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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions)

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes in Item 8.

Management Overview

We are a global provider of high-technology products to virtually every major on-highway vehicle manufacturer in the world. Our technologies include drive systems (axles, driveshafts and transmissions); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle and medium/heavy vehicle markets through two business units – Light Vehicle Drive Systems (Light Vehicle) and Commercial Vehicle Drive and Motion Systems (Commercial Vehicle). We have a diverse customer base and geographic footprint which minimizes our exposure to individual market and segment declines. In 2025, 60% of our sales came from North American operations and 40% from operations throughout the rest of the world. Our sales by operating segment were Light Vehicle – 70% and Commercial Vehicle – 30%.

Operational and Strategic Initiatives

Our strategy builds on our strong technology foundation and leverages our resources across the organization while driving a customer-centric focus, expanding our global markets, and delivering innovative solutions for the mobility markets we serve.

Central to our strategy is leveraging our core operations. This foundational element enables us to infuse strong operational disciplines throughout the strategy, making it practical, actionable, and effective. We are achieving improved profitability by actively improving our cost structure and gaining efficiencies across all of our operations and functions.

Our customers remain at the center of our value system. These relationships are strengthened as we are physically located where we need to be in order to provide unparalleled service. We prioritize our customers’ needs as we engineer solutions that differentiate their products while making it easier to do business by streamlining our commercial organization. Our customer-centric focus has uniquely positioned us to win more than our fair share of new business and capitalize on future customer outsourcing initiatives.

Dana has embarked on a strategic plan to focus on core on-highway markets and accelerate value creation by improving its cost structure, increasing its efficiency, and creating a more focused and nimble Dana.

Recent Strategic Actions

Cost reduction initiatives — During the fourth quarter of 2024, we announced further actions to support sustained long-term profitability and enhanced cash flow generation. This includes substantial reduction in selling, general and administrative costs and aligning engineering expenses to match current industry dynamics,

including the ongoing delay in the adoption of electric vehicles. We expect to deliver annualized savings of $325 through 2026. Approximately $260 of annualized savings was realized through 2025 with an additional $65 to be realized in 2026. See Summary of Consolidated Results and Segment Results of Operations in Item 7 and Note 4 of our consolidated financial statements in Item 8 for additional information.

Segment realignment — Through December 2024, we managed our operations globally through four operating segments. Our Light Vehicle and Power Technologies segments primarily supported light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars. Our Commercial Vehicles segment supported the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supported OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications). In the first quarter of 2025, our Power Technologies segment was integrated into our Light Vehicle and Commercial Vehicle segments, streamlining the business, enhancing our go-to-market approach and serving our customers more efficiently. The OEM-facing business was integrated into our Light Vehicle segment while the aftermarket business was integrated into our Commercial Vehicle segment. See Note 20 of our consolidated financial statements in Item 8 for additional information.

Divestiture of Off-Highway Business — Dana has embarked on a strategic plan to focus on our core on-highway markets, creating a more focused and nimble Dana through the divestiture of our Off-Highway business. In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc. We analyzed the quantitative and qualitative factors relevant to the pending divestiture of our Off-Highway business and determined that the conditions for discontinued operations presentation have been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying consolidated financial statements. Prior period amounts have been recast to reflect discontinued operations presentation. See Note 1 and Note 2 of our consolidated financial statements in Item 8 for additional information. The transaction closed on January 1, 2026, with Dana receiving initial cash proceeds of $2,664. The sale price is subject to adjustment based on net working capital and net indebtedness balances as of the closing date.

Capital Structure Initiatives — Net cash proceeds from the Off-Highway business divestiture will be used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders. On January 7, 2026, we purchased, via a net proceeds tender offer, $138 of our November 2027 Notes, $142 of our June 2028 Notes, €141 of our July 2029 Notes ($164 as of January 7, 2026), $173 of our September 2030 Notes, €9 of our 2031 Notes ($10 as of January 7, 2026) and $152 of our February 2032 Notes at prices equal to 100.00% plus accrued and unpaid interest. On January 8, 2026, we redeemed the remaining $262 of our November 2027 Notes and the remaining $258 of our June 2028 Notes at prices equal to 100.00% plus accrued and unpaid interest. In addition, on January 2, 2026, we repaid the $225 outstanding balance on the Term A Facility. See Note 13 of our consolidated financial statements in Item 8 for additional information. On June 8, 2025, Dana’s board of directors approved a program to provide up to a $1,000 return of capital to shareholders through common stock share repurchases and/or special dividends through the end of 2027. On February 11, 2026, Dana's board of directors increased and extended the share repurchase program to a total of $2,000 through the end of 2030. Through January 31, 2026, we have spent $750 to repurchase 37,943,413 shares under the approved stock repurchase program. See Note 8 of our consolidated financial statements in Item 8 for additional information.

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Other Initiatives

Aftermarket opportunities — We have a global group dedicated to identifying and developing aftermarket growth opportunities that leverage the capabilities within our existing businesses – targeting increased future aftermarket sales. Powered by recognized brands such as Dana®, Spicer®, Spicer ElectrifiedTM, Victor Reinz®, Glaser®, GWB®, Thompson®, Tru-Cool®, SVL®, and TransejesTM, Dana delivers a broad range of aftermarket solutions – including genuine, all makes, and value lines – servicing passenger and commercial vehicles across the globe.

Selective acquisitions — Although transformational opportunities will be considered when strategically and economically attractive, our acquisition focus is principally directed at “bolt-on” or adjacent acquisition opportunities that have a strategic fit with our existing core businesses, particularly opportunities that support our enterprise strategy and enhance the value proposition of our product offerings. Any potential acquisition will be evaluated in the same manner we currently consider customer program opportunities and other uses of capital – with a disciplined financial approach designed to ensure profitable growth and increased shareholder value.

Trends in Our Markets

We serve our customers in two core global end markets: light vehicle, primarily full frame trucks and SUVs; and commercial vehicle, including medium-and heavy-duty trucks and busses. Each of our end-markets has unique cyclical dynamics and market drivers. These cycles are impacted by periods of investment where end-user vehicle fleets are refreshed or expanded in reaction to demand usage patterns, regulatory changes, or when the age of vehicles in service reach their useful life. Key market drivers include regional economic growth rates; cost and availability of end customer financing; and industrial output. Our multi-market coverage and broad customer base help provide stability across the cycles while mitigating secular variability.

Light vehicle markets — Our driveline business is weighted more heavily to the truck and SUV segments of the light-vehicle market versus the passenger-car segment. Our vehicle content is greater on rear-wheel drive, four-wheel drive, and all-wheel drive vehicles, as well as hybrid and electric vehicles. During 2025, light-truck markets showed marginal improvement across all regions except North America, which was flat compared to 2024. The outlook for 2026 reflects global light-truck production being relatively stable in North America and Asia Pacific, while Europe and South America reflect marginal improvement, in comparison with the prior year.

Commercial vehicle markets — Our primary business is driveline systems for medium and heavy-duty trucks and busses, including the emerging market for hybrid and electric vehicles. Key regional markets are North America, South America (primarily Brazil) and Asia Pacific. During 2025, production of Class-8 and Classes 5-7 trucks in North America both decreased 23% compared to 2024. The outlook for 2026 is for a moderate increase in production of Classes 5-7 trucks and continued deterioration in Class-8 truck production compared to the prior year. Outside of North America, production of medium- and heavy-duty trucks in South America decreased 7% compared to 2024, reflecting relatively stable economic conditions in the region. The 2026 outlook for South America reflects medium- and heavy-duty production being relatively flat compared to the prior year. Production of medium- and heavy-duty trucks in Asia Pacific, driven by China and India, increased 12% in 2024. The 2026 outlook for Asia Pacific is for a modest increase in production from the prior year.

Foreign currency — With 43% of our 2025 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations. The euro zone countries and Brazil accounted for 32% and 13% of our 2025 non-U.S. sales, respectively, while India, Thailand and China accounted for 9%, 8% and 7%, respectively. Although sales in South Africa are less than 7% of our non-U.S. sales, the rand has been volatile and significantly impacted sales from time to time. International currencies strengthened against the U.S. dollar in 2025, increasing 2025 sales by $28. A stronger euro and Thai baht, were partially offset by a weaker Brazilian real and India rupee.

Argentina has experienced significant inflationary pressures the past several years, contributing to significant devaluation of its currency among other economic challenges. Our Argentine operation supports our Light Vehicle operating segment. Our sales in Argentina for 2025 of approximately $231 are 3% of our consolidated sales and our net asset exposure related to Argentina was approximately $59, including $19 of net fixed assets, at December 31, 2025. During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy. In assessing Argentina's economy as highly inflationary we considered its three-year cumulative inflation rate along with other factors. As a result, effective July 1, 2018, the U.S. dollar is the functional currency for our Argentine operations, rather than the Argentine peso. Beginning July 1, 2018, peso-denominated monetary assets and liabilities are remeasured into U.S. dollars using current Argentine peso exchange rates with resulting translation gains or losses included in results of operations. Nonmonetary assets and liabilities are remeasured into U.S. dollar using historic Argentine peso exchange rates. Reference is made to Note 1 of our consolidated financial statements in Item 8 for additional information.

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Commodity costs — The cost of our products may be significantly impacted by changes in raw material commodity prices, the most important to us being those of various grades of steel, aluminum, copper, brass and rare earth materials. The effects of changes in commodity prices are reflected directly in our purchases of commodities and indirectly through our purchases of products such as castings, forgings, bearings, batteries and component parts that include commodities. Most of our major customer agreements provide for the sharing of significant commodity price changes with those customers based on the movement in various published commodity indexes. Where such formal agreements are not present, we have historically been successful implementing price adjustments that largely compensate for the inflationary impact of material costs. Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes. Higher commodity prices decreased year-over-year earnings by $19 in 2025. Material recovery pricing actions increased year-over-year earnings by $19 in 2025.

Sales, Earnings and Cash Flow Outlook

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

Our 2026 sales outlook is $7,300 to $7,700, reflecting declining global market demand, offset by $200 of net new business backlog, dissipation of the tariff recovery lag experienced in 2025 and currency tailwinds. Based on our current sales and exchange rate outlook for 2026, we expect international currencies to be a modest tailwind to sales primarily due to a stronger euro. At sales levels in our current outlook for 2026, a 5% movement on the euro would impact our annual sales by approximately $135. A 5% change on the Chinese renminbi, Indian rupee or Brazilian real rates would impact our annual sales in each of those countries by approximately $25. At our current sales outlook for 2026, we expect full year 2026 adjusted EBITDA to approximate $750 to $850. Adjusted EBITDA margin is expected to be 10.7% at the midpoint of our guidance range, a 260 basis-point improvement over 2025, reflecting the impact of significant cost savings actions, improved operational performance and favorable product mix, partially offset by the impact of lower end-market demand and net material cost recoveries. We expect to generate free cash flow of $300 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA and lower income tax and interest payments, partially offset by higher capital spending.

Among our operational and strategic initiatives is continued focus on and investment in product technology – delivering products and technology that are key to bringing solutions to issues of paramount importance to our customers. Our success on this front is measured, in part, by our sales backlog – net new business awarded that will be launching over the next three years, adding to our base annual sales. This backlog excludes replacement business and represents incremental sales associated with new programs for which we have received formal customer awards. At December 31, 2025, our sales backlog of net new business for the 2026 through 2028 period was $750. We expect to realize $200 of our sales backlog in 2026, with incremental sales backlog of $300 and $250 being realized in 2027 and 2028, respectively.

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Consolidated Results of Operations

Summary Consolidated Results of Operations (2025 versus 2024)

% of % of Increase/

Dollars Net Sales Dollars Net Sales (Decrease)

Selling, general and administrative expenses 387 5.2 % 429 5.5 % (42 )

Amortization of intangibles 7 8 (1 )

Restructuring charges, net 23 70 (47 )

Loss on disposal group previously held for sale — (26 ) 26

Other income (expense), net (46 ) (21 ) (25 )

Earnings (loss) before interest and income taxes 139 (176 ) 315

Interest income 10 13 (3 )

Loss before income taxes (32 ) (321 ) 289

Equity in earnings of affiliates 32 10 22

Net loss from continuing operations (53 ) (342 ) 289

Net income from discontinued operations 155 293 (138 )

Less: Noncontrolling interests net income from continuing operations 17 21 (4 )

Net income (loss) attributable to the parent company $ 85 $ (57 ) $ 142

Sales — The following table shows changes in our sales by geographic region.

Amount of Change Due To

Increase/ Currency Organic

2025 2024 (Decrease) Effects Divestiture Change

Sales in 2025 were $234 lower than in 2024. Stronger international currencies increased sales by $28, principally due to a stronger euro and Thai baht, partially offset by a weaker Brazilian real and Indian rupee. The organic sales decrease of $257, or 3%, resulted primarily from lower full-frame light-truck production volumes in North America and lower medium/heavy-truck production volumes in North America and South America, partially offset by the conversion of sales backlog. Pricing actions and recoveries, including material commodity price and tariff and inflationary costs adjustments, increased sales by $202.

The North America organic sales decrease of 3% was driven principally by lower full-frame light-truck and medium- and heavy-truck production volumes, partially offset by the conversion of sales backlog and net customer pricing and tariff and cost recovery actions. Full-frame light-truck production was down 1%, Class 8 production was down 23% and Classes 5-7 was down 23% compared to 2024. Excluding currency effects, sales in Europe were down 3% compared with 2024, reflecting lower electric-vehicle product orders. Excluding currency effects, sales in South America were down 5% compared to 2024, reflecting lower light-truck product orders and lower medium/heavy-duty production volumes. Excluding currency effects, sales in Asia Pacific were down 4% compared to 2024, reflecting lower electric-vehicle related production orders, partially offset by modestly improving medium/heavy-truck production volumes.

Cost of sales and gross margin — Cost of sales decreased $458, or 6%, when compared to 2024. Cost of sales as a percent of sales was 310 basis points lower than in the previous year. Incremental margins from cost reduction initiatives of $223, higher material cost savings of $90, operational efficiencies of $53, lower premium freight costs of $22, lower spending on electrification initiatives of $7 and lower warranty expense of $2 were partially offset by unfavorable product mix, tariff-related impacts of $116, non-material inflation of $122, commodity cost increases of $19 and higher incentive compensation expense of $13. Commodity costs are primarily driven by certain grades of steel and aluminum. Non-material inflation includes higher labor, energy and transportation rates.

Gross margin of $602 for 2025 increased $224 from 2024. Gross margin as a percent of sales was 8.0% in 2025, 310 basis points higher than in 2024. The improvement in gross margin as a percent of sales was driven principally by the cost of sales factors referenced above. Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days. The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

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Selling, general and administrative expenses (SG&A) — SG&A expenses in 2025 were $387 (5.2% of sales) as compared to $429 (5.5% of sales) in 2024. SG&A expenses were $42 lower in 2025 primarily due to lower salary and employee benefit costs and lower travel and discretionary spending, resulting from global headcount and cost reduction initiatives that commenced during the fourth quarter of 2024, partially offset by higher incentive compensation.

Amortization of intangibles — Amortization expense was $7 in 2025 and $8 in 2024. See Note 3 of our consolidated financial statements in Item 8 for additional information.

Restructuring charges, net — Net restructuring charges were $23 in 2025 and $70 in 2024. See Note 4 of our consolidated financial statements in Item 8 for additional information.

Loss on disposal group previously held for sale — In February 2024, we entered into a definitive agreement to sell our European hydraulics business to HPIH S.à r.l. We classified the disposal group as held for sale, recognizing a $26 loss to adjust the carrying value of net assets to fair value less estimated costs to sell. The transaction was not completed by the date set forth in the definitive agreement. The assets of the European hydraulics business are no longer held for sale and have been reclassified as held and used at the lower of their adjusted carrying value or fair value at the date the held for sale criteria was no longer met.

Other income (expense), net — The following table shows the major components of other income (expense), net.

Non-service cost components of pension and OPEB costs $ (11 ) $ (17 )

Government assistance 5 10

Foreign exchange gain (loss) (8 ) (15 )

Strategic transaction expenses (12 ) (3 )

Loss on sale of property, plant and equipment — (1 )

Loss on divestiture of ownership interests (9 ) —

Impairment of electric vehicle program property, plant and equipment (16 ) —

Other, net 5 5

Other income (expense), net $ (46 ) $ (21 )

We continue to account for Argentina as a highly inflationary economy and remeasure the financial statements of our Argentine subsidiaries as if their functional currency was the U.S. dollar. Continued devaluation of the Argentine peso was the primary driver of the foreign exchange loss in 2025 and 2024. Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs, and other strategic initiatives. On June 6, 2025, we sold our ownership interest in Switch Mobility Limited, recognizing an $8 pre-tax loss on the transaction. See Note 21 of our consolidated financial statements in Item 8 for additional information. During the fourth quarter of 2025, we recorded an impairment charge associated with machinery and equipment, including construction in progress, of certain electric vehicle programs that were either cancelled by the customer or that have experienced a precipitous decline in program volumes.

Interest income and interest expense — Interest income was $10 in 2025 and $13 in 2024. Interest expense increased from $158 in 2024 to $181 in 2025, due to higher average outstanding borrowings, partially offset by lower average interest rates. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.2% in 2025 and 5.8% in 2024.

Income tax expense — Income tax expense was $53 in 2025 and $31 in 2024. During 2025, we recorded a tax benefit of $48 to release valuation allowance on certain U.S. federal attributes, $7 of tax benefit due to basis difference in a foreign subsidiary as a result of a change in tax status, $9 of tax expense for income tax reserves associated with prior tax years in a foreign jurisdiction and $6 of tax expense resulting from the sale of Dana's ownership interest in an equity method investment. During 2024, we recorded tax expense of $21 for valuation allowances related to foreign jurisdictions and tax expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions. See Note 17 to our consolidated financial statements in Item 8 for additional information.

Equity in earnings of affiliates — Net earnings from equity investments were $32 in 2025 and $10 in 2024. Net earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were $9 in 2025 and $3 in 2024. On April 25, 2025, we sold our ownership interest in Axles India Limited, recognizing a $19 pre-tax gain on the transaction. See Note 21 of our consolidated financial statements in Item 8 for additional information.

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Summary Consolidated Results of Operations (2024 versus 2023)

% of % of Increase/

Dollars Net Sales Dollars Net Sales (Decrease)

Selling, general and administrative expenses 429 5.5 % 440 5.8 % (11 )

Amortization of intangibles 8 8 —

Restructuring charges, net 70 23 47

Loss on disposal group previously held for sale (26 ) (26 )

Other income (expense), net (21 ) (14 ) (7 )

Loss before interest and income taxes (176 ) (108 ) (68 )

Loss on extinguishment of debt — (1 ) 1

Interest income 13 15 (2 )

Loss before income taxes (321 ) (246 ) (75 )

Income tax expense 31 7 24

Equity in earnings (loss) of affiliates 10 (9 ) 19

Net loss from continuing operations (342 ) (262 ) (80 )

Net income from discontinued operations 293 310 (17 )

Net income (loss) (49 ) 48 (97 )

Less: Noncontrolling interests net income from continuing operations 21 22 (1 )

Net income (loss) attributable to the parent company $ (57 ) $ 38 $ (95 )

Sales — The following table shows changes in our sales by geographic region.

Amount of Change Due To

Increase/ Currency Organic

2024 2023 (Decrease) Effects Divestiture Change

Sales in 2024 were $121 higher than in 2023. Weaker international currencies decreased sales by $42, principally due to a weaker Brazilian real, Indian rupee and Thai baht. The organic sales increase of $163, or 2%, resulted from having a full year of production on a full-frame light-truck customer program that launched and was ramping up production in the first quarter of 2023 and the conversion of sales backlog. Pricing actions and recoveries, including material commodity price and inflationary cost adjustments, increased sales by $131.

The North America organic sales increase of 6% was driven principally by having a full year of production on a full-frame light-truck customer program that launched and was ramping up production in the first quarter of 2024, the conversion of sales backlog and net customer pricing and cost recovery actions. Excluding currency effects, sales in Europe were down 5% compared with 2023, reflecting lower electric vehicle related product sales. Excluding currency effects, sales in South America were up 14% compared with 2023, reflecting improved medium- and heavy-duty truck production volumes. Excluding currency effects, sales in Asia Pacific decreased 10% compared to 2023, reflecting lower electric vehicle related product sales.

Cost of sales and gross margin — Cost of sales for 2024 increased $120, or 2%, when compared to 2023. Cost of sales as a percent of sales was 10 basis points hihger than in the previous year. Incremental margins resulting from higher material cost savings of $90, lower premium freight costs of $26, lower incentive compensation expense of $15, lower program launch costs of $11 and lower spending on electrification initiatives of $5, were partially offset by unfavorable product mix, non-material inflation of $157, operational inefficiencies of $16 and higher warranty expense of $6. Commodity costs are primarily driven by certain grades of steel and aluminum. Non-material inflation includes higher labor, energy and transportation rates.

Gross margin of $378 for 2024 increased $1 from 2023. Gross margin as a percent of sales was 4.9% in 2024, 10 basis points lower than in 2023. The gross margin as a percent of sales was driven principally by the cost of sales factors referenced above. Material cost recovery mechanisms with our customers lag material cost changes by our suppliers by approximately 90 days. With commodity costs abating during 2024, gross margin was negatively impacted by net material cost recoveries on both a dollar and percentage basis. The recovery of non-material inflation is not specifically provided for in our current contracts with customers resulting in prolonged negotiations and indeterminate recoveries.

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Selling, general and administrative expenses (SG&A) — SG&A expenses in 2024 were $429 (5.5% of sales) as compared to $440 (5.8% of sales) in 2023. SG&A expenses were $11 lower in 2024 primarily due to lower incentive compensation and lower professional services and consulting costs, partially offset by increased information technology expenses.

Amortization of intangibles — Amortization expense was $8 in both 2024 and 2023. See Note 3 of our consolidated financial statements in Item 8 for additional information.

Restructuring charges, net — Net restructuring charges were $70 in 2024 and $23 in 2023. See Note 4 of our consolidated financial statements in Item 8 for additional information.

Other income (expense), net — The following table shows the major components of other income (expense), net.

Non-service cost components of pension and OPEB costs $ (17 ) $ (10 )

Government assistance 10 15

Foreign exchange gain (loss) (15 ) (17 )

Strategic transaction expenses (3 ) (5 )

Loss on sale of property, plant and equipment (1 ) —

Other, net 5 3

Other income (expense), net $ (21 ) $ (14 )

We continue to account for Argentina as a highly inflationary economy and remeasure the financial statements of our Argentine subsidiaries as if their functional currency was the U.S. dollar. The foreign exchange loss in 2023 was primarily due to the Argentine government significantly devaluing the Argentine peso during the fourth quarter of 2023. Continued devaluation of the Argentine peso was the primary driver of the foreign exchange loss in 2024. Strategic transaction expenses relate primarily to costs incurred in connection with acquisition and divestiture related activities, including costs to complete the transaction and post-closing integration costs, and other strategic initiatives. Strategic transaction expenses in 2024 and 2023 were primarily attributable to investigating potential acquisitions and business ventures, divestitures and other strategic initiatives.

Loss on extinguishment of debt —On June 9, 2023 we redeemed $200 of our April 2025 Notes. The $1 loss on extinguishment of debt is comprised of the write-off of previously deferred financing costs associated with the April 2025 Notes. See Note 13 of our consolidated financial statements in Item 8 for additional information.

Interest income and interest expense — Interest income was $13 in 2024 and $15 in 2023. Interest expense increased from $152 in 2023 to $158 in 2024, due to higher average outstanding borrowings and higher average interest rates. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.8% in 2024 and 5.6% in 2023.

Income tax expense — Income tax expense was $31 in 2024 and $7 in 2023. During 2024, we recorded tax expense of $21 for valuation allowances related to foreign jurisdictions and tax expense of $11 due to revisions in our assertions on unremitted earnings in foreign jurisdictions. During 2023, we recorded tax expense of $14 for income tax reserves associated with prior tax years in foreign jurisdictions. In addition, we recorded net benefit of $55 on the intercompany sale of intangible assets to the U.S. See Note 17 to our consolidated financial statements in Item 8 for additional information.

Equity in earnings of affiliates — Net earnings (loss) from equity investments were earnings of $10 in 2024 and a loss of $9 in 2023. Net earnings (loss) from Dongfeng Dana Axle Co., Ltd. (DDAC) were earnings of $3 in 2024 and a loss of $16 in 2023. DDAC’s 2023 results were negatively impacted by valuation allowances being recorded against certain deferred tax assets.

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Segment Results of Operations (2025 versus 2024)

Light Vehicle

Segment

Segment EBITDA

Sales EBITDA Margin

Volume and mix (206 ) (49 )

Divestiture (5 )

Currency effects 22 1

Light Vehicle sales in 2025, exclusive of divestiture and currency effects, were 1% lower than 2024 reflecting lower production volumes in North America and lower electric-vehicle product orders in Europe and Asia Pacific partially offset by the benefit of net customer pricing and cost and tariff recovery actions and the conversion of sales backlog. Year-over-year North America full-frame light truck production decreased 1% while light-truck production in Europe, Asia Pacific and South America increased 2%, 8% and 7%, respectively. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $156.

Light Vehicle segment EBITDA increased by $132 in 2025. Lower sales volumes decreased year-over-year earnings by $49 (24% decremental margin). The year-over-year performance-related earnings increase was driven by net customer pricing and cost and tariff recovery actions of $156, cost reduction initiatives of $99, higher material cost savings of $66, lower premium freight costs of $11 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $65. Partially offsetting these performance-related earnings increases were higher tariff-related costs of $96, inflationary cost increases of $92, commodity cost increases of $13, higher incentive compensation expense of $9, higher warranty expense of $6 and higher program launch costs of $1.

Commercial Vehicle

Segment

Segment EBITDA

Sales EBITDA Margin

Volume and mix (253 ) (63 )

Currency effects 6 2

Commercial Vehicle sales, exclusive of currency effects, were 8% lower than 2024, reflecting generally weaker global markets partially offset by the conversion of sales backlog and net customer pricing and cost and tariff recovery actions. Year-over-year Class 8 production in North America was down 23% and Classes 5-7 was down 23%. Year-over-year medium/heavy truck production in Europe was up 3% while South America was down 7%. Net customer pricing and cost and tariff recovery actions increased year-over-year sales by $46.

Commercial Vehicle segment EBITDA increased $65 in 2025. Lower sales volumes decreased year-over-year earnings by $63 (25% decremental margin). The year-over-year performance-related earnings increase was driven by cost reduction initiatives of $53, net customer pricing and cost and tariff recovery actions of $46, higher material costs savings of $24, lower premium freight costs of $11, lower warranty expense of $8, lower spending on electrification initiatives of $7, lower program launch costs of $2 and operational efficiencies, inclusive of lower corporate allocations resulting from cost reduction initiatives, of $41. Partially offsetting these performance-related earnings increases were inflationary cost increases of $35, higher tariff-related costs of $20, commodity cost increases of $6 and higher incentive compensation expense of $5.

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Segment Results of Operations (2024 versus 2023)

Light Vehicle

Segment

Segment EBITDA

Sales EBITDA Margin

Currency effects (10 ) (2 )

Light Vehicle sales in 2024, exclusive of currency effects, were 5% higher than 2023, reflecting a full year of production on a full-frame light-truck customer program that launched and was ramping up production in the first quarter of 2023, the conversion of sale backlog and the benefit of net customer pricing and cost recovery actions, partially offset by mixed global markets. Year-over-year North America full-frame light-truck production increased 1% while light-truck production in Europe decreased 2%. Year-over-year South America and Asia Pacific light-truck production increased 7% and 1%, respectively. Net customer pricing and cost recovery actions increased year-over-year sales by $129.

Light Vehicle segment EBITDA increased by $103 in 2024. Higher sales volumes provided a year-over-year earnings benefit of $41 (29% incremental margin). The year-over-year performance-related earnings increase was driven by net customer pricing and cost recovery actions of $129, higher material cost savings of $63, lower premium freight costs of $17, lower incentive compensation expense of $15 and lower program launch costs of $12. Partially offsetting these performance-related earnings increases were inflationary cost increases of $146, higher spending on electrification initiatives of $14, commodity cost increases of $2, higher warranty expense of $1 and operational inefficiencies of $9.

Commercial Vehicle

Segment

Segment EBITDA

Sales EBITDA Margin

Volume and mix (110 ) (63 )

Performance 2 39

Currency effects (32 ) (3 )

Commercial Vehicle sales in 2024, exclusive of currency effects, were 4% lower than 2023 reflecting mixed global markets being partially offset by the conversion of sales backlog and net customer pricing and cost recovery actions. Year-over-year Class 8 production in North America was down 3% while Classes 5-7 were up 4%. Year-over-year medium/heavy-truck production in Europe and Asia Pacific were down 23% and 5%, respectively, while medium/heavy-truck production in South America was up 41%. Net customer pricing and cost recovery actions increased year-over-year sales by $2.

Commercial Vehicle segment EBITDA decreased $27 in 2024. Lower sales volumes and unfavorable product mix decreased earnings by $63 (57% decremental margin). The year-over-year performance-related earnings increase was driven by higher material cost savings of $27, lower spending on electrification initiatives of $24, lower premium freight costs of $9, lower incentive compensation expense of $8, net customer pricing and cost recovery actions of $2 and commodity cost decreases of $2. Partially offsetting these performance-related earnings increases were inflationary cost increases of $20, operational inefficiencies of $7, higher warranty expense of $5 and higher program launch costs of $1.

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Non-GAAP Financial Measures

Adjusted EBITDA

We have defined adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits (OPEB) costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted EBITDA is a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for earnings before income taxes, net income (loss) or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table provides a reconciliation of net loss from continuing operations to adjusted EBITDA.

Net loss from continuing operations $ (53 ) $ (342 ) $ (262 )

Equity in earnings (loss) of affiliates 32 10 (9 )

Income tax expense 53 31 7

Loss from continuing operations before income taxes (32 ) (321 ) (246 )

Restructuring charges, net 23 70 23

Loss on extinguishment of debt 1

Electric vehicle program termination charges 36

Loss on divestiture of ownership interests 9

Supplier capacity charge, net (21 ) 46

Loss on disposal group previously held for sale 26

Amounts attributable to previously closed/divested operations 9

Distress supplier costs 44

Free Cash Flow

We have defined adjusted free cash flow as cash provided by (used in) operating activities less purchases of property, plant and equipment plus proceeds from sale of property, plant and equipment plus cash paid for Off-Highway business divestiture related activities. We believe adjusted free cash flow is useful to investors in

evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Adjusted free cash flow is not intended to represent nor be an alternative to the measure of net cash provided by operating activities reported in accordance with GAAP. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

The following table reconciles net cash flows provided by operating activities to adjusted free cash flow.

Net cash provided by operating activities $ 512 $ 450 $ 476

Cash paid for Off-Highway business divestiture related activities 75 — —

Adjusted free cash flow $ 331 $ 81 $ (23 )

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Liquidity

On January 1, 2026, Dana completed the sale of its Off-Highway business. Net cash proceeds from the Off-Highway business divestiture have been used to pay down debt, strengthening Dana’s financial position, and provide capital returns to shareholders. During January 2026, Dana purchase and redeemed certain of its senior notes, paid down its Term A Facility and continued to repurchase common shares under its board of director approved program. See "Capital Structure Initiatives" in Item 1 for additional information.

The following table provides a reconciliation of cash and cash equivalents to liquidity, a non-GAAP measure, at January 31, 2026:

Cash and cash equivalents $ 659

Additional cash availability from Revolving Facility 1,140

Total liquidity $ 1,799

We had availability of $1,140 at January 31, 2026 under our Revolving Facility after deducting $10 of outstanding letters of credit.

The components of our January 31, 2026 consolidated cash balance were as follows:

U.S. Non-U.S. Total

Cash and cash equivalents held at less than wholly-owned subsidiaries 70 70

A portion of the non-U.S. cash and cash equivalents is utilized for working capital and other operating purposes. Several countries have local regulatory requirements that restrict the ability of our operations to repatriate this cash. Beyond these restrictions, there are practical limitations on repatriation of cash from certain subsidiaries because of the resulting tax withholdings and subsidiary by-law restrictions which could limit our ability to access cash and other assets.

At December 31, 2025, we were in compliance with the covenants of our financing agreements. Under the Revolving Facility and our senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types. The incurrence-based covenants in the Revolving Facility permit us to, among other things, (i) issue foreign subsidiary indebtedness, (ii) incur general secured indebtedness subject to a pro forma first lien net leverage ratio not to exceed 1.50:1.00 in the case of first lien debt and a pro forma secured net leverage ratio of 2.50:1.00 in the case of other secured debt and (iii) incur additional unsecured debt subject to a pro forma total net leverage ratio not to exceed 3.50:1.00, tested at the time of incurrence. We may also make dividend payments in respect of our common stock as well as certain investments and acquisitions subject to a pro forma total net leverage ratio of 2.75:1.00. In addition, the Revolving Facility is subject to a financial covenant requiring us to maintain a first lien net leverage ratio not to exceed 2.00:1.00. The indentures governing the senior notes include other incurrence-based covenants that may subject us to additional specified limitations.

From time to time, depending upon market, pricing and other conditions, as well as our cash balances and liquidity, we may seek to acquire our senior notes or other indebtedness or our common stock through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the indentures governing the notes), for cash, securities or other consideration. In addition, we may enter into sale-leaseback transactions related to certain of our real estate holdings and factor receivables. There can be no assurance that we will pursue any such transactions in the future, as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our financing and governance documents.

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand and (iii) borrowings from our Revolving Facility. We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital, debt obligations and other commitments during the next twelve months. While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity.

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Cash Flow

Net cash provided by operating activities $ 512 $ 450 $ 476

Net cash used in investing activities (222 ) (352 ) (528 )

Net cash provided by (used in) financing activities (371 ) (90 ) 160

The table above summarizes our consolidated statement of cash flows.

Operating activities — Exclusive of working capital, other cash provided by continuing operations was $300 and $43 in 2025 and 2024, respectively, while other cash used by continuing operations was $10 in 2023. The year-over-year improvement from 2023 to 2024 and 2024 to 2025 is primarily attributable to the impact of higher year-over-year operating earnings from continuing operations. Working capital provided cash of $29, $33 and $15 in 2025, 2024 and 2023, respectively. Cash of $47, $14 and $63 was used to fund higher accounts receivable in 2025, 2024 and 2023, respectively. Cash of $78 was provided by lower inventory levels in 2025. Cash of $11 and $37 was used to fund higher inventory levels is 2024 and 2023, respectively. Decreases in accounts payable and other net liabilities used cash of $2 in 2025, while increases in accounts payable and other net liabilities provided cash of $58 and $115 in 2024 and 2023, respectively. Operating activities of discontinued operations generated cash of $183, $374 and $471 in 2025, 2024 and 2023, respectively.

Investing activities — Expenditures for property plant and equipment by continuing operations were $214, $312 and $427, in 2025, 2024 and 2023 respectively. The decrease in capital spending from 2023 to 2024 was primarily due to lower year-over-year program launches. The decrease in capital spending from 2024 to 2025 was primarily due to lower year-over-year program launches and a focus on rationalizing capital investments. On April 25, 2025, we sold our ownership interest in Axles India Limited for $43. On June 6, 2025, we sold our ownership interest in Switch Mobility Limited for $10. Investing activities of discontinued operations used cash of $53, $47 and $91 in 2025, 2024 and 2023, respectively.

Financing activities — During 2025, we had net borrowings on our Revolving Facility of $390 and net borrowings on our Term A Facility of $225. During 2025, we redeemed the remaining $200 of our April 2025 Notes. During 2023, we made net repayments of $25 on our Revolving Facility. During 2023, we completed the issuance of €425 of our July 2031 Notes, paying financings costs of $7. Also during 2023, we redeemed $200 of our April 2025 Notes. During 2023, we paid financing costs of $2 to amend our credit and guaranty agreement, extending the Revolving Facility maturity to March 14, 2028. We used cash of $54, $58 and $58 for dividend payments to common stockholders in 2025, 2024 and 2023, respectively. During 2025, we used $650 to repurchase 34,278,815 common stock shares. Distributions to noncontrolling interests totaled $17, $20 and $10 in 2025, 2024 and 2023, respectively. During 2024, we received $11 from Hydro-Québec, which represents deferred purchase consideration associated with their acquisition of a 45% ownership interest in SME S.p.A. from Dana. Hydro-Québec made cash contributions to Dana TM4 of $18 and $22 in 2024 and 2023, respectively. During 2025, we used cash of $14 to settle swaps associated with our April 2025 Notes.

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Contractual Obligations

We are obligated to make future cash payments in fixed amounts under various agreements. The following table summarizes our significant contractual obligations as of December 31, 2025, except for the long-term debt and interest payment figures which are presented as of January 8, 2026. On January 1, 2026, Dana completed the sale of its Off-Highway business. A portion of the cash proceeds from the divestiture were used to purchase and redeem certain of Dana's senior notes. See Note 13 of our consolidated financial statements in Item 8 for additional information. The long-term debt and interest payment amounts presented in the table below are after the January 7, 2026 senior note purchases and January 8, 2026 senior note redemptions.

Payments Due by Period

Pension contribution(6) 18 18

Retiree health care benefits(7) 37 4 8 8 17

Uncertain income tax positions(8) —

______________________________________________________

Notes:

(1) Principal payments on long-term debt as of January 8, 2026.

Contingencies

For a summary of litigation and other contingencies, see Note 15 of our consolidated financial statements in Item 8. Based on information available to us at the present time, we do not believe that any liabilities beyond the amounts already accrued that may result from these contingencies will have a material adverse effect on our liquidity, financial condition or results of operations.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with GAAP requires us to use estimates and make judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. Considerable judgment is often involved in making these determinations. Critical estimates are those that require the most difficult, subjective or complex judgments in the preparation of the financial statements and the accompanying notes. We evaluate these estimates and judgments on a regular basis. We believe our assumptions and estimates are reasonable and appropriate. However, the use of different assumptions could result in significantly different results and actual results could differ from those estimates. The following discussion of accounting estimates is intended to supplement the Summary of Significant Accounting Policies presented as Note 1 of our consolidated financial statements in Item 8.

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Income taxes — Accounting for income taxes is complex, in part because we conduct business globally and therefore file income tax returns in numerous tax jurisdictions. Significant judgment is required in determining the income tax provision, uncertain tax positions, deferred tax assets and liabilities and the valuation allowances recorded against our net deferred tax assets. A valuation allowance is provided when, in our judgment based upon available information, it is more likely than not that a portion of such deferred tax assets will not be realized. To make this assessment, we consider the historical and projected future taxable income or loss by tax jurisdiction. We consider all components of comprehensive income and weigh the positive and negative evidence, putting greater reliance on objectively verifiable historical evidence than on projections of future profitability that are dependent on actions that have not taken place as of the assessment date. We also consider changes to historical profitability of actions that occurred through the date of assessment and objectively verifiable effects of material forecasted events that would have a sustained effect on future profitability, as well as the effect on historical profits of nonrecurring events. We also incorporate the changes to historical and prospective income from tax planning strategies that are prudent and feasible.

In the ordinary course of business, there are many transactions and calculations where the ultimate tax determination is less than certain. We are regularly under audit by the various applicable tax authorities. Although the outcome of tax audits is always uncertain, we believe that we have appropriate support for the positions taken on our tax returns and that our annual tax provisions include amounts sufficient to pay assessments, if any, upon final determination by the taxing authorities. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. See additional discussion of our deferred tax assets and liabilities in Note 17 of our consolidated financial statements in Item 8.

Retiree benefits — Accounting for pension benefits and other postretirement benefits (OPEB) involves estimating the cost of benefits to be provided well into the future and generally attributing that cost to the time period each employee works. These plan expenses and obligations are dependent on assumptions developed by us in consultation with our outside advisers such as actuaries and other consultants and are generally calculated independently of funding requirements. The assumptions used, including inflation, discount rates, investment returns, mortality rates, turnover rates, retirement rates, future compensation levels and health care cost trend rates, have a significant impact on plan expenses and obligations. These assumptions are regularly reviewed and modified when appropriate based on historical experience, current trends and future outlook. Changes in one or more of the underlying assumptions could result in a material impact to our consolidated financial statements in any given period. If actual experience differs from expectations, our financial position and results of operations in future periods could be affected.

Mortality rates are based in part on the company's plan experience and actuarial estimates. The inflation assumption is based on an evaluation of external market indicators, while retirement and turnover rates are based primarily on actual plan experience. Health care cost trend rates are developed based on our actual historical claims experience, the near-term outlook and an assessment of likely long-term trends. For our largest plans, discount rates are based upon the construction of a yield curve which is developed based on a subset of high-quality fixed-income investments (those with yields between the 40th and 90th percentiles). The projected cash flows are matched to this yield curve and a present value developed which is then calibrated to develop a single equivalent discount rate. Pension benefits are funded through deposits with trustees that satisfy, at a minimum, the applicable funding regulations. For our largest defined benefit pension plans, expected investment rates of return are based on input from the plans’ investment advisers regarding our expected investment portfolio mix, historical rates of return on those assets, projected future asset class returns, the impact of active management and long-term market conditions and inflation expectations. We believe that the long-term asset allocation on average will approximate the targeted allocation and we regularly review the actual asset allocation to periodically re-balance the investments to the targeted allocation when appropriate. OPEB and the majority of our non-U.S. pension benefits are funded as they become due.

Actuarial gains or losses may result from changes in assumptions or when actual experience is different from that which was expected. Under the applicable standards, those gains and losses are not required to be immediately recognized in our results of operations as income or expense, but instead are deferred as part of AOCI and amortized into our results of operations over future periods.

U.S. retirement plans — Our U.S. defined benefit pension plans comprise 61% of our consolidated defined benefit pension obligations at December 31, 2025. These plans are frozen and no service-related costs are being incurred. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets.

Rising discount rates decrease the present value of future pension obligations – a 25 basis point increase in the discount rate would decrease our U.S. pension liability by about $7. As indicated above, when establishing the expected long-term rate of return on our U.S. pension plan assets, we consider historical performance and forward looking return estimates reflective of our portfolio mix and investment strategy. Based on the most recent analysis of projected portfolio returns, we concluded that the use of a 5.75% expected return in 2026 is appropriate for our U.S. pension plans. See Note 12 to our consolidated financial statements in Item 8 for information about the investing and allocation objectives related to our U.S. pension plan assets.

We use a full yield curve approach to estimate the service (where applicable) and interest components of the annual cost of our pension and other postretirement benefit plans. This method estimates interest and service expense using the specific spot rates, from the yield curve, that relate to projected cash flows. We believe this method is a more precise measurement of interest and service costs by improving the correlation between the projected cash flows and the corresponding interest rates. The determination of the projected benefit obligation at year end is unchanged.

At December 31, 2025, we have $125 of unrecognized losses relating to our U.S. pension plans. Actuarial gains and losses, which are primarily the result of changes in the discount rate and other assumptions and differences between actual and expected asset returns, are deferred in AOCI and amortized to expense following the corridor approach. We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy of inactive participants.

Based on the current funded status of our U.S. plans, we expect to make contributions of $1 during 2026.

See Note 12 of our consolidated financial statements in Item 8 for additional discussion of our pension and OPEB obligations.

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Acquisitions —From time to time, we make strategic acquisitions that have a material impact on our consolidated results of operations or financial position. We allocate the purchase price of acquired businesses to the identifiable tangible and intangible assets acquired, liabilities assumed and any redeemable noncontrolling interests or noncontrolling interests based upon their estimated fair values as of the acquisition date. We determine the estimated fair values using information available to us and engage independent third-party valuation specialists when necessary. Estimating fair values can be complex and subject to significant business judgment. We believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they were based, in part, on historical experience and information obtained from management of the acquired companies and were inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired included, but were not limited to, future expected cash flows from product sales, customer contracts and acquired technologies, and discount rates. The discount rates used to discount expected future cash flows to present value were typically derived from a weighted-average cost of capital analysis and adjusted to reflect inherent risks. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results. Generally, we have, if necessary, up to one year from the acquisition date to finalize our estimates of acquisition date fair values.

Indefinite-lived intangible assets — Our indefinite-lived intangible assets are tested for impairment annually as of October 31 for all of our reporting units, and more frequently if events or circumstances warrant such a review. We make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected gross margins, discount rates, and exit earnings multiples. The cash flows are estimated over a significant future period of time, which makes those estimates and assumptions subject to a high degree of uncertainty. Our utilization of market valuation models requires us to make certain assumptions and estimates regarding the applicability of those models to our assets and businesses. We use our internal forecasts, which we update quarterly, to make our cash flow projections. These forecasts are based on our knowledge of our customers’ production forecasts, our assessment of market growth rates, net new business, material and labor cost estimates, cost recovery agreements with customers and our estimate of savings expected from our restructuring activities.

The most likely factors that would significantly impact our forecasts are changes in customer production levels and loss of significant portions of our business. We believe that the assumptions and estimates used in the assessment of indefinite-lived intangible assets as of October 31, 2025 were reasonable.

Long-lived assets with definite lives — We perform impairment assessments on our property, plant and equipment and our definite-lived intangible assets whenever events and circumstances indicate that the carrying amounts of the assets may not be recoverable. When indications are present, we compare the estimated future undiscounted net cash flows of the operations to which the assets relate to the carrying amounts of such assets. We utilize the cash flow projections discussed above for property, plant and equipment and amortizable intangibles. We group the assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the undiscounted future cash flows using the life of the primary assets. If the carrying amounts of the long-lived assets are not recoverable from future cash flows and exceed their fair value, an impairment loss is recognized to reduce the carrying amounts of the long-lived assets to their fair value. Fair value is determined based on discounted cash flows, third-party appraisals or other methods that provide appropriate estimates of value. Determining whether a triggering event has occurred, performing the impairment analysis and estimating the fair value of the assets require numerous assumptions and a considerable amount of management judgment.

Investments in affiliates — We had aggregate investments in affiliates of $102 at December 31, 2025 and $125 at December 31, 2024. We monitor our investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. If we determine that an other-than-temporary decline in value has occurred, we recognize an impairment loss, which is measured as the difference between the recorded carrying value and the fair value of the investment. Fair value is generally determined using the discounted cash flows (an income approach) or guideline public company (a market approach) methods.

Warranty — Costs related to product warranty obligations are estimated and accrued at the time of sale with a charge against cost of sales. Warranty accruals are evaluated and adjusted as appropriate based on occurrences giving rise to potential warranty exposure and associated experience. Warranty accruals and adjustments require significant judgment, including a determination of our involvement in the matter giving rise to the potential warranty issue or claim, our contractual requirements, estimates of units requiring repair and estimates of repair costs. If actual experience differs from expectations, our financial position and results of operations in future periods could be affected.

Contingency reserves — We have numerous other loss exposures, such as product liability, environmental liability and matters involving litigation. Establishing loss reserves for these matters requires the use of estimates and judgment regarding risk of exposure and ultimate liability. Product liability claims are generally estimated based on historical experience and the estimated costs associated with specific events giving rise to potential field campaigns or recalls. We consider the most probable method of remediation, current laws and regulations and existing technology in estimating our environmental liabilities. In the case of legal contingencies, estimates are made of the likely outcome of legal proceedings and potential exposure where reasonably determinable based on the information presently known to us. New information and other developments in these matters could materially affect our recorded liabilities.

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to fluctuations in foreign currency exchange rates, commodity prices for products we use in our manufacturing and interest rates. To reduce our exposure to these risks, we maintain risk management controls to monitor these risks and take appropriate actions to attempt to mitigate such forms of market risks.

Foreign currency exchange rate risk — Our foreign currency exposures are primarily associated with intercompany and third party sales and purchase transactions, cross-currency intercompany loans and external debt. We use forward contracts to manage our foreign currency exchange rate risk associated with a portion of our forecasted foreign currency-denominated sales and purchase transactions and with certain foreign currency-denominated assets and liabilities. We also use currency swaps, including fixed-to-fixed cross-currency interest rate swaps, to manage foreign currency exchange rate risk associated with our intercompany loans and external debt. Foreign currency exposures are reviewed quarterly, at a minimum, and natural offsets are considered prior to entering into derivative instruments.

Changes in the fair value of derivative instruments treated as cash flow hedges are reported in other comprehensive income (loss) (OCI). Deferred gains and losses are reclassified to earnings in the same period in which the underlying transactions affect earnings. Specifically, with respect to the cross-currency interest rate swap, to the extent we recognize an exchange gain or loss on the underlying external debt, we reclassify an offsetting portion from OCI to earnings in the same period.

Changes in the fair value of derivative instruments not treated as cash flow hedges are recognized in earnings in the period in which those changes occur. Changes in the fair value of derivative instruments associated with product-related transactions are recorded in cost of sales, while those associated with non-product transactions are recorded in other income (expense), net. See Note 14 of our consolidated financial statements in Item 8.

The following table summarizes the sensitivity of the fair value of our derivative instruments, including forward contracts and currency swaps, at December 31, 2025 to a 10% change in foreign exchange rates.

10% Increase 10% Decrease

in Rates in Rates

Gain (Loss) Gain (Loss)

Foreign currency rate sensitivity:

Currency swaps $ (34 ) $ 34

Forward contracts $ (36 ) $ 42

At December 31, 2025, of the $1,610 total notional amount of foreign currency derivatives, approximately 56% primarily represents forward contracts associated with our forecasted foreign currency-denominated sales, purchase transactions and hedges of inter-company loans that are not deemed to be permanent in nature. The remaining 44% represents the aggregate of fixed-to-fixed cross-currency interest rate swaps.

To manage our global liquidity objectives, we periodically execute intercompany loans, some of which are foreign currency-denominated. With respect to such intercompany loans, the total notional amount outstanding at December 31, 2025 is approximately $768. Depending on the specific objective of each intercompany loan arrangement, certain intercompany loans may be hedged while others remain unhedged for strategic reasons. The decision to hedge the loan, to designate the loan itself as a hedge or not to hedge the loan is dependent on management's underlying strategy. Of the approximately $768 of foreign currency-denominated intercompany loans outstanding at December 31, 2025, $327, or 43%, has been hedged by one of our fixed-to-fixed cross-currency swaps whereby we have protected the income statement from exchange rate risk. Of the remaining 57% of such outstanding intercompany loans, $72 has been hedged by foreign currency forwards and the remaining balances have not been hedged.

Commodity price risk — We do not utilize derivative contracts to manage commodity price risk. Our overall strategy is to pass through commodity risk to our customers in our pricing agreements. A substantial portion of our customer agreements include contractual provisions for the pass-through of commodity price movements. In instances where the risk is not covered contractually, we have generally been able to adjust customer pricing to recover commodity cost increases.

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Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Dana Incorporated

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Dana Incorporated and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and schedule of valuation and qualifying accounts and reserves for each of the three years in the period ended December 31, 2025 appearing under Item 8 (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s report on internal control over financial reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Discontinued Operations - Off-Highway Business

As described in Notes 1 and 2 to the consolidated financial statements, in June 2025, the Company entered into a definitive agreement to sell its Off-Highway business for $2.7 billion. Management concluded that their Off-Highway business met the criteria to be classified as held for sale in June 2025. Management analyzed the quantitative and qualitative factors relevant to the pending divestiture of the Off-Highway business and determined that the conditions for discontinued operations presentation have been met. As a result, the Company presented current and noncurrent assets of disposal group held for sale of $2 billion and current and noncurrent liabilities of disposal group held for sale of $871 million as of December 31, 2025 and net income from discontinued operations of $155 million for the year ended December 31, 2025.

The principal considerations for our determination that performing procedures related to the discontinued operations of the Off-Highway business is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to management’s assessment, classification, and disclosure of the discontinued operations.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s discontinued operations assessment, including controls related to management’s classification and disclosure of the discontinued operations in the Company’s consolidated financial statements. These procedures also included, among others (i) evaluating management’s assessment that the Off-Highway business sale was a discontinued operation; (ii) testing the classification of amounts included in discontinued operations, including agreeing such amounts to the Company’s historical accounting records; and (iii) evaluating the sufficiency of the disclosures in the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Toledo, Ohio

We have served as the Company’s auditor since 1916.

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Dana Incorporated

Consolidated Statement of Operations

(In millions, except per share amounts)

Costs and expenses

Selling, general and administrative expenses 387 429 440

Amortization of intangibles 7 8 8

Restructuring charges, net 23 70 23

Loss on disposal group previously held for sale (26 )

Other income (expense), net (46 ) (21 ) (14 )

Loss on extinguishment of debt (1 )

Loss from continuing operations before income taxes (32 ) (321 ) (246 )

Income tax expense 53 31 7

Equity in earnings (loss) of affiliates 32 10 (9 )

Net loss from continuing operations (53 ) (342 ) (262 )

Net income from discontinued operations 155 293 310

Less: Noncontrolling interests net income from continuing operations 17 21 22

Net income (loss) attributable to the parent company $ 85 $ (57 ) $ 38

Net income (loss) per share available to common stockholders

Basic loss per share from continuing operations $ (0.52 ) $ (2.41 ) $ (1.88 )

Basic earnings per share from discontinued operations $ 1.16 $ 2.02 $ 2.14

Basic earnings (loss) per share $ 0.64 $ (0.39 ) $ 0.26

Diluted loss per share from continuing operations $ (0.52 ) $ (2.41 ) $ (1.88 )

Diluted earnings per share from discontinued operations $ 1.16 $ 2.02 $ 2.14

Diluted earnings (loss) per share $ 0.64 $ (0.39 ) $ 0.26

Weighted-average common shares outstanding

The accompanying notes are an integral part of the consolidated financial statements.

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Dana Incorporated

Consolidated Statement of Comprehensive Income

(In millions)

Net loss from continuing operations $ (53 ) $ (342 ) $ (262 )

Other comprehensive income (loss) from continuing operations, net of tax:

Currency translation adjustments 41 (97 ) 38

Hedging gains and losses 48 (48 )

Defined benefit plans 8 13 (16 )

Other comprehensive income (loss) 97 (132 ) 22

Total comprehensive income (loss) from continuing operations 44 (474 ) (240 )

Net income from discontinued operations 155 293 310

Other comprehensive income (loss) from discontinued operations, net of tax:

Currency translation adjustments 6 (20 ) (8 )

Hedging gains and losses (1 ) (1 )

Defined benefit plans 9 (5 )

Other comprehensive income (loss) from discontinued operations 15 (26 ) (9 )

Total comprehensive income from discontinued operations 170 267 301

Total comprehensive income (loss) 214 (207 ) 61

The accompanying notes are an integral part of the consolidated financial statements.

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Dana Incorporated

Consolidated Balance Sheet

(In millions, except share and per share amounts)

Assets

Current assets

Cash and cash equivalents $ 469 $ 494

Accounts receivable

Current assets of disposal group held for sale 1,029 923

Other noncurrent assets 102 118

Investments in affiliates 102 125

Property, plant and equipment, net 1,872 1,830

Noncurrent assets of disposal group held for sale 954 855

Liabilities, redeemable noncontrolling interests and equity

Current liabilities

Short-term debt $ 615 $ 8

Current portion of long-term debt 30 214

Accrued payroll and employee benefits 210 176

Taxes on income 75 49

Current portion of operating lease liabilities 41 35

Other accrued liabilities 495 314

Current liabilities of disposable group held for sale 688 645

Noncurrent operating lease liabilities 266 235

Pension and postretirement obligations 249 233

Other noncurrent liabilities 337 322

Noncurrent liabilities of disposal group held for sale 183 163

Commitments and contingencies (Note 15)

Redeemable noncontrolling interests 189

Parent company stockholders' equity

Accumulated other comprehensive loss (1,032 ) (1,142 )

Total parent company stockholders' equity 840 1,333

Noncontrolling interests 59 63

The accompanying notes are an integral part of the consolidated financial statements.

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Dana Incorporated

Consolidated Statement of Cash Flows

(In millions)

Operating activities

Net income (loss) $ 102 $ (49 ) $ 48

Less: Net income from discontinued operations 155 293 310

Net loss from continuing operations (53 ) (342 ) (262 )

Amortization of deferred financing charges 5 6 5

Write-off of deferred financing costs 1

Earnings of affiliates, net of dividends received (8 ) (7 ) 11

Stock compensation expense 40 30 26

Deferred income taxes (60 ) (76 ) (99 )

Pension expense (benefit), net (2 ) 7 4

Change in working capital 29 33 15

Loss on disposal group previously held for sale 26

Change in other noncurrent assets and liabilities 1 63

Loss on divestiture of ownership interests (12 )

Net cash provided by operating activities from continuing operations 329 76 5

Net cash provided by operating activities 512 450 476

Investing activities

Purchases of property, plant and equipment (214 ) (312 ) (427 )

Proceeds from sale of property, plant and equipment 13 7 2

Settlements of undesignated derivatives (25 ) (5 ) (13 )

Proceeds from sale of investments 57

Other, net 5 1

Net cash used in investing activities (222 ) (352 ) (528 )

Financing activities

Net change in short-term debt 607 (14 ) (30 )

Proceeds from long-term debt 1 458

Repayment of long-term debt (223 ) (37 ) (209 )

Deferred financing payments (9 )

Dividends paid to common stockholders (54 ) (58 ) (58 )

Repurchases of common stock (650 )

Distributions to noncontrolling interests (17 ) (20 ) (10 )

Collection of note receivable from redeemable noncontrolling interest 11

Contributions from redeemable noncontrolling interests 18 22

Swap settlements (14 )

Other, net (20 ) 9 (4 )

Net cash provided by (used in) financing activities (371 ) (90 ) 160

Cash, cash equivalents and restricted cash - beginning of period 512 563 442

Effect of exchange rate changes on cash balances 55 (59 ) 13

Cash, cash equivalents and restricted cash - end of period $ 486 $ 512 $ 563

The accompanying notes are an integral part of the consolidated financial statements.

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Dana Incorporated

Consolidated Statement of Stockholders’ Equity

(In millions)

Parent Company Stockholders'

Accumulated Parent

Additional Other Company Non-

Stock Stock Capital Earnings Stock Loss Equity Interests Equity

Other comprehensive income 11 11 11

Distributions to noncontrolling interests — (12 ) (12 )

Redeemable noncontrolling interests adjustment to redemption value 16 16 16

Stock withheld for employees taxes (9 ) (9 ) (9 )

Distributions to noncontrolling interests — (17 ) (17 )

Redeemable noncontrolling interests adjustment to redemption value 4 4 4

Stock withheld for employees taxes (4 ) (4 ) (4 )

Distributions to noncontrolling interests — (17 ) (17 )

Repurchase and retirement of shares (1 ) (654 ) (655 ) (655 )

Redeemable noncontrolling interests adjustments to redemption value 8 1 9 9

Sale of non-wholly-owned subsidiary (5 ) (5 )

Purchase of noncontrolling interests (1 ) (1 )

Stock withheld for employees taxes (22 ) (22 ) (22 )

The accompanying notes are an integral part of the consolidated financial statements.

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Dana Incorporated

Index to Notes to the Consolidated

Financial Statements

Page

1. Organization and Summary of Significant Accounting Policies 39

2. Discontinued Operations 43

3. Other Intangible Assets 44

4. Restructuring of Operations 45

5. Inventories 46

6. Supplemental Balance Sheet and Cash Flow Information 46

8. Stockholders' Equity 48

9. Redeemable Noncontrolling Interests 50

10. Earnings per Share 50

11. Stock Compensation 51

12. Pension and Postretirement Benefit Plans 52

13. Financing Agreements 58

14. Fair Value Measurements and Derivatives 61

15. Commitments and Contingencies 63

16. Warranty Obligations 64

18. Other Income (Expense), Net 68

19. Revenue from Contracts with Customers 68

20. Segments, Geographical Area and Major Customer Information 70

21. Equity Affiliates 73

22. Quarterly Financial Data (Unaudited) 73

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Notes to the Consolidated Financial Statements

(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 on-highway vehicle manufacturer in the world.

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 include the accounts of all subsidiaries where we hold a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Investments in 20 to 50%-owned affiliates, which are not required to be consolidated, are generally accounted for under the equity method. Equity in earnings of these investments is presented separately in the consolidated statement of operations, net of tax. Investments in less-than-20%-owned companies are generally included in the financial statements at the cost of our investment. Dividends, royalties and fees from these cost basis affiliates are recorded in income when received. Certain items previously reported in specific financial statement captions have been reclassified to conform to the current presentation.

In June 2025, we entered into a definitive agreement to sell our Off-Highway business. We concluded that our Off-Highway business met the criteria to be classified as held for sale in June 2025. We analyzed the quantitative and qualitative factors relevant to the pending divestiture of our Off-Highway business and determined that the conditions for discontinued operations presentation have been met. As such, the financial position, results of operations and cash flows of that business are reported as discontinued operations in the accompanying consolidated financial statements. Prior period amounts have been recast to reflect discontinued operations presentation. On January 1, 2026, we completed the previously announced sale of our Off-Highway business to Allison Transmission Holdings, Inc. The sale was consummated pursuant to the terms and conditions of the definitive agreement to sell that we entered in June 2025. See Note 2 for additional information.

Held for sale — We classify long-lived assets or disposal groups as held for sale in the period: management commits to a plan to sell; the long-lived asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such long-lived assets or disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; the sale is probable within one year; the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long-lived assets and disposal groups classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. If held for sale criteria is no longer met, assets are reclassified as held and used at the lower of their adjusted carrying value or fair value.

Discontinued operations — The results of operations of a component or a group of components that either has been disposed of or is classified as held for sale is reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on operations and financial results.

Estimates — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP), which require the use of estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying disclosures. We believe our assumptions and estimates are reasonable and appropriate. However, due to the inherent uncertainties in making estimates, actual results could differ from those estimates.

Fair value measurements — A three-tier fair value hierarchy is used to prioritize the inputs to valuation techniques used to measure fair value. The three levels of inputs are as follows: Level 1 inputs (highest priority) include unadjusted quoted prices in active markets for identical instruments. Level 2 inputs include quoted prices for similar instruments that are observable either directly or indirectly. Level 3 inputs (lowest priority) include unobservable inputs in which there is little or no market data, which require management to develop its own assumptions. Classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The inputs we use in our valuation techniques include 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. When available, we use quoted market prices to determine the fair value (market approach). In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, we consider the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of credit risk that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date (income approach). Fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

Cash and cash equivalents — Cash and cash equivalents includes cash on hand, demand deposits and short-term cash investments that are highly liquid in nature and have maturities of three months or less when purchased.

Inventories — Inventories are valued at the lower of cost or net realizable value. Cost is determined using the average or first-in, first-out (FIFO) cost method.

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Property, plant and equipment — Property, plant and equipment are recorded at cost. Depreciation is recognized over the estimated useful lives using primarily the straight-line method for financial reporting purposes and accelerated depreciation methods for federal income tax purposes. Useful lives of newly acquired assets are generally twenty to thirty years for buildings and building improvements, five to ten years for machinery and equipment, three to five years for tooling and office equipment and three to ten years for furniture and fixtures. If assets are impaired, their value is reduced via an increase in accumulated depreciation.

Leases — Our global lease portfolio represents leases of real estate, including manufacturing, assembly and office facilities, while the remainder represents leases of personal property, including manufacturing, material handling and IT equipment. We have lease agreements with lease and non-lease components, which are accounted for separately. Leases with an initial term of twelve months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term. Generally, we use our incremental borrowing rate in determining the present value of lease payments, unless there is a rate stated in the lease agreement.

Pre-production costs related to long-term supply arrangements — The costs of tooling used to make products sold under long-term supply arrangements are capitalized as part of property, plant and equipment and depreciated over their useful lives if we own the tooling or if we fund the purchase but our customer owns the tooling and grants us the irrevocable right to use the tooling over the contract period. If we have a contractual right to bill our customers, costs incurred in connection with the design and development of tooling are carried as a component of other accounts receivable until invoiced. Design and development costs related to customer products are deferred if we have an agreement to collect such costs from the customer; otherwise, they are expensed when incurred. The machinery and equipment component of property, plant and equipment includes $20 and $22 of our tooling related to long-term supply arrangements at December 31, 2025 and December 31, 2024 . Also, at December 31, 2025 and December 31, 2024 other accounts receivables include $52 and $57 and other noncurrent assets include $40 and $32 of costs related to tooling, design and development that we have a contractual right to collect from our customers.

Intangible assets — Intangible assets include the value of core technology, trademarks and trade names and customer relationships. Core technology and customer relationships have definite lives while the majority of our trademarks and trade names have indefinite lives. Definite-lived intangible assets are amortized over their useful life using the straight-line method of amortization and are periodically reviewed for impairment indicators. Amortization of core technology is charged to cost of sales. Amortization of trademarks and trade names and customer relationships is charged to amortization of intangibles. Fully amortized intangible assets are retired at the end of their economic useful life. Indefinite-lived intangible assets are tested for impairment annually and more frequently if impairment indicators exist. See Note 3 for more information about intangible assets.

Investments in affiliates — Investments in affiliates include investments accounted for under the equity and cost methods. We monitor our investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis in accordance with GAAP. Indicators include, but are not limited to, current economic and market conditions, operating performance of the affiliate, including current earnings trends and undiscounted cash flows, and other affiliate-specific information. If we determine that an other-than-temporary decline in value has occurred, we recognize an impairment loss, which is measured as the excess of the investment's recorded carrying value over its fair value. The fair value determination, particularly for investments in privately-held companies, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and determination of whether any identified impairment is other than temporary. See Note 21 for further information about our investment in affiliates.

Tangible asset impairments — We review the carrying value of depreciable long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the undiscounted future net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell and are no longer depreciated.

Other long-lived assets and liabilities — We discount our workers’ compensation obligations by applying blended risk-free rates that are appropriate for the duration of the projected cash flows. The use of risk-free rates is considered appropriate given that other risks affecting the volume and timing of payments have been considered in developing the probability-weighted projected cash flows. The blended risk-free rates are revised annually to consider incremental cash flow projections.

Supplier finance programs — We facilitate voluntary supplier finance programs to provide certain suppliers the opportunity to sell their right to Dana payment obligations to participating financial institutions. Under these programs, Dana agrees to pay the participating financial institutions the stated amount of confirmed invoices from its designated suppliers on the original maturity dates of the invoices. Participation by suppliers in these programs have no impact on the payment terms and amounts due from Dana. Dana does not have an economic interest in a supplier's participation in the program and is not a party to the agreement between the supplier and the financial institutions. In connection with these programs, Dana does not pledge assets or other forms of guarantees as security for the committed payment to the participating financial institutions. Confirmed obligations are presented as accounts payable within total current liabilities on the consolidated balance sheet.

Financial instruments — The carrying values of cash and cash equivalents, trade receivables, notes receivable and short-term borrowings approximate fair value. Borrowings under our credit facilities are carried at historical cost and adjusted for principal payments and foreign currency fluctuations.

Derivatives — Foreign currency forward contracts and currency swaps are carried at fair value. We enter into these contracts to manage our exposure to the impact of currency fluctuations on certain foreign currency-denominated assets and liabilities and on a portion of our forecasted purchase and sale transactions. On occasion, we also enter into net investment hedges to protect the translated U.S. dollar value of our investment in certain foreign subsidiaries. We also periodically enter into fixed-to-fixed cross-currency swaps on foreign currency-denominated external or intercompany debt instruments to reduce our exposure to foreign currency exchange rate risk. We do not use derivatives for trading or speculative purposes and we do not hedge all of our exposures.

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For derivative instruments designated as cash flow hedges, at the cash flow hedge’s inception and on an ongoing basis, the company formally assesses whether the cash flow hedging instruments have been highly effective in offsetting changes in the cash flows of the hedged transactions and whether those cash flow hedging instruments may be expected to remain highly effective in future periods. Changes in the fair value of currency-related contracts treated as cash flow hedges are deferred and included as a component of other comprehensive income (loss) (OCI). For our fixed-to-fixed cross-currency swaps, a review of critical terms is performed each period to establish that an assumption of effectiveness remains appropriate. Deferred gains and losses are reclassified to earnings in the same periods in which the underlying transactions affect earnings.

Changes in the fair value of contracts treated as net investment hedges are recorded in the cumulative translation adjustment (CTA) component of OCI. Amounts recorded in CTA are deferred until such time as the investment in the associated subsidiary is substantially liquidated. Changes in the fair value of contracts not treated as cash flow hedges or as net investment hedges are recognized in other income (expense), net in the period in which those changes occur.

We may also use fixed-to-floating or floating-to-fixed interest rate swaps or other similar derivatives to manage exposure to fluctuations in interest rates and to adjust the mix of our fixed-rate and variable-rate debt. As a fair value hedge of the underlying debt, changes in the fair values of the swap and the underlying debt are recorded in interest expense. No such fixed-to-floating or floating-to-fixed swaps were outstanding at December 31, 2025 or December 31, 2024. See Note 14 for additional information.

Cash flows associated with designated derivatives are classified within the same category as the item being hedged on the consolidated statement of cash flows. Cash flows associated with undesignated derivatives are included in the investing category on the consolidated statement of cash flows.

Environmental compliance and remediation — Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to existing conditions caused by past operations that do not contribute to our current or future revenue generation are expensed. Liabilities are recorded when environmental assessments and/or remedial efforts are probable and the costs can be reasonably estimated. We consider the most probable method of remediation, current laws and regulations and existing technology in determining our environmental liabilities.

Pension and other postretirement defined benefits — Net pension and postretirement benefits expenses and the related liabilities are determined on an actuarial basis. These plan expenses and obligations are dependent on management’s assumptions developed in consultation with our actuaries. We review these actuarial assumptions at least annually and make modifications when appropriate. With the input of independent actuaries and other relevant sources, we believe that the assumptions used are reasonable; however, changes in these assumptions, or experience different from that assumed, could impact our financial position, results of operations or cash flows.

Postemployment benefits — Costs to provide postemployment benefits to employees are accounted for on an accrual basis. Obligations that do not accumulate or vest are recorded when payment is probable and the amount can be reasonably estimated. For those obligations that accumulate or vest and the amount can be reasonably estimated, expense and the related liability are recorded as service is rendered.

Equity-based compensation — We measure compensation cost arising from the grant of share-based awards to employees at fair value. We recognize such costs in income over the period during which the requisite service is provided, usually the vesting period. The grant date fair value is estimated using valuation techniques that require the input of management estimates and assumptions.

Government assistance — We account for separate legally enforceable agreements with governments and government agencies where the agreement provides for the government to determine whether Dana will receive assistance and the amount of assistance by applying a contribution accounting model by analogy. The primary forms of government assistance received includes cash grants based on making qualifying capital investments over a specified period of time; cash grants based on creating new jobs, increasing and maintaining qualifying employee headcount over a specified period of time; and cash grants based on investing in specified research and development activities. The agreements include imposed conditions that must be satisfied for us to retain grant proceeds received. Imposed conditions include providing documentation supporting qualified expenditures have been made and may include providing documentation that specified employment levels have been achieved. Imposed conditions related to employment levels typically range from one to five years. Amounts received or receivable from these cash grants are deferred as a liability until such time as we have satisfied all imposed conditions documented in the agreement with the government. Deferred amounts are recorded in other accrued liabilities and other noncurrent liabilities as appropriate. Government assistance received for making qualifying capital investments is realized by reducing the associated fixed assets so long as we have satisfied all imposed conditions by the time the associated fixed assets are placed into service. All other government assistance is realized in other income (expense), net once all imposed conditions have been satisfied. See Notes 6 and 18 for additional information.

Revenue recognition — Sales are recognized when products are shipped and risk of loss has transferred to the customer. We accrue for warranty costs, sales returns and other allowances based on experience and other relevant factors when sales are recognized. Adjustments are made as new information becomes available. Shipping and handling fees billed to customers are included in sales, while costs of shipping and handling are included in cost of sales. Taxes collected from customers are excluded from revenues and credited directly to obligations to the appropriate governmental agencies. See Note 19 for additional information.

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Foreign currency translation — The financial statements of subsidiaries and equity affiliates outside the U.S. located in non-highly inflationary economies are measured using the currency of the primary economic environment in which they operate as the functional currency, which typically is the local currency. Transaction gains and losses resulting from translating assets and liabilities of these entities into the functional currency are included in other income (expense), net or in equity in earnings of affiliates. When translating into U.S. dollars, income and expense items are translated at average monthly rates of exchange, while assets and liabilities are translated at the rates of exchange at the balance sheet date. Translation adjustments resulting from translating the functional currency into U.S. dollars are deferred and included as a component of accumulated other comprehensive income (loss) (AOCI) in stockholders’ equity. For operations whose functional currency is the U.S. dollar, nonmonetary assets are translated into U.S. dollars at historical exchange rates and monetary assets are translated at current exchange rates with translation gains and losses included in other income (expense), net.

We continue to account for Argentina as a highly inflationary economy and remeasure the financial statements of our Argentine subsidiaries as if their functional currency was the U.S. dollar.

Income taxes — In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax assets or liabilities for all years subject to examination based upon management’s evaluation of the facts and circumstances and information available at the reporting dates. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Where applicable, the related interest cost has also been recognized as a component of the income tax provision.

A valuation allowance is provided when, in our judgment based upon available information, it is more likely than not that a portion of such deferred tax assets will not be realized. To make this assessment, we consider the historical and projected future taxable income or loss by tax jurisdiction. We consider all components of comprehensive income and weigh the positive and negative evidence, putting greater reliance on objectively verifiable historical evidence than on projections of future profitability that are dependent on actions that have not taken place as of the assessment date. We also consider changes to historical profitability of actions that occurred through the date of assessment and objectively verifiable effects of material forecasted events that would have a sustained effect on future profitability, as well as the effect on historical profits of nonrecurring events. We also incorporate the changes to historical and prospective income from tax planning strategies that are prudent and feasible.

Research and development — Research and development costs include expenditures for research activities relating to product development and improvement. Salaries, fringes and occupancy costs, including building, utility and overhead costs, comprise the vast majority of these expenses and are expensed as incurred. Research and development expenses were $105, $184 and $196 in 2025,2024 and 2023, respectively.

Recently adopted accounting pronouncements

On December 31, 2025, we adopted Accounting Standards Update (ASU) 2023-09,Improvements to Income Tax Disclosures. This guidance requires disaggregated income tax disclosures on the rate reconciliation and income taxes paid. See Note 17 for more information.

Recently issued accounting pronouncements

In December 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-10,Government Grants (Topic 832), which addresses the recognition, measurement, presentation and disclosure of government grants, including grants related to income and grants related to assets. The new guidance leverages the principles in the accounting framework for government assistance in IFRS, specifically IAS 20, with certain targeted improvements. This ASU requires entities to recognize government grants only when it is probable that the entity will meet the stipulated grant conditions and ultimately receive the grant funds. This ASU provides two acceptable methods for accounting for grants related to assets: the grant may be initially recognized as deferred income, or it may be recorded as an adjustment to reduce the cost basis of the related asset. For grants related to income, the standard mandates that these shall be consistently recognized as deferred income. Deferred grants should be recognized in earnings on a systematic and rational basis either under a general heading such as other income or deducted from the related expense. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods; early adoption is permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815), which provides targeted amendments to better align U.S. GAAP with common risk management practices.The guidance simplifies cash flow hedge accounting for forecasted transactions primarily by allowing entities to hedge a broader group of risks using a single derivative. Additionally, the ASU expands the scope of qualifying hedged items to include certain nonfinancial components, creates an optional accounting model for "choose-your-rate" debt instruments, and eliminates the recognition mismatch for dual-hedge strategies. The guidance is effective for annual reporting periods beginning after December 15, 2026; early adoption is permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06,Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which eliminates the sequential software development-stage model and requires capitalization when management authorizes and commits to funding a software project and determines it is probable of completion. In evaluating whether it is probable the project will be completed, management is required to consider whether there is significant uncertainty associated with the development activities of the software. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of the guidance on the consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05,Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient that allows entities to assume conditions existing at the balance-sheet date will remain constant over the remaining life of current accounts receivable and contract assets arising from revenue transactions. The guidance is effective prospectively for annual reporting periods beginning after December 15, 2025, including interim periods within those annual reporting periods, with early adoption permitted. We do not expect this guidance to have a material impact on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03,Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires public entities to disclose detailed components of income statement expenses, such as inventory purchases, employee compensation, depreciation and amortization within relevant expense captions. Companies are also required to explain amounts not disaggregated and define and disclose total selling expenses. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. We are currently evaluating the impact of the guidance on our financial statement disclosures.

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Note 2. Discontinued Operations

In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc. (Allison). The transaction closed on January 1, 2026, with Dana receiving gross cash proceeds of $2,664. The sale price is subject to adjustment based on net working capital and net indebtedness balances as of the closing date. We expect to recognize a gain on the sale within our financial statements for the first quarter of 2026. The initial accounting for the sale is in process, including the effect of working capital and net indebtedness adjustments and the recognition of foreign currency translation adjustments included in accumulated other comprehensive loss. As such, the gain on sale cannot be estimated at this time.

At closing, Dana entered into a transition services agreement, engineering services agreement, intellectual property and trademark license agreements, and certain supply agreements with Allison. Services to be provided by Dana under the transition services agreement include finance, information technology, human resources and certain other administrative services for periods up to 24 months.

The major classes of line items included in net income from discontinued operations are as follows:

Selling, general and administrative expenses 108 95 109

Amortization of intangibles 2 5 5

Restructuring charges, net 2 6 2

Other income (expense), net (63 ) 10 17

Interest income 3 2 2

Interest expense 3 3 2

Earnings from discontinued operations before income taxes 284 401 424

Net income from discontinued operations $ 155 $ 293 $ 310

During 2025, we incurred $84 of Off-Highway business divestiture transaction related costs. These costs were attributed to discontinued operations and included in other income (expense), net in the table above.

The carrying amounts of the major classes of assets and liabilities of our Off-Highway business are as follows:

Accounts receivable - Trade $ 360 $ 305

Accounts receivable - Other 39 41

Other current assets 97 77

Current assets of disposal group held for sale $ 1,029 $ 923

Deferred tax assets 49 46

Other noncurrent assets 44 72

Operating lease assets 39 33

Property, plant and equipment, net 480 384

Noncurrent assets of disposal group held for sale $ 954 $ 855

Current portion of long-term debt $ 2 $ —

Accrued payroll and employee benefits 72 60

Taxes on income 11 20

Current portion of operating lease liabilities 9 9

Other accrued liabilities 169 154

Current liabilities of disposal group held for sale $ 688 $ 645

Long-term debt $ 33 $ 2

Noncurrent operating lease liabilities 30 23

Pension and postretirement obligations 48 62

Other noncurrent liabilities 72 76

Noncurrent liabilities of disposal group held for sale $ 183 $ 163

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Note 3. Other Intangible Assets

Non-amortizable intangible assets — Our non-amortizable intangible assets include a portion of our trademarks and trade names. Non-amortizable trademarks and trade names consist of the Dana®, Spicer® and TM4® trademarks and trade names utilized in our Commercial Vehicle segment. We value trademarks and trade names using a relief from royalty method which is based on revenue streams. No impairment was recorded during the three years ended December 31, 2025 in connection with the required annual assessment for trademarks and trade names.

Amortizable intangible assets — Our amortizable intangible assets include core technology and customer relationships. Core technology includes the proprietary know-how and expertise that is inherent in our products and manufacturing processes. Customer relationships include the established relationships with our customers and the related ability of these customers to continue to generate future recurring revenue and income.

These assets are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. We group the assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the undiscounted future cash flows. We use our internal forecasts, which we update quarterly, to develop our cash flow projections. These forecasts are based on our knowledge of our customers’ production forecasts, our assessment of market growth rates, net new business, material and labor cost estimates, cost recovery agreements with customers and our estimate of savings expected from our restructuring activities. The most likely factors that would significantly impact our forecasts are changes in customer production levels and loss of significant portions of our business. Our valuation is applied over the life of the primary assets within the asset groups. If the undiscounted cash flows do not indicate that the carrying amount of the asset group is recoverable, an impairment charge is recorded if the carrying amount of the asset group exceeds its fair value based on discounted cash flow analyses or appraisals. There were no impairments recorded during the three years ended December 31, 2025.

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Components of other intangible assets (excluding fully-amortized other intangible assets) —

Weighted

Average Gross Accumulated Net Gross Accumulated Net

Useful Life Carrying Impairment and Carrying Carrying Impairment and Carrying

(years) Amount Amortization Amount Amount Amortization Amount

Amortizable intangible assets

Non-amortizable intangible assets

The net carrying amounts of intangible assets attributable to each of our operating segments at December 31, 2025 were as follows: Light Vehicle Systems (Light Vehicle) – $8 and Commercial Vehicle Systems (Commercial Vehicle) – $63.

Amortization expense related to amortizable intangible assets —

Charged to cost of sales $ 5 $ 5 $ 8

Charged to amortization of intangibles 7 8 8

Total amortization $ 12 $ 13 $ 16

The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on December 31, 2025 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.

Amortization expense $ 11 $ 10 $ 6 $ 3 $ 2

Note 4. Restructuring of Operations

Our restructuring activities include rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations, and headcount reduction initiatives focused on reducing operating and overhead costs. 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.

During 2024, we announced actions to consolidate certain manufacturing facilities along with global headcount reductions focused on reducing engineering and overhead costs in response to market dynamics, including delays in the adoption of electric vehicles. During 2025, we continued to execute on these initiatives.

Accrued restructuring costs and activity —

Employee

Termination Exit

Benefits Costs Total

Charges to restructuring 15 8 23

Cash payments (8 ) (8 ) (16 )

DAN US Equity

DAN · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions)

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8. Financial Statements and Supplementary Data

DAN US Equity☆

DAN · 10-K · period ended 2025-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions)

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8. Financial Statements and Supplementary Data

DAN US Equity