Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Dana (DAN) despite lower revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Dana is expected to report quarterly earnings of $0.26 per share, reflecting a year-over-year increase of +116.7% [3]. - Revenues are projected to be $1.93 billion, which is a decrease of 22.1% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 53.51% higher in the last 30 days, indicating a positive reassessment by analysts [4]. - The Most Accurate Estimate for Dana is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +4.48% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - Dana currently holds a Zacks Rank of 2, suggesting a high likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, Dana was expected to post earnings of $0.40 per share but only achieved $0.05, resulting in a surprise of -87.50% [13]. - Over the past four quarters, Dana has only beaten consensus EPS estimates once [14]. Industry Context - Another player in the automotive equipment sector, Gentex (GNTX), is expected to report earnings of $0.47 per share, indicating a year-over-year decrease of -11.3% [18]. - Gentex's revenues are expected to be $667.88 million, up 9.8% from the previous year, with an Earnings ESP of +5.64% and a Zacks Rank of 3 [19].

Core Insights - Dana Incorporated will release its 2025 third-quarter financial results on October 29, 2025, with a press release at 7 a.m. EDT and a conference call at 9 a.m. EDT [1][2] - The company reported sales of $7.7 billion in 2024 and has a workforce of 28,000 across 26 countries [4] Company Overview - Dana is a leader in designing and manufacturing efficient propulsion and energy-management solutions for various mobility markets globally [3] - The company focuses on sustainable progress through both conventional and clean-energy solutions, supporting nearly every vehicle manufacturer [3] - Dana has been recognized as one of the "World's Most Ethical Companies" for 2025 and one of "America's Most Responsible Companies 2025" [4]

Core Insights - Three stocks with strong value characteristics and a Zacks Rank of 1 (Strong Buy) are highlighted for investors: Energizer, Guess, and Dana [1][2][3]. Company Summaries - **Energizer (ENR)**: - Leading manufacturer and distributor of batteries and lighting products - Current year earnings estimate increased by 1.4% over the last 60 days - Price-to-earnings ratio (P/E) is 6.26, significantly lower than the industry average of 25.90 - Holds a Value Score of A [1][2]. - **Guess (GES)**: - Designs, markets, distributes, and licenses casual apparel and accessories - Current year earnings estimate increased by 8.1% over the last 60 days - Price-to-earnings ratio (P/E) is 10.58, compared to the industry average of 23.20 - Holds a Value Score of A [1][3]. - **Dana (DAN)**: - Provider of technology driveline, sealing, and thermal-management products - Current year earnings estimate increased by 35.6% over the last 60 days - Price-to-earnings ratio (P/E) is 13.16, slightly below the industry average of 13.40 - Holds a Value Score of A [1][4].

Core Insights - Dana Incorporated (NYSE:DAN) is recognized as one of the best small-cap EV stocks to buy according to analysts [1] - Wells Fargo lowered its price target for Dana from $22 to $21 while maintaining an Equal Weight rating [1] - UBS analyst Joseph Spak reiterated a Buy rating with a price target of $25 [3] Financial Performance - Dana reported $2.35 billion in revenue for the fiscal second quarter of 2025, a decrease of 14% year-over-year, but exceeded Wall Street estimates by $49.5 million [3] - The company's earnings per share (EPS) of $0.13 fell short of estimates by $0.03 [3] - Management raised its full-year guidance by $250 million, adjusted EBITDA by $35 million, and free cash flow by $50 million ahead of the fiscal third-quarter results expected on November 5, 2025 [2] Business Overview - Dana Incorporated specializes in energy management solutions and designs and manufactures propulsion systems for vehicles and machines across global mobility markets [4]

Summary of Dana's Conference Call Company Overview - **Company**: Dana Incorporated - **Industry**: Automotive, specifically focusing on driveline and electrification technologies Key Points and Arguments Corporate Restructuring and Off-Highway Sale - The decision to sell the off-highway business was driven by the company's stock trading at automotive multiples, which did not reflect the value of the off-highway segment, leading to a significant stock price increase post-announcement [4][5] - The off-highway sale is expected to generate approximately $2.4 billion in net proceeds, which will be used to reduce debt and return capital to shareholders [16][51] - The company aims to achieve $300 million in cost savings, with a third coming from reduced investments in electrification and the remainder from simplifying corporate structure and reducing overhead [11][12][13] Financial Performance and Projections - Dana targets EBITDA margins of 10% to 10.5% for the next year, with a current guidance of around 7.5% for this year [17][62] - The company anticipates a free cash flow of $150 million, approximately 2% of sales, for the current year, with expectations to increase this to $400 million through margin expansion [21][22] - The stock has appreciated by 98% since the CEO's appointment, outperforming the S&P 500 [14] Cost Reduction Strategies - Significant cost reductions have been achieved by eliminating over-investments in high-risk electrification projects and simplifying the corporate structure [11][12] - The company has reduced corporate expenses in Europe, Asia, and South America, focusing on a more North American-centric approach [12][13] - The restructuring program is expected to yield further savings beyond the initial $300 million target [14] Market Dynamics and Demand - The relaxation of federal greenhouse gas and corporate average fuel economy standards is seen as beneficial for Dana's light vehicle business, particularly for high-demand models like the Ford Super Duty [42][45] - The company is experiencing a mixed demand landscape, with North American commercial truck demand softening slightly, while European markets are showing improvement [66] Electrification and Future Growth - Dana's electrification business is projected to become accretive, moving from a historically negative performance to a positive outlook as investments are recalibrated [49] - The company is focusing on strategic partnerships and customer co-investments in electrification projects to mitigate risks [39] Capital Allocation and Shareholder Returns - Dana plans to return approximately $600 million to shareholders through buybacks, representing about 25% of its market cap, as part of its capital allocation strategy [16][51] - The preference for buybacks over dividends is based on the perceived undervaluation of the stock, allowing the company to buy shares at a favorable price [53] Competitive Landscape - The competitive environment in the commercial vehicle driveline market remains challenging, but Dana believes it has a cost advantage due to new facilities and operational efficiencies [75][76] Additional Important Insights - The company is actively working to improve its manufacturing capabilities and automation, identifying significant opportunities for cost savings through operational improvements [30][31] - Dana's strategic focus includes evaluating its global positioning, particularly in the commercial vehicle sector, to ensure long-term competitiveness [72][74]

Company Performance - Dana reported quarterly earnings of $0.05 per share, missing the Zacks Consensus Estimate of $0.40 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -87.50% [1] - The company posted revenues of $1.94 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 11.51%, and down from $2.74 billion year-over-year [2] - Over the last four quarters, Dana has surpassed consensus EPS estimates only once and has topped consensus revenue estimates just once [2] Stock Performance - Dana shares have increased approximately 51.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.6% [3] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $1.94 billion, and for the current fiscal year, it is $0.67 on revenues of $7.43 billion [7] Industry Outlook - The Automotive - Original Equipment industry, to which Dana belongs, is currently in the top 41% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can materially impact stock performance [5][8]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201%20Financial%20Statements) This section presents Dana's unaudited consolidated financial statements, including key financial highlights and the Off-Highway business reclassification [Consolidated Statement of Operations (Unaudited)](index=3&type=section&id=Consolidated%20Statement%20of%20Operations%20(Unaudited)) Net income for Q2 2025 increased to **$31 million** from **$16 million** in Q2 2024, driven by improved continuing operations **Net Income (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------------- | :----------------- | :----------------- | :----- | | Net income | $31 | $16 | +$15 | | Net income attributable to parent | $27 | $16 | +$11 | | Basic EPS | $0.19 | $0.11 | +$0.08 | | Diluted EPS | $0.19 | $0.11 | +$0.08 | **Net Income (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------------------------------- | :------------------ | :------------------ | :----- | | Net income | $61 | $16 | +$45 | | Net income attributable to parent | $52 | $19 | +$33 | | Basic EPS | $0.36 | $0.13 | +$0.23 | | Diluted EPS | $0.36 | $0.13 | +$0.23 | **Net Sales (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------- | :----------------- | :----------------- | :----- | | Net sales | $1,935 | $2,047 | -$112 | **Net Sales (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------- | :------------------ | :------------------ | :----- | | Net sales | $3,716 | $4,062 | -$346 | [Consolidated Statement of Comprehensive Income (Unaudited)](index=4&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20(Unaudited)) Total comprehensive income significantly improved to **$96 million** in Q2 2025 from a **$52 million loss** in Q2 2024, driven by currency translation and hedging gains **Total Comprehensive Income (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------- | :----------------- | :----------------- | :----- | | Total comprehensive income | $96 | $(52) | +$148 | **Total Comprehensive Income (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------------------------- | :------------------ | :------------------ | :----- | | Total comprehensive income | $158 | $(73) | +$231 | **Other Comprehensive Income (Loss) from Continuing Operations (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------- | :----------------- | :----------------- | :----- | | Currency translation adjustments | $35 | $(45) | +$80 | | Hedging gains and losses | $23 | $(26) | +$49 | [Consolidated Balance Sheet (Unaudited)](index=5&type=section&id=Consolidated%20Balance%20Sheet%20(Unaudited)) Total assets increased to **$8,139 million** at June 30, 2025, from **$7,502 million** at December 31, 2024, driven by higher current assets and liabilities **Total Assets (Period-end):** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :---------- | :----------------------- | :---------------------- | :----- | | Total assets | $8,139 | $7,502 | +$637 | **Total Liabilities (Period-end):** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :------------- | :----------------------- | :---------------------- | :----- | | Total liabilities | $6,680 | $5,917 | +$763 | **Key Balance Sheet Changes (June 30, 2025 vs. Dec 31, 2024):** | Item | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :------------------------------------ | :----------------------- | :---------------------- | :----- | | Cash and cash equivalents | $486 | $494 | -$8 | | Accounts receivable (Trade) | $1,143 | $890 | +$253 | | Inventories | $1,105 | $1,047 | +$58 | | Short-term debt | $530 | $8 | +$522 | | Current portion of long-term debt | $22 | $214 | -$192 | | Accounts payable | $1,186 | $1,120 | +$66 | [Consolidated Statement of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20(Unaudited)) Net cash used in operating activities was **$5 million** for YTD 2025, a decrease from **$113 million provided** in the prior year, due to increased working capital usage **Cash Flow Summary (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :------------------------------------------ | :------------------ | :------------------ | :----- | | Net cash provided by (used in) operating activities | $(5) | $113 | -$118 | | Net cash used in investing activities | $(60) | $(177) | +$117 | | Net cash provided by (used in) financing activities | $1 | $(30) | +$31 | | Net decrease in cash, cash equivalents and restricted cash | $(64) | $(94) | +$30 | - Key Cash Flow Activities (YTD 2025): * Net change in short-term debt: **+$522 million** (vs. **-$4 million** in 2024) * Repayment of long-term debt: **-$210 million** (vs. **-$30 million** in 2024) * Repurchases of common stock: **-$257 million** (vs. **$0** in 2024) * Purchases of property, plant and equipment: **-$104 million** (vs. **-$161 million** in 2024) * Proceeds from sale of investments: **+$57 million** (vs. **$0** in 2024)[15](index=15&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes detail Dana's accounting policies, Off-Highway business divestiture, restructuring, equity changes, financing, and segment reporting, including a new share repurchase program [Note 1. Organization and Summary of Significant Accounting Policies](index=8&type=section&id=Note%201.%20Organization%20and%20Summary%20of%20Significant%20Accounting%20Policies) Dana reclassified its Off-Highway business as discontinued operations due to a June 2025 sale agreement and is evaluating new FASB ASUs on expense and income tax disclosures - Dana is a global provider of high-technology driveline, sealing and thermal-management products, and motors, power inverters, and control systems for electric vehicles[19](index=19&type=chunk) - In June 2025, Dana entered into a definitive agreement to sell its Off-Highway business, which has been classified as held for sale and reported as discontinued operations[22](index=22&type=chunk) - Dana is evaluating the impact of ASU 2024-03 (Disaggregation of Income Statement Expenses) and ASU 2023-09 (Improvements to Income Tax Disclosures), effective for fiscal years beginning after December 15, 2026, and December 15, 2024, respectively[24](index=24&type=chunk)[25](index=25&type=chunk) [Note 2. Discontinued Operations](index=8&type=section&id=Note%202.%20Discontinued%20Operations) Dana agreed to sell its Off-Highway business for **$2,732 million**, classifying it as discontinued operations, with net sales decreasing by **$63 million** in Q2 2025 - Dana agreed to sell its Off-Highway business to Allison Transmission Holdings, Inc. for **$2,732 million**, expected to close in Q4 2025[26](index=26&type=chunk) **Net Income from Discontinued Operations (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------- | :----------------- | :----------------- | :----- | | Net sales | $663 | $726 | -$63 | | Net income | $43 | $77 | -$34 | **Net Income from Discontinued Operations (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------- | :------------------ | :------------------ | :----- | | Net sales | $1,263 | $1,484 | -$221 | | Net income | $90 | $142 | -$52 | - Incurred **$14 million** (Q2 2025) and **$34 million** (YTD 2025) in transaction-related costs for the Off-Highway business divestiture[28](index=28&type=chunk) **Assets and Liabilities of Discontinued Operations (June 30, 2025):** | Category | Amount (Millions) | | :---------------------------------- | :---------------- | | Current assets of disposal group held for sale | $1,090 | | Noncurrent assets of disposal group held for sale | $981 | | Current liabilities of disposal group held for sale | $753 | | Noncurrent liabilities of disposal group held for sale | $204 | [Note 3. Disposal Group Previously Held for Sale](index=10&type=section&id=Note%203.%20Disposal%20Group%20Previously%20Held%20for%20Sale) Dana's European hydraulics business was reclassified from held for sale to held and used after its sale was not completed, resulting in a **$26 million loss** in 2024 - European hydraulics business reclassified from "held for sale" to "held and used" as the sale was not completed[30](index=30&type=chunk) - A **$26 million loss** was recognized in 2024 to adjust the carrying value to fair value less costs to sell[30](index=30&type=chunk) [Note 4. Intangible Assets](index=12&type=section&id=Note%204.%20Intangible%20Assets) Net intangible assets totaled **$79 million** at June 30, 2025, with amortization expense remaining consistent at **$3 million** for Q2 2025 **Net Intangible Assets:** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :---------------------- | :----------------------- | :---------------------- | | Net Carrying Amount | $79 | $80 | **Amortization Expense (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :----------------- | :----------------- | :----------------- | | Total amortization | $3 | $3 | **Amortization Expense (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | | :----------------- | :------------------ | :------------------ | | Total amortization | $6 | $7 | [Note 5. Restructuring of Operations](index=13&type=section&id=Note%205.%20Restructuring%20of%20Operations) Dana continued restructuring activities in H1 2025, focusing on facility consolidation and headcount reductions, with accrued costs at **$38 million** as of June 30, 2025 - Restructuring activities include rationalizing operating footprint, consolidating facilities, positioning operations in lower cost locations, and headcount reduction initiatives[32](index=32&type=chunk) **Accrued Restructuring Costs (June 30, 2025):** | Metric | Amount (Millions) | | :-------------------------- | :---------------- | | Balance, June 30, 2025 | $38 | | Charges to restructuring (Q2) | $12 | | Cash payments (Q2) | $(10) | - Accrued employee termination benefits include costs to reduce approximately **700 employees** over the next year[34](index=34&type=chunk) [Note 6. Supplemental Balance Sheet and Cash Flow Information](index=13&type=section&id=Note%206.%20Supplemental%20Balance%20Sheet%20and%20Cash%20Flow%20Information) Supplier finance obligations increased to **$53 million**, inventories rose to **$1,105 million**, and total cash decreased to **$501 million** at June 30, 2025 - Confirmed obligations subject to supplier finance programs increased to **$53 million** at June 30, 2025, from **$46 million** at December 31, 2024[35](index=35&type=chunk) **Inventory Components (June 30, 2025 vs. Dec 31, 2024):** | Component | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :------------------------ | :----------------------- | :---------------------- | | Raw materials | $489 | $456 | | Work in process and finished goods | $616 | $591 | | Total | $1,105 | $1,047 | **Cash, Cash Equivalents and Restricted Cash (June 30, 2025 vs. Dec 31, 2024):** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :------------------------------------ | :----------------------- | :---------------------- | | Cash and cash equivalents | $486 | $494 | | Total cash, cash equivalents and restricted cash | $501 | $512 | [Note 7. Stockholders' Equity](index=14&type=section&id=Note%207.%20Stockholders%27%20Equity) Dana declared a **$0.10** cash dividend and repurchased **$257 million** of common stock under a **$1,000 million** program, leading to a decrease in stockholders' equity - Declared a cash dividend of ten cents per share of common stock in the first and second quarters of 2025[37](index=37&type=chunk) - Board of Directors approved a stock repurchase program of up to an aggregate of **$1,000 million** through December 31, 2027[38](index=38&type=chunk) - Spent **$257 million** to repurchase **14,607,283 shares** of common stock during Q2 2025, including **$251 million** from the Icahn Group. Approximately **$743 million** remained available[38](index=38&type=chunk)[194](index=194&type=chunk) **Total Parent Company Stockholders' Equity:** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :-------------------------------- | :----------------------- | :---------------------- | :----- | | Total parent company stockholders' equity | $1,204 | $1,333 | -$129 | - Accumulated other comprehensive loss (AOCI) improved from **$(1,142) million** at December 31, 2024, to **$(1,047) million** at June 30, 2025, driven by positive currency translation adjustments and hedging gains[13](index=13&type=chunk)[42](index=42&type=chunk) [Note 8. Redeemable Noncontrolling Interests](index=17&type=section&id=Note%208.%20Redeemable%20Noncontrolling%20Interests) Hydro-Québec holds a **45%** redeemable noncontrolling interest in Dana TM4 Inc., with the balance remaining at **$189 million** at June 30, 2025 - Hydro-Québec owns a **45%** redeemable noncontrolling interest in Dana TM4 Inc., Dana TM4 Electric Holdings BV and Dana TM4 USA, LLC, with a put right at fair value[44](index=44&type=chunk) - On May 6, 2024, Hydro-Québec provided Dana with its put notice, after which Dana no longer attributes net income (loss) and other comprehensive income (loss) items of these entities to Hydro-Québec's interest[45](index=45&type=chunk) - The balance of redeemable noncontrolling interests was **$189 million** at June 30, 2025, unchanged from December 31, 2024[13](index=13&type=chunk)[46](index=46&type=chunk) [Note 9. Earnings per Share](index=17&type=section&id=Note%209.%20Earnings%20per%20Share) Basic and diluted EPS for Q2 2025 increased to **$0.19** from **$0.11** in Q2 2024, driven by higher net income attributable to the parent company **Basic and Diluted EPS (Q2 YoY):** | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------------------ | :------ | :------ | :----- | | Basic earnings per share | $0.19 | $0.11 | +$0.08 | | Diluted earnings per share | $0.19 | $0.11 | +$0.08 | **Basic and Diluted EPS (YTD YoY):** | Metric | YTD 2025 | YTD 2024 | Change | | :------------------------------------ | :------- | :------- | :----- | | Basic earnings per share | $0.36 | $0.13 | +$0.23 | | Diluted earnings per share | $0.36 | $0.13 | +$0.23 | **Weighted-Average Common Shares Outstanding (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :------------------------------------ | :----------------- | :----------------- | :----- | | Basic | 143.8 | 145.0 | -1.2 | | Diluted | 143.8 | 145.0 | -1.2 | [Note 10. Stock Compensation](index=18&type=section&id=Note%2010.%20Stock%20Compensation) Dana granted **0.9 million RSUs** and **0.4 million PSUs** in H1 2025, with stock compensation expense increasing to **$11 million** in Q2 2025 - Granted **0.9 million RSUs** (Fair Value **$16.33/share**) and **0.4 million PSUs** (Fair Value **$18.70/share**) during the six months ended June 30, 2025[49](index=49&type=chunk) **Stock Compensation Expense (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------- | :----------------- | :----------------- | :----- | | Stock compensation expense | $11 | $8 | +$3 | **Stock Compensation Expense (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------------------------- | :------------------ | :------------------ | :----- | | Stock compensation expense | $23 | $14 | +$9 | - Total unrecognized compensation cost related to nonvested awards was **$32 million** at June 30, 2025, expected to be recognized over a weighted-average period of **1.5 years**[50](index=50&type=chunk) [Note 11. Pension and Postretirement Benefit Plans](index=18&type=section&id=Note%2011.%20Pension%20and%20Postretirement%20Benefit%20Plans) Net periodic pension benefit cost was **$4 million** in Q2 2025, while OPEB costs were a **$1 million credit**, with service costs in cost of sales and SG&A **Net Periodic Benefit Cost (Pension - Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------- | :----------------- | :----------------- | :----- | | U.S. Pension | $1 | $0 | +$1 | | Non-U.S. Pension | $3 | $5 | -$2 | | Total Pension | $4 | $5 | -$1 | **Net Periodic Benefit Cost (Pension - YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------------------------- | :------------------ | :------------------ | :----- | | U.S. Pension | $1 | $1 | $0 | | Non-U.S. Pension | $6 | $8 | -$2 | | Total Pension | $7 | $9 | -$2 | **Net Periodic Benefit Cost (OPEB - Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :-------------------------- | :----------------- | :----------------- | :----- | | Non-U.S. OPEB | $(1) | $0 | -$1 | **Net Periodic Benefit Cost (OPEB - YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :-------------------------- | :------------------ | :------------------ | :----- | | Non-U.S. OPEB | $(1) | $0 | -$1 | [Note 12. Financing Agreements](index=19&type=section&id=Note%2012.%20Financing%20Agreements) Long-term debt increased to **$2,568 million** at June 30, 2025, with Dana retiring April 2025 Senior Notes and establishing a **$250 million** Term A Facility, while remaining compliant with debt covenants **Long-Term Debt (June 30, 2025 vs. Dec 31, 2024):** | Metric | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | Change | | :------------------------------------ | :----------------------- | :---------------------- | :----- | | Long-term debt, less debt issuance costs | $2,568 | $2,387 | +$181 | - Retired its remaining April 2025 Senior Notes on April 15, 2025[57](index=57&type=chunk) - On July 31, 2025, amended its credit and guaranty agreement to include a **$250 million** Term A Facility, which was fully drawn to pay down outstanding borrowings on the Revolving Facility[60](index=60&type=chunk) - Had availability of **$615 million** at June 30, 2025, under the Revolving Facility[63](index=63&type=chunk) - In compliance with the covenants of its financing agreements at June 30, 2025, including a first lien net leverage ratio not to exceed **2.00 to 1.00**[64](index=64&type=chunk) [Note 13. Fair Value Measurements and Derivatives](index=21&type=section&id=Note%2013.%20Fair%20Value%20Measurements%20and%20Derivatives) Dana uses derivatives to manage foreign currency exposure, with **$1,156 million** in forward contracts and **$715 million** in currency swaps, reporting a **$15 million** deferred gain in AOCI **Fair Value of Financial Instruments (June 30, 2025):** | Instrument | Fair Value (Millions) | Carrying Value (Millions) | | :--------------- | :-------------------- | :------------------------ | | Long-term debt | $2,471 | $2,420 | **Foreign Currency Derivatives Notional Amounts (June 30, 2025 vs. Dec 31, 2024):** | Derivative Type | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :------------------------------ | :----------------------- | :---------------------- | | Foreign currency forward contracts | $1,156 | $1,147 | | Foreign currency swaps | $715 | $951 | **Deferred Gain (Loss) in AOCI from Cash Flow Hedges (June 30, 2025 vs. Dec 31, 2024):** | Derivative Type | June 30, 2025 (Millions) | Dec 31, 2024 (Millions) | | :-------------------- | :----------------------- | :---------------------- | | Forward Contracts | $16 | $(35) | | Cross-Currency Swaps | $(1) | $(3) | | Total | $15 | $(38) | - **$16 million** from forward contracts expected to be reclassified to income in one year or less[73](index=73&type=chunk) [Note 14. Commitments and Contingencies](index=27&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) Accrued environmental liabilities were **$14 million** at June 30, 2025, and Dana believes legal proceedings will not materially impact its financial condition - Accrued environmental liabilities were **$14 million** at June 30, 2025, compared to **$13 million** at December 31, 2024[77](index=77&type=chunk) - Dana is subject to various pending or threatened legal proceedings but believes any liabilities will not have a material adverse effect on its liquidity, financial condition, or results of operations[78](index=78&type=chunk) [Note 15. Warranty Obligations](index=27&type=section&id=Note%2015.%20Warranty%20Obligations) Warranty liabilities were **$84 million** at June 30, 2025, with accruals for current period sales at **$9 million** in Q2 2025 **Warranty Liabilities (June 30, 2025 vs. June 30, 2024):** | Metric | June 30, 2025 (Millions) | June 30, 2024 (Millions) | | :-------------------- | :----------------------- | :----------------------- | | Balance, end of period | $84 | $86 | **Accruals for Current Period Sales (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :-------------------------- | :----------------- | :----------------- | | Accrued for current period sales | $9 | $8 | **Accruals for Current Period Sales (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | | :-------------------------- | :------------------ | :------------------ | | Accrued for current period sales | $18 | $16 | [Note 16. Income Taxes](index=27&type=section&id=Note%2016.%20Income%20Taxes) Income tax expense was **$10 million** in Q2 2025, with effective tax rates of **(43)%** for Q2 and **0%** for YTD 2025, influenced by a **$19 million** tax benefit **Income Tax Expense (Q2 YoY):** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change | | :----------------- | :----------------- | :----------------- | :----- | | Income tax expense | $10 | $12 | -$2 | **Income Tax Expense (YTD YoY):** | Metric | YTD 2025 (Millions) | YTD 2024 (Millions) | Change | | :----------------- | :------------------ | :------------------ | :----- | | Income tax expense | $0 | $5 | -$5 | **Effective Tax Rates (YTD YoY):** | Metric | YTD 2025 | YTD 2024 | | :------------------ | :------- | :------- | | Effective tax rate | 0% | (4)% | - Significant Tax Adjustments (YTD 2025): * Tax benefit of **$19 million** due to a basis difference in a foreign subsidiary * **$9 million** tax expense for income tax reserves associated with prior tax years in foreign jurisdictions * **$6 million** expense resulting from the sale of Dana's ownership interest in an equity method investment[84](index=84&type=chunk) - The company is currently assessing the impact of the newly enacted One Big Beautiful Bill Act (OBBBA) in the U.S. on its consolidated financial

Group 1 - Dana Incorporated held its earnings call for the second quarter of 2025, indicating a focus on future performance expectations [4] - The call included participation from various analysts representing major financial institutions, highlighting the interest in Dana's financial performance [1] - The presentation emphasized the availability of supporting materials on Dana's investor website, indicating a commitment to transparency [5]

Financial Data and Key Metrics Changes - The company reported a solid Q2 beat with double-digit margins and accelerating free cash flow [6] - Sales from continuing operations were $2,052 million lower than last year due to lower end market demand, while adjusted EBITDA was $145 million with a profit margin of 7.5%, which is 210 basis points higher than last year [20][26] - The company raised its profit guidance for the year by $35 million for new Dana, while the overall company guidance increased by $15 million due to a decrease in Off Highway operations [11][26] Business Line Data and Key Metrics Changes - Continuing operations saw a sales increase of $250 million, while Off Highway sales decreased by $125 million [14] - Cost savings contributed $59 million in profit through various actions taken, bringing the total to $110 million to date, with a target of $225 million in savings for the current year [22][26] - The company anticipates a significant split between commercial and light vehicle segments, with a strong aftermarket business in commercial vehicles [12] Market Data and Key Metrics Changes - The company observed strong schedules in the light vehicle sector, but some softening in North American commercial vehicles, partially offset by better volumes from South America and Europe [11][64] - Tariff impacts were noted, with an expectation of over 80% recovery for the year despite an 80 basis point headwind in Q2 [10][28] - The company expects a decrease in sales due to lower demand across both light vehicle and commercial vehicle markets, with a decremental margin of about 20% anticipated for the full year [27] Company Strategy and Development Direction - The company plans to return approximately $600 million to shareholders and reduce overall debt by a couple of billion dollars following the sale of the Off Highway business [7][31] - The focus for 2026 includes a cost reduction savings plan with a target of $310 million, which is expected to provide a strong tailwind for the next fiscal year [35][38] - The company aims to drive organic growth while being selective with capital expenditures, and will aggressively lower debt to achieve a one-time net leverage target [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on margin targets for 2026, with expectations of a 10% margin driven by cost savings and operational performance [34][39] - The outlook for the North American commercial vehicle market remains pessimistic, with significant softness noted in orders and demand [66] - Management highlighted the importance of mitigating tariff impacts and maintaining customer relationships to support vehicle demand [10][64] Other Important Information - The company expects to close the Off Highway sale in the fourth quarter, with net cash proceeds anticipated to be about $2.4 billion [6][31] - The company has ample liquidity of about $1.35 billion at the end of Q2, which supports its capital return strategy [30][31] - Adjusted free cash flow for 2025 is anticipated at $275 million, which is approximately $50 million higher than previously expected [29] Q&A Session Summary Question: Can you provide color on the new business wins and where they are coming from? - Management noted significant programs with JLR and Ford, contributing to the backlog and driving new business wins [41][43] Question: How much room is there for incremental cost savings? - Most cost-saving programs are above the plants, with a focus on operating improvements and stranded costs for future savings [45][46] Question: Will the Off Highway guidance cut impact deal closing timing? - Management confirmed that the guidance cut will not impact deal closing timing, as margins have been maintained despite lower top-line revenue [52][54] Question: What are the current conditions in the light vehicle and commercial vehicle markets? - Light vehicle demand remains stable, while commercial vehicle sales are softening in North America but showing strength in South America and Europe [63][64] Question: Can you clarify the expected improvement in working capital? - The improvement is attributed to the normalization of working capital requirements and efficiency gains expected in the back half of the year [101][104]

Financial Data and Key Metrics Changes - The company reported a solid Q2 performance with double-digit margins and accelerating free cash flow, raising the full-year profit guidance by $35 million for continuing operations [6][11] - Adjusted EBITDA for continuing operations was $145 million, with a profit margin of 7.5%, reflecting a 210 basis point improvement from the previous year [20] - Free cash flow guidance was increased by $50 million to approximately $275 million at the midpoint for the year [27][30] Business Line Data and Key Metrics Changes - Continuing operations saw sales of $2.052 billion, a decrease from the previous year due to lower end market demand, while adjusted EBITDA was impacted by lower sales and tariffs [18][20] - Cost savings initiatives delivered $59 million in profit, contributing to a total of $110 million year-to-date, with a target of $225 million for the current year [22][30] Market Data and Key Metrics Changes - The company experienced softness in the North American commercial vehicle market, partially offset by better volumes in South America and Europe [11][62] - Tariff impacts were noted, with expectations of an 80% recovery for the year, although there was a headwind of 80 basis points in Q2 [10][11] Company Strategy and Development Direction - The company is transitioning to a more North American-centric light vehicle company, with a strong aftermarket business and integrated thermal and sealing operations [12][34] - A commitment to return $1 billion to shareholders, with an increased share buyback target of $600 million, was announced [7][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 10% margin target for 2026, supported by a cost reduction savings plan of $310 million [34][38] - The outlook for the commercial vehicle market remains cautious, with no cyclical upturn expected in the near term [64] Other Important Information - The Off Highway business is classified as a discontinued operation, with the sale expected to close in Q4, and the company is focused on a smooth transition [6][7] - The company has ample liquidity of approximately $1.35 billion at the end of Q2, allowing for flexibility in capital allocation [32] Q&A Session Summary Question: Can you provide color on the drivers of the expected margin improvement from new business backlog? - The new business wins are coming from significant programs with customers like JLR and Ford, contributing to the backlog [41][42] Question: How much room is there for incremental cost savings? - Most remaining cost savings will focus on operating improvements in the plants, with opportunities to reduce stranded costs [45][46] Question: Will the Off Highway guidance cut impact deal closing timing? - No, the guidance cut will not impact the timing of the deal closing, as the Off Highway team has maintained margins despite lower revenue [52][54] Question: What is driving the expected improvement in working capital? - The improvement is attributed to the normalization of working capital requirements and efficiency gains expected in the second half of the year [97][99] Question: Can you clarify the nature of variable costs associated with stranded costs? - Variable costs include fixed costs that will decrease with the reduction in business size, such as auditing costs [100][101]