Delaware
|
|
26-1531856
|
(State of incorporation)
|
|
(IRS Employer Identification Number)
|
|
|
|
3939 Technology Drive, Maumee, OH
|
|
43537
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Common stock $0.01 par value
|
|
New York Stock Exchange
|
|
DAN
|
(Title of each class)
|
|
(Name of exchange on which registered)
|
|
(Trading Symbol)
|
Large accelerated filer
þ
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
Accelerated filer
o
|
|
Emerging growth company
o
|
|
|
10-Q Pages
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
|
Item 1
|
Financial Statements
|
|
|
Consolidated Statement of Operations (Unaudited)
|
|
|
Consolidated Statement of Comprehensive Income (Unaudited)
|
|
|
Consolidated Balance Sheet (Unaudited)
|
|
|
Consolidated Statement of Cash Flows (Unaudited)
|
|
|
Notes to Consolidated Financial Statements (Unaudited)
|
|
|
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
|
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
|
|
Item 4
|
Controls and Procedures
|
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
|
Item 1
|
Legal Proceedings
|
|
|
|
|
Item 1A
|
Risk Factors
|
|
|
|
|
Item 2
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
Item 6
|
Exhibits
|
|
|
|
|
Signatures
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net sales
|
|
$
|
2,163
|
|
|
$
|
2,138
|
|
Costs and expenses
|
|
|
|
|
|
|
||
Cost of sales
|
|
1,863
|
|
|
1,831
|
|
||
Selling, general and administrative expenses
|
|
136
|
|
|
130
|
|
||
Amortization of intangibles
|
|
2
|
|
|
2
|
|
||
Restructuring charges, net
|
|
9
|
|
|
1
|
|
||
Other expense, net
|
|
(13
|
)
|
|
|
|
||
Earnings before interest and income taxes
|
|
140
|
|
|
174
|
|
||
Interest income
|
|
2
|
|
|
3
|
|
||
Interest expense
|
|
27
|
|
|
24
|
|
||
Earnings before income taxes
|
|
115
|
|
|
153
|
|
||
Income tax expense
|
|
20
|
|
|
48
|
|
||
Equity in earnings of affiliates
|
|
6
|
|
|
6
|
|
||
Net income
|
|
101
|
|
|
111
|
|
||
Less: Noncontrolling interests net income
|
|
4
|
|
|
2
|
|
||
Less: Redeemable noncontrolling interests net income (loss)
|
|
(1
|
)
|
|
1
|
|
||
Net income attributable to the parent company
|
|
$
|
98
|
|
|
$
|
108
|
|
|
|
|
|
|
||||
Net income per share available to common stockholders
|
|
|
|
|
|
|
||
Basic
|
|
$
|
0.68
|
|
|
$
|
0.74
|
|
Diluted
|
|
$
|
0.68
|
|
|
$
|
0.73
|
|
|
|
|
|
|
||||
Weighted-average common shares outstanding
|
|
|
|
|
||||
Basic
|
|
143.9
|
|
|
145.6
|
|
||
Diluted
|
|
144.8
|
|
|
147.5
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
101
|
|
|
$
|
111
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Currency translation adjustments
|
|
27
|
|
|
10
|
|
||
Hedging gains and losses
|
|
5
|
|
|
(8
|
)
|
||
Defined benefit plans
|
|
5
|
|
|
7
|
|
||
Other comprehensive income
|
|
37
|
|
|
9
|
|
||
Total comprehensive income
|
|
138
|
|
|
120
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
|
(2
|
)
|
|
(2
|
)
|
||
Less: Comprehensive income attributable to redeemable noncontrolling interests
|
|
(4
|
)
|
|
(2
|
)
|
||
Comprehensive income attributable to the parent company
|
|
$
|
132
|
|
|
$
|
116
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
383
|
|
|
$
|
510
|
|
Marketable securities
|
20
|
|
|
21
|
|
||
Accounts receivable
|
|
|
|
|
|
||
Trade, less allowance for doubtful accounts of $8 in 2019 and $9 in 2018
|
1,416
|
|
|
1,065
|
|
||
Other
|
202
|
|
|
178
|
|
||
Inventories
|
1,282
|
|
|
1,031
|
|
||
Other current assets
|
140
|
|
|
102
|
|
||
Total current assets
|
3,443
|
|
|
2,907
|
|
||
Goodwill
|
456
|
|
|
264
|
|
||
Intangibles
|
185
|
|
|
164
|
|
||
Deferred tax assets
|
464
|
|
|
445
|
|
||
Other noncurrent assets
|
87
|
|
|
80
|
|
||
Investments in affiliates
|
226
|
|
|
208
|
|
||
Operating lease assets
|
181
|
|
|
|
|
||
Property, plant and equipment, net
|
2,242
|
|
|
1,850
|
|
||
Total assets
|
$
|
7,284
|
|
|
$
|
5,918
|
|
|
|
|
|
||||
Liabilities and equity
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Short-term debt
|
$
|
14
|
|
|
$
|
8
|
|
Current portion of long-term debt
|
41
|
|
|
20
|
|
||
Accounts payable
|
1,448
|
|
|
1,217
|
|
||
Accrued payroll and employee benefits
|
207
|
|
|
186
|
|
||
Taxes on income
|
62
|
|
|
47
|
|
||
Current portion of operating lease liabilities
|
39
|
|
|
|
|
||
Other accrued liabilities
|
302
|
|
|
269
|
|
||
Total current liabilities
|
2,113
|
|
|
1,747
|
|
||
Long-term debt, less debt issuance costs of $29 in 2019 and $18 in 2018
|
2,425
|
|
|
1,755
|
|
||
Noncurrent operating lease liabilities
|
147
|
|
|
|
|
||
Pension and postretirement obligations
|
602
|
|
|
561
|
|
||
Other noncurrent liabilities
|
353
|
|
|
313
|
|
||
Total liabilities
|
5,640
|
|
|
4,376
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
105
|
|
|
100
|
|
||
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, 143,901,808 and 144,663,403 shares outstanding
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
2,372
|
|
|
2,368
|
|
||
Retained earnings
|
538
|
|
|
456
|
|
||
Treasury stock, at cost (10,095,558 and 8,342,185 shares)
|
(150
|
)
|
|
(119
|
)
|
||
Accumulated other comprehensive loss
|
(1,328
|
)
|
|
(1,362
|
)
|
||
Total parent company stockholders' equity
|
1,434
|
|
|
1,345
|
|
||
Noncontrolling interests
|
105
|
|
|
97
|
|
||
Total equity
|
1,539
|
|
|
1,442
|
|
||
Total liabilities and equity
|
$
|
7,284
|
|
|
$
|
5,918
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
|
|
|
|
|
||
Net income
|
$
|
101
|
|
|
$
|
111
|
|
Depreciation
|
73
|
|
|
64
|
|
||
Amortization
|
4
|
|
|
3
|
|
||
Amortization of deferred financing charges
|
1
|
|
|
1
|
|
||
Earnings of affiliates, net of dividends received
|
(5
|
)
|
|
(5
|
)
|
||
Stock compensation expense
|
5
|
|
|
4
|
|
||
Deferred income taxes
|
(14
|
)
|
|
12
|
|
||
Pension contributions, net
|
4
|
|
|
|
|
||
Change in working capital
|
(175
|
)
|
|
(216
|
)
|
||
Other, net
|
(10
|
)
|
|
(2
|
)
|
||
Net cash used in operating activities
|
(16
|
)
|
|
(28
|
)
|
||
Investing activities
|
|
|
|
|
|
||
Purchases of property, plant and equipment
|
(98
|
)
|
|
(65
|
)
|
||
Acquisition of businesses, net of cash acquired
|
(606
|
)
|
|
|
|
||
Purchases of marketable securities
|
(5
|
)
|
|
(17
|
)
|
||
Proceeds from sales of marketable securities
|
|
|
|
4
|
|
||
Proceeds from maturities of marketable securities
|
6
|
|
|
11
|
|
||
Settlements of undesignated derivatives
|
(20
|
)
|
|
|
|
||
Other, net
|
(1
|
)
|
|
|
|
||
Net cash used in investing activities
|
(724
|
)
|
|
(67
|
)
|
||
Financing activities
|
|
|
|
|
|
||
Net change in short-term debt
|
(2
|
)
|
|
(7
|
)
|
||
Proceeds from long-term debt
|
675
|
|
|
|
|
||
Repayment of long-term debt
|
(9
|
)
|
|
(1
|
)
|
||
Deferred financing payments
|
(12
|
)
|
|
|
|
||
Dividends paid to common stockholders
|
(14
|
)
|
|
(15
|
)
|
||
Distributions to noncontrolling interests
|
(1
|
)
|
|
(1
|
)
|
||
Contributions from noncontrolling interests
|
1
|
|
|
|
|
||
Repurchases of common stock
|
(25
|
)
|
|
|
|
||
Other, net
|
(3
|
)
|
|
(4
|
)
|
||
Net cash provided by (used in) financing activities
|
610
|
|
|
(28
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
(130
|
)
|
|
(123
|
)
|
||
Cash, cash equivalents and restricted cash – beginning of period
|
520
|
|
|
610
|
|
||
Effect of exchange rate changes on cash balances
|
5
|
|
|
14
|
|
||
Less: Cash contributed to disposal group
|
|
|
|
(10
|
)
|
||
Cash, cash equivalents and restricted cash – end of period (Note 6)
|
$
|
395
|
|
|
$
|
491
|
|
|
|
|
|
||||
Non-cash investing activity
|
|
|
|
||||
Purchases of property, plant and equipment held in accounts payable
|
$
|
84
|
|
|
$
|
81
|
|
1.
|
Organization and Summary of Significant Accounting Policies
|
|
|
2.
|
Acquisitions
|
|
|
3.
|
Disposal Groups and Divestitures
|
|
|
4.
|
Goodwill and Other Intangible Assets
|
|
|
5.
|
Restructuring of Operations
|
|
|
6.
|
Supplemental Balance Sheet and Cash Flow Information
|
|
|
7.
|
Leases
|
|
|
8.
|
Stockholders' Equity
|
|
|
9.
|
Redeemable Noncontrolling Interests
|
|
|
10.
|
Earnings per Share
|
|
|
11.
|
Stock Compensation
|
|
|
12.
|
Pension and Postretirement Benefit Plans
|
|
|
13.
|
Marketable Securities
|
|
|
14.
|
Financing Agreements
|
|
|
15.
|
Fair Value Measurements and Derivatives
|
|
|
16.
|
Commitments and Contingencies
|
|
|
17.
|
Warranty Obligations
|
|
|
18.
|
Income Taxes
|
|
|
19.
|
Other Expense, Net
|
|
|
20.
|
Revenue from Contracts with Customers
|
|
|
21.
|
Segments
|
|
|
22.
|
Equity Affiliates
|
Standard
|
|
Effective Date
|
||
2017-11
|
|
Earnings Per Share, Distinguishing Liabilities from Equity, Derivatives and Hedging – (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception
|
|
January 1, 2019
|
Purchase consideration paid at closing
|
|
$
|
626
|
|
Less purchase consideration to be recovered for indemnified matters
|
|
(4
|
)
|
|
Total purchase consideration
|
|
$
|
622
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
76
|
|
Accounts receivable - Trade
|
|
150
|
|
|
Accounts receivable - Other
|
|
15
|
|
|
Inventories
|
|
202
|
|
|
Other current assets
|
|
16
|
|
|
Goodwill
|
|
126
|
|
|
Deferred tax assets
|
|
37
|
|
|
Other noncurrent assets
|
|
28
|
|
|
Investments in affiliates
|
|
7
|
|
|
Property, plant and equipment
|
|
345
|
|
|
Current portion of long-term debt
|
|
(2
|
)
|
|
Accounts payable
|
|
(151
|
)
|
|
Accrued payroll and employee benefits
|
|
(33
|
)
|
|
Other accrued liabilities
|
|
(48
|
)
|
|
Long-term debt
|
|
(8
|
)
|
|
Pension and postretirement obligations
|
|
(47
|
)
|
|
Other noncurrent liabilities
|
|
(83
|
)
|
|
Noncontrolling interests
|
|
(8
|
)
|
|
Total purchase consideration allocation
|
|
$
|
622
|
|
Total purchase consideration
|
|
$
|
88
|
|
|
|
|
||
Accounts receivable - Trade
|
|
4
|
|
|
Accounts receivable - Other
|
|
1
|
|
|
Inventories
|
|
8
|
|
|
Goodwill
|
|
68
|
|
|
Intangibles
|
|
24
|
|
|
Other noncurrent assets
|
|
1
|
|
|
Property, plant and equipment
|
|
5
|
|
|
Short-term debt
|
|
(8
|
)
|
|
Accounts payable
|
|
(6
|
)
|
|
Accrued payroll and employee benefits
|
|
(1
|
)
|
|
Other accrued liabilities
|
|
(1
|
)
|
|
Other noncurrent liabilities
|
|
(7
|
)
|
|
Total purchase consideration allocation
|
|
$
|
88
|
|
Total purchase consideration
|
|
$
|
125
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
3
|
|
Accounts receivable - Trade
|
|
3
|
|
|
Accounts receivable - Other
|
|
1
|
|
|
Inventories
|
|
4
|
|
|
Goodwill
|
|
148
|
|
|
Intangibles
|
|
24
|
|
|
Investments in affiliates
|
|
49
|
|
|
Property, plant and equipment
|
|
5
|
|
|
Accounts payable
|
|
(2
|
)
|
|
Accrued payroll and employee benefits
|
|
(1
|
)
|
|
Other accrued liabilities
|
|
(7
|
)
|
|
Redeemable noncontrolling interest
|
|
(102
|
)
|
|
Total purchase consideration allocation
|
|
$
|
125
|
|
|
|
|
|
Light Vehicle
|
|
Commercial Vehicle
|
|
Off-Highway
|
|
Power Technologies
|
|
Total
|
||||||||||
Balance, December 31, 2018
|
$
|
3
|
|
|
$
|
150
|
|
|
$
|
105
|
|
|
$
|
6
|
|
|
$
|
264
|
|
Acquisitions
|
|
|
|
|
194
|
|
|
|
|
194
|
|
||||||||
Currency impact
|
|
|
3
|
|
|
(5
|
)
|
|
|
|
(2
|
)
|
|||||||
Balance, March 31, 2019
|
$
|
3
|
|
|
$
|
153
|
|
|
$
|
294
|
|
|
$
|
6
|
|
|
$
|
456
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Weighted Average
Useful Life
(years)
|
|
Gross
Carrying
Amount
|
|
Accumulated Impairment and
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated Impairment and
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Core technology
|
9
|
|
$
|
121
|
|
|
$
|
(89
|
)
|
|
$
|
32
|
|
|
$
|
107
|
|
|
$
|
(89
|
)
|
|
$
|
18
|
|
Trademarks and trade names
|
16
|
|
16
|
|
|
(4
|
)
|
|
12
|
|
|
16
|
|
|
(4
|
)
|
|
12
|
|
||||||
Customer relationships
|
8
|
|
465
|
|
|
(399
|
)
|
|
66
|
|
|
460
|
|
|
(400
|
)
|
|
60
|
|
||||||
Non-amortizable intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trademarks and trade names
|
|
|
75
|
|
|
|
|
|
75
|
|
|
74
|
|
|
|
|
|
74
|
|
||||||
Used in research and development activities
|
|
|
20
|
|
|
(20
|
)
|
|
—
|
|
|
20
|
|
|
(20
|
)
|
|
—
|
|
||||||
|
|
|
$
|
697
|
|
|
$
|
(512
|
)
|
|
$
|
185
|
|
|
$
|
677
|
|
|
$
|
(513
|
)
|
|
$
|
164
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Charged to cost of sales
|
|
$
|
1
|
|
|
$
|
1
|
|
Charged to amortization of intangibles
|
|
2
|
|
|
2
|
|
||
Total amortization
|
|
$
|
3
|
|
|
$
|
3
|
|
|
Remainder of 2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
||||||||||
Amortization expense
|
$
|
8
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
10
|
|
|
Employee
Termination
Benefits
|
|
Exit
Costs
|
|
Total
|
||||||
Balance, December 31, 2018
|
$
|
25
|
|
|
$
|
4
|
|
|
$
|
29
|
|
Charges to restructuring
|
7
|
|
|
2
|
|
|
9
|
|
|||
Cash payments
|
(6
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|||
Lease cease-use reclassification
|
|
|
(4
|
)
|
|
(4
|
)
|
||||
Balance, March 31, 2019
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
|
Expense Recognized
|
|
Future
Cost to
Complete
|
||||||||||||
|
Prior to
2019
|
|
2019
|
|
Total
to Date
|
|
|||||||||
Commercial Vehicle
|
$
|
35
|
|
|
$
|
1
|
|
|
$
|
36
|
|
|
$
|
7
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Raw materials
|
|
$
|
515
|
|
|
$
|
433
|
|
Work in process and finished goods
|
|
822
|
|
|
649
|
|
||
Inventory reserves
|
|
(55
|
)
|
|
(51
|
)
|
||
Total
|
|
$
|
1,282
|
|
|
$
|
1,031
|
|
|
|
March 31,
2019 |
|
December 31,
2018 |
|
March 31,
2018 |
|
December 31,
2017 |
||||||||
Cash and cash equivalents
|
|
$
|
383
|
|
|
$
|
510
|
|
|
$
|
479
|
|
|
$
|
603
|
|
Restricted cash included in other current assets
|
|
9
|
|
|
7
|
|
|
8
|
|
|
3
|
|
||||
Restricted cash included in other noncurrent assets
|
|
3
|
|
|
3
|
|
|
4
|
|
|
4
|
|
||||
Total cash, cash equivalents and restricted cash
|
|
$
|
395
|
|
|
$
|
520
|
|
|
$
|
491
|
|
|
$
|
610
|
|
|
|
Classification
|
|
March 31, 2019
|
||
Finance lease right-of-use assets
|
|
Property, plant and equipment, net
|
|
$
|
42
|
|
Finance lease liabilities
|
|
Current portion of long-term debt
|
|
5
|
|
|
Finance lease liabilities
|
|
Long-term debt
|
|
25
|
|
|
|
Three Months Ended
March 31, 2019 |
||
Operating lease cost
|
|
$
|
12
|
|
Finance lease cost:
|
|
|
||
Amortization of right-of-use assets
|
|
$
|
1
|
|
Interest on lease liabilities
|
|
—
|
|
|
Total finance lease cost
|
|
$
|
1
|
|
|
|
Three Months Ended
March 31, 2019 |
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
12
|
|
Operating cash flows from finance leases
|
|
—
|
|
|
Financing cash flows from finance leases
|
|
1
|
|
|
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
||
Operating leases
|
|
6
|
|
|
Finance leases
|
|
10
|
|
|
|
Operating Leases
|
|
Finance Leases
|
||||
Remainder of 2019
|
|
$
|
37
|
|
|
$
|
4
|
|
2020
|
|
44
|
|
|
4
|
|
||
2021
|
|
37
|
|
|
4
|
|
||
2022
|
|
27
|
|
|
4
|
|
||
2023
|
|
20
|
|
|
3
|
|
||
Thereafter
|
|
57
|
|
|
15
|
|
||
Total lease payments
|
|
222
|
|
|
34
|
|
||
Less: interest
|
|
36
|
|
|
5
|
|
||
Present value of lease liabilities
|
|
$
|
186
|
|
|
$
|
29
|
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
Thereafter
|
|
Total
|
||||||||||||||
Lease commitments
|
$
|
57
|
|
|
$
|
41
|
|
|
$
|
35
|
|
|
$
|
27
|
|
|
$
|
21
|
|
|
$
|
64
|
|
|
$
|
245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||
2019
|
|
Common Stock
|
|
Additional Paid-In Stock
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Accumulated Other Compre-hensive Loss
|
|
Non-controlling Interests
|
|
Total Equity
|
||||||||||||||
Balance, December 31, 2018
|
|
$
|
2
|
|
|
$
|
2,368
|
|
|
$
|
456
|
|
|
$
|
(119
|
)
|
|
$
|
(1,362
|
)
|
|
$
|
97
|
|
|
$
|
1,442
|
|
Adoption of ASU 2016-02 leases, January 1, 2019
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
(1
|
)
|
||||||||||||
Net income
|
|
|
|
|
|
98
|
|
|
|
|
|
|
4
|
|
|
102
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
34
|
|
|
(2
|
)
|
|
32
|
|
|||||||||||
Common stock dividends
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
(15
|
)
|
||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||||||
Increase from business combination
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
7
|
|
||||||||||||
Common stock share repurchases
|
|
|
|
|
|
|
|
(25
|
)
|
|
|
|
|
|
(25
|
)
|
||||||||||||
Stock compensation
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
4
|
|
||||||||||||
Stock withheld for employee taxes
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
||||||||||||
Balance, March 31, 2019
|
|
$
|
2
|
|
|
$
|
2,372
|
|
|
$
|
538
|
|
|
$
|
(150
|
)
|
|
$
|
(1,328
|
)
|
|
$
|
105
|
|
|
$
|
1,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance, December 31, 2017
|
|
$
|
2
|
|
|
$
|
2,354
|
|
|
$
|
86
|
|
|
$
|
(87
|
)
|
|
$
|
(1,342
|
)
|
|
$
|
101
|
|
|
$
|
1,114
|
|
Adoption of ASU 2016-01 financial instruments adjustment,
January 1, 2018 |
|
|
|
|
|
2
|
|
|
|
|
(2
|
)
|
|
|
|
—
|
|
|||||||||||
Net income
|
|
|
|
|
|
108
|
|
|
|
|
|
|
2
|
|
|
110
|
|
|||||||||||
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
8
|
|
|
|
|
8
|
|
||||||||||||
Common stock dividends
|
|
|
|
|
|
(15
|
)
|
|
|
|
|
|
|
|
(15
|
)
|
||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||||||
Purchase of noncontrolling interests
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
9
|
|
|
—
|
|
|||||||||||
Stock compensation
|
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
5
|
|
||||||||||||
Stock withheld for employee taxes
|
|
|
|
|
|
|
|
(6
|
)
|
|
|
|
|
|
(6
|
)
|
||||||||||||
Balance, March 31, 2018
|
|
$
|
2
|
|
|
$
|
2,350
|
|
|
$
|
181
|
|
|
$
|
(93
|
)
|
|
$
|
(1,336
|
)
|
|
$
|
111
|
|
|
$
|
1,215
|
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company Stockholders
|
||||||||||||||||||
|
Foreign Currency Translation
|
|
Hedging
|
|
Investments
|
|
Defined Benefit Plans
|
|
Total
|
||||||||||
Balance, December 31, 2018
|
$
|
(721
|
)
|
|
$
|
(54
|
)
|
|
$
|
—
|
|
|
$
|
(587
|
)
|
|
$
|
(1,362
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation adjustments
|
24
|
|
|
|
|
|
|
|
|
24
|
|
||||||||
Holding gains and losses
|
|
|
29
|
|
|
|
|
|
|
29
|
|
||||||||
Reclassification of amount to net income (a)
|
|
|
(24
|
)
|
|
|
|
|
|
(24
|
)
|
||||||||
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)
|
|
|
|
|
|
|
7
|
|
|
7
|
|
||||||||
Tax expense
|
|
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
||||||||
Other comprehensive income
|
24
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
34
|
|
|||||
Balance, March 31, 2019
|
$
|
(697
|
)
|
|
$
|
(49
|
)
|
|
$
|
—
|
|
|
$
|
(582
|
)
|
|
$
|
(1,328
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance, December 31, 2017
|
$
|
(670
|
)
|
|
$
|
(64
|
)
|
|
$
|
2
|
|
|
$
|
(610
|
)
|
|
$
|
(1,342
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Currency translation adjustments
|
14
|
|
|
|
|
|
|
|
|
14
|
|
||||||||
Holding loss on net investment hedge
|
(5
|
)
|
|
|
|
|
|
|
|
(5
|
)
|
||||||||
Holding gains and losses
|
|
|
(38
|
)
|
|
|
|
|
|
(38
|
)
|
||||||||
Reclassification of amount to net income (a)
|
|
|
29
|
|
|
|
|
|
|
29
|
|
||||||||
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)
|
|
|
|
|
|
|
9
|
|
|
9
|
|
||||||||
Tax (expense) benefit
|
|
|
1
|
|
|
|
|
(2
|
)
|
|
(1
|
)
|
|||||||
Other comprehensive income (loss)
|
9
|
|
|
(8
|
)
|
|
—
|
|
|
7
|
|
|
8
|
|
|||||
Adoption of ASU 2016-01 financial instruments adjustment, January 1, 2018
|
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
||||||||
Balance, March 31, 2018
|
$
|
(661
|
)
|
|
$
|
(72
|
)
|
|
$
|
—
|
|
|
$
|
(603
|
)
|
|
$
|
(1,336
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
|
$
|
100
|
|
|
$
|
47
|
|
Cash contributions from redeemable noncontrolling interests
|
|
1
|
|
|
|
|||
Comprehensive income (loss) adjustments:
|
|
|
|
|
||||
Net income (loss) attributable to redeemable noncontrolling
interests
|
|
(1
|
)
|
|
1
|
|
||
Other comprehensive income (loss) attributable to redeemable noncontrolling interests
|
|
5
|
|
|
1
|
|
||
Balance, end of period
|
|
$
|
105
|
|
|
$
|
49
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net income attributable to the parent company
|
|
$
|
98
|
|
|
$
|
108
|
|
Less: Redeemable noncontrolling interests adjustment to redemption value
|
|
—
|
|
|
—
|
|
||
Net income available to common stockholders - Numerator basic and diluted
|
|
$
|
98
|
|
|
$
|
108
|
|
|
|
|
|
|
|
|
||
Denominator:
|
|
|
|
|
||||
Weighted-average common shares outstanding - Basic
|
|
143.9
|
|
|
145.6
|
|
||
Employee compensation-related shares, including stock options
|
|
0.9
|
|
|
1.9
|
|
||
Weighted-average common shares outstanding - Diluted
|
|
144.8
|
|
|
147.5
|
|
|
Granted
(In millions)
|
|
Grant Date
Fair Value*
|
|||
RSUs
|
1.0
|
|
|
$
|
17.12
|
|
PSUs
|
0.4
|
|
|
$
|
16.17
|
|
|
|
Pension
|
|
|
||||||||||||||||||||
|
|
2019
|
|
2018
|
|
OPEB - Non-U.S.
|
||||||||||||||||||
Three Months Ended March 31,
|
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
|
2019
|
|
2018
|
||||||||||||
Interest cost
|
|
$
|
9
|
|
|
$
|
2
|
|
|
$
|
11
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
Expected return on plan assets
|
|
(12
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
||||||
Service cost
|
|
|
|
|
2
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
||||||
Amortization of net actuarial loss
|
|
5
|
|
|
2
|
|
|
7
|
|
|
2
|
|
|
|
|
|
|
|
||||||
Net periodic benefit cost
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Cost
|
|
Unrealized
Gain (Loss) |
|
Fair
Value |
|
Cost
|
|
Unrealized
Gain (Loss) |
|
Fair
Value |
||||||||||||
U.S. government securities
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Corporate securities
|
4
|
|
|
|
|
|
4
|
|
|
4
|
|
|
|
|
|
4
|
|
||||||
Certificates of deposit
|
14
|
|
|
|
|
|
14
|
|
|
15
|
|
|
|
|
|
15
|
|
||||||
Total marketable securities
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
|
Interest
Rate |
|
March 31,
2019 |
|
December 31, 2018
|
||||
Senior Notes due September 15, 2023
|
|
6.000%
|
|
$
|
300
|
|
|
$
|
300
|
|
Senior Notes due December 15, 2024
|
|
5.500%
|
|
425
|
|
|
425
|
|
||
Senior Notes due April 15, 2025
|
|
5.750%
|
*
|
400
|
|
|
400
|
|
||
Senior Notes due June 1, 2026
|
|
6.500%
|
*
|
375
|
|
|
375
|
|
||
Term Facility
|
|
|
|
932
|
|
|
265
|
|
||
Other indebtedness
|
|
|
|
63
|
|
|
28
|
|
||
Debt issuance costs
|
|
|
|
(29
|
)
|
|
(18
|
)
|
||
|
|
|
|
2,466
|
|
|
1,775
|
|
||
Less: Current portion of long-term debt
|
|
|
|
41
|
|
|
20
|
|
||
Long-term debt, less debt issuance costs
|
|
|
|
$
|
2,425
|
|
|
$
|
1,755
|
|
*
|
In conjunction with the issuance of the April 2025 Notes we entered into 8-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the April 2025 Notes to euro-denominated debt at a fixed rate of
3.850%
. In conjunction with the issuance of the June 2026 Notes we entered into 10-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the June 2026 Notes to euro-denominated debt at a fixed rate of
5.140%
. See
Note 15
for additional information.
|
|
|
Margin
|
||||
Total Net Leverage Ratio
|
|
Base Rate
|
|
Eurodollar Rate
|
||
Less than or equal to 1.00:1.00
|
|
0.50
|
%
|
|
1.50
|
%
|
Greater than 1.00:1.00 but less than or equal to 2.00:1.00
|
|
0.75
|
%
|
|
1.75
|
%
|
Greater than 2.00:1.00
|
|
1.00
|
%
|
|
2.00
|
%
|
Total Net Leverage Ratio
|
|
Commitment Fee
|
|
Less than or equal to 1.00:1.00
|
|
0.250
|
%
|
Greater than 1.00:1.00 but less than or equal to 2.00:1.00
|
|
0.375
|
%
|
Greater than 2.00:1.00
|
|
0.500
|
%
|
|
|
|
|
|
|
Fair Value
|
||||||
Category
|
|
Balance Sheet Location
|
|
Fair Value Level
|
|
March 31,
2019 |
|
December 31,
2018 |
||||
Available-for-sale securities
|
|
Marketable securities
|
|
2
|
|
$
|
20
|
|
|
$
|
21
|
|
Currency forward contracts
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
Accounts receivable - Other
|
|
2
|
|
8
|
|
|
6
|
|
||
Cash flow hedges
|
|
Other accrued liabilities
|
|
2
|
|
5
|
|
|
5
|
|
||
Undesignated
|
|
Accounts receivable - Other
|
|
2
|
|
2
|
|
|
2
|
|
||
Undesignated
|
|
Other accrued liabilities
|
|
2
|
|
|
|
|
1
|
|
||
Currency swaps
|
|
|
|
|
|
|
|
|
||||
Cash flow hedges
|
|
Other noncurrent liabilities
|
|
2
|
|
92
|
|
|
118
|
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||||
|
|
Fair Value Level
|
|
Carrying Value
|
|
Fair
Value
|
|
Carrying Value
|
|
Fair
Value
|
||||||||
Senior notes
|
|
2
|
|
$
|
1,500
|
|
|
$
|
1,515
|
|
|
$
|
1,500
|
|
|
$
|
1,442
|
|
Term Facility
|
|
2
|
|
932
|
|
|
928
|
|
|
265
|
|
|
265
|
|
||||
Other indebtedness*
|
|
2
|
|
63
|
|
|
58
|
|
|
28
|
|
|
23
|
|
||||
Total
|
|
|
|
$
|
2,495
|
|
|
$
|
2,501
|
|
|
$
|
1,793
|
|
|
$
|
1,730
|
|
*
|
The carrying value includes the unamortized portion of a fair value adjustment related to a terminated interest rate swap at both dates.
|
Underlying Financial Instrument
|
|
Derivative Financial Instrument
|
|||||||||||||||||||||
Description
|
|
Type
|
|
Face Amount
|
|
Rate
|
|
Designated Notional Amount
|
|
Traded Amount
|
|
Inflow Rate
|
|
Outflow Rate
|
|||||||||
June 2026 Notes
|
|
Payable
|
|
$
|
375
|
|
|
6.50
|
%
|
|
$
|
375
|
|
|
€
|
338
|
|
|
6.50
|
%
|
|
5.14
|
%
|
April 2025 Notes
|
|
Payable
|
|
$
|
400
|
|
|
5.75
|
%
|
|
$
|
400
|
|
|
€
|
371
|
|
|
5.75
|
%
|
|
3.85
|
%
|
Luxembourg Intercompany Notes
|
|
Receivable
|
|
€
|
281
|
|
|
3.91
|
%
|
|
€
|
281
|
|
|
$
|
300
|
|
|
6.00
|
%
|
|
3.91
|
%
|
|
|
|
|
Notional Amount (U.S. Dollar Equivalent)
|
|
|
||||||||||
Functional Currency
|
|
Traded Currency
|
|
Designated as
Cash Flow Hedges |
|
Undesignated
|
|
Total
|
|
Maturity
|
||||||
U.S. dollar
|
|
Mexican peso, euro
|
|
$
|
149
|
|
|
$
|
13
|
|
|
$
|
162
|
|
|
Jun-20
|
Euro
|
|
U.S. dollar, Canadian dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Russian ruble, Chinese renminbi, Mexican peso
|
|
123
|
|
|
3
|
|
|
126
|
|
|
Jan-24
|
|||
British pound
|
|
U.S. dollar, euro
|
|
2
|
|
|
|
|
|
2
|
|
|
Nov-19
|
|||
Swedish krona
|
|
euro
|
|
11
|
|
|
|
|
|
11
|
|
|
Dec-19
|
|||
South African rand
|
|
U.S. dollar, euro, Thai baht
|
|
7
|
|
|
4
|
|
|
11
|
|
|
Mar-20
|
|||
Thai baht
|
|
U.S. dollar
|
|
21
|
|
|
|
|
|
21
|
|
|
Mar-20
|
|||
Canadian dollar
|
|
U.S. dollar
|
|
18
|
|
|
|
|
|
18
|
|
|
Jun-20
|
|||
Brazilian real
|
|
U.S. dollar, euro
|
|
44
|
|
|
45
|
|
|
89
|
|
|
Mar-20
|
|||
Indian rupee
|
|
U.S. dollar, British pound, euro
|
|
|
|
|
53
|
|
|
53
|
|
|
Mar-20
|
|||
Chinese renminbi
|
|
U.S. dollar, Canadian dollar, euro
|
|
|
|
10
|
|
|
10
|
|
|
Jul-19
|
||||
Taiwan dollar
|
|
Chinese renminbi
|
|
|
|
13
|
|
|
13
|
|
|
Mar-20
|
||||
Total forward contracts
|
|
|
|
375
|
|
|
141
|
|
|
516
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
U.S. dollar
|
|
euro
|
|
315
|
|
|
|
|
|
315
|
|
|
Sep-23
|
|||
Euro
|
|
U.S. dollar
|
|
775
|
|
|
|
|
|
775
|
|
|
Jun-26
|
|||
Total currency swaps
|
|
|
|
1,090
|
|
|
—
|
|
|
1,090
|
|
|
|
|||
Total currency derivatives
|
|
|
|
$
|
1,465
|
|
|
$
|
141
|
|
|
$
|
1,606
|
|
|
|
|
|
Deferred Gain (Loss) in AOCI
|
||||||||||
|
|
March 31, 2019
|
|
December 31, 2018
|
|
Gain (loss) expected to be reclassified into income in one year or less
|
||||||
Forward Contracts
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
3
|
|
Cross-Currency Swaps
|
|
(56
|
)
|
|
(60
|
)
|
|
—
|
|
|||
Total
|
|
$
|
(53
|
)
|
|
$
|
(58
|
)
|
|
$
|
3
|
|
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships
|
||||||||||
|
|
Three Months Ended March 31, 2019
|
||||||||||
|
|
Net sales
|
|
Cost of sales
|
|
Other expense, net
|
||||||
Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded
|
|
$
|
2,163
|
|
|
$
|
1,863
|
|
|
$
|
13
|
|
(Gain) or loss on cash flow hedging relationships
|
|
|
|
|
|
|
||||||
Foreign currency forwards
|
|
|
|
|
|
|
||||||
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
(1
|
)
|
|
|
||||
Cross-currency swaps
|
|
|
|
|
|
|
||||||
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
(23
|
)
|
|
|
Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships
|
||||||||||
|
|
Three Months Ended March 31, 2018
|
||||||||||
|
|
Net sales
|
|
Cost of sales
|
|
Other expense, net
|
||||||
Total amounts of income and expense line items presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded
|
|
$
|
2,138
|
|
|
$
|
1,831
|
|
|
|
||
(Gain) or loss on cash flow hedging relationships
|
|
|
|
|
|
|
||||||
Foreign currency forwards
|
|
|
|
|
|
|
||||||
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
(2
|
)
|
|
|
|||||
Cross-currency swaps
|
|
|
|
|
|
|
||||||
Amount of (gain) loss reclassified from AOCI into income
|
|
|
|
|
|
$
|
31
|
|
|
|
Amount of Gain (Loss) Recognized in Income
|
|
|
||
Derivatives Not Designated as Hedging Instruments
|
|
Three Months Ended
March 31, 2019 |
|
Location of Gain or (Loss) Recognized in Income
|
||
Foreign currency forward contracts
|
|
$
|
2
|
|
|
Cost of sales
|
Foreign currency forward contracts
|
|
$
|
(13
|
)
|
|
Other expense, net
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Balance, beginning of period
|
|
$
|
75
|
|
|
$
|
76
|
|
Acquisitions
|
|
15
|
|
|
|
|
||
Amounts accrued for current period sales
|
|
8
|
|
|
10
|
|
||
Adjustments of prior estimates
|
|
5
|
|
|
|
|
||
Settlements of warranty claims
|
|
(7
|
)
|
|
(11
|
)
|
||
Currency impact
|
|
(1
|
)
|
|
1
|
|
||
Balance, end of period
|
|
$
|
95
|
|
|
$
|
76
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Non-service cost components of pension and OPEB costs
|
|
$
|
(6
|
)
|
|
$
|
(3
|
)
|
Government grants and incentives
|
|
3
|
|
|
2
|
|
||
Foreign exchange loss
|
|
(11
|
)
|
|
(2
|
)
|
||
Strategic transaction expenses, net of transaction breakup fee income
|
|
(13
|
)
|
|
1
|
|
||
Non-income tax legal judgment
|
|
6
|
|
|
|
|||
Other, net
|
|
8
|
|
|
2
|
|
||
Other expense, net
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
Three Months Ended
March 31, 2019 |
|
Light Vehicle
|
|
Commercial Vehicle
|
|
Off-Highway
|
|
Power Technologies
|
|
Total
|
||||||||||
North America
|
|
$
|
660
|
|
|
$
|
253
|
|
|
$
|
58
|
|
|
$
|
141
|
|
|
$
|
1,112
|
|
Europe
|
|
91
|
|
|
67
|
|
|
407
|
|
|
113
|
|
|
678
|
|
|||||
South America
|
|
33
|
|
|
75
|
|
|
9
|
|
|
5
|
|
|
122
|
|
|||||
Asia Pacific
|
|
122
|
|
|
36
|
|
|
78
|
|
|
15
|
|
|
251
|
|
|||||
Total
|
|
$
|
906
|
|
|
$
|
431
|
|
|
$
|
552
|
|
|
$
|
274
|
|
|
$
|
2,163
|
|
Three Months Ended
March 31, 2018 |
|
|
|
|
|
|
|
|
|
|
||||||||||
North America
|
|
$
|
666
|
|
|
$
|
215
|
|
|
$
|
37
|
|
|
$
|
153
|
|
|
$
|
1,071
|
|
Europe
|
|
95
|
|
|
72
|
|
|
386
|
|
|
119
|
|
|
672
|
|
|||||
South America
|
|
43
|
|
|
82
|
|
|
7
|
|
|
6
|
|
|
138
|
|
|||||
Asia Pacific
|
|
146
|
|
|
31
|
|
|
62
|
|
|
18
|
|
|
257
|
|
|||||
Total
|
|
$
|
950
|
|
|
$
|
400
|
|
|
$
|
492
|
|
|
$
|
296
|
|
|
$
|
2,138
|
|
|
|
2019
|
|
2018
|
||||||||||||||||||||
Three Months Ended March 31,
|
|
External Sales
|
|
Inter-Segment Sales
|
|
Segment EBITDA
|
|
External Sales
|
|
Inter-Segment Sales
|
|
Segment EBITDA
|
||||||||||||
Light Vehicle
|
|
$
|
906
|
|
|
$
|
36
|
|
|
$
|
102
|
|
|
$
|
950
|
|
|
$
|
33
|
|
|
$
|
103
|
|
Commercial Vehicle
|
|
431
|
|
|
27
|
|
|
41
|
|
|
400
|
|
|
26
|
|
|
34
|
|
||||||
Off-Highway
|
|
552
|
|
|
5
|
|
|
82
|
|
|
492
|
|
|
2
|
|
|
72
|
|
||||||
Power Technologies
|
|
274
|
|
|
6
|
|
|
34
|
|
|
296
|
|
|
5
|
|
|
45
|
|
||||||
Eliminations and other
|
|
|
|
|
(74
|
)
|
|
|
|
|
|
|
|
(66
|
)
|
|
|
|
||||||
Total
|
|
$
|
2,163
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
2,138
|
|
|
$
|
—
|
|
|
$
|
254
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Segment EBITDA
|
|
$
|
259
|
|
|
$
|
254
|
|
Corporate expense and other items, net
|
|
(2
|
)
|
|
(6
|
)
|
||
Depreciation
|
|
(73
|
)
|
|
(64
|
)
|
||
Amortization
|
|
(4
|
)
|
|
(3
|
)
|
||
Non-service cost components of pension and OPEB costs
|
|
(6
|
)
|
|
(3
|
)
|
||
Restructuring charges, net
|
|
(9
|
)
|
|
(1
|
)
|
||
Stock compensation expense
|
|
(5
|
)
|
|
(4
|
)
|
||
Strategic transaction expenses, net of transaction breakup fee income
|
|
(13
|
)
|
|
1
|
|
||
Acquisition related inventory adjustments
|
|
(4
|
)
|
|
|
|
||
Non-income tax legal judgment
|
|
6
|
|
|
|
|||
Other items
|
|
(9
|
)
|
|
|
|
||
Earnings before interest and income taxes
|
|
140
|
|
|
174
|
|
||
Interest expense
|
|
27
|
|
|
24
|
|
||
Interest income
|
|
2
|
|
|
3
|
|
||
Earnings before income taxes
|
|
115
|
|
|
153
|
|
||
Income tax expense
|
|
20
|
|
|
48
|
|
||
Equity in earnings of affiliates
|
|
6
|
|
|
6
|
|
||
Net income
|
|
$
|
101
|
|
|
$
|
111
|
|
|
Ownership
Percentage
|
|
Investment
|
||
Dongfeng Dana Axle Co., Ltd. (DDAC)
|
50%
|
|
$
|
99
|
|
Prestolite E-Propulsion Systems Limited (PEPS)
|
50%
|
|
48
|
|
|
Bendix Spicer Foundation Brake, LLC
|
20%
|
|
47
|
|
|
Axles India Limited
|
48%
|
|
10
|
|
|
Ashwoods Innovations Ltd.
|
58%
|
|
9
|
|
|
Taiway Ltd.
|
28%
|
|
5
|
|
|
All others as a group
|
|
|
6
|
|
|
Investments in equity affiliates
|
|
|
224
|
|
|
Investments in affiliates carried at cost
|
|
|
2
|
|
|
Investments in affiliates
|
|
|
$
|
226
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
|
2019
|
|
2018
|
||||||||||
|
|
|
|
% of
|
|
|
|
% of
|
||||||
|
|
Dollars
|
|
Total
|
|
Dollars
|
|
Total
|
||||||
Light Vehicle
|
|
$
|
906
|
|
|
41.9
|
%
|
|
$
|
950
|
|
|
44.4
|
%
|
Commercial Vehicle
|
|
431
|
|
|
19.9
|
%
|
|
400
|
|
|
18.7
|
%
|
||
Off-Highway
|
|
552
|
|
|
25.5
|
%
|
|
492
|
|
|
23.0
|
%
|
||
Power Technologies
|
|
274
|
|
|
12.7
|
%
|
|
296
|
|
|
13.9
|
%
|
||
Total
|
|
$
|
2,163
|
|
|
|
|
$
|
2,138
|
|
|
|
|
|
|
|
|
Actual
|
|||||
(Units in thousands)
|
Dana 2019 Outlook
|
|
2018
|
|
2017
|
|||||
North America
|
|
|
|
|
|
|
|
|
|
|
Light Truck (Full Frame)
|
4,275
|
|
to
|
4,575
|
|
4,474
|
|
|
4,331
|
|
Light Vehicle Engines
|
14,700
|
|
to
|
15,000
|
|
15,332
|
|
|
14,828
|
|
Medium Truck (Classes 5-7)
|
265
|
|
to
|
275
|
|
270
|
|
|
246
|
|
Heavy Truck (Class 8)
|
325
|
|
to
|
345
|
|
320
|
|
|
255
|
|
Agricultural Equipment
|
50
|
|
to
|
60
|
|
56
|
|
|
54
|
|
Construction/Mining Equipment
|
175
|
|
to
|
185
|
|
176
|
|
|
157
|
|
Europe (including Eastern Europe)
|
|
|
|
|
|
|
|
|
|
|
Light Truck
|
10,500
|
|
to
|
11,500
|
|
10,720
|
|
|
10,276
|
|
Light Vehicle Engines
|
23,000
|
|
to
|
23,500
|
|
23,098
|
|
|
24,096
|
|
Medium/Heavy Truck
|
505
|
|
to
|
520
|
|
506
|
|
|
486
|
|
Agricultural Equipment
|
200
|
|
to
|
215
|
|
204
|
|
|
202
|
|
Construction/Mining Equipment
|
350
|
|
to
|
370
|
|
351
|
|
|
309
|
|
South America
|
|
|
|
|
|
|
|
|
|
|
Light Truck
|
1,300
|
|
to
|
1,500
|
|
1,296
|
|
|
1,235
|
|
Light Vehicle Engines
|
2,800
|
|
to
|
2,900
|
|
2,797
|
|
|
2,412
|
|
Medium/Heavy Truck
|
115
|
|
to
|
125
|
|
113
|
|
|
89
|
|
Agricultural Equipment
|
30
|
|
to
|
35
|
|
34
|
|
|
33
|
|
Construction/Mining Equipment
|
8
|
|
to
|
12
|
|
9
|
|
|
9
|
|
Asia-Pacific
|
|
|
|
|
|
|
|
|
|
|
Light Truck
|
29,800
|
|
to
|
31,000
|
|
29,527
|
|
|
29,495
|
|
Light Vehicle Engines
|
51,700
|
|
to
|
52,700
|
|
52,293
|
|
|
52,543
|
|
Medium/Heavy Truck
|
1,900
|
|
to
|
2,100
|
|
2,004
|
|
|
2,039
|
|
Agricultural Equipment
|
640
|
|
to
|
670
|
|
653
|
|
|
653
|
|
Construction/Mining Equipment
|
480
|
|
to
|
500
|
|
495
|
|
|
441
|
|
|
2019
Outlook |
|
2018
|
|
2017
|
||||
Sales
|
$8,950 - $9,350
|
|
$
|
8,143
|
|
|
$
|
7,209
|
|
Adjusted EBITDA
|
$1,085 - $1,165
|
|
$
|
957
|
|
|
$
|
835
|
|
Net cash provided by operating activities
|
~5.5% of Sales
|
|
$
|
568
|
|
|
$
|
554
|
|
Discretionary pension contribution
|
~1.5% of Sales
|
|
$
|
—
|
|
|
$
|
—
|
|
Purchases of property, plant and equipment
|
~4% of Sales
|
|
$
|
325
|
|
|
$
|
393
|
|
Adjusted Free Cash Flow
|
~3% of Sales
|
|
$
|
243
|
|
|
$
|
161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||||||||
|
2019
|
|
2018
|
|
|
||||||||||||
|
Dollars
|
|
% of
Net Sales |
|
Dollars
|
|
% of
Net Sales |
|
Increase/
(Decrease) |
||||||||
Net sales
|
$
|
2,163
|
|
|
|
|
$
|
2,138
|
|
|
|
|
$
|
25
|
|
||
Cost of sales
|
1,863
|
|
|
86.1
|
%
|
|
1,831
|
|
|
85.6
|
%
|
|
32
|
|
|||
Gross margin
|
300
|
|
|
13.9
|
%
|
|
307
|
|
|
14.4
|
%
|
|
(7
|
)
|
|||
Selling, general and administrative expenses
|
136
|
|
|
6.3
|
%
|
|
130
|
|
|
6.1
|
%
|
|
6
|
|
|||
Amortization of intangibles
|
2
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|||||
Restructuring charges, net
|
9
|
|
|
|
|
1
|
|
|
|
|
8
|
|
|||||
Other expense, net
|
(13
|
)
|
|
|
|
|
|
|
|
|
(13
|
)
|
|||||
Earnings before interest and income taxes
|
140
|
|
|
|
|
174
|
|
|
|
|
(34
|
)
|
|||||
Interest income
|
2
|
|
|
|
|
3
|
|
|
|
|
(1
|
)
|
|||||
Interest expense
|
27
|
|
|
|
|
24
|
|
|
|
|
3
|
|
|||||
Earnings before income taxes
|
115
|
|
|
|
|
153
|
|
|
|
|
(38
|
)
|
|||||
Income tax expense
|
20
|
|
|
|
|
48
|
|
|
|
|
(28
|
)
|
|||||
Equity in earnings of affiliates
|
6
|
|
|
|
|
6
|
|
|
|
|
—
|
|
|||||
Net income
|
101
|
|
|
|
|
111
|
|
|
|
|
(10
|
)
|
|||||
Less: Noncontrolling interests net income
|
4
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|||||
Less: Redeemable noncontrolling interests net income
|
(1
|
)
|
|
|
|
1
|
|
|
|
|
(2
|
)
|
|||||
Net income attributable to the parent company
|
$
|
98
|
|
|
|
|
$
|
108
|
|
|
|
|
$
|
(10
|
)
|
|
Three Months Ended
March 31, |
|
|
|
Amount of Change Due To
|
||||||||||||||||||
|
2019
|
|
2018
|
|
Increase/
(Decrease) |
|
Currency Effects
|
|
Acquisitions
(Divestitures)
|
|
Organic Change
|
||||||||||||
North America
|
$
|
1,112
|
|
|
$
|
1,071
|
|
|
$
|
41
|
|
|
$
|
(2
|
)
|
|
$
|
28
|
|
|
$
|
15
|
|
Europe
|
678
|
|
|
672
|
|
|
6
|
|
|
(50
|
)
|
|
36
|
|
|
20
|
|
||||||
South America
|
122
|
|
|
138
|
|
|
(16
|
)
|
|
(14
|
)
|
|
(6
|
)
|
|
4
|
|
||||||
Asia Pacific
|
251
|
|
|
257
|
|
|
(6
|
)
|
|
(12
|
)
|
|
23
|
|
|
(17
|
)
|
||||||
Total
|
$
|
2,163
|
|
|
$
|
2,138
|
|
|
$
|
25
|
|
|
$
|
(78
|
)
|
|
$
|
81
|
|
|
$
|
22
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Non-service cost components of pension and OPEB costs
|
$
|
(6
|
)
|
|
$
|
(3
|
)
|
Government grants and incentives
|
3
|
|
|
2
|
|
||
Foreign exchange loss
|
(11
|
)
|
|
(2
|
)
|
||
Strategic transaction expenses, net of transaction breakup fee income
|
(13
|
)
|
|
1
|
|
||
Non-income tax legal judgment
|
6
|
|
|
|
|||
Other, net
|
8
|
|
|
2
|
|
||
Other expense, net
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
|
Three Months
|
|||||||||
|
|
Sales
|
|
Segment
EBITDA |
|
Segment
EBITDA Margin |
|||||
2018
|
|
$
|
950
|
|
|
$
|
103
|
|
|
10.8
|
%
|
Volume and mix
|
|
(31
|
)
|
|
(8
|
)
|
|
|
|||
Performance
|
|
1
|
|
|
9
|
|
|
|
|||
Currency effects
|
|
(14
|
)
|
|
(2
|
)
|
|
|
|||
2019
|
|
$
|
906
|
|
|
$
|
102
|
|
|
11.3
|
%
|
|
|
Three Months
|
|||||||||
|
|
Sales
|
|
Segment
EBITDA |
|
Segment
EBITDA Margin |
|||||
2018
|
|
$
|
400
|
|
|
$
|
34
|
|
|
8.5
|
%
|
Volume and mix
|
|
35
|
|
|
6
|
|
|
|
|||
Acquisition / Divestiture
|
|
5
|
|
|
1
|
|
|
|
|||
Performance
|
|
11
|
|
|
2
|
|
|
|
|||
Currency effects
|
|
(20
|
)
|
|
(2
|
)
|
|
|
|||
2019
|
|
$
|
431
|
|
|
$
|
41
|
|
|
9.5
|
%
|
|
|
Three Months
|
|||||||||
|
|
Sales
|
|
Segment
EBITDA |
|
Segment
EBITDA Margin |
|||||
2018
|
|
$
|
492
|
|
|
$
|
72
|
|
|
14.6
|
%
|
Volume and mix
|
|
15
|
|
|
1
|
|
|
|
|||
Acquisitions
|
|
76
|
|
|
11
|
|
|
|
|||
Performance
|
|
|
|
1
|
|
|
|
||||
Currency effects
|
|
(31
|
)
|
|
(3
|
)
|
|
|
|||
2019
|
|
$
|
552
|
|
|
$
|
82
|
|
|
14.9
|
%
|
|
|
Three Months
|
|||||||||
|
|
Sales
|
|
Segment
EBITDA |
|
Segment
EBITDA Margin |
|||||
2018
|
|
$
|
296
|
|
|
$
|
45
|
|
|
15.2
|
%
|
Volume and mix
|
|
(8
|
)
|
|
(3
|
)
|
|
|
|||
Performance
|
|
(1
|
)
|
|
(7
|
)
|
|
|
|||
Currency effects
|
|
(13
|
)
|
|
(1
|
)
|
|
|
|||
2019
|
|
$
|
274
|
|
|
$
|
34
|
|
|
12.4
|
%
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
101
|
|
|
$
|
111
|
|
Equity in earnings of affiliates
|
|
6
|
|
|
6
|
|
||
Income tax expense
|
|
20
|
|
|
48
|
|
||
Earnings before income taxes
|
|
115
|
|
|
153
|
|
||
Depreciation and amortization
|
|
77
|
|
|
67
|
|
||
Restructuring
|
|
9
|
|
|
1
|
|
||
Interest expense, net
|
|
25
|
|
|
21
|
|
||
Other*
|
|
31
|
|
|
6
|
|
||
Adjusted EBITDA
|
|
$
|
257
|
|
|
$
|
248
|
|
*
|
Other includes non-service cost components of pension and OPEB costs, stock compensation expense, strategic transaction expenses, net of transaction breakup fees and other items. See
Note 21
to our consolidated financial statements in Item 1 of Part I for additional details.
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2019
|
|
2018
|
||||
Net cash used in operating activities
|
|
$
|
(16
|
)
|
|
$
|
(28
|
)
|
Purchases of property, plant and equipment
|
|
(98
|
)
|
|
(65
|
)
|
||
Free cash flow
|
|
(114
|
)
|
|
(93
|
)
|
||
Discretionary pension contribution
|
|
—
|
|
|
—
|
|
||
Adjusted free cash flow
|
|
$
|
(114
|
)
|
|
$
|
(93
|
)
|
Cash and cash equivalents
|
$
|
383
|
|
Less: Deposits supporting obligations
|
(5
|
)
|
|
Available cash
|
378
|
|
|
Additional cash availability from Revolving Facility
|
729
|
|
|
Marketable securities
|
20
|
|
|
Total liquidity
|
$
|
1,127
|
|
|
U.S.
|
|
Non-U.S.
|
|
Total
|
||||||
Cash and cash equivalents
|
$
|
8
|
|
|
$
|
223
|
|
|
$
|
231
|
|
Cash and cash equivalents held as deposits
|
|
|
|
5
|
|
|
5
|
|
|||
Cash and cash equivalents held at less than wholly-owned subsidiaries
|
3
|
|
|
144
|
|
|
147
|
|
|||
Consolidated cash balance
|
$
|
11
|
|
|
$
|
372
|
|
|
$
|
383
|
|
|
Three Months Ended
March 31, |
||||||
|
2019
|
|
2018
|
||||
Cash used for changes in working capital
|
$
|
(175
|
)
|
|
$
|
(216
|
)
|
Other cash provided by operations
|
159
|
|
|
188
|
|
||
Net cash used in operating activities
|
(16
|
)
|
|
(28
|
)
|
||
Net cash used in investing activities
|
(724
|
)
|
|
(67
|
)
|
||
Net cash provided by (used in) financing activities
|
610
|
|
|
(28
|
)
|
||
Net decrease in cash, cash equivalents and restricted cash
|
$
|
(130
|
)
|
|
$
|
(123
|
)
|
Calendar Month
|
|
Class or Series of Securities
|
|
Number
of Shares Purchased |
|
Average
Price Paid
per Share
|
|
Number of
Shares Purchased as Part of Publicly Announced Plans
or Programs
|
|
Approximate
Dollar Value of
Shares that May Yet be Purchased Under
the Plans or Programs
|
||||||
January
|
|
Common
|
|
1,330,000
|
|
|
$
|
17.47
|
|
|
1,330,000
|
|
|
$
|
152
|
|
February
|
|
Common
|
|
102,275
|
|
|
$
|
17.60
|
|
|
102,275
|
|
|
$
|
150
|
|
March
|
|
Common
|
|
|
|
|
|
|
|
|
|
|
$
|
150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit No.
|
Description
|
|
|
10.1
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101
|
The following materials from Dana Incorporated’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Operations, (ii) the Consolidated Statement of Comprehensive Income, (iii) the Consolidated Balance Sheet, (iv) the Consolidated Statement of Cash Flows and (v) Notes to the Consolidated Financial Statements. Filed with this Report.
|
|
|
DANA INCORPORATED
|
|
Date:
|
May 2, 2019
|
By:
|
/s/ Jonathan M. Collins
|
|
|
|
Jonathan M. Collins
|
|
|
|
Executive Vice President and
|
|
|
|
Chief Financial Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Dana Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ James K. Kamsickas
|
|
James K. Kamsickas
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Dana Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ Jonathan M. Collins
|
|
Jonathan M. Collins
|
|
Executive Vice President and Chief Financial Officer
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Dana as of the dates and for the periods expressed in the Report.
|
/s/ James K. Kamsickas
|
|
James K. Kamsickas
|
|
President and Chief Executive Officer
|
|
|
|
/s/ Jonathan M. Collins
|
|
Jonathan M. Collins
|
|
Executive Vice President and Chief Financial Officer
|
|