Segments, Geographical Area and Major Customer Information

12 Months Ended

Dec. 31, 2019

Segments, Geographical Area and Major Customer Information [Text Block]

Segments, Geographical Area and Major Customer Information

We are a global provider of high-technology products to virtually every major vehicle manufacturer in the world. We also serve the stationary industrial market. Our technologies include drive systems (axles, driveshafts, transmissions, and wheel and track drives); motion systems (winches, slew drives, and hub drives); electrodynamic technologies (motors, inverters, software and control systems, battery-management systems, and fuel cell plates); sealing solutions (gaskets, seals, cam covers, and oil pan modules); thermal-management technologies (transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding); and digital solutions (active and passive system controls and descriptive and predictive analytics). We serve our global light vehicle, medium/heavy vehicle and off-highway markets through four operating segments – Light Vehicle Drive Systems (Light Vehicle), Commercial Vehicle Drive and Motion Systems (Commercial Vehicle), Off-Highway Drive and Motion Systems (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 —



2019	External Sales		Inter- Segment Sales			Segment EBITDA		Capital Spend		Depreciation		Net Assets
Light Vehicle	$	3,609	$	124		$	438	$	179	$	149	$	1,310
Commercial Vehicle	1,611		100			138		52		37		888
Off-Highway	2,360		17			330		85		87		1,369
Power Technologies	1,040		23			117		46		30		379
Eliminations and other			(264		)			64		19		221
Total	$	8,620	$	—		$	1,023	$	426	$	322	$	4,167

2018
Light Vehicle	$	3,575	$	133		$	398	$	195	$	124	$	1,264
Commercial Vehicle	1,612		107			146		27		38		577
Off-Highway	1,844		12			285		36		43		709
Power Technologies	1,112		23			149		36		30		376
Eliminations and other			(275		)			31		25		83
Total	$	8,143	$	—		$	978	$	325	$	260	$	3,009

2017
Light Vehicle	$	3,172	$	130		$	359	$	279	$	88	$	1,192
Commercial Vehicle	1,412		97			116		31		41		575
Off-Highway	1,521		4			212		32		40		698
Power Technologies	1,104		17			168		32		29		380
Eliminations and other			(248		)			19		22		124
Total	$	7,209	$	—		$	855	$	393	$	220	$	2,969

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. The service cost components continue to be included as part of compensation cost and remain eligible for capitalization in inventory and other assets. Segment EBITDA amounts for 2017 were not recast due to the insignificance of the adjustments. Had amounts been recast to conform with the current presentation, segment EBITDA for 2017 would have been $359 for Light Vehicle, $119 for Commercial Vehicle, $213 for Off-Highway and $173 for Power Technologies.

Net assets include accounts receivable, inventories, other current assets, goodwill, intangibles, investments in affiliates, other noncurrent assets, net property, plant and equipment, accounts payable and current accrued liabilities.

Reconciliation of segment EBITDA to consolidated net income —



	2019			2018			2017
Segment EBITDA	$	1,023		$	978		$	855
Corporate expense and other items, net	(4		)	(21		)	(20		)
Depreciation	(322		)	(260		)	(220		)
Amortization	(17		)	(10		)	(13		)
Non-service cost components of pension and OPEB costs	(23		)	(15		)
Restructuring charges, net	(29		)	(25		)	(14		)
Stock compensation expense	(19		)	(16		)	(23		)
Strategic transaction expenses, net of transaction breakup fee income	(41		)	(18		)	(25		)
Acquisition related inventory adjustments	(13		)				(14		)
Non-income tax legal judgment	6
Other items	(11		)	(17		)	(11		)
Gain (loss) on disposal group held for sale				3			(27		)
Gain on liquidation of foreign subsidiary	12
Impairment of goodwill and indefinite-lived intangible asset	(6		)	(20		)
Amounts attributable to previously divested/closed operations	(5		)				2
Pension settlement charges	(259		)
Earnings before interest and income taxes	292			579			490
Loss on extinguishment of debt	(9		)				(19		)
Interest expense	122			96			102
Interest income	10			11			11
Earnings before income taxes	171			494			380
Income tax expense (benefit)	(32		)	78			283
Equity in earnings of affiliates	30			24			19
Net income	$	233		$	440		$	116

Reconciliation of segment net assets to consolidated total assets —



	2019		2018
Segment net assets	$	4,167	$	3,009
Accounts payable and other current liabilities	1,723		1,672
Other current and long-term assets	1,330		1,237
Consolidated total assets	$	7,220	$	5,918

Geographic information — Of our 2019 consolidated net sales, the U.S., Italy and Germany account for 47%, 14% and 6%, respectively. No other country accounted for more than 5% of our consolidated net sales during 2019. Sales are attributed to the location of the product entity recording the sale. Long-lived assets represent property, plant and equipment.



	Net Sales						Long-Lived Assets
	2019		2018		2017		2019		2018		2017
North America
United States	$	4,069	$	3,613	$	3,209	$	972	$	860	$	828
Other North America	404		493		479		105		87		82
Total	4,473		4,106		3,688		1,077		947		910
Europe
Italy	1,186		971		762		248		138		122
Germany	478		513		473		131		133		149
Other Europe	942		1,000		919		265		241		211
Total	2,606		2,484		2,154		644		512		482
South America	509		546		500		126		129		153
Asia Pacific	1,032		1,007		867		418		262		262
Total	$	8,620	$	8,143	$	7,209	$	2,265	$	1,850	$	1,807

Sales to major customers — Ford is the only individual customer to whom sales have exceeded 10% of our consolidated sales in each of the past three years. Sales to Ford were $1,753 (20%) in 2019, $1,646 (20%) in 2018 and $1,553 (22%) in 2017. Sales to FCA (via a directed supply relationship) exceeded the threshold in 2019 at $988 (11%) and 2018 at $911 (11%).