The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
The accompanying notes are an integral part of the consolidated financial statements.
Notes to Consolidated Financial Statements (Unaudited)
(In millions, except share and per share amounts)
Note 1. Organization and Summary of Significant Accounting Policies
General
Dana Incorporated (Dana) is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. As a global provider of high technology driveline (axles, driveshafts and transmissions); sealing and thermal-management products; and motors, power inverters, and control systems for electric vehicles our customer base includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets.
The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.
Summary of significant accounting policies
Basis of presentation — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. These statements are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the results for the interim periods. The results reported in these consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020 (the 2020 Form 10-K).
During the second quarter of 2020, we identified an error in the loss attributable to redeemable noncontrolling interests due to incorrectly excluding the share of the goodwill impairment charge related to the redeemable noncontrolling interests. Of the $48 impairment charge recorded for the Commercial Vehicle reporting unit during the quarter ended March 31, 2020, $20 should have been attributable to the redeemable noncontrolling interests.
We concluded that the error was not material to the financial statements for the quarter ended March 31, 2020 and therefore, amendment of the previously filed Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 was not required. In accordance with ASC Topic 250, "Accounting Changes and Error Corrections," we corrected the error of the prior period by revising the then year-to-date consolidated financial statements. The first quarter of 2020 presented herein has been revised in this filing. The following historical consolidated financial information includes both the consolidated financial information “as previously reported” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as well as the consolidated financial information “as revised” to reflect the correction of the error.
|
|
Period Ended March 31, 2020
|
|
|
|
As Previously Reported
|
|
|
Adjustment
|
|
|
As Revised
|
|
|
|
(unaudited)
|
|
Consolidated Statement of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
38
|
|
|
$
|
—
|
|
|
$
|
38
|
|
Less: Noncontrolling interests net income
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
Less: Redeemable noncontrolling interests net loss
|
|
|
(2
|
)
|
|
|
(20
|
)
|
|
|
(22
|
)
|
Net income attributable to the parent company
|
|
$
|
38
|
|
|
$
|
20
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share available to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
0.40
|
|
Diluted
|
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
|
|
$
|
(84
|
)
|
|
$
|
—
|
|
|
$
|
(84
|
)
|
Less: Comprehensive loss attributable to noncontrolling interests
|
|
|
17
|
|
|
|
|
|
|
|
17
|
|
Less: Comprehensive (income) loss attributable to redeemable noncontrolling interests
|
|
|
(6
|
)
|
|
|
20
|
|
|
|
14
|
|
Comprehensive income (loss) attributable to the parent company
|
|
$
|
(73
|
)
|
|
$
|
20
|
|
|
$
|
(53
|
)
|
|
|
Period Ended March 31, 2020
|
|
|
|
As Previously Reported
|
|
|
Adjustment
|
|
|
As Revised
|
|
|
|
(unaudited)
|
|
Consolidated Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable noncontrolling interests
|
|
$
|
175
|
|
|
$
|
(20
|
)
|
|
$
|
155
|
|
Retained earnings
|
|
$
|
644
|
|
|
$
|
20
|
|
|
$
|
664
|
|
Recently adopted accounting pronouncements
On January 1, 2021, we adopted Accounting Standards Update (ASU) 2019-12, Income Taxes – Simplifying the Accounting for Income Taxes. This guidance is intended to simplify various aspects of income tax accounting including the elimination of certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. Adoption of this guidance requires certain changes to primarily be made prospectively, with some changes to be made retrospectively. The adoption of this standard did not have a material impact on our consolidated financial statements.
Recently issued accounting pronouncements
In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting and in January 2021, the FASB issued ASU 2021-01, Reference Rate Reform. The guidance is intended to provide temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments in these ASUs are elective and are effective upon issuance for all entities through December 31, 2022. We are currently assessing the impact of the guidance on our consolidated financial statements.
Note 2. Acquisitions
Pi Innovo Holding Limited — On March 1, 2021, we acquired the remaining 51% ownership interest in Pi Innovo Holding Limited (Pi Innovo). Pi Innovo designs, develops and manufactures electronic control units spanning a range of applications and industries. The acquisition of the remaining ownership interest provides us with a 100% ownership interest in Pi Innovo. The total purchase consideration of $35 is comprised of $18 of cash paid at closing and the $17 fair value of our previously held equity method investment in Pi Innovo. The results of operations of the business are reported within our Commercial Vehicle operating segment. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented.
Ashwoods Innovations Limited — On February 5, 2020, we acquired Curtis Instruments, Inc.'s (Curtis) 35.4% ownership interest in Ashwoods Innovations Limited (Ashwoods). Ashwoods designs and manufactures permanent magnet electric motors for the automotive, material handling and off-highway vehicle markets. The acquisition of Curtis' interest in Ashwoods, along with our existing ownership interest in Ashwoods, provided us with a 97.8% ownership interest and a controlling financial interest in Ashwoods. We recognized a $3 gain to other income (expense), net on the required remeasurement of our previously held equity method investment in Ashwoods to fair value. The total purchase consideration of $22 is comprised of $8 of cash paid to Curtis at closing, the $10 fair value of our previously held equity method investment in Ashwoods and $4 related to the effective settlement of a pre-existing loan payable due from Ashwoods. During March 2020, we acquired the remaining noncontrolling interests in Ashwoods held by employee shareholders. See Hydro-Québec relationship discussion below for details of subsequent changes in our ownership interest in Ashwoods. The results of operations of the business are reported within our Off-Highway operating segment. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial information is presented.
Hydro-Québec Relationship — On April 14, 2020, Hydro-Québec acquired an indirect 45% redeemable noncontrolling interest in Ashwoods. We received $9 in cash at closing, inclusive of $2 in proceeds on a loan from Hydro-Québec. Dana will continue to consolidate Ashwoods as the governing documents continue to provide Dana with a controlling financial interest in this subsidiary.
Note 3. Goodwill and Other Intangible Assets
Goodwill — Our goodwill is tested for impairment annually as of October 31 for all of our reporting units, and more frequent if events or circumstances warrant such a review. No impairment charge was recorded in connection with our annual goodwill impairment test performed as of October 31, 2020 and we did not identify any events or circumstances during the first quarter 2021 that required an interim impairment test. We expect that the fair value of our reporting units will continue to exceed their carrying values in future periods.
As a result of the effect of the global COVID-19 pandemic on our expected future operating cash flows, a decrease in our share price which reduced our market capitalization below the book value of net assets and lower cushion in our expected reporting unit fair values as a result of the recent acquisitions, we determined certain impairment triggers had occurred in the first quarter of 2020. Accordingly, we performed interim impairment analyses at each of our reporting units as of March 31, 2020. Based on the results of our interim impairment tests, we concluded that carrying value exceeded fair value in our Commercial Vehicle and Light Vehicle reporting units and we recorded a goodwill impairment charge of $51 in the first quarter of 2020. See Note 3 to our consolidated financial statements in Item 8 of our 2020 Form 10-K for additional information on these impairment losses.
The change in the carrying amount of goodwill in 2021 is primarily due to the acquisition of Pi Innovo, measurement period adjustments for the 2020 Ashwoods acquisition and currency fluctuation. See Note 2 for additional information on recent acquisitions.
Changes in the carrying amount of goodwill by segment —
|
|
Light Vehicle
|
|
|
Commercial Vehicle
|
|
|
Off-Highway
|
|
|
Power Technologies
|
|
|
Total
|
|
Balance, December 31, 2020
|
|
$
|
—
|
|
|
$
|
177
|
|
|
$
|
302
|
|
|
$
|
—
|
|
|
$
|
479
|
|
Acquisitions
|
|
|
|
|
|
|
24
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
13
|
|
Currency impact
|
|
|
|
|
|
|
3
|
|
|
|
(7
|
)
|
|
|
|
|
|
|
(4
|
)
|
Balance, March 31, 2021
|
|
$
|
—
|
|
|
$
|
204
|
|
|
$
|
284
|
|
|
$
|
—
|
|
|
$
|
488
|
|
Components of other intangible assets —
|
|
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
|
Weighted Average Useful Life (years)
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Impairment and Amortization
|
|
|
Net Carrying Amount
|
|
|
Gross Carrying Amount
|
|
|
Accumulated Impairment and Amortization
|
|
|
Net Carrying Amount
|
|
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core technology
|
|
8
|
|
|
$
|
162
|
|
|
$
|
(103
|
)
|
|
$
|
59
|
|
|
$
|
146
|
|
|
$
|
(103
|
)
|
|
$
|
43
|
|
Trademarks and trade names
|
|
13
|
|
|
|
31
|
|
|
|
(10
|
)
|
|
|
21
|
|
|
|
31
|
|
|
|
(9
|
)
|
|
|
22
|
|
Customer relationships
|
|
8
|
|
|
|
523
|
|
|
|
(428
|
)
|
|
|
95
|
|
|
|
525
|
|
|
|
(431
|
)
|
|
|
94
|
|
Non-amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks and trade names
|
|
|
|
|
|
75
|
|
|
|
|
|
|
|
75
|
|
|
|
77
|
|
|
|
|
|
|
|
77
|
|
|
|
|
|
|
$
|
791
|
|
|
$
|
(541
|
)
|
|
$
|
250
|
|
|
$
|
779
|
|
|
$
|
(543
|
)
|
|
$
|
236
|
|
The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at March 31, 2021 were as follows: Light Vehicle — $21, Commercial Vehicle — $79, Off-Highway — $144 and Power Technologies — $6.
Amortization expense related to amortizable intangible assets —
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Charged to cost of sales
|
|
$
|
3
|
|
|
$
|
1
|
|
Charged to amortization of intangibles
|
|
|
4
|
|
|
|
3
|
|
Total amortization
|
|
$
|
7
|
|
|
$
|
4
|
|
The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on March 31, 2021 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.
|
|
Remainder of 2021
|
|
|
2022
|
|
|
2023
|
|
|
2024
|
|
|
2025
|
|
Amortization expense
|
|
$
|
16
|
|
|
$
|
22
|
|
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
21
|
|
Note 4. Restructuring of Operations
Our restructuring activities have historically included rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. In recent years our focus has been primarily headcount reduction initiatives to reduce operating costs, including actions taken at acquired businesses to rationalize cost structures and achieve operating synergies. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including certain operating costs of facilities that we are in the process of closing.
Net restructuring charges of $1 and $3 in the first quarters of 2021 and 2020 were comprised of severance and benefit costs related to integration of recent acquisitions, headcount reductions across our operations and exit costs related to previously announced actions.
Accrued restructuring costs and activity —
|
|
Employee Termination Benefits
|
|
|
Exit Costs
|
|
|
Total
|
|
Balance, December 31, 2020
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
30
|
|
Charges to restructuring
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
Cash payments
|
|
|
(4
|
)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
Currency impact
|
|
|
(1
|
)
|
|
|
|
|
|
|
(1
|
)
|
Balance, March 31, 2021
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At March 31, 2021, the accrued employee termination benefits include costs to reduce approximately 500 employees to be completed over the next year.
Cost to complete — The following table provides project-to-date and estimated future restructuring expenses for completion of our approved restructuring initiatives for our business segments at March 31, 2021.
|
|
Expense Recognized
|
|
|
|
|
|
|
|
Prior to 2021
|
|
|
2021
|
|
|
Total to Date
|
|
|
Future Cost to Complete
|
|
Commercial Vehicle
|
|
$
|
41
|
|
|
$
|
—
|
|
|
$
|
41
|
|
|
$
|
2
|
|
The future cost to complete includes estimated separation costs, primarily those associated with one-time benefit programs, and exit costs through 2021, equipment transfers and other costs which are required to be recognized as closures are finalized or as incurred during the closure.
Note 5. Supplemental Balance Sheet and Cash Flow Information
Inventory components at —
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Raw materials
|
|
$
|
532
|
|
|
$
|
473
|
|
Work in process and finished goods
|
|
|
805
|
|
|
|
752
|
|
Inventory reserves
|
|
|
(77
|
)
|
|
|
(76
|
)
|
Total
|
|
$
|
1,260
|
|
|
$
|
1,149
|
|
Cash, cash equivalents and restricted cash at —
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
Cash and cash equivalents
|
|
$
|
483
|
|
|
$
|
559
|
|
|
$
|
628
|
|
|
$
|
508
|
|
Restricted cash included in other current assets
|
|
|
7
|
|
|
|
5
|
|
|
|
5
|
|
|
|
6
|
|
Restricted cash included in other noncurrent assets
|
|
|
3
|
|
|
|
3
|
|
|
|
3
|
|
|
|
4
|
|
Total cash, cash equivalents and restricted cash
|
|
$
|
493
|
|
|
$
|
567
|
|
|
$
|
636
|
|
|
$
|
518
|
|
Note 6. Stockholders’ Equity
Common stock — Our Board of Directors declared a cash dividend of ten cents per share of common stock in the first quarter of 2021. Dividends accrue on restricted stock units (RSUs) granted under our stock compensation program and will be paid in cash or additional units when the underlying units vest.
Share repurchase program — On February 16, 2021 our Board of Directors approved an extension of our existing common stock share repurchase program through December 31, 2023. Approximately $150 remained available for future share repurchases as of March 31, 2021.
Changes in equity —
|
|
Three Months Ended March 31,
|
|
2021
|
|
Common Stock
|
|
|
Additional Paid-In Capital
|
|
|
Retained Earnings
|
|
|
Treasury Stock
|
|
|
Accumulated Other Comprehensive Loss
|
|
|
Non-controlling Interests
|
|
|
Total Equity
|
|
Balance, December 31, 2020
|
|
$
|
2
|
|
|
$
|
2,408
|
|
|
$
|
530
|
|
|
$
|
(156
|
)
|
|
$
|
(1,026
|
)
|
|
$
|
76
|
|
|
$
|
1,834
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
71
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
72
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
|
(2
|
)
|
|
|
(20
|
)
|
Common stock dividends
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
Redeemable noncontrolling interests adjustment to redemption value
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Stock compensation
|
|
|
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
Stock withheld for employee taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
(5
|
)
|
Balance, March 31, 2021
|
|
$
|
2
|
|
|
$
|
2,415
|
|
|
$
|
583
|
|
|
$
|
(161
|
)
|
|
$
|
(1,044
|
)
|
|
$
|
75
|
|
|
$
|
1,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019
|
|
$
|
2
|
|
|
$
|
2,386
|
|
|
$
|
622
|
|
|
$
|
(150
|
)
|
|
$
|
(987
|
)
|
|
$
|
95
|
|
|
$
|
1,968
|
|
Adoption of ASU 2016-13 credit losses, January 1, 2020
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
Net income
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
60
|
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(111
|
)
|
|
|
(19
|
)
|
|
|
(130
|
)
|
Common stock dividends
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15
|
)
|
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Stock compensation
|
|
|
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
Stock withheld for employee taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
Balance, March 31, 2020
|
|
$
|
2
|
|
|
$
|
2,391
|
|
|
$
|
664
|
|
|
$
|
(156
|
)
|
|
$
|
(1,098
|
)
|
|
$
|
77
|
|
|
$
|
1,880
|
|
Changes in each component of accumulated other comprehensive income (loss) (AOCI) of the parent —
|
|
Parent Company Stockholders
|
|
|
|
Foreign Currency Translation
|
|
|
Hedging
|
|
|
Defined Benefit Plans
|
|
|
Accumulated Other Comprehensive Loss
|
|
Balance, December 31, 2020
|
|
$
|
(802
|
)
|
|
$
|
9
|
|
|
$
|
(233
|
)
|
|
$
|
(1,026
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation adjustments
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
|
|
|
(4
|
)
|
Holding gains and losses
|
|
|
|
|
|
|
32
|
|
|
|
|
|
|
|
32
|
|
Reclassification of amount to net income (a)
|
|
|
|
|
|
|
(50
|
)
|
|
|
|
|
|
|
(50
|
)
|
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
|
4
|
|
Tax (expense) benefit
|
|
|
|
|
|
|
1
|
|
|
|
(1
|
)
|
|
|
—
|
|
Other comprehensive income (loss)
|
|
|
(4
|
)
|
|
|
(17
|
)
|
|
|
3
|
|
|
|
(18
|
)
|
Balance, March 31, 2021
|
|
$
|
(806
|
)
|
|
$
|
(8
|
)
|
|
$
|
(230
|
)
|
|
$
|
(1,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2019
|
|
$
|
(714
|
)
|
|
$
|
(30
|
)
|
|
$
|
(243
|
)
|
|
$
|
(987
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency translation adjustments
|
|
|
(143
|
)
|
|
|
|
|
|
|
|
|
|
|
(143
|
)
|
Holding gains and losses
|
|
|
|
|
|
|
39
|
|
|
|
|
|
|
|
39
|
|
Reclassification of amount to net income (a)
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
(11
|
)
|
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
5
|
|
Tax (expense) benefit
|
|
|
|
|
|
|
1
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
Other comprehensive income (loss)
|
|
|
(143
|
)
|
|
|
29
|
|
|
|
3
|
|
|
|
(111
|
)
|
Balance, March 31, 2020
|
|
$
|
(857
|
)
|
|
$
|
(1
|
)
|
|
$
|
(240
|
)
|
|
$
|
(1,098
|
)
|
(a) Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments treated as cash flow hedges are reclassified from AOCI into the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. See Note 13 for additional details.
(b) See Note 10 for additional details.
Note 7. Redeemable Noncontrolling Interests
Hydro-Québec holds direct 45% redeemable noncontrolling interest in Dana TM4 Inc. and Dana TM4 USA, LLC and indirect 45% ownership interests in Dana (Beijing) Electric Motor Co., Ltd., Dana TM4 Italia S.r.l., Ashwoods Innovations Ltd. and Dana TM4 Private Limited (together Dana TM4). Hydro-Québec may put all, and not less than all, of its ownership interests in Dana TM4 to Dana at fair value any time after June 22, 2021. See Note 2 for additional information.
Redeemable noncontrolling interests reflected as of the balance sheet date are the greater of the redeemable noncontrolling interest balances adjusted for comprehensive income items and distributions or the redemption values. Redeemable noncontrolling interest adjustments of redemption value are recorded in retained earnings. We estimate the fair value of the redemption value using an income based approach based on discounted cash flow projections. In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected EBITDA, discount rates, terminal growth rates and exit multiples. See Note 1 for additional information on the correction of the error in net loss attributable to redeemable noncontrolling interests.
Reconciliation of changes in redeemable noncontrolling interests —
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Balance, beginning of period
|
|
$
|
180
|
|
|
$
|
167
|
|
Capital contribution from redeemable noncontrolling interest
|
|
|
1
|
|
|
|
2
|
|
Adjustment to redemption value
|
|
|
4
|
|
|
|
|
|
Comprehensive income (loss) adjustments:
|
|
|
|
|
|
|
|
|
Net loss attributable to redeemable noncontrolling interests
|
|
|
(4
|
)
|
|
|
(22
|
)
|
Other comprehensive income attributable to redeemable noncontrolling interests
|
|
|
1
|
|
|
|
8
|
|
Balance, end of period
|
|
$
|
182
|
|
|
$
|
155
|
|
Note 8. Earnings per Share
Reconciliation of the numerators and denominators of the earnings per share calculations —
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Net income available to common stockholders - Numerator basic and diluted
|
|
$
|
71
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - Basic
|
|
|
144.9
|
|
|
|
144.2
|
|
Employee compensation-related shares, including stock options
|
|
|
1.5
|
|
|
|
0.6
|
|
Weighted-average common shares outstanding - Diluted
|
|
|
146.4
|
|
|
|
144.8
|
|
The share count for diluted earnings per share is computed on the basis of the weighted-average number of common shares outstanding plus the effects of dilutive common stock equivalents (CSEs) outstanding during the period. We excluded 0.9 million and 0.6 million CSEs from the calculation of diluted earnings per share for the first quarters of 2021 and 2020 as the effect of including them would have been anti-dilutive.
Note 9. Stock Compensation
The Compensation Committee of our Board of Directors approved the grant of RSUs and performance share units (PSUs) shown in the table below during 2021.
|
|
Granted
|
|
|
Grant Date
|
|
|
|
(In millions)
|
|
|
Fair Value*
|
|
RSUs
|
|
|
0.8
|
|
|
$
|
23.43
|
|
PSUs
|
|
|
0.2
|
|
|
$
|
26.81
|
|
* Weighted-average per share
We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The number of PSUs that ultimately vest is contingent on achieving specified financial targets and specified total shareholder return targets relative to peer companies. For the portion of the award based on financial metrics, we estimated the fair value of the PSUs at grant date based on the closing market price of our common stock at the date of grant adjusted for the value of assumed dividends over the period because the awards are not dividend protected. For the portion of the award based on shareholder returns, we estimated the fair value of the PSUs at grant date using various assumptions as part of a Monte Carlo simulation. The expected term represents the period from the grant date to the end of the three-year performance period. The risk-free interest rate of 0.18% was based on U.S. Treasury constant maturity rates at the grant date. The dividend yield of 2.27% was calculated using a blended approach of a historical average yield calculated by dividing the expected annual dividend by the average stock price over the prior year and the current yield calculated by dividing the expected annual dividend by the grant date stock price. The estimated volatility of 62.8% was based on observed historical volatility of daily stock returns for the 3-year period preceding the grant date.
We received $4 of cash from the exercise of stock options related to 0.2 million shares. We paid $2 of cash to settle RSUs. We issued 0.5 million and 0.1 million shares of common stock based on the vesting of RSUs and PSUs during 2021. We recognized stock compensation expense of $5 and $4 during the first quarters of 2021 and 2020. At March 31, 2021, the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was $36. This cost is expected to be recognized over a weighted-average period of 2.3 years.
Note 10. Pension and Postretirement Benefit Plans
We have a number of defined contribution and defined benefit, qualified and nonqualified, pension plans covering eligible employees. Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.
Components of net periodic benefit cost (credit) —
|
|
Pension
|
|
|
OPEB
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Three Months Ended March 31,
|
|
U.S.
|
|
|
Non-U.S.
|
|
|
U.S.
|
|
|
Non-U.S.
|
|
|
Non-U.S.
|
|
|
Non-U.S.
|
|
Interest cost
|
|
$
|
3
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Expected return on plan assets
|
|
|
(7
|
)
|
|
|
|
|
|
|
(9
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
Amortization of net actuarial loss
|
|
|
2
|
|
|
|
2
|
|
|
|
3
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost (credit)
|
|
$
|
(2
|
)
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
1
|
|
The service cost components of net periodic pension and OPEB costs are included in cost of sales and selling, general and administrative expenses as part of compensation cost and are eligible for capitalization in inventory and other assets. The non-service components are reported in other income (expense), net and are not eligible for capitalization.
Note 11. Marketable Securities
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
|
|
|
Unrealized
|
|
|
Fair
|
|
|
|
Cost
|
|
|
Gains (Losses)
|
|
|
Value
|
|
|
Cost
|
|
|
Gains (Losses)
|
|
|
Value
|
|
Certificates of deposit - Current marketable securities
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
Corporate securities - Noncurrent marketable securities
|
|
$
|
16
|
|
|
$
|
16
|
|
|
$
|
32
|
|
|
$
|
16
|
|
|
$
|
33
|
|
|
$
|
49
|
|
Certificates of deposit maturing in one year or less total $26 at March 31, 2021.
We held $16 of convertible notes receivable from our investment in Hyliion Inc. On October 1, 2020, Hyliion completed its merger with Tortoise Acquisition Corp. The business combination resulted in the combined company being renamed Hyliion Holdings Corp., with its common stock being listed on the New York Stock Exchange under the ticker symbol HYLN. Effective with the completed merger, our notes receivable were converted into 2,988,229 common shares of HYLN. Our investment in Hyliion is included in noncurrent marketable securities and carried at fair value with changes in fair value included in other income (expense), net. The strategic partnership with Hyliion establishes Dana as the preferred supplier for e-propulsion systems to Hyliion as long as Dana maintains a minimum equity investment in Hyliion.
Note 12. Financing Agreements
Long-term debt at —
|
Interest Rate
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Senior Notes due December 15, 2024
|
5.500%
|
|
|
$
|
425
|
|
|
$
|
425
|
|
Senior Notes due April 15, 2025
|
5.750%
|
*
|
|
|
400
|
|
|
|
400
|
|
Senior Notes due June 1, 2026
|
6.500%
|
*
|
|
|
375
|
|
|
|
375
|
|
Senior Notes due November 15, 2027
|
5.375%
|
|
|
|
400
|
|
|
|
400
|
|
Senior Notes due June 15, 2028
|
5.625%
|
|
|
|
400
|
|
|
|
400
|
|
Term B Facility
|
|
|
|
|
349
|
|
|
|
349
|
|
Other indebtedness
|
|
|
|
|
105
|
|
|
|
106
|
|
Debt issuance costs
|
|
|
|
|
(26
|
)
|
|
|
(27
|
)
|
|
|
|
|
|
2,428
|
|
|
|
2,428
|
|
Less: Current portion of long-term debt
|
|
|
|
|
8
|
|
|
|
8
|
|
Long-term debt, less debt issuance costs
|
|
|
|
$
|
2,420
|
|
|
$
|
2,420
|
|
*
|
In conjunction with the issuance of the April 2025 Notes we entered into 8-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the April 2025 Notes to euro-denominated debt at a fixed rate of 3.850%. In conjunction with the issuance of the June 2026 Notes we entered into 10-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the June 2026 Notes to euro-denominated debt at a fixed rate of 5.140%. See Note 13 for additional information.
|
Interest on the senior notes is payable semi-annually and interest on the Term Facility B is payable quarterly. Other indebtedness includes the note payable to the former owners of S.M.E. S.p.A., borrowings from various financial institutions, finance lease obligations and the unamortized fair value adjustment related to a terminated interest rate swap. See Note 13 for additional information on the terminated interest rate swap.
Senior notes activity — In June 2020, we completed the sale of $400 in senior unsecured notes ( June 2028 Notes) at 5.625%. The June 2028 Notes rank equally with Dana's other unsecured senior notes. Interest on the notes is payable on December 15 and June 15 of each year, beginning on December 15, 2020. The June 2028 Notes will mature on June 15, 2028. Net proceeds of the offering totaled $395. Financing costs of $5 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The proceeds from the offering were used to pay down outstanding borrowings under our Revolving Facility and for general corporate purposes. Also, we completed the sale of an additional $100 of November 2027 Notes at 5.375%. The November 2027 Notes rank equally with Dana’s other unsecured senior notes. Interest on the notes is payable on May 15 and November 15 of each year, beginning on November 15, 2020. The November 2027 Notes will mature on November 15, 2027. Net proceeds of the offering totaled $99. Financing costs of $1 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The proceeds from the offering were used for general corporate purposes.
We may redeem some or all of the senior notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period commencing on the anniversary date of the senior notes in the year set forth below:
|
|
Redemption Price
|
|
|
|
December
|
|
|
April
|
|
|
June
|
|
|
November
|
|
|
June
|
|
Year
|
|
2024 Notes
|
|
|
2025 Notes
|
|
|
2026 Notes
|
|
|
2027 Notes
|
|
|
2028 Notes
|
|
2020
|
|
|
101.833
|
%
|
|
|
104.313
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
100.917
|
%
|
|
|
102.875
|
%
|
|
|
103.250
|
%
|
|
|
|
|
|
|
|
|
2022
|
|
|
100.000
|
%
|
|
|
101.438
|
%
|
|
|
102.167
|
%
|
|
|
102.688
|
%
|
|
|
|
|
2023
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
|
|
101.083
|
%
|
|
|
101.344
|
%
|
|
|
102.813
|
%
|
2024
|
|
|
|
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
|
|
101.406
|
%
|
2025
|
|
|
|
|
|
|
|
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.000
|
%
|
|
|
100.000
|
%
|
2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.000
|
%
|
Prior to June 1, 2021, we may redeem some or all of the June 2026 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.
At any time prior to November 15, 2022, we may redeem up to 35% of the aggregate principal amount of the November 2027 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the original aggregate principal amount of the November 2027 Notes remains outstanding after the redemption. Prior to November 15, 2022, we may redeem some or all of the November 2027 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.
At any time prior to June 15, 2023, we may redeem up to 35% of the aggregate principal amount of the June 2028 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 105.625% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the original aggregate principal amount of the June 2028 Notes remains outstanding after the redemption. Prior to June 15, 2023, we may redeem some or all of the June 2028 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.
Credit agreement — On December 31, 2020, we fully paid down the Term A Facility. We wrote off $3 of previously deferred financing costs associated with the Term A Facility. On March 25, 2021, we amended our credit and guaranty agreement, increasing the Revolving Facility to $1,150 and extending the maturity to March 25, 2026. We recorded deferred fees of $2 related to the amendment. The deferred fees are being amortized over the life of the applicable facilities. Deferred financing costs on our Revolving Facility are included in other noncurrent assets. The Term B Facility will mature on February 28, 2026. We may prepay some or all of the amounts under the Term B Facility without penalty.
The Term Facility B and the Revolving Facility are guaranteed by all of our wholly-owned domestic subsidiaries subject to certain exceptions (the guarantors) and are secured by a first-priority lien on substantially all of the assets of Dana and the guarantors, subject to certain exceptions.
Advances under the Revolving Facility bear interest at a floating rate based on, at our option, the base rate or Eurodollar rate (each as described in the credit agreement) plus a margin as set forth below:
|
|
Margin
|
|
Total Net Leverage Ratio
|
|
Base Rate
|
|
|
Eurodollar Rate
|
|
Less than or equal to 1.00:1.00
|
|
|
0.25
|
%
|
|
|
1.25
|
%
|
Greater than 1.00:1.00 but less than or equal to 2.00:1.00
|
|
|
0.50
|
%
|
|
|
1.50
|
%
|
Greater than 2.00:1.00
|
|
|
0.75
|
%
|
|
|
1.75
|
%
|
The Term B Facility bears interest based on, at our option, the Base Rate plus 1.25% or the Eurodollar rate plus 2.25%. We have elected to pay interest on our advances under Term Facility B at the Eurodollar Rate. The interest rate on the Term B Facility was 2.359%, inclusive of the applicable margins, as of March 31, 2021.
Commitment fees are applied based on the average daily unused portion of the available amounts under the Revolving Facility as set forth below:
Total Net Leverage Ratio
|
|
Commitment Fee
|
|
Less than or equal to 1.00:1.00
|
|
|
0.250
|
%
|
Greater than 1.00:1.00 but less than or equal to 2.00:1.00
|
|
|
0.375
|
%
|
Greater than 2.00:1.00
|
|
|
0.500
|
%
|
Up to $275 of the Revolving Facility may be applied to letters of credit, which reduces availability. We pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable margin for Eurodollar rate advances based on a quarterly average availability under issued and undrawn letters of credit under the Revolving Facility and a per annum fronting fee of 0.125%, payable quarterly.
At March 31, 2021, we had no outstanding borrowings under the Revolving Facility and had utilized $21 for letters of credit. We had availability at March 31, 2021 under the Revolving Facility of $1,129 after deducting the letters of credit.
Bridge facility — On April 16, 2020, we entered into a $500 bridge facility (the Bridge Facility). We recorded deferred fees of $5 related to the Bridge Facility. The deferred fees were being amortized over the life of the Bridge Facility. The Bridge Facility was to mature on April 15, 2021. On June 19, 2020, in connection with the issuance of our June 2028 Notes, we terminated the Bridge Facility and wrote off the $5 of deferred fees associated with the Bridge Facility.
Debt covenants — At March 31, 2021, we were in compliance with the covenants of our financing agreements. Under the Term B Facility, Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types and, in the case of the Revolving Facility, a maintenance covenant tested on the last day of each fiscal quarter requiring us to maintain a first lien net leverage ratio not to exceed 2.00 to 1.00.
Note 13. Fair Value Measurements and Derivatives
In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate. Our valuation techniques include a combination of observable and unobservable inputs.
Fair value measurements on a recurring basis — Assets and liabilities that are carried in our balance sheet at fair value are as follows:
|
|
|
|
|
|
|
Fair Value
|
|
Category
|
|
Balance Sheet Location
|
|
Fair Value Level
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
Certificates of deposit
|
|
Marketable securities
|
|
2
|
|
|
$
|
26
|
|
|
$
|
21
|
|
Available-for-sale securities
|
|
Other noncurrent assets
|
|
1
|
|
|
|
32
|
|
|
|
49
|
|
Currency forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
Accounts receivable - Other
|
|
2
|
|
|
|
11
|
|
|
|
15
|
|
Cash flow hedges
|
|
Other accrued liabilities
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
Undesignated
|
|
Accounts receivable - Other
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
Undesignated
|
|
Other accrued liabilities
|
|
2
|
|
|
|
2
|
|
|
|
1
|
|
Interest rate collars
|
|
Other accrued liabilities
|
|
2
|
|
|
|
6
|
|
|
|
7
|
|
Currency swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow hedges
|
|
Other noncurrent liabilities
|
|
2
|
|
|
|
95
|
|
|
|
128
|
|
Fair Value Level 1 assets and liabilities reflect quoted prices in active markets. Fair Value Level 2 assets and liabilities reflect the use of significant other observable inputs.
Fair value of financial instruments — The financial instruments that are not carried in our balance sheet at fair value are as follows:
|
|
|
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
|
Fair Value Level
|
|
Carrying Value
|
|
|
Fair Value
|
|
|
Carrying Value
|
|
|
Fair Value
|
|
Long term debt
|
|
|
2
|
|
|
$
|
2,369
|
|
|
$
|
2,450
|
|
|
$
|
2,376
|
|
|
$
|
2,475
|
|
Interest rate derivatives — Our portfolio of derivative financial instruments periodically includes interest rate swaps and interest rate collars designed to mitigate our interest rate risk. As of March 31, 2021, no fixed-to-floating interest rate swaps remain outstanding. However, a $3 fair value adjustment to the carrying amount of our December 2024 Notes, associated with a fixed-to-floating interest rate swap that had been executed but was subsequently terminated during 2015, remains deferred at March 31, 2021. This amount is being amortized as a reduction of interest expense through the period ending December 2024, the scheduled maturity date of the December 2024 Notes. The amount amortized as a reduction of interest expense was not material during the three months ended March 31, 2021. We have outstanding interest rate collars with a notional value of $425 that will mature in December 2021. For interest rate collars, no payments or receipts are exchanged unless interest rates rise or fall in excess of a predetermined ceiling or floor rate.
Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory through the next fifteen months, as well as currency swaps associated with certain recorded external notes payable and intercompany loans receivable and payable. Periodically, our foreign currency derivatives also include net investment hedges of certain of our investments in foreign operations.
We have executed fixed-to-fixed cross-currency swaps in conjunction with the issuance of certain notes to eliminate the variability in the functional-currency-equivalent cash flows due to changes in exchange rates associated with the forecasted principal and interest payments. All of the underlying designated financial instruments, and any subsequent replacement debt, have been designated as the hedged items in each respective cash flow hedge relationship, as shown in the table below. Designated as cash flow hedges of the forecasted principal and interest payments of the underlying designated financial instruments, or subsequent replacement debt, all of the swaps economically convert the underlying designated financial instruments into the functional currency of each respective holder. The impact of the interest rate differential between the inflow and outflow rates on all fixed-to-fixed cross-currency swaps is recognized during each period as a component of interest expense.
The following fixed-to-fixed cross-currency swaps were outstanding at March 31, 2021:
Underlying Financial Instrument
|
|
|
Derivative Financial Instrument
|
|
Description
|
|
Type
|
|
Face Amount
|
|
|
Rate
|
|
|
Designated Notional Amount
|
|
|
Traded Amount
|
|
|
Inflow Rate
|
|
|
Outflow Rate
|
|
April 2025 Notes
|
|
Payable
|
|
$
|
400
|
|
|
|
5.75
|
%
|
|
$
|
400
|
|
|
€
|
371
|
|
|
|
5.75
|
%
|
|
|
3.85
|
%
|
June 2026 Notes
|
|
Payable
|
|
$
|
375
|
|
|
|
6.50
|
%
|
|
$
|
375
|
|
|
€
|
338
|
|
|
|
6.50
|
%
|
|
|
5.14
|
%
|
Luxembourg Intercompany Notes
|
|
Receivable
|
|
€
|
278
|
|
|
|
3.70
|
%
|
|
€
|
278
|
|
|
$
|
300
|
|
|
|
5.38
|
%
|
|
|
3.70
|
%
|
All of the swaps are expected to be highly effective in offsetting the corresponding currency-based changes in cash outflows related to the underlying designated financial instruments. Based on our qualitative assessment that the critical terms of all of the underlying designated financial instruments and all of the associated swaps match and that all other required criteria have been met, we do not expect to incur any ineffectiveness. As effective cash flow hedges, changes in the fair value of the swaps will be recorded in OCI during each period. Additionally, to the extent the swaps remain effective, the appropriate portion of AOCI will be reclassified to earnings each period as an offset to the foreign exchange gain or loss resulting from the remeasurement of the underlying designated financial instruments. See Note 12 for additional information about the April 2025 Notes and the June 2026 Notes. To the extent the swaps are no longer effective, changes in their fair values will be recorded in earnings.
The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $422 at March 31, 2021 and $386 at December 31, 2020. The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was $1,101 at March 31, 2021 and $1,118 at December 31, 2020.
The following currency derivatives were outstanding at March 31, 2021:
|
|
|
|
Notional Amount (U.S. Dollar Equivalent)
|
|
|
|
Functional Currency
|
|
Traded Currency
|
|
Designated
|
|
|
Undesignated
|
|
|
Total
|
|
|
Maturity
|
U.S. dollar
|
|
Mexican peso, Canadian dollar
|
|
$
|
75
|
|
|
$
|
35
|
|
|
$
|
110
|
|
|
Dec-2021
|
Euro
|
|
U.S. dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Mexican peso, Australian dollar, Chinese renminbi, Brazilian real
|
|
|
55
|
|
|
|
29
|
|
|
|
84
|
|
|
Jan-2024
|
British pound
|
|
U.S. dollar, euro
|
|
|
2
|
|
|
|
1
|
|
|
|
3
|
|
|
Apr-2021
|
South African rand
|
|
U.S. dollar, euro, Thai baht
|
|
|
|
|
|
|
12
|
|
|
|
12
|
|
|
Apr-2021
|
Thai baht
|
|
U.S. dollar, euro
|
|
|
8
|
|
|
|
20
|
|
|
|
28
|
|
|
Dec-2021
|
Canadian dollar
|
|
U.S. dollar
|
|
|
6
|
|
|
|
|
|
|
|
6
|
|
|
Oct-2021
|
Brazilian real
|
|
U.S. dollar, euro
|
|
|
43
|
|
|
|
8
|
|
|
|
51
|
|
|
Mar-2022
|
Indian rupee
|
|
U.S. dollar, euro, British pound
|
|
|
|
|
|
|
118
|
|
|
|
118
|
|
|
Apr-2022
|
Chinese renminbi
|
|
Canadian dollar, euro
|
|
|
|
|
|
|
6
|
|
|
|
6
|
|
|
Apr-2021
|
Australian dollar
|
|
U.S. dollar, euro
|
|
|
|
|
|
|
4
|
|
|
|
4
|
|
|
Apr-2021
|
Total forward contracts
|
|
|
|
|
189
|
|
|
|
233
|
|
|
|
422
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. dollar
|
|
euro
|
|
|
326
|
|
|
|
|
|
|
|
326
|
|
|
Nov-2027
|
Euro
|
|
U.S. dollar
|
|
|
775
|
|
|
|
|
|
|
|
775
|
|
|
Jun-2026
|
Total currency swaps
|
|
|
|
|
1,101
|
|
|
|
—
|
|
|
|
1,101
|
|
|
|
Total currency derivatives
|
|
|
|
$
|
1,290
|
|
|
$
|
233
|
|
|
$
|
1,523
|
|
|
|
Designated cash flow hedges — With respect to contracts designated as cash flow hedges, changes in fair value during the period in which the contracts remain outstanding are reported in OCI to the extent such contracts remain effective. Effectiveness is measured by using regression analysis to determine the degree of correlation between the change in the fair value of the derivative instrument and the change in the associated foreign currency exchange rates. Changes in fair value of contracts not designated as cash flow hedges or as net investment hedges are recognized in other income (expense), net in the period in which the changes occur. Realized gains and losses from currency-related forward contracts associated with forecasted transactions or from other derivative instruments, including those that have been designated as cash flow hedges and those that have not been designated, are recognized in the same line item in the consolidated statement of operations in which the underlying forecasted transaction or other hedged item is recorded. Accordingly, amounts are potentially recorded in sales, cost of sales or, in certain circumstances, other income (expense), net.
The following table provides a summary of deferred gains (losses) reported in AOCI as well as the amount expected to be reclassified to income in one year or less:
|
|
Deferred Gain (Loss) in AOCI
|
|
|
|
March 31, 2021
|
|
|
December 31, 2020
|
|
|
Gain (loss) expected to be reclassified into income in one year or less
|
|
Forward Contracts
|
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
5
|
|
Collar
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(5
|
)
|
Cross-Currency Swaps
|
|
|
(12
|
)
|
|
|
3
|
|
|
|
|
|
Total
|
|
$
|
(12
|
)
|
|
$
|
6
|
|
|
$
|
—
|
|
The following table provides a summary of the location and amount of gains or losses recognized in the consolidated statement of operations associated with cash flow hedging relationships:
|
|
Three Months Ended March 31, 2021
|
|
Derivatives Designated as Cash Flow Hedges
|
|
Net sales
|
|
|
Cost of sales
|
|
|
Other income (expense), net
|
|
Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded
|
|
$
|
2,263
|
|
|
$
|
2,012
|
|
|
$
|
(19
|
)
|
(Gain) or loss on cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forwards
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Cross-currency swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
|
|
|
|
|
(48
|
)
|
|
|
Three Months Ended March 31, 2020
|
|
Derivatives Designated as Cash Flow Hedges
|
|
Net sales
|
|
|
Cost of sales
|
|
|
Other income (expense), net
|
|
Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded
|
|
$
|
1,926
|
|
|
$
|
1,720
|
|
|
$
|
4
|
|
(Gain) or loss on cash flow hedging relationships
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency forwards
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
|
7
|
|
|
|
|
|
Cross-currency swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
The amounts reclassified from AOCI into income for the cross-currency swaps represent an offset to a foreign exchange loss on our foreign currency-denominated intercompany and external debt instruments.
Certain of our hedges of forecasted transactions have not formally been designated as cash flow hedges. As undesignated forward contracts, the changes in the fair value of such contracts are included in earnings for the duration of the outstanding forward contract. Any realized gain or loss on the settlement of such contracts is recognized in the same period and in the same line item in the consolidated statement of operations as the underlying transaction. The following table provides a summary of the location and amount of gains or losses recognized in the consolidated statement of operations associated with undesignated hedging relationships.
|
|
Amount of Gain (Loss) Recognized in Income
|
|
|
|
Derivatives Not Designated as Hedging Instruments
|
|
Three Months Ended March 31, 2021
|
|
|
Three Months Ended March 31, 2020
|
|
|
Location of Gain or (Loss) Recognized in Income
|
Foreign currency forward contracts
|
|
$
|
—
|
|
|
$
|
5
|
|
|
Cost of sales
|
Foreign currency forward contracts
|
|
$
|
(2
|
)
|
|
$
|
(9
|
)
|
|
Other income (expense), net
|
Net investment hedges — We periodically designate derivative contracts or underlying non-derivative financial instruments as net investment hedges. With respect to contracts designated as net investment hedges, we apply the forward method, but for non-derivative financial instruments designated as net investment hedges, we apply the spot method. Under both methods, we report changes in fair value in the cumulative translation adjustment (CTA) component of OCI during the period in which the contracts remain outstanding to the extent such contracts and non-derivative financial instruments remain effective.
Note 14. Commitments and Contingencies
Product liabilities — Accrued product liability costs were $1 at March 31, 2021 and $1 at December 31, 2020. We had also recognized amounts recoverable from third parties of $11 at March 31, 2021 and $11 at December 31, 2020. Payments made to claimants precede recovery of amounts from third parties, and may result in recoverable amounts in excess of the total liability. We estimate these liabilities based on current information and assumptions about the value and likelihood of the claims against us.
Environmental liabilities — Accrued environmental liabilities were $9 at March 31, 2021 and $10 at December 31, 2020. We consider the most probable method of remediation, current laws and regulations and existing technology in estimating our environmental liabilities.
Guarantee of lease obligations — In connection with the divestiture of our Structural Products business in 2010, leases covering three U.S. facilities were assigned to a U.S. affiliate of Metalsa. Under the terms of the sale agreement, we will guarantee the affiliate’s performance under the leases, which run through June 2025, including approximately $6 of annual payments. In the event of a required payment by Dana as guarantor, we are entitled to pursue full recovery from Metalsa of the amounts paid under the guarantee and to take possession of the leased property.
Other legal matters — We are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, we cannot state what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, we believe that any liabilities that may result from these proceedings will not have a material adverse effect on our liquidity, financial condition or results of operations.
Note 15. Warranty Obligations
We record a liability for estimated warranty obligations at the dates our products are sold. We record the liability based on our estimate of costs to settle future claims. Adjustments to our estimated costs at time of sale are made as claim experience and other new information becomes available. Obligations for service campaigns and other occurrences are recognized as adjustments to prior estimates when the obligation is probable and can be reasonably estimated.
Changes in warranty liabilities —
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Balance, beginning of period
|
|
$
|
98
|
|
|
$
|
101
|
|
Amounts accrued for current period sales
|
|
|
10
|
|
|
|
8
|
|
Adjustments of prior estimates
|
|
|
(1
|
)
|
|
|
1
|
|
Settlements of warranty claims
|
|
|
(7
|
)
|
|
|
(11
|
)
|
Currency impact
|
|
|
(1
|
)
|
|
|
(2
|
)
|
Balance, end of period
|
|
$
|
99
|
|
|
$
|
97
|
|
Note 16. Income Taxes
We estimate the effective tax rate expected to be applicable for the full fiscal year and use that rate to provide for income taxes in interim reporting periods. We also recognize the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur.
We have generally not recognized tax benefits on losses generated in several entities where the recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for the recognition of deferred tax assets. Consequently, there is no income tax expense or benefit recognized on the pre-tax income or losses in these jurisdictions as valuation allowances are adjusted to offset the associated tax expense or benefit.
We record interest and penalties related to uncertain tax positions as a component of income tax expense. Net interest expense for the periods presented herein is not significant.
We reported an income tax expense of $22 and an income tax benefit of $16 for the first three months ended March 31, 2021 and 2020, respectively. Our effective tax rates were 29% and (80)% for the first three months of 2021 and 2020. During the first quarter of 2020, a pre-tax goodwill impairment charge of $51 with an associated income tax benefit of $1 was recorded. Also, during the first quarter of 2020, we recorded tax benefits of $37 related to tax actions that adjusted federal tax credits, tax expense of $2 to record additional valuation allowance in the U.S. based on reduced income projections, and tax expense of $4 to record valuation allowances in foreign jurisdictions due to reduced income projections. Excluding these items, the effective tax rate would be 23% for the 2020 three-month period. Our effective income tax rates vary from the U.S. federal statutory rate of 21% due to establishment, release and adjustment of valuation allowances in several countries, nondeductible expenses and deemed income, local tax incentives in several countries outside the U.S., different statutory tax rates outside the U.S. and withholding taxes related to repatriations of international earnings. The effective income tax rate may vary significantly due to fluctuations in the amounts and sources, both foreign and domestic, of pretax income and changes in the amounts of non-deductible expenses.
Dividends of earnings from non-U.S. operations are generally no longer subjected to U.S. income tax. We continue to analyze and adjust the estimated tax impact of the income and non-U.S. withholding tax liabilities based on the amounts and sources of these earnings.
Note 17. Other Income (Expense), Net
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Non-service cost components of pension and OPEB costs
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Government grants and incentives
|
|
|
3
|
|
|
|
4
|
|
Foreign exchange gain
|
|
|
1
|
|
|
|
5
|
|
Strategic transaction expenses
|
|
|
(3
|
)
|
|
|
(6
|
)
|
Loss on investment in Hyliion
|
|
|
(17
|
)
|
|
|
|
|
Loss on disposal group held for sale
|
|
|
(7
|
)
|
|
|
|
|
Other, net
|
|
|
6
|
|
|
|
3
|
|
Other income (expense), net
|
|
$
|
(19
|
)
|
|
$
|
4
|
|
Foreign exchange gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included above. Foreign exchange gains and losses on intercompany loans that are permanently invested are reported in OCI.
Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs. Strategic transaction expenses in 2021 were primarily attributable to our pending acquisition of a portion of the thermal-management business of Modine Manufacturing Company and certain other strategic initiatives. Strategic transaction expenses in 2020 were primarily attributable to the acquisitions of the Oerlikon Drive Systems segment of the Oerlikon Group (ODS) and Nordresa Motors, Inc. and certain other strategic initiatives.
We held convertible notes receivable from our investment in Hyliion Inc. On October 1, 2020, Hyliion Inc. completed its merger with Tortoise Acquisition Corp. The business combination resulted in the combined company being renamed Hyliion Holdings Corp. (Hyliion), with its common stock being listed on the New York Stock Exchange under the ticker symbol HYLN. Effective with the completed merger, our notes receivable were converted into 2,988,229 common shares of HYLN. Our investment in Hyliion is included in noncurrent marketable securities and carried at fair value with changes in fair value included in net income. The strategic partnership with Hyliion establishes Dana as the preferred supplier for e-propulsion systems to Hyliion as long as Dana maintains a minimum equity investment in Hyliion.
In conjunction with our acquisition of ODS, we acquired a controlling financial interest in a joint venture in China. We are required to divest of our interest in this joint venture as it violates competitive restrictions of another of our China joint venture shareholder agreements. During the first quarter of 2021, we recorded an impairment charge of $7, as we determined the carrying value of the disposal group exceeded its fair value less costs to sell. The disposal group has net assets of $2 as of March 31, 2021. Individual asset and liability balances are not material and therefore the amounts have not been segregated as held for sale on our consolidated balance sheet. We completed the disposal of this business in April 2021.
Note 18. Revenue from Contracts with Customers
We generate revenue from selling production parts to original equipment manufacturers (OEMs) and service parts to OEMs and aftermarket customers. While we provide production and service parts to certain OEMs under awarded multi-year programs, these multi-year programs do not contain any commitment to volume by the customer. As such, individual customer releases or purchase orders represent the contract with the customer. Our customer contracts do not provide us with an enforceable right to payment for performance completed to date throughout the contract term. As such, we recognize part sales revenue at the point in time when the parts are shipped, and risk of loss has transferred to the customer. We have elected to continue to include shipping and handling fees billed to customers in revenue, while including costs of shipping and handling in costs of sales. Taxes collected from customers are excluded from revenues and credited directly to obligations to the appropriate government agencies. Payment terms with our customers are established based on industry and regional practices and generally do not exceed 180 days.
We continually seek new business opportunities and at times provide incentives to our customers for new program awards. We evaluate the underlying economics of each payment made to our customers to determine the proper accounting by understanding the nature of the payment, the rights and obligations in the contract, and other relevant facts and circumstances. Upfront payments to our customers are capitalized if we determine that the payments are incremental and incurred only if the new business is obtained and we expect to recover these amounts from the customer over the term of the new business program. We recognize a reduction to revenue as products that the upfront payments are related to are transferred to the customer, based on the total amount of products expected to be sold over the term of the program. We evaluate the amounts capitalized each period for recoverability and expense any amounts that are no longer expected to be recovered. We had $9 and $8 recorded in other current assets and $45 and $45 recorded in other noncurrent assets at March 31, 2021 and December 31, 2020.
Certain of our customer contracts include rebate incentives. We estimate expected rebates and accrue the corresponding refund liability, as a reduction of revenue, at the time covered product is sold to the customer based on anticipated customer purchases during the rebate period and contractual rebate percentages. Refund liabilities are included in other accrued liabilities on our consolidated balance sheet. We provide standard fitness for use warranties on the products we sell, accruing for estimated costs related to product warranty obligations at time of sale. See Note 15 for additional information.
Contract liabilities are primarily comprised of cash deposits made by customers with cash in advance payment terms. Generally, our contract liabilities turn over frequently given our relatively short production cycles. Contract liabilities were $29 and $27 at March 31, 2021 and December 31, 2020. Contract liabilities are included in other accrued liabilities on our consolidated balance sheet.
Disaggregation of revenue —
The following table disaggregates revenue for each of our operating segments by geographical market:
Three Months Ended March 31, 2021
|
|
Light Vehicle
|
|
|
Commercial Vehicle
|
|
|
Off-Highway
|
|
|
Power Technologies
|
|
|
Total
|
|
North America
|
|
$
|
706
|
|
|
$
|
185
|
|
|
$
|
66
|
|
|
$
|
138
|
|
|
$
|
1,095
|
|
Europe
|
|
|
123
|
|
|
|
63
|
|
|
|
417
|
|
|
|
129
|
|
|
|
732
|
|
South America
|
|
|
36
|
|
|
|
70
|
|
|
|
9
|
|
|
|
5
|
|
|
|
120
|
|
Asia Pacific
|
|
|
126
|
|
|
|
34
|
|
|
|
140
|
|
|
|
16
|
|
|
|
316
|
|
Total
|
|
$
|
991
|
|
|
$
|
352
|
|
|
$
|
632
|
|
|
$
|
288
|
|
|
$
|
2,263
|
|
Three Months Ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
$
|
586
|
|
|
$
|
199
|
|
|
$
|
74
|
|
|
$
|
123
|
|
|
$
|
982
|
|
Europe
|
|
|
102
|
|
|
|
49
|
|
|
|
349
|
|
|
|
114
|
|
|
|
614
|
|
South America
|
|
|
30
|
|
|
|
63
|
|
|
|
7
|
|
|
|
5
|
|
|
|
105
|
|
Asia Pacific
|
|
|
90
|
|
|
|
22
|
|
|
|
102
|
|
|
|
11
|
|
|
|
225
|
|
Total
|
|
$
|
808
|
|
|
$
|
333
|
|
|
$
|
532
|
|
|
$
|
253
|
|
|
$
|
1,926
|
|
Note 19. Segments
We are a global provider of high-technology products to virtually every major vehicle manufacturer in the world. We also serve the stationary industrial market. Our technologies include drive systems (axles, driveshafts, transmissions, and wheel and track drives); motion systems (winches, slew drives, and hub drives); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle, medium/heavy vehicle and off-highway markets through four operating segments – Light Vehicle Drive Systems (Light Vehicle), Commercial Vehicle Drive and Motion Systems (Commercial Vehicle), Off-Highway Drive and Motion Systems (Off-Highway) and Power Technologies, which is the center of excellence for sealing and thermal-management technologies that span all customers in our on-highway and off-highway markets. These operating segments have global responsibility and accountability for business commercial activities and financial performance.
Dana evaluates the performance of its operating segments based on external sales and segment EBITDA. Segment EBITDA is a primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. Our segments are charged for corporate and other shared administrative costs. Segment EBITDA may not be comparable to similarly titled measures reported by other companies.
Segment information —
|
|
2021
|
|
|
2020
|
|
Three Months Ended March 31,
|
|
External Sales
|
|
|
Inter-Segment Sales
|
|
|
Segment EBITDA
|
|
|
External Sales
|
|
|
Inter-Segment Sales
|
|
|
Segment EBITDA
|
|
Light Vehicle
|
|
$
|
991
|
|
|
$
|
40
|
|
|
$
|
100
|
|
|
$
|
808
|
|
|
$
|
30
|
|
|
$
|
83
|
|
Commercial Vehicle
|
|
|
352
|
|
|
|
25
|
|
|
|
14
|
|
|
|
333
|
|
|
|
20
|
|
|
|
21
|
|
Off-Highway
|
|
|
632
|
|
|
|
13
|
|
|
|
80
|
|
|
|
532
|
|
|
|
9
|
|
|
|
72
|
|
Power Technologies
|
|
|
288
|
|
|
|
6
|
|
|
|
41
|
|
|
|
253
|
|
|
|
6
|
|
|
|
30
|
|
Eliminations and other
|
|
|
|
|
|
|
(84
|
)
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
|
|
|
|
Total
|
|
$
|
2,263
|
|
|
$
|
—
|
|
|
$
|
235
|
|
|
$
|
1,926
|
|
|
$
|
—
|
|
|
$
|
206
|
|
Reconciliation of segment EBITDA to consolidated net income —
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2021
|
|
|
2020
|
|
Segment EBITDA
|
|
$
|
235
|
|
|
$
|
206
|
|
Corporate expense and other items, net
|
|
|
(1
|
)
|
|
|
(1
|
)
|
Depreciation
|
|
|
(88
|
)
|
|
|
(85
|
)
|
Amortization
|
|
|
(7
|
)
|
|
|
(4
|
)
|
Non-service cost components of pension and OPEB costs
|
|
|
(2
|
)
|
|
|
(2
|
)
|
Restructuring charges, net
|
|
|
(1
|
)
|
|
|
(3
|
)
|
Stock compensation expense
|
|
|
(5
|
)
|
|
|
(4
|
)
|
Strategic transaction expenses
|
|
|
(3
|
)
|
|
|
(6
|
)
|
Loss on investment in Hyliion
|
|
|
(17
|
)
|
|
|
|
|
Impairment of goodwill
|
|
|
|
|
|
|
(51
|
)
|
Loss on disposal group held for sale
|
|
|
(7
|
)
|
|
|
|
|
Other items
|
|
|
4
|
|
|
|
(3
|
)
|
Earnings before interest and income taxes
|
|
|
108
|
|
|
|
47
|
|
Interest income
|
|
|
2
|
|
|
|
2
|
|
Interest expense
|
|
|
34
|
|
|
|
29
|
|
Earnings before income taxes
|
|
|
76
|
|
|
|
20
|
|
Income tax expense (benefit)
|
|
|
22
|
|
|
|
(16
|
)
|
Equity in earnings of affiliates
|
|
|
14
|
|
|
|
2
|
|
Net income
|
|
$
|
68
|
|
|
$
|
38
|
|
Note 20. Equity Affiliates
We have a number of investments in entities that engage in the manufacture and supply of vehicular parts (primarily axles, axle housings and driveshafts) and electronic control units.
Equity method investments exceeding $5 at March 31, 2021 —
|
|
Ownership Percentage
|
|
Investment
|
|
Dongfeng Dana Axle Co., Ltd. (DDAC)
|
|
50%
|
|
$
|
111
|
|
ROC-Spicer, Ltd.
|
|
50%
|
|
|
22
|
|
Axles India Limited
|
|
48%
|
|
|
9
|
|
All others as a group
|
|
|
|
|
5
|
|
Investments in equity affiliates
|
|
|
|
|
147
|
|
Investments in affiliates carried at cost
|
|
|
|
|
2
|
|
Investments in affiliates
|
|
|
|
$
|
149
|
|
On March 1, 2021, we acquired the remaining 51% ownership interest in Pi Innovo Holdings Limited (Pi Innovo). The additional interest, along with our existing ownership interest, provided us with a 100% ownership interest in Pi Innovo. As such, we ceased accounting for our investment in Pi Innovo under the equity method. See Note 2 for additional information.