Dana Incorporated Achieves Record Annual Sales, Profit, and Margin

MAUMEE, Ohio, Feb. 15, 2019 /PRNewswire/ --

Full-Year Highlights

    --  Record sales of $8.143 billion, an increase of $934 million or growth of
        13 percent, compared with 2017
    --  Net income attributable to Dana of $427 million; diluted EPS of $2.91
    --  Record adjusted EBITDA of $957 million, an increase of $122 million, or
        growth of 15 percent
    --  Record margin of 11.8 percent of sales, an expansion of 20 basis points
    --  Record diluted adjusted EPS of $2.97, an improvement of 18 percent over
        2017
    --  Operating cash flow of $568 million
    --  Cash dividends of $0.40 per share declared in 2018, a 67 percent
        increase over dividends declared in 2017
    --  Adjusted free cash flow of $243 million, a 51 percent improvement over
        2017
    --  Second consecutive year of double-digit sales growth, adjusted EBITDA,
        and adjusted free cash flow growth
    --  Company expects to achieve nearly $1 billion in sales growth for third
        consecutive year in 2019; strong sales backlog of $700 million through
        2021
    --  Acquisition of SME Group enhances electromobility capabilities
    --  Company expects to complete acquisition of Oerlikon Drive Systems by
        March 1, 2019

Dana Incorporated (NYSE: DAN) today announced strong financial results for 2018 and affirmed 2019 guidance.

"Dana achieved record annual sales, profit, and profit margin performance in 2018, and we increased adjusted free cash flow by more than 50 percent. At the same time, we organically and inorganically established complete e-Propulsion capability to support all our end markets," said James Kamsickas, Dana president and chief executive officer. "Through the outstanding efforts and commitment of our associates and the support of our customers, we have achieved exceptional results and expect to continue this strong trajectory in 2019, including increasing sales by nearly one billion dollars for the third consecutive year."

Fourth-quarter 2018 Financial Results
Sales for the fourth quarter of 2018 totaled $1.973 billion, compared with $1.837 billion in the same period of 2017, representing a 7 percent improvement. The increase was largely attributable to higher end-market demand in all business units, conversion of sales backlog, and favorable currency translation.

Dana reported net income of $100 million for the fourth quarter of 2018, compared with a net loss of $104 million in the same period of 2017. The increase was primarily due to a $186 million charge related to the enactment of U.S. tax reform in the fourth quarter of 2017 and increased operating earnings associated with higher sales in the fourth quarter of 2018.

Reported diluted earnings per share were $0.69, compared with a loss of $0.74 in the fourth quarter of 2017.

Adjusted EBITDA for the fourth quarter of 2018 was $223 million, compared with $197 million for the same period last year. Profit in the fourth quarter of 2018 benefited from higher end-market demand, conversion of the sales backlog, and acquisition synergies, partially offset by higher commodity costs.

Diluted adjusted earnings per share were $0.71 in the fourth quarter of 2018, compared with $0.62 in the same period last year.

Operating cash flow in the fourth quarter of 2018 was $331 million, compared with $193 million in the same period of 2017. Adjusted free cash flow was $241 million, compared with $51 million in the fourth quarter of 2017, driven by higher earnings and lower capital spending, partially offset by higher working capital requirements to support new program launches in 2018.

Full-year 2018 Financial Results
Sales for 2018 were $8.143 billion, $934 million higher than 2017, primarily due to strong end-market demand, conversion of sales backlog, and to a lesser extent, acquisitions and recovery of material inflation.

Net income in 2018 was $427 million, compared with net income of $111 million in 2017, which included the fourth-quarter non-recurring tax item in 2017 referenced above.

Reported diluted earnings per share were $2.91, compared with $0.71 in 2017.

Adjusted EBITDA for 2018 was $957 million, or 11.8 percent of sales, 20 basis points higher than 2017. Stronger end-market demand more than offset the margin headwind attributable to the effects of higher raw material prices and the associated material recovery reflected in sales.

Diluted adjusted earnings per share for 2018 were $2.97, compared with $2.52 in 2017, an 18 percent increase, primarily reflecting higher year-over-year earnings improvement.

The company reported operating cash flow of $568 million in 2018, an improvement of $14 million compared with 2017. Adjusted free cash flow was $243 million, or 3 percent of sales, compared with $161 million, or 2 percent of sales in 2017. The improvement was driven by higher earnings and lower capital spending, partially offset by higher working capital requirements to support sales growth.

Company Affirms 2019 Full-year Financial Targets
The company affirmed guidance for Dana as currently consolidated, as well as guidance resulting from the completion of the acquisition of the Drive Systems segment of the Oerlikon Group (ODS), which is expected to close by March 1. Guidance ranges are:

    --  Sales of $8.250 to $8.550 billion; or $8.950 to $9.350 billion including
        ODS;
    --  Adjusted EBITDA of $995 million to $1.055 billion, an implied adjusted
        EBITDA margin of approximately 12.2 percent at the midpoint of the
        range; $1.085 billion to $1.165 billion including ODS, an implied
        adjusted EBITDA margin of approximately 12.3 percent at the midpoint of
        the range;
    --  Diluted adjusted EPS(1) of $2.90 to $3.30; $2.95 to $3.45 including ODS;
    --  Operating cash flow of approximately 6.5 percent of sales; 5.5 percent
        including ODS; and
    --  Adjusted free cash flow of approximately 4.0 percent of sales; 3.0
        percent including ODS.

(1)Net income and diluted EPS guidance are not provided, as discussed below in Non-GAAP Financial Information.

"Strong customer demand and delivery of our sales backlog, combined with our recent acquisitions, allowed us to achieve a record performance in 2018," said Jonathan Collins, executive vice president and chief financial officer of Dana. "We have a positive outlook for 2019 due to stable end markets, our solid sales backlog, and accretive acquisitions, all of which we expect to provide us a third consecutive year of double-digit sales and profit growth."

Dana to Host Conference Call at 9 a.m. Today
Dana will discuss its full-year and fourth-quarter results in a conference call at 9 a.m. EST today. Participants may listen to the audio portion of the conference call either through audio streaming online or by telephone. Slide viewing is available online via a link provided on the Dana investor website: www.dana.com/investors. U.S. and Canadian locations should dial 1-888-311-4590 and international locations should call 1-706-758-0054. Please enter conference I.D. 2947329 and ask for the "Dana Incorporated's Financial Webcast and Conference Call." Phone registration will be available starting at 8:30 a.m. EST.

An audio recording of the webcast will be available after 5 p.m. EST on Feb. 15 by dialing 1-855-859-2056 (U.S. or Canada) or 1-404-537-3406 (international) and entering conference I.D. 2947329. A webcast replay will also be available after 5 p.m. EST and may be accessed via Dana's investor website.

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

Diluted adjusted EPS is a non-GAAP financial measure, which we have defined as adjusted net income divided by adjusted diluted shares. We define adjusted net income as net income (loss) attributable to the parent company, excluding any nonrecurring income tax items, restructuring charges, amortization expense, and other adjustments not related to our core operations (as used in adjusted EBITDA), net of any associated income tax effects. We define adjusted diluted shares as diluted shares as determined in accordance with GAAP based on adjusted net income. This measure is considered useful for purposes of providing investors, analysts, and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies. Diluted adjusted EPS is neither intended to represent nor be an alternative measure to diluted EPS reported under GAAP.

Adjusted free cash flow is a non-GAAP financial measure, which we have defined as cash provided by (used in) operating activities excluding voluntary pension contributions, less purchases of property, plant, and equipment. We believe this measure 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 neither intended to represent nor be an alternative to the measure of net cash provided by (used in) operating activities reported under GAAP. Adjusted free cash flow may not be comparable to similarly titled measures reported by other companies.

We have not provided reconciliations of preliminary and projected adjusted EBITDA and diluted adjusted EPS to the most comparable GAAP measures of net income and diluted EPS. Providing net income and diluted EPS guidance is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items that are included in net income and diluted EPS, including restructuring actions, asset impairments, and income tax valuation adjustments. Reconciliations of these non-GAAP measures with the most comparable GAAP measures for historical periods are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Please reference the "Non-GAAP financial information" accompanying our quarterly earnings conference call presentations on our website at www.dana.com/investors for our GAAP results and the reconciliations of these measures, where used, to the comparable GAAP measures.

Forward-Looking Statements
Certain statements and projections contained in this news release are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

Dana's Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this news release speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason.

About Dana Incorporated
Dana is a world leader in highly engineered solutions for improving the efficiency, performance, and sustainability of powered vehicles and machinery. Dana supports the passenger vehicle, commercial truck, and off-highway markets, as well as industrial and stationary equipment applications. Founded in 1904, Dana employs more than 30,000 people in 33 countries on six continents who are committed to delivering long-term value to customers. The company reported sales of $8.1 billion in 2018. Based in Maumee, Ohio, USA, the company's operations in Northwest Ohio and Southeast Michigan were selected as a Top Workplace for the last three years by The (Toledo) Blade and its research partner, Energage. For more information, please visit www.dana.com.


                 DANA INCORPORATED


                 Consolidated
                  Statement of
                  Operations
                  (Unaudited)


                 For the Three
                  Months Ended
                  December 31, 2018
                  and 2017




                                                   Three Months Ended


      (In millions, except per
       share amounts)                               December 31,



                                                                 2018      2017



                 Net sales                                     $1,973    $1,837


      Costs and expenses


          Cost of sales                                       1,717     1,581


          Selling, general and
           administrative expenses                              116       131


          Amortization of
           intangibles                                            2         2


          Restructuring charges, net                              8


      Loss on disposal group
       held for sale                                                    (27)


      Other expense, net                                       (10)      (4)



      Earnings before interest
       and income taxes                                         120        92



     Interest income                                             3         3



     Interest expense                                           25        23



      Earnings before income
       taxes                                                     98        72


      Income tax expense                                          3       189


      Equity in earnings of
       affiliates                                                11         7


                 Net income (loss)                              106     (110)


          Less: Noncontrolling
           interests net income
           (loss)                                                 7       (3)


          Less: Redeemable noncontrolling
           interests net loss                                  (1)      (3)


                 Net income (loss) attributable to
                  the parent company                          $100    $(104)





                 Net income (loss) per share
                  available to common stockholders



        Basic                                                  $0.69   $(0.74)


         Diluted                                                $0.69   $(0.74)




      Weighted-average shares
       outstanding - Basic                                    144.8     145.4


      Weighted-average shares
       outstanding - Diluted                                  145.8     145.4


                    DANA INCORPORATED


                    Consolidated Statement of
                     Operations


                    For the Year Ended December
                     31, 2018 and 2017




                                                             Year Ended


       (In millions, except per share
        amounts)                                          December 31,



                                                                    2018    2017



                    Net sales                                     $8,143  $7,209



      Costs and expenses



          Cost of sales                                         6,986   6,143


           Selling, general and administrative
            expenses                                               499     508


           Amortization of intangibles                               8      11


           Restructuring charges, net                               25      14


       Impairment of indefinite-lived
        intangible asset                                          (20)


       Gain (loss) on disposal group held
        for sale                                                     3    (27)



      Other expense, net                                         (29)   (16)



       Earnings before interest and income
        taxes                                                      579     490


       Loss on extinguishment of debt                                    (19)



      Interest income                                              11      11



      Interest expense                                             96     102



       Earnings before income taxes                                494     380



      Income tax expense                                           78     283


       Equity in earnings of affiliates                             24      19



     
                 Net income                                     440     116


           Less: Noncontrolling interests net
            income                                                  13      10


           Less: Redeemable noncontrolling
            interests net loss                                            (5)


                    Net income attributable to the parent
                     company                                      $427    $111





                    Net income per share available to
                     common stockholders



         Basic                                                    $2.94   $0.72



         Diluted                                                  $2.91   $0.71




       Weighted-average shares outstanding
        - Basic                                                  145.0   145.1


       Weighted-average shares outstanding
        - Diluted                                                146.5   146.9



     
                 DANA INCORPORATED



     
                 Consolidated Statement of Comprehensive Income (Unaudited)



     
                 For the Three Months Ended December 31, 2018 and 2017




                                                                                                                                                            Three Months Ended



      (In millions)                                                                                                                                      
     December 31,



                                                                                                                                                                          2018            2017




     
                 Net income (loss)                                                                                                                                  $106          $(110)



      Other comprehensive income (loss), net of tax:


                                                                                  
     Currency translation adjustments                                    2                       (12)


                                                                                  
     Hedging gains and losses                                           21                       (17)


                                                                                  
     Investment and other gains and losses                                                         2


                                                                                  
     Defined benefit plans                                            (11)                      (35)



                                                                                  
     Other comprehensive income (loss)                                  12                       (62)




     
                Total comprehensive income (loss)                                                                                                                    118           (172)


                                                                                    Less: Comprehensive (income) loss attributable to noncontrolling
                                                                                     interests                                                        (7)                         1


                                                                                    Less: Comprehensive loss attributable to redeemable
                                                                                     noncontrolling interests                                           6                          2




     
                Comprehensive income (loss) attributable to the parent company                                                                                      $117          $(169)



     
                 DANA INCORPORATED



     
                 Consolidated Statement of Comprehensive Income



     
                 For the Year Ended December 31, 2018 and 2017




                                                                                                                                              
         Year Ended



      (In millions)                                                                                                                        
       December 31,



                                                                                                                                                              2018          2017




     
                 Net income                                                                                                                             $440          $116



      Other comprehensive income (loss), net of tax:


                                                                           
     Currency translation adjustments                          (63)                        (14)


                                                                           
     Hedging gains and losses                                    10                         (30)


                                                                           
     Investment and other gains and losses                                                    2


                                                                           
     Defined benefit plans                                       23                          (6)



                                                                           
     Other comprehensive loss                                  (30)                        (48)




     
                Total comprehensive income                                                                                                               410            68


                                                                             Less: Comprehensive income attributable to noncontrolling
                                                                              interests                                                 (7)                        (17)


                                                                             Less: Comprehensive loss attributable to redeemable
                                                                              noncontrolling interests                                    6                            2



     
                Comprehensive income attributable to the parent company                                                                                 $409           $53



     
                 DANA INCORPORATED



     
                 Consolidated Balance Sheet



     
                 As of December 31, 2018 and December 31, 2017





      (In millions, except share and per share amounts)                                    
     December 31,                   
     December 31,


                                                                                                               2018                             2017




     
                 Assets



      Current assets



      Cash and cash equivalents                                                                             $510                             $603



      Marketable securities                                                                                   21                               40



      Accounts receivable



          Trade, less allowance for doubtful accounts of $9 in 2018 and $8 in 2017   1,065                              994



           Other                                                                       178                              172



      Inventories                                                                                          1,031                              969



      Other current assets                                                                                   102                               97



      Current assets of disposal group held for sale                                                                                           7


                                                                                                            2,907                            2,882


     
                           Total current assets



      Goodwill                                                                                               264                              127



      Intangibles                                                                                            164                              174



      Deferred tax assets                                                                                    445                              420



      Other noncurrent assets                                                                                 80                               71



      Investments in affiliates                                                                              208                              163



      Property, plant and equipment, net                                                                   1,850                            1,807



     
                           Total assets                                                                 $5,918                           $5,644






     
                 Liabilities and equity



      Current liabilities



      Short-term debt                                                                                         $8                              $17



      Current portion of long-term debt                                                                       20                               23



      Accounts payable                                                                                     1,217                            1,165



      Accrued payroll and employee benefits                                                                  186                              219



      Taxes on income                                                                                         47                               53



      Other accrued liabilities                                                                              269                              220



      Current liabilities of disposal group held for sale                                                                                      5


                                                                                                            1,747                            1,702


     
                           Total current liabilities



      Long-term debt, less debt issuance costs of $18 in 2018 and $22 in 2017                              1,755                            1,759



      Pension and postretirement obligations                                                                 561                              607



      Other noncurrent liabilities                                                                           313                              413



      Noncurrent liabilities of disposal group held for sale                                                                                   2


                                                                                                            4,376                            4,483


     
                           Total liabilities




      Commitments and contingencies



      Redeemable noncontrolling interests                                                                      100                               47



      Parent company stockholders' equity



          Preferred stock, 50,000,000 shares authorized, $0.01 par value,



               no shares outstanding



     Common stock, 450,000,000 shares authorized, $0.01 par value,



               144,663,403 and 144,984,050 shares outstanding                                                    2                                2



     Additional paid-in capital                                                      2,368                            2,354



     Retained earnings                                                                 456                               86



     Treasury stock, at cost (8,342,185 and 7,001,017 shares)                        (119)                            (87)



     Accumulated other comprehensive loss                                          (1,362)                         (1,342)



               Total parent company stockholders' equity                                                     1,345                            1,013



      Noncontrolling interests                                                                                97                              101



     
                          Total equity                                                                     1,442                            1,114




     
                          Total liabilities and equity                                                    $5,918                           $5,644


                    DANA INCORPORATED


                    Consolidated Statement of Cash Flows
                     (Unaudited)


                    For the Three Months Ended December 31, 2018
                     and 2017




                                                                 Three Months Ended



      (In millions)                                              December 31,



                                                                               2018         2017




     
                 Operating activities



      Net income (loss)                                                     $106       $(110)



      Depreciation                                                            73           58



      Amortization of intangibles                                              2            3


       Amortization of deferred financing charges                               1            1


       Earnings of affiliates, net of dividends
        received                                                              (9)         (5)



      Stock compensation expense                                               3            6



      Deferred income taxes                                                 (17)         169



      Pension contributions, net                                               1          (2)


       Loss on disposal group held for sale                                                27



      Change in working capital                                              156           72


       Change in other noncurrent assets and
        liabilities                                                          (12)         (9)



      Other, net                                                              27         (17)



                    Net cash provided by operating activities                       331          193






     
                 Investing activities


       Purchases of property, plant and equipment                            (90)       (142)


       Acquisition of businesses, net of cash
        acquired                                                              (2)         (3)


       Purchases of marketable securities                                     (1)        (12)


       Proceeds from sales of marketable securities                             9


       Proceeds from maturities of marketable
        securities                                                              7           11


                    Net cash used in investing activities                      (77)       (146)






     
                 Financing activities



      Net change in short-term debt                                          (8)           6



      Repayment of long-term debt                                            (5)



      Deferred financing payments                                            (1)


       Dividends paid to common stockholders                                 (15)         (9)


       Distributions to noncontrolling interests                             (35)         (5)


       Contributions from noncontrolling interests                              3



      Other, net                                                               3            1


                    Net cash used in financing activities                      (58)         (7)





                    Net increase in cash, cash equivalents and
                     restricted cash                                          196           40


       Cash, cash equivalents and restricted cash -
        beginning of period                                                   327          568


       Effect of exchange rate changes on cash
        balances                                                              (3)           2


                    Cash, cash equivalents and restricted cash -
                     end of period                                           $520         $610


                   DANA INCORPORATED


                   Consolidated Statement of Cash
                    Flows


                   For the Year Ended December 31,
                    2018 and 2017




                                                     Year Ended



     (In millions)                                 December 31,



                                                            2018   2017



                   Operating activities



     Net income                                            $440   $116



     Depreciation                                           260    220


      Amortization of intangibles                             10     13


      Amortization of deferred financing
       charges                                                 4      5



     Call premium on debt                                          15


      Write-off of deferred financing
       costs                                                         4


      Earnings of affiliates, net of
       dividends received                                    (4)   (3)


      Stock compensation expense                              16     23



     Deferred income taxes                                 (64)   179


      Pension contributions, net                               3    (6)


      Impairment of indefinite-lived
       intangible asset                                       20


      Gain on sale of subsidiary                                   (3)


      (Gain) loss on disposal group held
       for sale                                              (2)    27


      Change in working capital                            (113)   (8)


      Change in other noncurrent assets
       and liabilities                                      (12)   (9)



     Other, net                                              10   (19)



                   Net cash provided by operating
                    activities                               568    554





                   Investing activities


      Purchases of property, plant and
       equipment                                           (325) (393)


      Acquisition of businesses, net of
       cash acquired                                       (153) (185)


      Proceeds from previous acquisition                       9


      Purchases of marketable securities                    (37)  (35)


      Proceeds from sales of marketable
       securities                                             15      1


      Proceeds from maturities of
       marketable securities                                  37     27


      Proceeds from sale of
       subsidiaries, net of cash
       disposed                                              (6)     3



     Other, net                                             (2)   (1)


                   Net cash used in investing
                    activities                             (462) (583)





                   Financing activities


      Net change in short-term debt                         (21)  (90)


      Proceeds from long-term debt                                 676


      Repayment of long-term debt                           (13) (640)



     Call premium on debt                                        (15)


      Deferred financing payments                            (1)   (9)


      Dividends paid to common
       stockholders                                         (58)  (35)


      Distributions to noncontrolling
       interests                                            (42)  (12)


      Contributions from noncontrolling
       interests                                              25


      Payments to acquire redeemable
       noncontrolling interests                             (43)


      Repurchases of common stock                           (25)



     Other, net                                             (2)     5


                   Net cash used in financing
                    activities                             (180) (120)





                   Net decrease in cash, cash
                    equivalents and restricted cash         (74) (149)


      Cash, cash equivalents and
       restricted cash - beginning of
       period                                                610    716


      Effect of exchange rate changes on
       cash balances                                        (16)    43


                   Cash, cash equivalents and
                    restricted cash - end of period         $520   $610


                    DANA INCORPORATED



     
                 Reconciliation of Net Cash Provided by Operating Activities to


                      Free Cash Flow and Adjusted Free Cash
                       Flow (Unaudited)




                                                                          Three Months Ended



      (In millions)                                              
              December 31,



                                                                                        2018        2017



                    Net cash provided by operating
                     activities                                                               $331            $193


       Purchase of property, plant and
        equipment                                                                             (90)          (142)



                    Free cash flow                                                             241              51


       Discretionary pension contributions



                    Adjusted free cash flow                                                   $241             $51





                                                                   
              Year Ended


                                                                  
              December 31,



                                                                                        2018        2017



                    Net cash provided by operating
                     activities                                                               $568            $554


       Purchase of property, plant and
        equipment                                                                            (325)          (393)



                    Free cash flow                                                             243             161


       Discretionary pension contributions



                    Adjusted free cash flow                                                   $243            $161





                                                                  
              2019 Guidance



                                                                                Without            With


                                                                                  ODS              ODS*



                    Net cash provided by operating
                     activities                                                            ~  $520        ~   $525


       Purchase of property, plant and
        equipment                                                                          ~ (350)       ~  (415)



                    Free cash flow                                                             170             110


       Discretionary pension contributions                                                 ~   165        ~    165



                    Adjusted free cash flow                                                ~  $335        ~   $275






     * Guidance range with Oerlikon Drive Systems (ODS) assumes a March 1, 2019


           transaction closing date.


                    DANA INCORPORATED


                    Segment Sales and Segment EBITDA (Unaudited)


                    For the Three Months Ended
                     December 31, 2018 and 2017




                                                                Three Months Ended



      (In millions)                                               December 31,



                                                                              2018   2017



                   Sales



       Light Vehicle                                                         $873   $803


        Commercial Vehicle                                                     395    355



       Off-Highway                                                            442    414


        Power Technologies                                                     263    265


                   Total Sales                                              $1,973 $1,837





                   Segment EBITDA



       Light Vehicle                                                         $101    $86


        Commercial Vehicle                                                      32     25



       Off-Highway                                                             65     55


        Power Technologies                                                      32     36


                   Total Segment EBITDA                                        230    202


      Corporate expense and other
       items, net                                                              (7)   (5)


                   Adjusted EBITDA                                            $223   $197


                    DANA INCORPORATED


                    Segment Sales and Segment EBITDA


                    For the Year Ended December 31, 2018 and
                     2017




                                                              Year Ended



      (In millions)                                         December 31,



                                                                     2018   2017




     
                Sales



       Light Vehicle                                              $3,575 $3,172



       Commercial Vehicle                                          1,612  1,412



       Off-Highway                                                 1,844  1,521



       Power Technologies                                          1,112  1,104



     
                Total Sales                                     $8,143 $7,209






     
                Segment EBITDA



       Light Vehicle                                                $398   $359



       Commercial Vehicle                                            146    116



       Off-Highway                                                   285    212



       Power Technologies                                            149    168


                   Total Segment EBITDA                               978    855


      Corporate expense and other items, net                         (21)  (20)



     
                Adjusted EBITDA                                   $957   $835


                   DANA INCORPORATED


                   Reconciliation of Segment and Adjusted EBITDA to Net Income
                    (Unaudited)


                   For the Three Months
                    Ended December 31,
                    2018 and 2017




                                                             Three Months
                                                                 Ended


      (In millions)                                          December 31,



                                                                     2018        2017



                  Segment EBITDA                                     $230        $202


       Corporate expense and
        other items, net                                              (7)        (5)


                  Adjusted EBITDA                                     223         197


       Depreciation                                                  (73)       (58)


       Amortization of
        intangibles                                                   (2)        (3)


       Non-service cost
        components of pension
        and OPEB costs                                                (5)


       Restructuring charges,
        net                                                           (8)


       Stock compensation
        expense                                                       (3)        (6)


       Strategic transaction
        expenses                                                      (5)        (5)


       Other items                                                    (7)        (6)


       Loss on disposal group
        held for sale                                                           (27)



      Earnings before
       interest and income
       taxes                                                          120          92


       Interest expense                                                25          23


       Interest income                                                  3           3



        Earnings before income
         taxes                                                         98          72


     Income tax expense                                                 3         189


     Equity in earnings of
      affiliates                                                       11           7



                  Net income (loss)                                  $106      $(110)


                    DANA INCORPORATED


                    Reconciliation of Segment and Adjusted EBITDA
                     to Net Income


                    For the Year Ended
                     December 31, 2018 and
                     2017




                                                               Year Ended



      (In millions)                                          December 31,



                                                                      2018   2017



                   Segment EBITDA                                     $978   $855


        Corporate expense and
         other items, net                                             (21)  (20)


                   Adjusted EBITDA                                     957    835



       Depreciation                                                 (260) (220)


        Amortization of
         intangibles                                                  (10)  (13)


        Non-service cost
         components of pension and
         OPEB costs                                                   (15)


        Restructuring charges, net                                    (25)  (14)


        Stock compensation expense                                    (16)  (23)


        Strategic transaction
         expenses, net of
         transaction breakup fee
         income                                                       (18)  (25)


        Acquisition related
         inventory adjustments                                              (14)



       Other items                                                   (17)  (11)


        Gain (loss) on disposal
         group held for sale                                             3   (27)


        Impairment of indefinite-
         lived intangible asset                                       (20)


        Amounts attributable to
         previously divested/
         closed operations                                                     2



      Earnings before interest
       and income taxes                                                579    490


        Loss on extinguishment of
         debt                                                               (19)


        Interest expense                                                96    102


        Interest income                                                 11     11



      Earnings before income
       taxes                                                           494    380


      Income tax expense                                                78    283


      Equity in earnings of
       affiliates                                                       24     19



                   Net income                                         $440   $116


                   DANA INCORPORATED


                   Diluted Adjusted EPS (Unaudited)


                   For the Three Months Ended December 31,
                    2018 and 2017




      (In millions, except per share amounts)


                                                                                                                 Three Months Ended


                                                                                                                 December 31,



                                                                                                         2018                         2017



                   Net income attributable to parent
                    company                                                                       $100    $(104)


      Items impacting income before income
       taxes:


                                                           
     Restructuring charges                            8


                                                             Amortization of intangibles                      2                            3


                                                             Strategic transaction expenses                   5                            5


                                                             Loss on disposal group held for sale                                        27


                                                             Income on sale of subsidiary                                               (3)


                                                           
     Other items                                      3                            5


      Items impacting income taxes:


                                                             Net income tax expense on items above          (3)                         (1)


                                                             U.S. tax reform legislation                                                186


                                                             Tax benefit attributable to
                                                              utilization of federal tax credits,
                                                              state tax


                                                                 law changes and valuation allowance
                                                                  adjustments                               (5)                        (27)


                                                             Tax benefit attributable to
                                                              international legal entity
                                                              reorganization,


                                                                 retroactive application of new tax
                                                                  authority administrative policy


                                                                 and permanent reinvestment assertions      (7)                           8


      Items impacting noncontrolling
       interests                                                                                            (7)


                   Adjusted net income                                                            $103       $92





      Diluted shares -as reported                                                                      145.8                        145.4


                                                             Adjustment -common stock equivalents                                       2.2



     Adjusted diluted shares                                                                          145.8                        147.6





                   Diluted adjusted EPS                                                          $0.71     $0.62


                  DANA INCORPORATED


                  Diluted Adjusted EPS
                   (Unaudited)


                  For the Year Ended December 31,
                   2018 and 2017




     (In millions, except per share
      amounts)


                                                                                                            Year Ended


                                                                                                            December 31,



                                                                                                     2018                2017



                  Net income attributable to
                   parent company                                                              $427              $111


     Items impacting income before
      income taxes:


                                                  
     Restructuring charges                                25                  14


                                                    Amortization of intangibles                          10                  13


                                                    Strategic transaction expenses                       18                  25


                                                    Impairment of indefinite-lived
                                                     intangible asset                                    20


                                                    Loss on extinguishment of debt                                          19


                                                    Loss on disposal group held for sale                                    27


                                                    Income on sale of subsidiary                                           (3)


                                                    Acquisition related inventory
                                                     adjustments                                                            14


                                                  
     Other items                                           6                   8


     Items impacting income taxes:


                                                    Net income tax expense on items above              (18)               (18)


                                                    U.S. tax reform legislation                                            186


                                                    Tax benefit attributable to
                                                     utilization of federal tax credits,
                                                     state tax


                                                        law changes and valuation allowance
                                                         adjustments                                   (51)               (27)


                                                    Tax benefit attributable to
                                                     international legal entity
                                                     reorganization,


                                                        retroactive application of new tax
                                                         authority administrative policy


                                                        and permanent reinvestment assertions           (2)                  8


     Items impacting noncontrolling
      interests                                                                                                  (7)


                  Adjusted net income                                                          $435              $370





     Diluted shares -as reported                                                                    146.5               146.9


     Adjusted diluted shares                                                                        146.5               146.9





                  Diluted adjusted EPS                                                        $2.97             $2.52

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SOURCE Dana Incorporated