Note 2 - Discontinued Operations

9 Months Ended

Sep. 30, 2026

Discontinued Operations, Disposed of by Sale [Member]

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 2. Discontinued Operations

In June 2025, we entered into a definitive agreement to sell our Off-Highway business to Allison Transmission Holdings, Inc. (Allison). The transaction closed on January 1, 2026, with Dana receiving gross cash proceeds of $2,664. Pursuant to the terms of the agreement, the purchase price was subject to post-closing adjustments based on net working capital and net indebtedness balances as of the closing date. Based on the final closing date net working capital and net indebtedness balances, we paid $34 to Allison during the second quarter of 2026.

Included in the gross cash proceeds received was $82 related to the Off-Highway business's Mexican operations which had not yet legally transferred to Allison. As a result, the $82 of proceeds had been deferred and included in other accrued liabilities on our consolidated balance sheet. During the three months ended September 30, 2026, certain assets of the Mexican operations were transferred to Allison, resulting in the release of $53 million of previously deferred proceeds and the derecognition of $15 million of net assets. As a result, we recognized an additional gain on sale of $38 million during the third quarter of 2026.

As of September 30, 2026, $29 million of deferred proceeds remained recorded in other accrued liabilities related to the portions of the Mexican operations that have not yet legally transferred to Allison. The remaining assets and liabilities of the Mexican operations will continue to be reported as held for sale on our consolidated balance sheet. The Mexican operations results of operations and cash flows will continue to be reported as discontinued operations on our consolidated statements of operations, comprehensive income and cash flows. We expect to complete the transfer of the Mexican operations to Allison by the end of 2026.

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

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

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2026				2025				2026				2025
Net sales		$	18			$	625			$	48			$	1,888
Cost of sales			18				500				44				1,539
Selling, general and administrative expenses							23								78
Amortization of intangibles															2
Restructuring charges, net															2
Gain on sale of Off-Highway business			38								1,224
Other income (expense), net			(6	)			(7	)			(61	)			(32	)
Earnings from discontinued operations before interest and income taxes			32				95				1,167				235
Interest income							1								3
Interest expense							1								1
Earnings from discontinued operations before income taxes			32				95				1,167				237
Income tax expense			3				21				43				73
Net income from discontinued operations		$	29			$	74			$	1,124			$	164

During the three and nine months ended September 30, 2026, we incurred $6 and $61 of Off-Highway business divestiture transaction related costs, compared with $20 and $54, respectively, during the corresponding periods in 2025. These costs were attributed to discontinued operations and included in other income (expense), net in the table above.

The carrying amounts of the major classes of assets and liabilities of disposal group held for sale are as follows:

		September 30,				December 31,
		2026				2025
Accounts receivable - Trade		$	15			$	360
Accounts receivable - Other			2				39
Inventories			20				533
Other current assets							97
Current assets of disposal group held for sale		$	37			$	1,029

Goodwill		$	—			$	270
Intangibles							72
Deferred tax assets							49
Other noncurrent assets							44
Operating lease assets							39
Property, plant and equipment, net			8				480
Noncurrent assets of disposal group held for sale		$	8			$	954

Current portion of long-term debt		$	—			$	2
Accounts payable			14				425
Accrued payroll and employee benefits							72
Taxes on income							11
Current portion of operating lease liabilities							9
Other accrued liabilities							169
Current liabilities of disposal group held for sale		$	14			$	688

Long-term debt		$	—			$	33
Noncurrent operating lease liabilities							30
Pension and postretirement obligations							48
Other noncurrent liabilities							72
Noncurrent liabilities of disposal group held for sale		$	—			$	183