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What changed in DANA Inc's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of DANA Inc's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+179 added−198 removedSource: 10-K (2024-02-20) vs 10-K (2023-02-21)

Top changes in DANA Inc's 2023 10-K

179 paragraphs added · 198 removed · 159 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIt provides resources, support, and professional development opportunities to new employees as they transition into their job responsibilities at Dana. ● Dana Alumni – With more than a century of rich history, Dana leverages its vast network of Alumni, including retirees and former long-time employees to help them remain informed about the company’s latest initiatives and to gather ideas on how to best continue to engage our workforce. ● Military and Veterans – The military and veterans group supports active-duty and veteran military personnel by understanding their unique needs and finding the best ways to support them.
Biggest changeThe group focuses on increasing cultural awareness by promoting understanding and respects of different beliefs, values and customs across diverse groups. ● Dana Alumni – With more than a century of rich history, Dana leverages its vast network of Alumni, including retirees and former long-time employees to help them remain informed about the company's latest initiatives and to gather ideas on how to best continue to engage our workforce. ● Dana Women’s Network (DAWN) – The company’s DAWN group is focused on providing professional networking and career development for women at Dana.
From axles, driveshafts, transmissions, sealing and thermal products to electrifications products including motors, inverters, controllers, e-sealing, e-thermal and digital solutions, we enable the propulsion of internal combustion engine (ICE), hybrid and electric powered vehicles by supplying nearly every major vehicle manufacturer in the world. We also serve the stationary industrial market.
From axles, driveshafts, transmissions, sealing and thermal products to electrification products including motors, inverters, controllers, e-sealing, e-thermal and digital solutions, we enable the propulsion of internal combustion engine (ICE), hybrid and electric powered vehicles by supplying nearly every major vehicle manufacturer in the world. We also serve the stationary industrial market.
With a focus on product innovation, we differentiate ourselves through efficiency and performance, reliability, materials and processes, sustainability and product extension. The following table summarizes our principal competitors by operating segment as of December 31, 2022 : Segment Principal Competitors Light Vehicle American Axle & Manufacturing Holdings, Inc. Magna International Inc. BorgWarner Inc.
With a focus on product innovation, we differentiate ourselves through efficiency and performance, reliability, materials and processes, sustainability and product extension. The following table summarizes our principal competitors by operating segment as of December 31, 2023: Segment Principal Competitors Light Vehicle American Axle & Manufacturing Holdings, Inc. Magna International Inc. BorgWarner Inc.
Environmental Compliance We make capital expenditures in the normal course of business as necessary to ensure that our facilities are in compliance with applicable environmental laws and regulations. The cost of environmental compliance has not been a material part of capital expenditures and did not have a material adverse effect on our earnings or competitive position in 2022 .
Environmental Compliance We make capital expenditures in the normal course of business as necessary to ensure that our facilities are in compliance with applicable environmental laws and regulations. The cost of environmental compliance has not been a material part of capital expenditures and did not have a material adverse effect on our earnings or competitive position in 2023.
As of December 31, 2022 we employed approximately 41,800 people and operated in 31 countries. The terms “Dana,” “we,” “our” and “us” are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.
As of December 31, 2023 we employed approximately 41,800 people and operated in 31 countries. The terms “Dana,” “we,” “our” and “us” are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.
The following table summarizes the markets, products and largest customers of each of our operating segments as of December 31, 2022 : Segment Markets Products Largest Customers Light Vehicle Light vehicle market: Axles Ford Motor Company Light trucks (full frame) Driveshafts Stellantis N.V.* Sport utility vehicles ICE, hybrid and e-transmissions Toyota Motor Corporation Crossover utility vehicles e-Axle systems Renault-Nissan-Mitsubishi Utility vans e-Transmission systems Alliance Sports cars Inverters Tata Motors Ltd (including Super sports cars Motors Jaguar Land Rover) Controllers General Motors Company Commercial Vehicle Commercial vehicle market: Axles PACCAR Inc Medium duty trucks Driveshafts Traton SE Heavy duty trucks Hybrid and e-transmissions AB Volvo Buses e-Axle systems Daimler Truck AB Specialty vehicles e-Transmission systems Ford Motor Company Inverters CNH Industrial N.V.
The following table summarizes the markets, products and largest customers of each of our operating segments as of December 31, 2023: Segment Markets Products Largest Customers Light Vehicle Light vehicle market: Axles Ford Motor Company Light trucks (full frame) Driveshafts Stellantis N.V.* Sport utility vehicles ICE, hybrid and e-transmissions Toyota Motor Corporation Crossover utility vehicles e-Axle systems Renault-Nissan-Mitsubishi Utility vans e-Transmission systems Alliance Sports cars Inverters Tata Motors Ltd (including Super sports cars Electric motors Jaguar Land Rover) Controllers Volkswagen AG Commercial Vehicle Commercial vehicle market: Axles PACCAR Inc Medium duty trucks Driveshafts Traton SE Heavy duty trucks Hybrid and e-transmissions AB Volvo Buses e-Axle systems Daimler Truck AB Specialty vehicles e-Transmission systems Ford Motor Company Inverters CNH Industrial N.V.
SEW-Eurodrive GmbH Comer Industries S.p.A. Zapi S.p.A. Curtis Instruments ZF Friedrichshafen AG Danfoss A/S Vertically integrated OEM operations Power Technologies Denso Corporation Mahle GmbH ElringKlinger AG Tenneco Inc. Freudenberg NOK Group Valeo SE Hanon Systems YinLun Co., LTD Intellectual Property Our proprietary driveline and power technologies product lines have strong identities in the markets we serve.
SEW-Eurodrive GmbH Comer Industries S.p.A. Zapi S.p.A. Danfoss A/S ZF Friedrichshafen AG Kessler+Co Vertically integrated OEM operations Power Technologies Denso Corporation Mahle GmbH ElringKlinger AG Tenneco Inc. Freudenberg Group Valeo SE Hanon Systems YinLun Co., LTD Intellectual Property Our proprietary driveline and power technologies product lines have strong identities in the markets we serve.
Schaeffler AG Hofer Powertrain GmbH Valeo SE Jing-Jin Electric Technologies Co. Ltd. ZF Friedrichshafen AG Linamar Corporation Vertically integrated OEM operations Commercial Vehicle Allison Transmission Holdings, Inc. Hendrickson Holdings, LLC. BorgWarner Inc. Tirsan Kardan A.Ş. Cummins Inc. ZF Friedrichshafen AG Danfoss A/S Vertically integrated OEM operations Eugen Klein GmbH Off-Highway Bonfiglioli Riduttori S.p.A. Kessler & Co. Carraro S.p.A.
Schaeffler AG Hofer Powertrain GmbH Valeo SE Jing-Jin Electric Technologies Co. Ltd. ZF Friedrichshafen AG Linamar Corporation Vertically integrated OEM operations Commercial Vehicle Allison Transmission Holdings, Inc. Eugen Klein GmbH BorgWarner Inc. Hendrickson Holdings, LLC Cummins Inc. Tirsan Kardan A.Ş. Danfoss A/S ZF Friedrichshafen AG Eaton Corporation plc Vertically integrated OEM operations Off-Highway Bonfiglioli Riduttori S.p.A. Kohler Co. Carraro S.p.A.
These BRGs are executive leadership-supported, employee-led initiatives with the mission to inspire growth and innovation and foster diversity for all employees. BRG s provide employees opportunities for development, mentoring, networking, and utilizing their talents in ways that positively impact the business.
These BRGs are executive leadership-supported, employee-led initiatives with the mission to inspire growth and innovation and foster belonging for all employees. BRGs provide employees opportunities for development, mentoring, networking, and utilizing their talents in ways that positively impact the business.
Dana remains focused on cultivating an inclusive culture that embraces diversity and equity to enable Dana people to contribute to their full potential. To achieve this, our diversity, equity, and inclusion strategy is guided by five pillars: leadership commitment; diversity representation; awareness, education and development; employee and community growth; and cross-functional collaboration.
Dana remains focused on cultivating an inclusive culture that embraces diversity and equity to enable Dana people to contribute to their full potential and have a sense of belonging. To achieve this, our diversity, equity, and inclusion strategy is guided by five pillars: leadership commitment; diversity representation; awareness, education and development; employee and community growth; and cross-functional collaboration.
We integrate related operations to create a more innovative environment, speed product development, maximize efficiency and improve communication and information sharing among our research and development operations. At December 31, 2022 , we had seven stand-alone technical and engineering centers and eighteen additional sites at which we conduct research and development activities.
We integrate related operations to create a more innovative environment, speed product development, maximize efficiency and improve communication and information sharing among our research and development operations. At December 31, 2023 , we had eleven stand-alone technical and engineering centers and fourteen additional sites at which we conduct research and development activities.
Electronics cooling Volkswagen AG Hydrogen fuel cell cooling (including Traton SE) New power industrial cooling Mercedes-Benz Group * Via a directed supply relationship 2 Table of Contents Geographic Operations We maintain administrative and operational organizations in North America, Europe, South America and Asia Pacific to support our operating segments, assist with the management of affiliate relations and facilitate financial and statutory reporting and tax compliance on a worldwide basis.
New power industrial cooling Mercedes-Benz Group * Via a directed supply relationship 2 Table of Contents Geographic Operations We maintain administrative and operational organizations in North America, Europe, South America and Asia Pacific to support our operating segments, assist with the management of affiliate relations and facilitate financial and statutory reporting and tax compliance on a worldwide basis.
Sources and Availability of Raw Materials We use a variety of raw materials in the prod uction of our products, including steel and products containing steel, stainless steel, forgings, castings, bearings, and batteries and related rare earth materials. Other commodity purchases include aluminum, brass, copper and plastics.
Sources and Availability of Raw Materials We use a variety of raw materials in the production of our products, including steel and products containing steel, stainless steel, forgings, castings, bearings, semiconductors, and magnets and related rare earth materials. Other commodity purchases include aluminum, brass, copper and plastics.
The following table summarizes our employees by operating segment and geographical region as of December 31, 2022 : Segment Employees Region Employees Light Vehicle 14,100 North America 15,800 Commercial Vehicle 7,800 Europe 11,300 Off-Highway 12,100 South America 4,800 Power Technologies 5,700 Asia Pacific 9,900 Technical and administrative 2,100 Total 41,800 Total 41,800 Safety – The health and safety of employees remain our highest priority and we believe our company has an essential responsibility to safeguard life, health, property, and the environment for the well-being of all involved.
The following table summarizes our employees by operating segment and geographical region as of December 31, 2023: Segment Employees Region Employees Light Vehicle 13,900 North America 15,900 Off-Highway 11,800 Europe 11,500 Commercial Vehicle 7,800 Asia Pacific 10,100 Power Technologies 6,100 South America 4,300 Technical and administrative 2,200 Total 41,800 Total 41,800 Safety – The health and safety of employees remain our highest priority and we believe our company has an essential responsibility to safeguard life, health, property, and the environment for the well-being of all involved.
(Stellantis) were the only individual customers accounting for 10% or more of our consolidated sales in 2022. As a percentage of total sales from operations, our sales to Ford were approximately 19% in 2022, 19% in 2021 and 20% in 2020.
(Stellantis) were the only individual customers accounting for 10% or more of our consolidated sales in one or more of the past three years. As a percentage of total sales from operations, our sales to Ford were approximately 20% in 2023, 19% in 2022 and 19% in 2021.
External sales by operating segment for the years ended December 31, 2022, 2021 and 2020 are as follows: 2022 2021 2020 Dollars % of Total Dollars % of Total Dollars % of Total Light Vehicle $ 4,090 40.3 % $ 3,773 42.2 % $ 3,038 42.8 % Commercial Vehicle 1,979 19.5 % 1,532 17.1 % 1,185 16.7 % Off-Highway 2,946 29.0 % 2,593 29.0 % 1,966 27.6 % Power Technologies 1,141 11.2 % 1,047 11.7 % 917 12.9 % Total $ 10,156 $ 8,945 $ 7,106 Refer to Segment Results of Operations in Item 7 and Note 20 to our consolidated financial statements in Item 8 for further financial information about our operating segments. 1 Table of Contents Our business is diversified across end-markets, products and customers.
External sales by operating segment for the years ended December 31, 2023, 2022 and 2021 are as follows: 2023 2022 2021 Dollars % of Total Dollars % of Total Dollars % of Total Light Vehicle $ 4,035 38.2 % $ 4,090 40.3 % $ 3,773 42.2 % Off-Highway 3,185 30.2 % 2,946 29.0 % 2,593 29.0 % Commercial Vehicle 2,092 19.8 % 1,979 19.5 % 1,532 17.1 % Power Technologies 1,243 11.8 % 1,141 11.2 % 1,047 11.7 % Total $ 10,555 $ 10,156 $ 8,945 Refer to Segment Results of Operations in Item 7 and Note 20 to our consolidated financial statements in Item 8 for further financial information about our operating segments. 1 Table of Contents Our business is diversified across end-markets, products and customers.
Operations outside the U.S. may be subject to a greater risk of changing political, economic and social environments, changing governmental laws and regulations, currency revaluations and market fluctuations than our domestic operations. See the discussion of risk factors in Item 1A. Sales reported by our non-U.S. subsidiaries comprised $5,488, or 54%, of our 2022 consolidated sales of $10,156.
Operations outside the U.S. may be subject to a greater risk of changing political, economic and social environments, changing governmental laws and regulations, currency revaluations and market fluctuations than our domestic operations. See the discussion of risk factors in Item 1A. Sales reported by our non-U.S. subsidiaries comprised $6,063, or 57%, of our 2023 consolidated sales of $10,555.
O ur research and development costs wer e $201 in 2022 , $178 in 2021 and $146 in 2020 . Total engineering expenses including research and development we re $321 in 2022 , $297 in 2021 and $246 in 2020 .
O ur research and development costs wer e $237 in 2023, $201 in 2022 and $178 in 2021. Total engineering expenses including research and development we re $369 in 2023 , $321 in 2022 and $297 in 2021 .
Our sales to Stellantis (via a directed supply relationship) were approximately 11% in 2022, 12% in 2021 and 12% in 2020. Volkswagen AG (including Traton SE), Deere & Company and PACCAR, Inc were our third, fourth and fifth largest customers in 2022. Our 10 largest customers collectively accounted for approximately 57% of our sales in 2022.
Our sales to Stellantis (via a directed supply relationship) were approximately 9% in 2023, 11% in 2022 and 12% in 2021. Volkswagen AG (including Traton SE), PACCAR, Inc and Toyota Motor Corporation were our third, fourth and fifth largest customers in 2023. Our 10 largest customers collectively accounted for approximately 55% of our sales in 2023.
Dana understands the needs of individuals are unique and continues to offer initiatives spanning the spectrum of health and wellness to help provide a supportive work environment where employees strive for balance in their lives. We have enhanced our employee assistance programs around the world to support the emotional, physical and financial needs of our employees.
We support vaccination programs to encourage employees to maintain their health and the health of their coworkers and communities. Dana understands the needs of individuals are unique and continues to offer initiatives spanning the spectrum of health and wellness to help provide a supportive work environment where employees strive for balance in their lives.
Our focus on key electrification initiatives continued during 2021 and 2022. Our research and development is targeted to create unique value for our customers. Our technologies are enabling the electrification of vehicles and accessories to improve efficiency a nd reduce the impact of carbon emissions.
Over the past several years our engineering spend has been more heavily focused on research and development activities, progressing key electrification initiatives. Our research and development is targeted to create unique value for our customers. Our technologies are enabling the electrification of vehicles and accessories to improve efficiency a nd reduce the impact of carbon emissions.
This group’s understanding of the needs of those who have served also allows the company to consider the best way to engage candidates and recruit them to Dana.
This group's understanding of the needs of those who have served also allows the company to consider the best way to engage candidates and recruit them to Dana. ● New to Dana (NTD) – The NTD group is open to all new Dana employees to help acclimate them to the Dana business culture and understand the company’s rich history.
Recruiting – As a company, we are always collaborating with internationally recognized organizations to reach out to diverse talent and implement best practices for recruiting individuals who work within our core business functions.
It provides resources, support, and professional development opportunities to new employees as they transition into their job responsibilities at Dana. Recruiting – As a company, we collaborate with internationally recognized organizations to reach out to diverse talent and implement best practices for recruiting individuals who work within our core business functions.
Motors Controllers Off-Highway Off-Highway market: Axles, hub drives and driveshafts Deere & Company Construction ICE, hybrid and e-transmissions CNH Industrial N.V.
Electric motors Controllers Off-Highway Off-Highway market: Axles, hub drives and driveshafts Deere & Company Construction ICE, hybrid and e-transmissions CNH Industrial N.V. Agricultural e-Axle systems AGCO Corporation Mining e-Transmission systems Oshkosh Corporation Forestry e-Hub drive systems Manitou Group Material handling Inverters JCB Inc.
The group provides Dana insight to the best practices for sourcing and retaining top talent. ● LGBTQ+A – The LGBTQ+A group focuses on maintaining an inclusive working environment that enables the company to leverage a diverse leadership pipeline.
The group helps to inform and drive grassroots employee initiatives on reducing our impact on the environment. ● LGBTQ+A – The LGBTQ+A group focuses on maintaining an inclusive working environment that enables the company to leverage a diverse leadership pipeline.
They also promote activities that engage Dana’s senior leaders to better understand how the company can support women at work. ● African American Resource Group (AARG) – Dana’s AARG group is committed to supporting the career development of African American talent through thought-leadership workshops and community events.
Our BRGs currently include: ● African American Resource Group (AARG) – Dana's AARG group is committed to supporting the career development of African American talent through thought-leadership workshops and community events.
Agricultural e-Axle systems AGCO Corporation Mining e-Transmission systems Oshkosh Corporation Forestry e-Hub drive systems Manitou Group Material handling Inverters Sandvik AB Industrial stationary Motors Lawn care and recreational Controllers Power Technologies Light vehicle market ICE sealing and thermal Ford Motor Company Commercial vehicle market e-Sealing General Motors Company Off-Highway market e-Thermal cooling systems Stellantis N.V.
Industrial stationary Electric motors Lawn care and recreational Controllers Power Technologies Light vehicle market ICE sealing and thermal Ford Motor Company Commercial vehicle market e-Sealing General Motors Company Off-Highway market e-Thermal cooling systems Stellantis N.V. Industrial stationary market Battery cooling Volkswagen AG Electronics cooling (including Traton SE) Hydrogen fuel cell cooling Cummins Inc.
It has assisted in providing educational resources and community activities to engage the Dana team on best ways to support our LGBTQ+A colleagues. ● Green Team – Dana’s Green Team resource group helps to advance Dana’s mission to be sustainably responsible in our business practices.
It has assisted in providing educational resources and community activities to engage the Dana team on best ways to support our LGBTQ+A colleagues. ● Military and Veterans – The military and veterans group supports active-duty and veteran military personnel by understanding their unique needs and finding the best ways to support them.
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During 2020, we reduced our total engineering spend in response to the COVID pandemic, taking advantage of various government programs and subsidies in the countries in which we operate. We also made the strategic decision to focus our engineering spend more heavily on research and development activities, continuing to progress key electrification initiatives despite the global pandemic.
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The group provides Dana insight to the best practices for sourcing and retaining top talent. ● Connected Cultures – Dana's Connected Cultures group aims to recognize and celebrate the cultural fluency and diversity of Dana people.
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COVID Response – The company’s response to the COVID pandemic has been comprehensive, swift, and decisive with an emphasis on health and safety while maintaining production for our customers. Our top priorities are to protect our employees, communities, customers, and our future.
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They also promote activities that engage Dana’s senior leaders to better understand how the company can support women at work. ● Green Team – Dana's Green Team resource group helps to advance Dana's mission to be sustainably responsible in our business practices.
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For our employees, we continue to monitor local COVID protocols throughout our global footprint to ensure their health and safety including, but not limited to: restricting access to all facilities; continued strong cleaning and disinfecting protocols; and as appropriate: use of personal protection equipment; adhering to social distancing guidelines; remote work; and restricting travel.
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We have enhanced our employee assistance programs around the world to support the emotional, physical and financial needs of our employees.
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Our BRGs currently include: ● Dana Women’s Network (DAWN) – The company’s DAWN group is focused on providing professional networking and career development for women at Dana.
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The group helps to inform and drive grassroots employee initiatives on reducing our impact on the environment. ● New to Dana (NTD) – The NTD group is open to all new Dana employees to help acclimate them to the Dana business culture and understand the company’s rich history.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operations are subject to environmental laws and regulations in the U.S. and other countries that govern emissions to the air; discharges to water; the generation, handling, storage, transportation, treatment and disposal of waste materials; and the cleanup of contaminated properties. Historically, environmental costs related to our former and existing operations have not been material.
Biggest changeWe could be adversely impacted by the costs of environmental, health, safety and product liability compliance. Our operations are subject to environmental laws and regulations in the U.S. and other countries that govern emissions to the air; discharges to water; the generation, handling, storage, transportation, treatment and disposal of waste materials; and the cleanup of contaminated properties.
Developments or assertions by or against us relating to intellectual property rights, and any inability to protect these rights, could have a material adverse impact on our business and our competitive position. We could encounter unexpected difficulties integrating acquisitions and joint ventures.
Developments or assertions by or against us relating to intellectual property rights, and any inability to protect these rights, could have a material adverse impact on our business and our competitive position. We could encounter unexpected difficulties integrating acquisitions and operating joint ventures.
Efforts to combat a pandemic can be complicated by viral variants and uneven access to, and acceptance and effectiveness of, vaccines globally. Pandemics may negatively impact the global economy, disrupted our operations as well as those of our customers, suppliers, and the global supply chains in which we participate, and create significant volatility and disruption of financial markets.
Efforts to combat a pandemic can be complicated by viral variants and uneven access to, and acceptance and effectiveness of, vaccines globally. Pandemics may negatively impact the global economy, disrupt our operations as well as those of our customers, suppliers, and the global supply chains in which we participate, and create significant volatility and disruption of financial markets.
Contributions are based on hours worked except in cases of layoff or leave where we generally contribute based on 40 hours per week for a maximum of one year. The plans are not fully funded as of December 31, 2022 .
Contributions are based on hours worked except in cases of layoff or leave where we generally contribute based on 40 hours per week for a maximum of one year. The plans are not fully funded as of December 31, 2023.
The mobility in dustry is beginning to shift away from petroleum fuel vehicles ("ICE" vehicles) and migrate to alternate fuel vehicles (as a group "EV-based vehicles"). As the market transitions from ICE vehicles to EV-based vehicles, the Company anticipates its content per vehicle opportunity will increase up to three-fold on a dollar basis.
The mobility industry is beginning to shift away from petroleum fuel vehicles ("ICE" vehicles) and migrate to alternate fuel vehicles (as a group "EV-based vehicles"). As the market transitions from ICE vehicles to EV-based vehicles, the Company anticipates its content per vehicle opportunity will increase up to three-fold on a dollar basis.
We are reliant upon sales to several significant customers. Sales to our ten largest custom ers accounted for 57% of our overall sales in 2022. Changes in our business relationships with any of our large customers or in the timing, size and continuation of their various programs could have a material adverse impact on us.
We are reliant upon sales to several significant customers. Sales to our ten largest customers accounted for 55% of our overall sales in 2023. Changes in our business relationships with any of our large customers or in the timing, size and continuation of their various programs could have a material adverse impact on us.
Approximately 54% of our sales in 2022 were from operations located in countries other than the U.S. Currency variations can have an impact on our results (expressed in U.S. dollars).
Approximately 57% of our sales in 2023 were from operations located in countries other than the U.S. Currency variations can have an impact on our results (expressed in U.S. dollars).
We could be adversely affected if we are unable to recover portions of commodity (including costs of steel and other raw materials), labor, transportation and energy costs from our customers. Commodity, labor, transportation and energy costs have risen sharply over the past couple of years creating pressure on our profit margins.
We could be adversely affected if we are unable to recover portions of commodity (including costs of steel and other raw materials), labor, transportation and energy costs from our customers. Commodity, labor, transportation and energy costs have been volatile over the past several of years creating pressure on our profit margins.
Developments in the financial markets or downgrades to Dana's credit rating could restrict our access to capital and increase financing costs. At December 31, 2022 , Dana had consolidated debt obligations of $2,430, with cash and cash equivalents of $425 and unused revolving credit capacity of $1,109.
Developments in the financial markets or downgrades to Dana's credit rating could restrict our access to capital and increase financing costs. At December 31, 2023, Dana had consolidated debt obligations of $2,679, with cash and cash equivalents of $529 and unused revolving credit capacity of $1,141.
However, there is no assurance that the costs of complying with current environmental laws and regulations, or those that may be adopted in the future, will not increase and adversely impact us.
Historically, environmental costs related to our former and existing operations have not been material. However, there is no assurance that the costs of complying with current environmental laws and regulations, or those that may be adopted in the future, will not increase and adversely impact us.
At December 31, 2022 , our net asset exposure related to Argentina was approximately $44, including $18 of net fixed assets.
At December 31, 2023, our net asset exposure related to Argentina was approximately $50, including $20 of net fixed assets.
Additionally, inability on the part of our partners to satisfy their contractual obligations under the agreements could adversely impact our results of operations and financial position. We could be adversely impacted by the costs of environmental, health, safety and product liability compliance.
Additionally, inability on the part of our partners to satisfy their contractual obligations under the agreements could adversely impact our results of operations and financial position. Certain of our joint venture partners have the ability to put their ownership interests to Dana at fair value.
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During 2022, residual effects of the COVID pandemic continued to negatively impact the global supply chains in which we participate, necessitating that we carry significantly higher levels of inventory to satisfy customer demand.
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If a joint venture partner were to put its ownership interest to Dana, it could cause Dana to outlay significant amounts of cash to purchase the joint venture partner's ownership interest in addition to increased future cash outlays required to fund 100% of the operations on a go-forward basis, reducing available funds for other strategic initiatives and capital investments.
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We could be adversely impacted by an extended transition period away from petroleum fuel vehicles to alternate fuel vehicles. As the market transitions from ICE vehicles to EV-based vehicles, we will continue to experience elevated levels of research and development costs, capital investment and inventory levels.
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During the transition period, we will need to maintain production capacity to meet both ICE and EV-related customer demand, requiring incremental capital investment and reducing our ability to operate at scale.
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In addition, we will need to maintain incremental levels of inventory to satisfy ICE and EV-related customer demand, as raw materials and components used in the production of ICE and EV-related products are largely unique. An extended transition period could negatively impact our profitability, cash flows and financial position.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Light Vehicle Commercial Vehicle Off-Highway Power Technologies Total Manufacturing and assembly plants 32 16 21 19 88 As of December 31, 2022 , we had eighty-eight major manufacturing and assembly plants. In addition, we had seven aftermarket sales and services facilities supporting our mobility customers and twenty-three service and assembly facilities supporting our stationary equipment customers.
Biggest changeItem 2. Properties Light Vehicle Commercial Vehicle Off-Highway Power Technologies Total Manufacturing and assembly plants 31 19 19 19 88 As of December 31, 2023, we had eighty-eight major manufacturing and assembly plants. In addition, we had nine aftermarket sales and services facilities supporting our mobility customers and twenty-two service and assembly facilities supporting our stationary equipment customers.
We maintain seven stand-alone technical and engineering centers in addition to eighteen technical and engineering centers housed within our manufacturing and assembly plants. Our world headquarters is located in Maumee, Ohio.
We maintain eleven stand-alone technical and engineering centers in addition to fourteen technical and engineering centers housed within our manufacturing and assembly plants. Our world headquarters is located in Maumee, Ohio.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeLegal proceedings are also discussed in Note 15 to our consolidated financial statements in Item 8. 12 Table of Contents PART II
Biggest changeLegal proceedings are also discussed in Note 15 to our consolidated financial statements in Item 8. 13 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePerformance chart Index 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Dana Incorporated $ 100.00 $ 43.46 $ 59.50 $ 64.44 $ 76.27 $ 51.18 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 Dow Jones US Auto Parts Index 100.00 69.37 88.40 103.88 125.69 92.46 Issuer's purchases of equity securities — On February 16, 2021, our Board of Directors approved an extension of our existing common stock share repurchase program through December 31, 2023.
Biggest changePerformance chart Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Dana Incorporated $ 100.00 $ 136.92 $ 148.28 $ 176.24 $ 119.72 $ 118.86 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 Dow Jones US Auto Parts Index 100.00 127.43 149.74 181.18 133.28 133.22 Issuer's purchases of equity securities — Our common stock share repurchase program expired on December 31, 2023.
The graph compares our performance to that of the Standard & Poor’s 500 Stock Index (S&P 500) and the Dow Jones US Auto Parts Index. The comparison assumes $100 was invested at the closing price on December 31, 2017. Each of the returns shown assumes that all dividends paid were reinvested.
The graph compares our performance to that of the Standard & Poor’s 500 Stock Index (S&P 500) and the Dow Jones US Auto Parts Index. The comparison assumes $100 was invested at the closing price on December 31, 2018. Each of the returns shown assumes that all dividends paid were reinvested.
Reference is made to the Equity Compensation Plan Information section of Item 12 for certain information regarding our equity compensation plans. Stockholder return — The following graph shows the cumulative total shareholder return for our common stock since December 31, 2017.
Reference is made to the Equity Compensation Plan Information section of Item 12 for certain information regarding our equity compensation plans. Stockholder return — The following graph shows the cumulative total shareholder return for our common stock since December 31, 2018.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market information — Our common stock trades on the New York Stock Exchange (NYSE) under the symbol "DAN." Holders of common stock — Based on reports by our transfer agent, there were approximately 2,444 registered holders of our common stock on January 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market information — Our common stock trades on the New York Stock Exchange (NYSE) under the symbol "DAN." Holders of common stock — Based on reports by our transfer agent, there were approximately 2,370 registered holders of our common stock on February 2, 2024.
No shares of our common stock were repurchased under the program during the fourth quarter of 2022. Annual meeting — We will hold an annual meeting of shareholders on April 26, 2023.
No shares of our common stock were repurchased under the program during the fourth quarter of 2023.
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Approximately $102 remained available under the program for future share repurchases as of December 31, 2022. We repurchase shares utilizing available excess cash either in the open market or through privately negotiated transactions. Stock repurchases are subject to prevailing market conditions and other considerations.
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Trading arrangements — During the three months ended December 31, 2023, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5 - 1 (c) or any non-Rule 10b5 - 1 trading agreement.
Added
Annual meeting — We will hold an annual meeting of shareholders on April 24, 2024 .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

104 edited+11 added−31 removed88 unchanged
Biggest changeOur sales backlog is balanced across all of our end markets. 17 Table of Contents Consolidated Results of Operations Summary Consolidated Results of Operations (2022 versus 2021) 2022 2021 % of % of Increase/ Dollars Net Sales Dollars Net Sales (Decrease) Net sales $ 10,156 $ 8,945 $ 1,211 Cost of sales 9,393 92.5 % 8,108 90.6 % 1,285 Gross margin 763 7.5 % 837 9.4 % (74 ) Selling, general and administrative expenses 495 4.9 % 460 5.1 % 35 Amortization of intangibles 14 14 — Restructuring charges, net (1 ) (1 ) Impairment of goodwill (191 ) (191 ) Other income (expense), net 22 32 (10 ) Earnings before interest and income taxes 86 395 (309 ) Loss on extinguishment of debt (29 ) 29 Interest income 11 9 2 Interest expense 128 131 (3 ) Earnings (loss) before income taxes (31 ) 244 (275 ) Income tax expense 284 72 212 Equity in earnings of affiliates 4 28 (24 ) Net income (loss) (311 ) 200 (511 ) Less: Noncontrolling interests net income 15 14 1 Less: Redeemable noncontrolling interests net loss (84 ) (11 ) (73 ) Net income (loss) attributable to the parent company $ (242 ) $ 197 $ (439 ) Sales — The following table shows changes in our sales by geographic region.
Biggest changeOur sales backlog is balanced across all of our end markets. 18 Table of Contents Consolidated Results of Operations Summary Consolidated Results of Operations (2023 versus 2022) 2023 2022 % of % of Increase/ Dollars Net Sales Dollars Net Sales (Decrease) Net sales $ 10,555 $ 10,156 $ 399 Cost of sales 9,655 91.5 % 9,393 92.5 % 262 Gross margin 900 8.5 % 763 7.5 % 137 Selling, general and administrative expenses 549 5.2 % 495 4.9 % 54 Amortization of intangibles 13 14 (1 ) Restructuring charges, net 25 (1 ) 26 Impairment of goodwill — (191 ) 191 Other income (expense), net 3 22 (19 ) Earnings before interest and income taxes 316 86 230 Loss on extinguishment of debt (1 ) — (1 ) Interest income 17 11 6 Interest expense 154 128 26 Earnings (loss) before income taxes 178 (31 ) 209 Income tax expense 121 284 (163 ) Equity in earnings (loss) of affiliates (9 ) 4 (13 ) Net income (loss) 48 (311 ) 359 Less: Noncontrolling interests net income 22 15 7 Less: Redeemable noncontrolling interests net loss (12 ) (84 ) 72 Net income (loss) attributable to the parent company $ 38 $ (242 ) $ 280 Sales — The following table shows changes in our sales by geographic region.
Retiree benefits — Accounting for pension benefits and other postretirement benefits (OPEB) involves estimating the cost of benefits to be provided well into the future and attributing that cost to the time period each employee works.
Retiree benefits — Accounting for pension benefits and other postretirement benefits (OPEB) involves estimating the cost of benefits to be provided well into the future and generally attributing that cost to the time period each employee works.
Reference is made to Note 1 of our consolidated financial statements in Item 8 for additional information. 16 Table of Contents Commodity costs — The cost of our products may be significantly impacted by changes in raw material commodity prices, the most important to us being those of various grades of steel, aluminum, copper, brass and rare earth materials.
Reference is made to Note 1 of our consolidated financial statements in Item 8 for additional information. 17 Table of Contents Commodity costs — The cost of our products may be significantly impacted by changes in raw material commodity prices, the most important to us being those of various grades of steel, aluminum, copper, brass and rare earth materials.
The Commercial Vehicle segment supports the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supports OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications). 15 Table of Contents Trends in Our Markets We serve our customers in three core global end markets: light vehicle, primarily full frame trucks and SUVs; commercial vehicle, including medium-and heavy-duty trucks and busses; and off-highway, including construction, mining, and agriculture equipment.
The Commercial Vehicle segment supports the OEMs of on-highway commercial vehicles (primarily trucks and buses), while our Off-Highway segment supports OEMs of off-highway vehicles (primarily wheeled vehicles used in construction, mining and agricultural applications). 16 Table of Contents Trends in Our Markets We serve our customers in three core global end markets: light vehicle, primarily full frame trucks and SUVs; commercial vehicle, including medium-and heavy-duty trucks and busses; and off-highway, including construction, mining, and agriculture equipment.
The following discussion of accounting estimates is intended to supplement the Summary of Significant Accounting Policies presented as Note 1 of our consolidated financial statements in Item 8. 25 Table of Contents Income taxes — Accounting for income taxes is complex, in part because we conduct business globally and therefore file income tax returns in numerous tax jurisdictions.
The following discussion of accounting estimates is intended to supplement the Summary of Significant Accounting Policies presented as Note 1 of our consolidated financial statements in Item 8. 26 Table of Contents Income taxes — Accounting for income taxes is complex, in part because we conduct business globally and therefore file income tax returns in numerous tax jurisdictions.
The discount rates used to discount expected future cash flows to present value are typically derived from a weighted-average cost of capital analysis and adjusted to reflect inherent risks. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results.
The discount rates used to discount expected future cash flows to present value were typically derived from a weighted-average cost of capital analysis and adjusted to reflect inherent risks. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results.
During 2021, we generally saw improvement across all of our end markets despite production levels being muted by continued global supply chain disruptions driven in part by transportation inefficiencies and labor, commodity and semiconductor chip shortages. During 2022, we continued to see incremental improvements across our end markets despite continuing, but lessening, global supply chain disruptions.
During 2021, we generally saw improvement across all of our end markets despite production levels being muted by global supply chain disruptions driven in part by transportation inefficiencies and labor, commodity and semiconductor chip shortages. During 2022 and 2023, we continued to see incremental improvement across our end markets despite continuing, but lessening, global supply chain disruptions.
The nine recent investments in electrodynamic expertise and technologies combined with Dana’s longstanding mechatronics capabilities has allowed us to develop and deliver fully integrated e-Propulsion systems that are power-dense and achieve optimal efficiency through the integration of the components that we offer due to our mechatronics capabilities.
Our investments in electrodynamic expertise and technologies combined with Dana’s longstanding mechatronics capabilities has allowed us to develop and deliver fully integrated e-Propulsion systems that are power-dense and achieve optimal efficiency through the integration of the components that we offer due to our mechatronics capabilities.
Estimating fair values can be complex and subject to significant business judgment. We believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they are based, in part, on historical experience and information obtained from management of the acquired companies and are inherently uncertain.
Estimating fair values can be complex and subject to significant business judgment. We believe the assumptions and estimates we have made in the past have been reasonable and appropriate, they were based, in part, on historical experience and information obtained from management of the acquired companies and were inherently uncertain.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions) Discussion and analysis of our results of operations pertaining to 2021 compared to 2020 not included in this Form 10-K can be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2021.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions) Discussion and analysis of our results of operations pertaining to 2022 compared to 2021 not included in this Form 10-K can be found in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2022.
(2) Interest payments are based on long-term debt in place at December 31, 2022 and the interest rates applicable to such obligations. (3) Operating lease obligations, including interest, related to real estate, manufacturing and material handling equipment, vehicles and other assets. (4) Finance lease obligations, including interest, related to real estate and manufacturing and material handling equipment.
(2) Interest payments are based on long-term debt in place at December 31, 2023 and the interest rates applicable to such obligations. (3) Operating lease obligations, including interest, related to real estate, manufacturing and material handling equipment, vehicles and other assets. (4) Finance lease obligations, including interest, related to real estate and manufacturing and material handling equipment.
See Note 12 of our consolidated financial statements in Item 8 for additional discussion of our pension and OPEB obligations. 26 Table of Contents Acquisitions — From time to time, we make strategic acquisitions that have a material impact on our consolidated results of operations or financial position.
See Note 12 of our consolidated financial statements in Item 8 for additional discussion of our pension and OPEB obligations. 27 Table of Contents Acquisitions — From time to time, we make strategic acquisitions that have a material impact on our consolidated results of operations or financial position.
At December 31, 2022, we were in compliance with the covenants of our financing agreements. Under the Revolving Facility and our senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types.
At December 31, 2023, we were in compliance with the covenants of our financing agreements. Under the Revolving Facility and our senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types.
If actual experience differs from expectations, our financial position and results of operations in future periods could be affected. Contingency reserves — We have numerous other loss exposures, such as product liability and warranty claims and matters involving litigation. Establishing loss reserves for these matters requires the use of estimates and judgment regarding risk of exposure and ultimate liability.
If actual experience differs from expectations, our financial position and results of operations in future periods could be affected. Contingency reserves — We have numerous other loss exposures, such as product liability, environmental liability and matters involving litigation. Establishing loss reserves for these matters requires the use of estimates and judgment regarding risk of exposure and ultimate liability.
In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected EBITDA, discount rates, and terminal growth rates. See additional discussion of redeemable noncontrolling interests in Note 9 of our consolidated financial statements in Item 8.
In determining fair value using discounted cash flow projections, we make significant assumptions and estimates about the extent and timing of future cash flows, including revenue growth rates, projected EBITDA, discount rate, capital expenditures and terminal growth rate. See additional discussion of redeemable noncontrolling interests in Note 9 of our consolidated financial statements in Item 8.
The assumptions used, including inflation, discount rates, investment returns, life expectancies, turnover rates, retirement rates, future compensation levels and health care cost trend rates, have a significant impact on plan expenses and obligations. These assumptions are regularly reviewed and modified when appropriate based on historical experience, current trends and future outlook.
The assumptions used, including inflation, discount rates, investment returns, mortality rates, turnover rates, retirement rates, future compensation levels and health care cost trend rates, have a significant impact on plan expenses and obligations. These assumptions are regularly reviewed and modified when appropriate based on historical experience, current trends and future outlook.
Off-highway markets — Our off-highway business has a large presence outside of North America, with 66% of its 2022 sales coming from products manufactured in Europe; however, a large portion of these products are utilized in vehicle production outside the region. The construction equipment segment of the off-highway market is closely related to global economic growth and infrastructure investment.
Off-highway markets — Our off-highway business has a large presence outside of North America, with 68% of its 2023 sales coming from products manufactured in Europe; however, a large portion of these products are utilized in vehicle production outside the region. The construction equipment segment of the off-highway market is closely related to global economic growth and infrastructure investment.
We believe this method is a more precise measurement of interest and service costs by improving the correlation between the projected cash flows and the corresponding interest rates. The determination of the projected benefit obligation at year end is unchanged. At December 31, 2022, we have $141 of unrecognized losses relating to our U.S. pension plans.
We believe this method is a more precise measurement of interest and service costs by improving the correlation between the projected cash flows and the corresponding interest rates. The determination of the projected benefit obligation at year end is unchanged. At December 31, 2023, we have $136 of unrecognized losses relating to our U.S. pension plans.
(8) We are not able to reasonably estimate the timing of payments related to uncertain tax positions because the timing of settlement is uncertain. The above table does not reflect unrecognized tax benefits at December 31, 2022 of $102. See Note 17 of our consolidated financial statements in Item 8 for additional discussion.
(8) We are not able to reasonably estimate the timing of payments related to uncertain tax positions because the timing of settlement is uncertain. The above table does not reflect unrecognized tax benefits at December 31, 2023 of $125. See Note 17 of our consolidated financial statements in Item 8 for additional discussion.
U.S. retirement plans — Our U.S. defined benefit pension plans comprise 65% of our consolidated defined benefit pension obligations at December 31, 2022. These plans are frozen and no service-related costs are being incurred. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets.
U.S. retirement plans — Our U.S. defined benefit pension plans comprise 62% of our consolidated defined benefit pension obligations at December 31, 2023. These plans are frozen and no service-related costs are being incurred. Changes in our net obligations are principally attributable to changing discount rates and the performance of plan assets.
Our sales backlog is approximately 65% attributable to electric-vehicle content with the balance attributable to traditional ICE-vehicle content.
Our sales backlog is approximately 75% attributable to electric-vehicle content with the balance attributable to traditional ICE-vehicle content.
The components of our December 31, 2022 consolidated cash balance were as follows: U.S. Non-U.S.
The components of our December 31, 2023 consolidated cash balance were as follows: U.S. Non-U.S.
Based on the most recent analysis of projected portfolio returns, we concluded that the use of a 6.0% expected return in 2023 is appropriate for our U.S. pension plans. See Note 12 to our consolidated financial statements in Item 8 for information about the investing and allocation objectives related to our U.S. pension plan assets.
Based on the most recent analysis of projected portfolio returns, we concluded that the use of a 5.75% expected return in 2024 is appropriate for our U.S. pension plans. See Note 12 to our consolidated financial statements in Item 8 for information about the investing and allocation objectives related to our U.S. pension plan assets.
Critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, future expected cash flows from product sales, customer contracts and acquired technologies, and discount rates.
Critical estimates in valuing certain of the intangible assets we have acquired included, but were not limited to, future expected cash flows from product sales, customer contracts and acquired technologies, and discount rates.
We have made significant investments - both organically and inorganically - allowing us to move to the next phase, which is to Lead electric propulsion . 14 Table of Contents Over the last several years we continue to deliver on our goal to accelerate vehicle electrification through both core Dana technologies and targeted strategic acquisitions and are positioned today to lead the market.
We have made significant investments - both organically and inorganically - allowing us to move to the next phase, which is to Lead electric propulsion . 15 Table of Contents We continue to deliver on our goal to accelerate vehicle electrification through both core Dana technologies and targeted strategic acquisitions and are positioned today to lead the market.
The following table summarizes our significant contractual obligations as of December 31, 2022 .
The following table summarizes our significant contractual obligations as of December 31, 2023 .
We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy of inactive participants. Based on the current funded status of our U.S. plans, we do not expect to make any contributions during 2023.
We use the average remaining service period of active participants unless almost all of the plan’s participants are inactive, in which case we use the average remaining life expectancy of inactive participants. Based on the current funded status of our U.S. plans, we expect to make contributions of $7 during 2024.
Determining whether a triggering event has occurred, performing the impairment analysis and estimating the fair value of the assets require numerous assumptions and a considerable amount of management judgment. Investments in affiliates — We had aggregate investments in affiliates of $138 at December 31, 2022 and $174 at December 31, 2021.
Determining whether a triggering event has occurred, performing the impairment analysis and estimating the fair value of the assets require numerous assumptions and a considerable amount of management judgment. Investments in affiliates — We had aggregate investments in affiliates of $123 at December 31, 2023 and $136 at December 31, 2022.
We have a diverse customer base and geographic footprint which minimizes our exposure to individual market and segment declines. In 2022 , 48% of our sales came from North American operations and 52% from operations throughout the rest of the world.
We have a diverse customer base and geographic footprint which minimizes our exposure to individual market and segment declines. In 2023, 45% of our sales came from North American operations and 55% from operations throughout the rest of the world.
At December 31, 2023, our sales backlog of net new business for the 2023 through 2025 period was $900. We expect to realize $300 of our sales backlog in 2023, with incremental sales backlog of $350 and $250 being realized in 2024 and 2025, respectively.
At December 31, 2023, our sales backlog of net new business for the 2024 through 2026 period was $950. We expect to realize $350 of our sales backlog in 2024, with incremental sales backlog of $300 being realized in both 2025 and 2026.
We have not estimated pension contributions beyond 2023 due to the significant impact that return on plan assets and changes in discount rates might have on such amounts. (7) This amount represents estimated payments under our retiree health care programs.
(6) This amount represents estimated 2024 minimum required contributions to our global defined benefit pension plans. We have not estimated pension contributions beyond 2024 due to the significant impact that return on plan assets and changes in discount rates might have on such amounts. (7) This amount represents estimated payments under our retiree health care programs.
Our sales in Argentina for 2022 of approximately $151 are 1% of our consolidated sales and our net asset exposure related to Argentina was approximately $44, including $18 of net fixed assets, at December 31, 2022 . During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy.
Our sales in Argentina for 2023 of approximately $215 are 2% of our consolidated sales and our net asset exposure related to Argentina was approximately $50, including $20 of net fixed assets, at December 31, 2023. During the second quarter of 2018, we determined that Argentina's economy met the GAAP definition of a highly inflationary economy.
Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes. Higher commodity prices decreased year-over-year earnings by $447 in 2022. Material recovery pricing actions increased year-over-year earnings by $446 in 2022.
Material cost changes will customarily have some impact on our financial results as customer pricing adjustments typically lag commodity price changes. Lower commodity prices increased year-over-year earnings by $51 in 2023. Material recovery pricing actions decreased year-over-year earnings by $2 in 2023.
While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity. 23 Table of Contents Cash Flow 2022 2021 Cash provided by (used for) changes in working capital $ 199 $ (455 ) Other cash provided by operations 450 613 Net cash provided by operating activities 649 158 Net cash used in investing activities (426 ) (293 ) Net cash used in financing activities (42 ) (127 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 181 $ (262 ) The table above summarizes our consolidated statement of cash flows.
While uncertainty surrounding the current economic environment could adversely impact our business, based on our current financial position, we believe it is unlikely that any such effects would preclude us from maintaining sufficient liquidity. 24 Table of Contents Cash Flow 2023 2022 Cash provided by changes in working capital $ 70 $ 199 Other cash provided by operations 406 450 Net cash provided by operating activities 476 649 Net cash used in investing activities (528 ) (426 ) Net cash provided by (used in) financing activities 160 (42 ) Net increase in cash, cash equivalents and restricted cash $ 108 $ 181 The table above summarizes our consolidated statement of cash flows.
Foreign currency — With 54% of our 2022 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations. The euro zone countries and Brazil accounted for 49% and 11% of our 2022 non-U.S. sales, respectively, while India and China accounted for 10% and 9%, respectively.
Foreign currency — With 57% of our 2023 sales coming from outside the U.S., international currency movements can have a significant effect on our sales and results of operations. The euro zone countries and India accounted for 50% and 10% of our 2023 non-U.S. sales, respectively, while Brazil and China both accounted for 8%.
SG&A expenses were $35 higher in 2022 primarily due to higher salaried employee wages and incentive compensation, increased software technology investments, travel expenses and professional fees. Amortization of intangibles — Amortization expense was $14 in both 2021 and 2021. Restructuring charges, net — Net restructuring charges were ($1) in 2022.
SG&A expenses were $54 higher in 2023 primarily due to higher salaried employee wages and incentive compensation, increased software technology investments and travel expenses. Amortization of intangibles — Amortization expense was $13 in 2023 and $14 in 2022. Restructuring charges, net — Net restructuring charges were $25 in 2023 and ($1) in 2022.
During 2022, we recognized tax expense of $240 to record valuation allowance in the U.S., which includes $189 on U.S. federal credits and attributes and $51 related to U.S. state attributes. In addition, we recorded a tax benefit of $32 for U.S. tax credits generated.
In addition, we recorded net benefit of $55 on the intercompany sale of intangible assets to the U.S. During 2022, we recognized tax expense of $240 to record valuation allowance in the U.S., which includes $189 on U.S. federal credits and attributes and $51 related to U.S. state attributes.
Weaker international currencies reduced sales by $420, principally due to a weaker euro, Indian rupee, Thai baht and Chinese renminbi, partially offset by a stronger Brazilian real. The organic sales increase of $1,639, or 18%, resulted from improved overall market demand and the conversion of sales backlog.
Weaker international currencies reduced sales by $9, principally due to a weaker Indian rupee, South African rand and Chinese renminbi, partially offset by a stronger euro and Brazilian real. The organic sales increase of $408, or 4%, resulted from improved overall market demand and the conversion of sales backlog.
Our sales by operating segment were Light Vehicle – 40%, Commercial Vehicle – 20%, Off-Highway – 29% and Power Technologies – 11%.
Our sales by operating segment were Light Vehicle – 38%, Commercial Vehicle – 20%, Off-Highway – 30% and Power Technologies – 12%.
Full-frame light-truck production was up 7 % while light-vehicle engine production was up 13% compared with 2021. Year-over-year Class 8 truck production was up 24% while Classes 5-7 truck production was up 3%. Excluding currency effects, sales in Europe were up 20% compared with 2021.
Year-over-year full-frame light-truck production was down 2% while light vehicle engine production was up 12% compared with 2022. Year-over-year Class 8 truck production was up 8% while Classes 5-7 truck production was up 9%. Excluding currency effects, sales in Europe were up 15% compared with 2022.
Like the underground mining segment, investment in agriculture equipment is primarily driven by prices for farm commodities. Farm commodity price increases in 2022 spurred a 6% increase in agriculture equipment production. The outlook for 2023 is for global end-market demand to remain relatively flat with the prior year.
The agriculture equipment market is the third of our key off-highway segments. Like the underground mining segment, investment in agriculture equipment is primarily driven by prices for farm commodities. Farm commodity price decreases in 2023 spurred a 2% decrease in agriculture equipment production. The outlook for 2024 is for global end-market demand to remain relatively flat with the prior year.
Other Initiatives Aftermarket opportunities — We have a global group dedicated to identifying and developing aftermarket growth opportunities that leverage the capabilities within our existing businesses – targeting increased future aftermarket sales.
See Note 13 to our consolidated financial statements in Item 8 for additional information. Other Initiatives Aftermarket opportunities — We have a global group dedicated to identifying and developing aftermarket growth opportunities that leverage the capabilities within our existing businesses – targeting increased future aftermarket sales.
Partially offsetting these performance-related decreases were net customer pricing and cost recovery actions of $79 and higher material cost savings of $7. 21 Table of Contents Non-GAAP Financial Measures Adjusted EBITDA We have defined adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits (OPEB) costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.).
Partially offsetting these performance-related earnings increases were inflationary cost increases of $34, higher program launch costs of $6, higher incentive compensation of $6, increased spending on electrification initiatives of $7, operational inefficiencies of $7 and commodity cost increases of $2. 22 Table of Contents Non-GAAP Financial Measures Adjusted EBITDA We have defined adjusted EBITDA as net income (loss) before interest, income taxes, depreciation, amortization, equity grant expense, restructuring expense, non-service cost components of pension and other postretirement benefits (OPEB) costs and other adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.).
Year-over-year North America Class 8 production was up 24% and Classes 5-7 production was up 3%. Year-over-year medium/heavy-truck production in Europe was up 14% while medium/heavy-truck production in South America and Asia Pacific were down 3% and 27%, respectively. Net customer pricing and cost recovery actions increased year-over-year sales by $178. Commercial Vehicle segment EBITDA decreased by $5 in 2022.
Year-over-year North America Class 8 production was up 8% while Classes 5-7 was up 9%. Year-over-year medium/heavy-truck production in Europe was up 17% while medium/heavy-truck production in South America was down 32%. Net customer pricing and cost recovery actions increased year-over-year sales by $76. Commercial Vehicle segment EBITDA increased by $44 in 2023.
The year-over-year performance-related earnings increase was driven by net customer pricing and cost recovery actions of $277 and higher material cost savings of $26.
The year-over-year performance-related earnings increase was driven by net customer pricing and cost recovery actions of $54, material cost savings of $13 and lower premium freight costs of $1.
Power Technologies Segment Segment EBITDA Sales EBITDA Margin 2021 $ 1,047 $ 123 11.7 % Volume and mix 76 13 Performance 79 (37 ) Currency effects (61 ) (5 ) 2022 $ 1,141 $ 94 8.2 % Power Technologies primarily serves the light-vehicle market but also sells product to the medium/heavy-truck and off-highway markets.
Power Technologies Segment Segment EBITDA Sales EBITDA Margin 2022 $ 1,141 $ 94 8.2 % Volume and mix 45 (12 ) Performance 54 6 Currency effects 3 1 2023 $ 1,243 $ 89 7.2 % Power Technologies primarily serves the light-vehicle market but also sells product to the medium/heavy-truck and off-highway markets.
At sales levels in our current outlook for 2023, a 5% movement on the euro would impact our annual sales by approximately $140. A 5% change on the Chinese renminbi, Indian rupee or Brazilian real rates would impact our annual sales in each of those countries by approximately $30.
A 5% change on the Chinese renminbi, Indian rupee or Brazilian real rates would impact our annual sales in each of those countries by approximately $30. At our current sales outlook for 2024, we expect full year 2024 adjusted EBITDA to approximate $875 to $975.
Total Cash and cash equivalents $ — $ 322 $ 322 Cash and cash equivalents held as deposits 1 1 Cash and cash equivalents held at less than wholly-owned subsidiaries 6 96 102 Consolidated cash balance $ 6 $ 419 $ 425 A portion of the non-U.S. cash and cash equivalents is utilized for working capital and other operating purposes.
Total Cash and cash equivalents $ — $ 399 $ 399 Cash and cash equivalents held at less than wholly-owned subsidiaries 3 127 130 Consolidated cash balance $ 3 $ 526 $ 529 A portion of the non-U.S. cash and cash equivalents is utilized for working capital and other operating purposes.
Any potential acquisition will be evaluated in the same manner we currently consider customer program opportunities and other uses of capital – with a disciplined financial approach designed to ensure profitable growth and increased shareholder value.
Any potential acquisition will be evaluated in the same manner we currently consider customer program opportunities and other uses of capital – with a disciplined financial approach designed to ensure profitable growth and increased shareholder value. Acquisitions We have actively grown our electric vehicle capabilities through multiple acquisitions, positioning us to deliver complete e-Propulsion systems with in-house electrodynamics.
Although sales in South Africa are less than 5% of our non-U.S. sales, the rand has been volatile and significantly impacted sales from time to time. International currencies weakened against the U.S. dollar in 2022, decreasing 2022 sales by $420.
Although sales in South Africa are less than 5% of our non-U.S. sales, the rand has been volatile and significantly impacted sales from time to time. International currencies weakened against the U.S. dollar in 2023, decreasing 2023 sales by $9. A weaker Indian rupee, South African rand and Chinese renminbi were partially offset by a stronger euro and Brazilian real.
(SME), Prestolite E-Propulsion Systems (Beijing) Limited (PEPS), Ashwoods Innovations Limited (Ashwoods), Oerlikon Drive Systems, Nordresa Motors, Inc., Rational Motion GmbH and Pi Innovo Holding Limited have enhanced our portfolio of core technologies including e-motors, power inverters, software and controls, and advance mechatronics. Our strategic partner, Hydro-Québec, owns 45% redeemable noncontrolling interests in the Dana TM4 joint venture entities.
Our acquisitions of TM4 Inc. (TM4), S.M.E. S.p.A. (SME), Prestolite E-Propulsion Systems (Beijing) Limited (PEPS), Ashwoods Innovations Limited (Ashwoods), Oerlikon Drive Systems, Nordresa Motors, Inc., Rational Motion GmbH and Pi Innovo Holding Limited have enhanced our portfolio of core technologies including e-motors, power inverters, software and controls, and advance mechatronics.
We expect to generate free cash flow of approximately $25 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA being largely offset by higher capital spending to support new business and our continued investment in our electrification strategy.
We expect to generate free cash flow of approximately $50 at the midpoint of our guidance range reflecting the benefit of higher year-over-year adjusted EBITDA and lower capital spending being largely offset by higher year-over-year cash paid for interest and income taxes and increased working capital to support higher sales levels.
Partially offsetting these performance-related increases were commodity cost increases of $134, inflationary cost increases of $130, operational inefficiencies of $11, higher spending on electrification initiatives of $9, higher incentive compensation of $4, higher premium freight costs of $4 and higher warranty costs of $2.
Partially offsetting these performance-related earnings increases were inflationary cost increases of $82, operational inefficiencies of $31, higher warranty expenses of $9, higher incentive compensation of $9 and higher spending on electrification initiatives of $1.
Upon our loss of control, we deconsolidated Tai Ya, including $6 of cash and cash equivalents. 24 Table of Contents Off-Balance Sheet Arrangements In connection with the divestiture of our Structural Products business in 2010, leases covering three U.S. facilities were assigned to a U.S. affiliate of the new owner, Metalsa S.A. de C.V. (Metalsa).
Hydro-Québec made cash contributions to Dana TM4 of $22 in 2023 and $51 in 2022. 25 Table of Contents Off-Balance Sheet Arrangements In connection with the divestiture of our Structural Products business in 2010, leases covering three U.S. facilities were assigned to a U.S. affiliate of the new owner, Metalsa S.A. de C.V. (Metalsa).
The global mining equipment market has been mostly stable over the past several years as industry participants have maintained vehicle inventory levels to match commodity output, and this trend is expected to continue in 2023. The agriculture equipment market is the third of our key off-highway segments.
End-user investment in the mining equipment segment is driven by prices for commodity products produced by underground mining. The global mining equipment market has been mostly stable over the past several years as industry participants have maintained vehicle inventory levels to match commodity output, and this trend is expected to continue in 2024.
The following table provides a reconciliation of net income (loss) to adjusted EBITDA. 2022 2021 Net income (loss) $ (311 ) $ 200 Equity in earnings of affiliates 4 28 Income tax expense (benefit) 284 72 Earnings (loss) before income taxes (31 ) 244 Depreciation and amortization 388 389 Restructuring charges, net (1 ) Interest expense, net 117 122 Loss on extinguishment of debt 29 (Gain) loss on investment in Hyliion 20 Loss on disposal group held for sale 7 Loss on de-designation of fixed-to-fixed cross currency swaps 9 Gain on sale leaseback (66 ) Impairment of goodwill 191 Other* 36 41 Adjusted EBITDA $ 700 $ 795 * Other includes stock compensation expense, non-service cost components of pension and OPEB costs, strategic transaction expenses and other items.
The following table provides a reconciliation of net income (loss) to adjusted EBITDA. 2023 2022 Net income (loss) $ 48 $ (311 ) Equity in earnings (loss) of affiliates (9 ) 4 Income tax expense 121 284 Earnings (loss) before income taxes 178 (31 ) Depreciation and amortization 416 388 Restructuring charges, net 25 (1 ) Interest expense, net 137 117 Loss on extinguishment of debt 1 Distressed supplier costs 44 Impairment of goodwill 191 Other* 44 36 Adjusted EBITDA $ 845 $ 700 * Other includes stock compensation expense, non-service cost components of pension and OPEB costs, strategic transaction expenses and other items.
Year-over-year North America full-frame light-truck production increased 7% while light-truck production in Europe, South America and Asia Pacific increased 5%, 13% and 6%, respectively. Net customer pricing and cost r ecovery actions increased year-over-year sales by $238. Light Vehicle segment EBITDA decreased by $116 in 2022. Higher sales volumes provided a year-over-year benefit of $37 (14.8% incremental margin).
Year-over-year North America full-frame light-truck production decreased 2% while light-truck production in Europe, South America and Asia Pacific increased 16%, 7% and 13%, respectively. Net customer pricing and cost recovery actions increased year-over-year sales by $184. Light Vehicle segment EBITDA increased by $54 in 2023. Lower sales volumes decreased year-over-year earnings by $16 (8% decremental margin).
Power Technologies sales in 2022, exclusive of currency effects, were $155 higher than in 2022 reflecting improved global markets, cost recovery actions and conversion of sales backlog. Year-over-year light-vehicle engine production in North America, South America and Asia Pacific increased 13%, 13% and 6%, respectively, while year-over-year light-vehicle engine production in Europe decreased 1%.
Power Technologies sales in 2023, exclusive of currency effects, were 9% higher than 2022 reflecting improved North America and Europe markets, the conversion of sales backlog and the benefit of net customer pricing and cost recovery actions. Year-over-year North America light-vehicle engine production was up 12% while Europe light-vehicle engine production was up 10%.
Incremental margins provided by increased sales volumes were more than offset by higher year-over-year commodity costs of $447, non-material inflationary cost impacts of $357, higher spending on electrification initiatives of $50 and operational inefficiencies primarily attributable to continued global supply chain disruptions and frequent customer order changes made with little to no advance notification.
Incremental margins provided by increased sales volumes, material cost savings of $114, lower commodity costs of $51 and lower premium freight of $48 were partially offset by non-material inflationary cost impacts of $296, higher warranty expense of $14, higher program launch costs of $21 and operational inefficiencies primarily attributed to continued global supply chain disruptions and frequent customer order changes made with little to no advance notification.
A weaker euro, Indian rupee, Thai baht, Chinese renminbi and South African rand were partially offset b y a stronger Brazilian real. Argentina has experienced significant inflationary pressures the past several years, contributing to significant devaluation of its currency among other economic challenges. Our Argentine operation supports our Light Vehicle operating segment.
Argentina has experienced significant inflationary pressures the past several years, contributing to significant devaluation of its currency among other economic challenges. Our Argentine operation supports our Light Vehicle operating segment.
Adjusted EBITDA Margin is expected to be 7.5% at the midpoint of our guidance range, a 60 basis-point improvement over 2022, reflecting higher margin net new business and the benefit of material cost recoveries as commodity costs begin to abate being partially offset by continued operational inefficiencies, driven by continuing global supply chain disruptions and customer order volatility, and increased investment to support our electrification strategy.
Adjusted EBITDA Margin is expected to be 8.5% at the midpoint of our guidance range, a 50 basis-point improvement over 2023, reflecting higher margin net new business and improving operational performance being partially offset by the benefit of the material cost recovery tailwind experienced in 2023 dissipating in 2024, as commodity prices stabilize, and increased investment to support our electrification strategy.
During 2021, we fully paid down our Term B Facility, making principal payments of $349. During 2021, we paid financing costs of $2 to amend our credit and guaranty agreement, increasing the Revolving Facility to $1,150 and extending its maturity to March 25, 2026. We used $58 for dividend payments to common stockholders during both 2022 and 2021.
During 2023, we paid financing costs of $2 to amend our credit and guaranty agreement, extending the Revolving Facility maturity to March 14, 2028. We used cash of $58 in both 2023 and 2022 for dividend payments to common stockholders. We used cash of $25 to repurchase common shares under our share repurchase program during 2022.
The 2023 outlook for Asia Pacific is for a modest increase in production from the prior year driven by the market recovery in India gaining traction.
Production of medium- and heavy-duty trucks in Asia Pacific, driven by China and India, increased 18% in 2023. The 2024 outlook for Asia Pacific is for a modest increase in production from the prior year.
Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 4.7% in 2022 and 5.1% in 2021. Income tax expense — Income tax expense was $284 in 2022 and $72 in 2021.
Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 5.6% in 2023 and 4.7% in 2022. Income tax expense — Income tax expense was $121 in 2023 and $284 in 2022. During 2023, we recorded tax expense of $19 for income tax reserves associated with prior tax years in foreign jurisdictions.
Sa les, Earnings and Cash Flow Outlook 2023 Outlook 2022 2021 2020 Sales $10,350 - $10,850 $ 10,156 $ 8,945 $ 7,106 Adjusted EBITDA $750 - $850 $ 700 $ 795 $ 593 Net cash provided by operating activities $510 - $560 $ 649 $ 158 $ 386 Purchases of property, plant and equipment ~5% of sales $ 440 $ 369 $ 326 Free Cash Flow $0 - $50 $ 209 $ (211 ) $ 60 Adjusted EBITDA and free cash flow are non-GAAP financial measures.
Sales, Earnings and Cash Flow Outlook 2024 Outlook 2023 2022 2021 Sales $10,650 - $11,150 $ 10,555 $ 10,156 $ 8,945 Adjusted EBITDA $875 - $975 $ 845 $ 700 $ 795 Net cash provided by operating activities $475 - $525 $ 476 $ 649 $ 158 Purchases of property, plant and equipment ~4% of sales $ 501 $ 440 $ 369 Free Cash Flow $25 - $75 $ (25 ) $ 209 $ (211 ) Adjusted EBITDA and free cash flow are non-GAAP financial measures.
The outlook for 2023 is for continued strong demand with production slightly above 2022 levels driven by solid order backlogs. Medium-duty truck production in North America experienced a modest 3% year-over-year increase from 2021 to 2022. The outlook for 2023 is for a slight increase in production over the prior year.
The outlook for 2024 is for weakening demand with production down moderately from 2023 levels driven by lower year-over-year freight volumes and rates. Medium-duty truck production in North America experienced a modest 9% year-over-year increase from 2022. The outlook for 2024 is for a modest decrease in production over the prior year.
See Note 9 to our consolidated financial statements in Item 8 for additional information. Segments We manage our operations globally through four operating segments. Our Light Vehicle and Power Technologies segments primarily support light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars.
Our Light Vehicle and Power Technologies segments primarily support light vehicle original equipment manufacturers (OEMs) with products for light trucks, SUVs, CUVs, vans and passenger cars.
Cost of sales and gross margin — Cost of sales for 2022 increased $1,285, or 16%, when compared to 2021. Cost of sales as a percent of sales was 190 basis points higher than in the previous year.
Year-over-year light-truck production was up 13% while medium/heavy-truck production was up 18%. Cost of sales and gross margin — Cost of sales for 2023 increased $262, or 3%, when compared to 2022. Cost of sales as a percent of sales was 100 basis points lower than in the previous year.
See Note 17 to our consolidated financial statements in Item 8 for additional information. Equity in earnings of affiliates — Net earnings from equity investments was $4 in 2022 and $28 in 2021. Equity in earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) was a loss of $1 in 2022 and earnings of $22 in 2021.
Equity in earnings of affiliates — Net earnings (loss) from equity investments was a loss of $9 in 2023 and earnings of $4 in 2022. Equity in loss of Dongfeng Dana Axle Co., Ltd. (DDAC) was $16 in 2023 and $1 in 2022.
Year-over-year global construction/mining and agricultural equipment markets reflected marked improvement with global production increasing 10% and 6%, respectively, over 2021. Net customer pricing and cost recovery actions increased year-over-year sales by $277. Off-Highway segment EBITDA increased by $51 in 2022. Higher sales volumes provided a year-over-year benefit of $76 (23.3% incremental margin).
Year-over-year global construction/mining equipment markets increased 5% while global agricultural equipment markets were relatively stable with production decreasing 2%. Net customer pricing and cost recovery actions increased year-over-year sales by $95. Off-Highway segment EBITDA increased by $61 in 2023. Higher sales volumes provided a year-over-year earnings increase of $37 (28% incremental margin).
The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance.
The accompanying reconciliations of these non-GAAP measures with the most comparable GAAP measures for the historical periods presented are indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Our 2024 sales outlook is $10,650 to $11,150, reflecting a modest improvement in global market demand and $350 of net new business backlog.
The following table reconciles net cash flows provided by operating activities to free cash flow. 2022 2021 Net cash provided by operating activities $ 649 $ 158 Purchases of property, plant and equipment (440 ) (369 ) Free cash flow $ 209 $ (211 ) 22 Table of Contents Liquidity The following table provides a reconciliation of cash and cash equivalents to liquidity, a non-GAAP measure, at December 31, 2022 : Cash and cash equivalents $ 425 Less: Deposits supporting obligations (1 ) Available cash 424 Additional cash availability from Revolving Facility 1,109 Total liquidity $ 1,533 Cash deposits are maintained to provide credit enhancement for certain agreements and are reported as part of cash and cash equivalents.
The following table reconciles net cash flows provided by operating activities to free cash flow. 2023 2022 Net cash provided by operating activities $ 476 $ 649 Purchases of property, plant and equipment (501 ) (440 ) Free cash flow $ (25 ) $ 209 23 Table of Contents Liquidity The following table provides a reconciliation of cash and cash equivalents to liquidity, a non-GAAP measure, at December 31, 2023: Cash and cash equivalents $ 529 Additional cash availability from Revolving Facility 1,141 Total liquidity $ 1,670 We had availability of $1,141 at December 31, 2023 under our Revolving Facility after deducting $9 of outstanding letters of credit.
Financing actions — We have taken advantage of competitive debt markets, eliminating our secured debt and extending and restructuring our senior note maturity schedule. Our current portfolio of unsecured senior notes is structured such that no more than $400 of senior notes comes due in any calendar year, with no maturities until the second quarter of 2025.
Financing initiatives — Our current portfolio of unsecured senior notes is structured such that no more than $469 of senior notes comes due in any calendar year, with no maturities until the second quarter of 2025. In addition, during 2023 we extended the maturity of our $1,150 revolving credit facility to March 2028.
Partially offsetting these performance-related decreases were net customer pricing and cost recovery actions of $178, higher material cost savings of $23, lower warranty costs of $4 and lower premium freight costs of $2. 20 Table of Contents Off-Highway Segment Segment EBITDA Sales EBITDA Margin 2021 $ 2,593 $ 353 13.6 % Volume and mix 326 76 Performance 277 9 Currency effects (250 ) (34 ) 2022 $ 2,946 $ 404 13.7 % Off-Highway sales in 2022, exclusive of currency effects, were 23% higher than 2021 reflecting improved global markets, cost recovery actions and the conversion of sales backlog.
Partially offsetting these performance-related earnings increases were operational inefficiencies of $60, inflationary cost increases of $22, higher program launch costs of $9, higher incentive compensation of $9, higher warranty costs of $8 and commodity cost increases of $1. 21 Table of Contents Off-Highway Segment Segment EBITDA Sales EBITDA Margin 2022 $ 2,946 $ 404 13.7 % Volume and mix 131 37 Performance 95 24 Currency effects 13 2023 $ 3,185 $ 465 14.6 % Off-Highway sales in 2023, exclusive of currency effects, were 8% higher than 2022 reflecting strong global markets, the conversion of sales backlog and the benefit of net customer pricing and cost recovery actions.
Shareholder return actions — When evaluating capital structure initiatives, we balance our growth opportunities and shareholder value initiatives with maintaining a strong balance sheet and access to capital.
Capital Structure Initiatives In addition to investing in our business, we plan to prioritize a balanced allocation of capital while maintaining a strong balance sheet. Shareholder return initiatives — When evaluating capital structure initiatives, we balance our growth opportunities with maintaining a strong balance sheet and returning capital to shareholders via dividends and share repurchases.
Investing activities — Expenditures for property plant and equipment were $440 and $369 in 2022 and 2021. The increase in capital spend during 2022 is in support of awarded next generation programs and new business. During December 2021, we completed a sale-leaseback transaction on three of our U.S. manufacturing facilities receiving proceeds of $77 from the sale of the properties.
Investing activities — Expenditures for property plant and equipment were $501 and $440 in 2023 and 2022. The increase in capital spend during 2023 is in support of awarded next generation programs and new business. During 2022, purchases of marketable securities were largely funded by proceeds from sales of marketable securities.
Operating activities — Exclusive of working capital, other cash provided by operations was $450 in 2022 and $613 in 2021. The year-over-year decrease is primarily attributable to lower operating earnings and higher cash paid for income taxes. Working capital provided cash of $199 in 2022 and used cash of $455 in 2021.
The year-over-year decrease is primarily attributable to the impact of higher year-over-year operating earnings being offset by lower year-over-year dividends received from equity-method investments, higher year-over-year cash paid for interest and income taxes and higher year-over-year cash payments made to distressed supplier. Working capital provided cash of $70 and $199 in 2023 and 2022, respectively.
On November 30, 2021, in connection with the issuance of our February 2032 Notes, we fully paid down our Term B Facility. We wrote off $5 of previously deferred financing costs associated with the Term B Facility. See Note 13 of our consolidated financial statements in Item 8 for additional information.
The $1 loss on extinguishment of debt is comprised of the write-off of previously deferred financing costs associated with the April 2025 Notes. See Note 13 of our consolidated financial statements in Item 8 for additional information.
Interest income and interest expense — Interest income was $11 in 2022 and $9 in 2021. Interest expense decreased from $131 in 2021 to $128 in 2022, with higher average debt levels being more than offset by lower interest rates on outstanding borrowings.
Interest income and interest expense — Interest income increased from $11 in 2022 to $17 in 2023, due to higher average cash balances and higher interest rates being paid on cash deposits. Interest expense increased from $128 in 2022 to $154 in 2023, due to higher average debt levels and higher interest rates on outstanding borrowings.
Net customer pricing and cost recovery actions increased year-over-year sales by $79. Power Technologies segment EBITDA decreased by $29 in 2022. Higher sales volumes provided a year-over-year benefit of $13 (17.1% incremental margin).
Net customer pricing and cost recovery actions increased year-over-year sales by $54. Power Technologies segment EBITDA decreased by $5 in 2023. Unfavorable product mix resulted in decremental margins on higher year-over-year sales volumes in 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−1 removed8 unchanged
Biggest changeThe remaining $957 represents currency swaps and forward contracts associated with certain foreign currency-denominated intercompany loans and forecasted sales and purchase transactions. Commodity price risk — We do not utilize derivative contracts to manage commodity price risk. Our overall strategy is to pass through commodity risk to our customers in our pricing agreements.
Biggest changeCommodity price risk — We do not utilize derivative contracts to manage commodity price risk. Our overall strategy is to pass through commodity risk to our customers in our pricing agreements. A substantial portion of our customer agreements include contractual provisions for the pass-through of commodity price movements.
Of the remaining 65% of such outstanding intercompany loans, $68 million has been hedged by foreign currency forwards and the remaining balances have not been hedged. To align our cash requirements with availability by currency, we also periodically issue external debt that is denominated in a currency other than the functional currency of the issuing entity.
Of the remaining 68% of such outstanding intercompany loans, $243 million has been hedged by foreign currency forwards and the remaining balances have not been hedged. To align our cash requirements with availability by currency, we also periodically issue external debt that is denominated in a currency other than the functional currency of the issuing entity.
To manage our global liquidity objectives, we periodically execute intercompany loans, some of which are foreign currency-denominated. With respect to such intercompany loans, the total notional amount outstanding at December 31, 2022 is approximately $846. Depending on the specific objective of each intercompany loan arrangement, certain intercompany loans may be hedged while others remain unhedged for strategic reasons.
To manage our global liquidity objectives, we periodically execute intercompany loans, some of which are foreign currency-denominated. With respect to such intercompany loans, the total notional amount outstanding at December 31, 2023 is approximately $975. Depending on the specific objective of each intercompany loan arrangement, certain intercompany loans may be hedged while others remain unhedged for strategic reasons.
As of December 31, 2022, we had $400 of external U.S. dollar debt, issued by a euro-functional entity, $300 of which has been hedged by our fixed-to-fixed cross-currency interest rate swaps. Such swaps are treated as cash flow hedges whereby the changes in fair value are recorded in OCI to the extent the hedges remain effective.
As of December 31, 2023, we had $200 of external U.S. dollar debt, issued by a euro-functional entity, all of which has been hedged by our fixed-to-fixed cross-currency interest rate swaps. Such swaps are treated as cash flow hedges whereby the changes in fair value are recorded in OCI to the extent the hedges remain effective.
The following table summarizes the sensitivity of the fair value of our derivative instruments, including forward contracts and currency swaps, at December 31, 2022 to a 10% change in foreign exchange rates. 10% Increase 10% Decrease in Rates in Rates Gain (Loss) Gain (Loss) Foreign currency rate sensitivity: Currency swaps $ (63 ) $ 63 Forward contracts $ (39 ) $ 46 At December 31, 2022, of the $1,575 total notional amount of foreign currency derivatives, approximately 61% represents the aggregate of fixed-to-fixed cross-currency interest rate swaps while the remaining 39% primarily represents forward contracts associated with our forecasted foreign currency-denominated sales and purchase transactions.
The following table summarizes the sensitivity of the fair value of our derivative instruments, including forward contracts and currency swaps, at December 31, 2023 to a 10% change in foreign exchange rates. 10% Increase 10% Decrease in Rates in Rates Gain (Loss) Gain (Loss) Foreign currency rate sensitivity: Currency swaps $ (65 ) $ 65 Forward contracts $ (67 ) $ 78 At December 31, 2023, of the $1,757 total notional amount of foreign currency derivatives, approximately 56% represents the aggregate of fixed-to-fixed cross-currency interest rate swaps while the remaining 44% primarily represents forward contracts associated with our forecasted foreign currency-denominated sales and purchase transactions.
Of the approximately $846 of foreign currency-denominated intercompany loans outstanding at December 31, 2022, $298, or 35%, has been hedged by one of our fixed-to-fixed cross-currency swaps whereby we have protected the income statement from exchange rate risk.
Of the approximately $975 of foreign currency-denominated intercompany loans outstanding at December 31, 2023, $307, or 32%, has been hedged by one of our fixed-to-fixed cross-currency swaps whereby we have protected the income statement from exchange rate risk.
A substantial portion of our customer agreements include contractual provisions for the pass-through of commodity price movements. In instances where the risk is not covered contractually, we have generally been able to adjust customer pricing to recover commodity cost increases. 28 Table of Contents
In instances where the risk is not covered contractually, we have generally been able to adjust customer pricing to recover commodity cost increases. 29 Table of Contents
Removed
The remaining $100 has been economically hedged by an offsetting intercompany loan. At December 31, 2021, the total notional amount of our currency derivative portfolio was $1,545 and included fixed-to-fixed cross-currency interest rate swaps associated with $588 of external debt.

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