adjusted EBITDA | 795 | 593 | ||||
| Depreciation | (365 | ) | (345 | ) | ||
| Amortization | (24 | ) | (20 | ) | ||
| Non-service cost components of pension and OPEB<br>costs | (10 | ) | (10 | ) | ||
| Restructuring charges, net | (34 | ) | ||||
| Stock compensation expense | (17 | ) | (14 | ) | ||
| Strategic transaction expenses | (13 | ) | (20 | ) | ||
| Amounts attributable to previously divested/closed operations | (2 | ) | (1 | ) | ||
| Gain (loss) on investment in Hyliion | (20 | ) | 33 | |||
| Loss on disposal group held for sale | (7 | ) | ||||
| Loss on de-designation of<br>fixed-to-fixed cross currency swaps | (9 | ) | ||||
| Gain on sale leaseback | 66 | |||||
| Impairment of goodwill | (51 | ) | ||||
| Other items | 1 | (7 | ) | |||
| Earnings before interest and income taxes | 395 | 124 | ||||
| Loss on extinguishment of debt | (29 | ) | (8 | ) | ||
| Interest income | 9 | 9 | ||||
| Interest expense | 131 | 138 | ||||
| Earnings (loss) before income taxes | 244 | (13 | ) | |||
| Income tax expense | 72 | 58 | ||||
| Equity in earnings of affiliates | 28 | 20 | ||||
| Net income (loss) | $ | 200 | $ | (51 | ) |
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 December 31, 2021 and 2020
| (In millions, except per share amounts) | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended<br>December 31, | ||||||
| 2021 | 2020 | |||||
| Net income attributable to parent company | $ | 25 | $ | 40 | ||
| Items impacting income before income taxes: | ||||||
| Amortization | 5 | 4 | ||||
| Restructuring charges, net | (2 | ) | 12 | |||
| Strategic transaction expenses | 5 | 6 | ||||
| Gain on investment in Hyliion | (33 | ) | ||||
| Loss on extinguishment of debt | 5 | 3 | ||||
| Gain on sale leaseback | (66 | ) | ||||
| Other items | (2 | ) | ||||
| Items impacting income taxes: | ||||||
| Net income tax expense on items above | 14 | 7 | ||||
| Income tax expense (benefit) attributable to various discrete tax matters | 16 | (4 | ) | |||
| Adjusted net income attributable to the parent | $ | — | $ | 35 | ||
| Diluted shares - as reported | 145.8 | 145.7 | ||||
| Adjusted diluted shares | 145.8 | 145.7 | ||||
| Diluted adjusted EPS | $ | — | $ | 0.24 |
DANA INCORPORATED
Reconciliation of Net Income (Loss) Attributable to the Parent Company to
Adjusted Net Income Attributable to the Parent Company and
Diluted Adjusted EPS (Unaudited)
For the Year Ended December 31, 2021 and 2020
| (In millions, except per share amounts) | ||||||
|---|---|---|---|---|---|---|
| Year Ended<br>December 31, | ||||||
| 2021 | 2020 | |||||
| Net income (loss) attributable to parent company | $ | 197 | $ | (31 | ) | |
| Items impacting income before income taxes: | ||||||
| Amortization | 20 | 17 | ||||
| Restructuring charges, net | 33 | |||||
| Strategic transaction expenses | 13 | 21 | ||||
| (Gain) loss on investment in Hyliion | 20 | (33 | ) | |||
| Loss on disposal group held for sale | 7 | |||||
| Loss on extinguishment of debt | 29 | 8 | ||||
| Loss on de-designation of<br>fixed-to-fixed cross currency swaps | 9 | |||||
| Gain on sale leaseback | (66 | ) | ||||
| Other items | 3 | |||||
| Impairment of goodwill | 31 | |||||
| Items impacting income taxes: | ||||||
| Net income tax benefit on items above | (7 | ) | ||||
| Income tax expense attributable to various discrete tax matters | 11 | 18 | ||||
| Adjusted net income attributable to the parent | $ | 243 | $ | 57 | ||
| Diluted shares - as reported | 146.2 | 144.5 | ||||
| Adjusted diluted shares | 146.2 | 145.1 | ||||
| Diluted adjusted EPS | $ | 1.66 | $ | 0.39 |