Segments

We are a global provider of high-technology products to virtually every major vehicle and engine manufacturer in the world. We also serve the stationary industrial market. Our technologies include drive and motion products (axles, driveshafts, planetary hub drives, power-transmission products, tire-management products, and transmissions); sealing solutions (gaskets, seals, heat shields, and fuel-cell plates); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, and exhaust-gas heat recovery); and fluid-power products (pumps, valves, motors, and controls). We serve our global light vehicle, medium/heavy vehicle and off-highway markets through four operating segments – Light Vehicle Driveline Technologies (Light Vehicle), Commercial Vehicle Driveline Technologies (Commercial Vehicle), Off-Highway Drive and Motion Technologies (Off-Highway) and Power Technologies, which is the center of excellence for sealing and thermal-management technologies that span all customers in our on-highway and off-highway markets. These operating segments have global responsibility and accountability for business commercial activities and financial performance.

Dana evaluates the performance of its operating segments based on external sales and segment EBITDA. Segment EBITDA is a primary driver of cash flows from operations and a measure of our ability to maintain and continue to invest in our operations and provide shareholder returns. Our segments are charged for corporate and other shared administrative costs. Segment EBITDA may not be comparable to similarly titled measures reported by other companies.

Segment information —



	2018							2017
Three Months Ended March 31,	External Sales		Inter-Segment Sales			Segment EBITDA		External Sales		Inter-Segment Sales			Segment EBITDA
Light Vehicle	$	950	$	33		$	103	$	761	$	29		$	89
Commercial Vehicle	400		26			34		329		23			28
Off-Highway	492		2			72		328					45
Power Technologies	296		5			45		283		4			50
Eliminations and other			(66		)					(56		)
Total	$	2,138	$	—		$	254	$	1,701	$	—		$	212

Upon our adoption of ASU 2017-07 on January 1, 2018, we changed our measurement of segment profit to exclude the non-service cost components of pension and OPEB costs. See Note 1 for additional information on ASU 2017-07. Prior period segment EBITDA amounts have not been recast due to the insignificance of the adjustments. Had the prior period amounts been recast to conform with the current presentation, segment EBITDA for the first quarter of 2017 would have been $89 for Light Vehicle, $29 for Commercial Vehicle, $45 for Off-Highway and $51 for Power Technologies.

Prior to the third quarter of 2017, our Crossville, Tennessee distribution center rolled up within our Commercial Vehicle operating segment for purposes of inter-segment sales reporting. Beginning in the third quarter of 2017, the distribution center has been split between our Commercial Vehicle and Off-Highway operating segments. This change in management reporting has resulted in a decrease in the inter-segment sales reported by our Off-Highway operating segment. Prior period amounts have been recast to conform with the current presentation. This change in management reporting had no impact on segment reporting of external sales or segment EBITDA.

Reconciliation of segment EBITDA to consolidated net income —



	Three Months Ended March 31,
	2018			2017
Segment EBITDA	$	254		$	212
Corporate expense and other items, net	(6		)	(7		)
Depreciation	(64		)	(49		)
Amortization of intangibles	(3		)	(3		)
Non-service cost components of pension and OPEB costs	(3		)
Restructuring	(1		)	(2		)
Stock compensation expense	(4		)	(4		)
Strategic transaction expenses, net of transaction breakup fee income	1			(11		)
Acquisition related inventory adjustments				(6		)
Other items				(1		)
Earnings before interest and income taxes	174			129
Interest expense	(24		)	(27		)
Interest income	3			3
Earnings before income taxes	153			105
Income tax expense	48			30
Equity in earnings of affiliates	6			5
Net income	$	111		$	80