UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the quarterly period ended: September 30, ~~2015~~2016

Commission File Number: 1-1063

Dana ~~Holding Corporation~~Incorporated

(Exact name of registrant as specified in its charter)



Delaware		26-1531856
(State of incorporation)		(IRS Employer Identification Number)

3939 Technology Drive, Maumee, OH		43537
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (419) 887-3000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No þ

APPLICABLE ONLY TO CORPORATE ISSUERS:

There were ~~152,896,181~~143,823,091 shares of the registrant’s common stock outstanding at October ~~9, 2015.~~7, 2016.

DANA ~~HOLDING CORPORATION~~INCORPORATED – FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, ~~2015~~2016

TABLE OF CONTENTS



		10-Q Pages

PART I – FINANCIAL INFORMATION

Item 1	Financial Statements
	Consolidated Statement of Operations (Unaudited)	3
	Consolidated Statement of Comprehensive Income (Unaudited)	4
	Consolidated Balance Sheet (Unaudited)	5
	Consolidated Statement of Cash Flows (Unaudited)	6
	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3	Quantitative and Qualitative Disclosures About Market Risk	4645

Item 4	Controls and Procedures	46

PART II – OTHER INFORMATION

Item 1	Legal Proceedings	4746

Item 1A	Risk Factors	4746

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	4746

Item 6	Exhibits	4746

Signatures		4847
Exhibit Index		4948

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dana ~~Holding Corporation~~Incorporated

Consolidated Statement of Operations (Unaudited)

(In millions, except per share amounts)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014			2015			2014			2016		2015			2016			2015
Net sales	$	1,468		$	1,637		$	4,685		$	5,035		$	1,384	$	1,468		$	4,379		$	4,685
Costs and expenses
Cost of sales	1,255			1,397			4,008			4,313			1,176		1,255			3,739			4,008
Selling, general and administrative expenses	98			97			299			310			99		98			303			299
Amortization of intangibles	4			10			13			33			2		4			6			13
Restructuring charges, net	1			2			13			14			17		1			23			13
Impairment of long-lived assets	(36		)				(36		)						(36		)				(36		)
Loss on extinguishment of debt							(2		)									(17		)	(2		)
Other income, net	2			20			18			35			9		2			17			18
Income from continuing operations before interest expense and income taxes	76			151			332			400
Income before interest expense and income taxes													99		76			308			332
Interest expense	31			30			86			89			27		31			84			86
Income from continuing operations before income taxes	45			121			246			311
Income before income taxes													72		45			224			246
Income tax expense (benefit)	(77		)	29			(10		)	96			13		(77		)	66			(10		)
Equity in earnings of affiliates	—			2			3			9			2		—			6			3
Income from continuing operations	122			94			259			224
Loss from discontinued operations	—			(1		)	—			(4		)
Net income	122			93			259			220			61		122			164			259
Less: Noncontrolling interests net income	3			3			18			10			4		3			9			18
Net income attributable to the parent company	119			90			241			210			$	57	$	119		$	155		$	241
Preferred stock dividend requirements				2						7
Net income available to common stockholders	$	119		$	88		$	241		$	203

Net income per share available to parent company common stockholders:
Basic:
Income from continuing operations	$	0.75		$	0.57		$	1.49		$	1.34
Loss from discontinued operations	$	—		$	(0.01	)	$	—		$	(0.03	)
Net income	$	0.75		$	0.56		$	1.49		$	1.31

Diluted:
Income from continuing operations	$	0.75		$	0.53		$	1.48		$	1.22
Loss from discontinued operations	$	—		$	(0.01	)	$	—		$	(0.02	)
Net income	$	0.75		$	0.52		$	1.48		$	1.20

Weighted-average common shares outstanding
Net income per share attributable to the parent company
Basic	158.0			156.5			161.6			154.6			$	0.40	$	0.75		$	1.06		$	1.49
Diluted	158.9			172.9			162.7			174.9			$	0.39	$	0.75		$	1.05		$	1.48

Dividends declared per common share	$	0.06		$	0.05		$	0.17		$	0.15
Weighted-average shares outstanding - Basic													144.0		158.0			146.7			161.6
Weighted-average shares outstanding - Diluted													144.6		158.9			147.1			162.7

Cash dividends declared per share													$	0.06	$	0.06		$	0.18		$	0.17

The accompanying notes are an integral part of the consolidated financial statements.

Dana ~~Holding Corporation~~Incorporated

Consolidated Statement of Comprehensive Income (Unaudited)

(In millions)


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Net income	$	122		$	93		$	259		$	220		$	61		$	122		$	164		$	259
Less: Noncontrolling interests net income	3			3			18			10			4			3			9			18
Net income attributable to the parent company	119			90			241			210			57			119			155			241

Other comprehensive income (loss) attributable to the parent company, net of tax:
Currency translation adjustments	(66		)	(113		)	(151		)	(111		)	(8		)	(66		)	(3		)	(151		)
Hedging gains and losses	1			(4		)	3			(3		)	(11		)	1			(21		)	3
Investment and other gains and losses	(5		)	(2		)	(5		)	1			(5		)	(5		)	(2		)	(5		)
Defined benefit plans	17			7			40			17						17			13			40
Other comprehensive loss attributable to the parent company	(53		)	(112		)	(113		)	(96		)	(24		)	(53		)	(13		)	(113		)

Other comprehensive income (loss) attributable to noncontrolling interests, net of tax:
Currency translation adjustments	(3		)	(2		)	(5		)	(2		)				(3		)	1			(5		)
Defined benefit plans							1															1
Other comprehensive loss attributable to noncontrolling interests	(3		)	(2		)	(4		)	(2		)
Other comprehensive income (loss) attributable to noncontrolling interests													—			(3		)	1			(4		)

Total comprehensive income (loss) attributable to the parent company	66			(22		)	128			114
Total comprehensive income attributable to the parent company													33			66			142			128
Total comprehensive income attributable to noncontrolling interests	—			1			14			8			4			—			10			14
Total comprehensive income (loss)	$	66		$	(21	)	$	142		$	122
Total comprehensive income													$	37		$	66		$	152		$	142

The accompanying notes are an integral part of the consolidated financial statements.

Dana ~~Holding Corporation~~Incorporated

Consolidated Balance Sheet (Unaudited)

(In millions, except share and per share amounts)


	September 30, 2015			December 31, 2014			September 30, 2016			December 31, 2015
Assets
Current assets
Cash and cash equivalents	$	817		$	1,121		$	727		$	791
Marketable securities	157			169			126			162
Accounts receivable
Trade, less allowance for doubtful accounts of $5 in 2015 and $6 in 2014	775			755
Trade, less allowance for doubtful accounts of $6 in 2016 and $5 in 2015							802			673
Other	111			117			150			115
Inventories
Raw materials	334			304			331			303
Work in process and finished goods	356			350			365			322
Other current assets	131			111			140			108
Current assets of disposal group held for sale				27
Total current assets	2,681			2,954			2,641			2,474
Goodwill	83			90			89			80
Intangibles	104			169			108			102
Other noncurrent assets	400			337			345			353
Investments in affiliates	191			204			147			150
Property, plant and equipment, net	1,141			1,176			1,283			1,167
Total assets	$	4,600		$	4,930		$	4,613		$	4,326

Liabilities and equity
Current liabilities
Notes payable, including current portion of long-term debt	$	40		$	65		$	50		$	22
Accounts payable	796			791			833			712
Accrued payroll and employee benefits	151			158			147			145
Taxes on income	44			32			20			19
Other accrued liabilities	165			194			202			193
Current liabilities of disposal group held for sale				21
Total current liabilities	1,196			1,261			1,252			1,091
Long-term debt	1,566			1,613
Long-term debt, less debt issuance costs of $23 in 2016 and $21 in 2015							1,615			1,553
Pension and postretirement obligations	501			580			508			521
Other noncurrent liabilities	286			279			368			330
Noncurrent liabilities of disposal group held for sale				17
Total liabilities	3,549			3,750			3,743			3,495
Commitments and contingencies (Note 12)
Commitments and contingencies (Note 13)
Parent company stockholders' equity
Preferred stock, 50,000,000 shares authorized, $0.01 par value, zero shares outstanding	—			—
Common stock, 450,000,000 shares authorized, $0.01 par value, 153,989,973 and 166,070,057 shares outstanding	2			2
Preferred stock, 50,000,000 shares authorized, $0.01 par value, no shares outstanding							—			—
Common stock, 450,000,000 shares authorized, $0.01 par value, 143,813,145 and 150,068,040 shares outstanding							2			2
Additional paid-in capital	2,657			2,640			2,322			2,311
Accumulated deficit	(318		)	(532		)	(281		)	(410		)
Treasury stock, at cost (14,192,554 and 1,588,990 shares)	(281		)	(33		)
Treasury stock, at cost (6,810,678 and 23,963 shares)							(83		)	(1		)
Accumulated other comprehensive loss	(1,110		)	(997		)	(1,187		)	(1,174		)
Total parent company stockholders' equity	950			1,080			773			728
Noncontrolling equity	101			100			97			103
Total equity	1,051			1,180			870			831
Total liabilities and equity	$	4,600		$	4,930		$	4,613		$	4,326

The accompanying notes are an integral part of the consolidated financial statements.

Dana ~~Holding Corporation~~Incorporated

Consolidated Statement of Cash Flows (Unaudited)

(In millions)


	Nine Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2016			2015
Operating activities
Net income	$	259		$	220		$	164		$	259
Depreciation	117			122			129			117
Amortization of intangibles	14			38			7			14
Amortization of deferred financing charges	3			4			4			3
Call premium on senior notes	2						12			2
Dividends received in excess of current earnings of affiliates	12			6
Write-off of deferred financing costs							5			1
Earnings of affiliates, net of dividends received							3			12
Stock compensation expense	14			11			11			14
Deferred income taxes	(97		)	(6		)	1			(97		)
Pension contributions, net	(14		)	(8		)	(12		)	(14		)
Impairment of long-lived assets	36									36
Interest payment received on payment-in-kind note receivable				40
Change in working capital	(92		)	(95		)	(142		)	(92		)
Other, net	12			(5		)				11
Net cash provided by operating activities	266			327			182			266

Investing activities
Purchases of property, plant and equipment	(192		)	(169		)	(198		)	(192		)
Principal payment received on payment-in-kind note receivable				35
Acquisition of business							(18		)
Purchases of marketable securities	(29		)	(63		)	(41		)	(29		)
Proceeds from sales of marketable securities	15			2			47			15
Proceeds from maturities of marketable securities	21			4			33			21
Proceeds from sale of business				9
Other	(3		)	5			(10		)	(3		)
Net cash used in investing activities	(188		)	(177		)	(187		)	(188		)

Financing activities
Net change in short-term debt	3			(5		)	14			3
Proceeds from letters of credit				12
Repayment of letters of credit	(4		)	(8		)				(4		)
Proceeds from long-term debt	18			23			441			18
Repayment of long-term debt	(59		)	(26		)	(378		)	(59		)
Call premium on senior notes	(2		)				(12		)	(2		)
Dividends paid to preferred stockholders				(6		)
Deferred financing payments							(10		)
Dividends paid to common stockholders	(27		)	(24		)	(26		)	(27		)
Distributions to noncontrolling interests	(8		)	(8		)	(16		)	(8		)
Repurchases of common stock	(245		)	(181		)	(81		)	(245		)
Other	6			4			(4		)	6
Net cash used in financing activities	(318		)	(219		)	(72		)	(318		)

Net decrease in cash and cash equivalents	(240		)	(69		)	(77		)	(240		)
Cash and cash equivalents – beginning of period	1,121			1,256			791			1,121
Effect of exchange rate changes on cash balances	(64		)	(84		)	13			(64		)
Cash and cash equivalents – end of period	$	817		$	1,103		$	727		$	817

The accompanying notes are an integral part of the consolidated financial statements.

Dana ~~Holding Corporation~~Incorporated

Index to Notes to Consolidated Financial Statements



1.	Organization and Summary of Significant Accounting Policies

2.	Acquisitions

3.	Disposal Groups ~~Discontinued Operations~~ and Impairment of Long-Lived Assets

3.4.	Goodwill and Other Intangible Assets

4.5.	Restructuring of Operations

5.6.	Stockholders' Equity

6.7.	Earnings per Share

7.8.	Stock Compensation

8.9.	Pension and Postretirement Benefit Plans

9.10.	Marketable Securities

~~10.~~11.	Financing Agreements

~~11.~~12.	Fair Value Measurements and Derivatives

~~12.~~13.	Commitments and Contingencies

~~13.~~14.	Warranty Obligations

~~14.~~15.	Income Taxes

~~15.~~16.	Other Income, Net

~~16.~~17.	Segments

~~17.~~18.	Equity Affiliates

Notes to Consolidated Financial Statements (Unaudited)

(In millions, except share and per share amounts)

Note 1. Organization and Summary of Significant Accounting Policies

General

Effective August 1, 2016, Dana Holding Corporation changed its legal name to Dana Incorporated. Dana Incorporated (Dana) is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. As a global provider of high technology driveline (axles, driveshafts and transmissions), sealing and thermal-management products our customer base includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets.

The terms "Dana," "we," "our" and "us," when used in this report, are references to Dana. These references include the subsidiaries of Dana unless otherwise indicated or the context requires otherwise.

Summary of significant accounting policies

Basis of presentation — Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. These statements are unaudited, but in the opinion of management include all adjustments (consisting only of normal recurring adjustments) necessary for a fair ~~presentation~~statement of the results for the interim periods. The results reported in these consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. The financial information included herein should be read in conjunction with the consolidated financial statements in Item 8 of our ~~2014~~2015 Form 10-K.

In the third quarter of 2016, we identified an error attributable to our second quarter 2016 calculation of cash used for purchases of property, plant and equipment. While the error had no impact on the total net cash flows presented for the period it did result in a misclassification between net cash provided by operating activities and net cash used in investing activities. Purchases of property, plant and equipment previously presented for the six months ended June 30, 2016 should have been $18 lower with a corresponding offset to the change in working capital. Based on our assessments of qualitative and quantitative factors, the error and related impacts were not considered to be material to our consolidated financial statements in Item 1 of Part I of our June 30, 2016 Form 10-Q. Purchases of property, plant and equipment and change in working capital for the six months ended June 30, 2016, will be revised to reflect the correction when presented as the comparable period in our June 30, 2017 Form 10-Q. At September 30, 2016 and September 30, 2015, we had $82 and $42 of purchases of property, plant and equipment included in accounts payable.

In the first quarter of 2015, we identified an error attributable to the calculation of noncontrolling interests net income of a subsidiary. The error resulted in an understatement of noncontrolling equity and noncontrolling interests net income and a corresponding overstatement of parent company stockholders' equity and net income attributable to the parent company in prior periods. Based on our assessments of qualitative and quantitative factors, the error and related impacts were not considered material to the financial statements of the prior periods to which they relate. The error was corrected in March 2015 by increasing noncontrolling interests net income by $9. The correction iswas not ~~anticipated to be~~considered material to our 2015 ~~full year~~ net income attributable to the parent company.

In the third quarter of 2014, we identified an error that had resulted in a $10 overstatement of the values assigned to our defined benefit pension obligation and goodwill when we applied fresh start accounting in 2008. These overstatements affected pension expense, other comprehensive income and impairment of goodwill in subsequent periods. Based on our assessments of qualitative and quantitative factors, the error and the related impacts were not considered material to the financial statements for the quarter ended September 30, 2014 or the prior periods to which they relate. The error was corrected in September 2014 by decreasing pension and postretirement obligations by $17, decreasing accumulated other comprehensive loss by $3 to eliminate the related impacts on unrecognized pension expense and currency translation adjustments, decreasing goodwill by $3, decreasing cost of sales by $5 to reverse the cumulative impact on pension expense and crediting other income, net for $6 to effectively reverse a portion of the goodwill impairment recognized in 2008.

Historically, we have not adjusted the purchases of property, plant and equipment presented in our consolidated statement of cash flows for invoices not paid in cash as of the end of the period. While the error had no impact on the total net cash flows presented in any prior period it did result in a misclassification between net cash provided by (used in) operating activities and net cash used in investing activities. Prior period amounts have been revised to properly reflect capital invoices not paid in cash as of the end of each period presented. Purchases of property, plant and equipment previously presented for the nine months ended September 30, 2014, have been increased by $25 with a corresponding offset to change in working capital. At September 30, 2015 and 2014, we had $42 and $18 of purchases of property, plant and equipment included in accounts payable.

~~Held for sale~~ — We classify long-lived assets or disposal groups as held for sale in the period: management commits to a plan to sell; the long-lived asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such long-lived assets or disposal groups; an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; the sale is probable within one year; the asset or disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Long-lived assets and disposal groups classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell. See Note 2 for additional information regarding the disposal group held for sale at the end of 2014 and divested in January 2015.

~~Discontinued operations~~ — Prior to January 1, 2015, we would classify a business component that had been disposed of or classified as held for sale as discontinued operations if the cash flows of the component were eliminated from our ongoing operations and we no longer had any significant continuing involvement in or with the component. The results of operations of our discontinued operations, including any gains or losses on disposition, were aggregated and presented on one line in the income statement. See Note 2 for additional information regarding our discontinued operations.

Recently adopted accounting pronouncements

In ~~April 2014,~~March 2016, the Financial Accounting Standards Board (FASB) issued guidance ~~that revises~~intended to simplify various aspects related to how share-based payments are accounted for and presented in the definition of a discontinued operation. The revised definition limits discontinued operations reporting to disposals of components of an entity that represent strategic shifts that have (or will have) a major effect on operations and financial ~~results.~~statements. The guidance ~~also requires~~addresses income tax effects of share-based payments, tax withholding requirements, recognition for forfeitures and presentation requirements in the statement of cash flows. This guidance becomes effective January 1, 2017 with earlier adoption permitted. We elected to adopt the new ~~disclosures~~guidance in the third quarter of ~~both discontinued operations~~2016, requiring us to reflect any adjustments as of January 1, 2016 in retained earnings. The primary impact of adopting the new guidance was an increase in deferred tax assets of $32 related to the cumulative excess tax benefits resulting from share-based payments. Previous guidance resulted in credits to equity for such tax benefits and delayed recognition until the tax benefits reduced income taxes payable. Because we continue to carry a valuation allowance against certain of our deferred tax assets in the U.S., the increase in deferred tax assets was offset by an increase in our valuation allowance of $32, resulting in no impact to retained earnings as of January 1, 2016. With respect to other ~~disposals that~~provisions in the new guidance, our plans currently do not ~~meet~~permit tax withholdings in excess of the ~~definition~~statutory minimums and we have elected to continue estimating forfeitures expected to occur when determining the amount of ~~a discontinued operation.~~compensation cost to be recognized in each period. The ~~guidance applies to covered transactions that occur after December 31, 2014. The significance~~presentation requirements for cash flows under the new standard had no impact on our consolidated statement of ~~this guidance for us is dependent on any qualifying future dispositions or disposals.~~cash flows.

In August 2015, the FASB issued guidance that resolves the issue of whether the scope exception in existing derivatives and hedging guidance is applicable to certain electricity contracts, permitting application of the exception. The guidance confirmed that a forward contract to purchase or sell electricity that is transmitted through a grid operated by an independent system operator will meet the physical delivery criterion under the normal purchases and normal sales scope exception. This guidance is effective immediately, permitting entities to designate prospective qualifying contracts as normal purchases or normal sales. Adoption of the guidance did not impact our consolidated financial statements.

~~Recently issued accounting pronouncements~~

In September 2015, the FASB issued an amendment that eliminates the requirement to restate prior period financial statements for measurement period adjustments in accounting for business combinations. Entities ~~should~~must recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. This guidance ~~becomes~~became effective January 1, 2016 and requires prospective ~~application. The guidance will apply~~application to ~~any~~ qualifying ~~future~~ business combinations.

In July 2015, the FASB issued an amendment that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This amendment only addresses the measurement of inventory if its value declines or is impaired. The guidance on determining the cost of inventory is not being amended. This guidance becomes effective January 1, 2017 and requires prospective application. Early adoption is permitted. Adoption of this guidance will have no impact on our consolidated financial statements.

In May 2015, the FASB issued guidance that modifies disclosures related to investments for which fair value is measured using the net asset value (or its equivalent) per share practical expedient by eliminating the requirement to categorize such assets under the fair value hierarchy. The new guidance also eliminates the requirement to include in certain disclosures those investments that are merely eligible to be measured using the practical expedient, limiting the disclosures to those investments actually valued under that approach. This guidance ~~becomes~~became effective January 1, 2016 and requires retrospective application. ~~Early adoption is permitted.~~ We ~~are currently evaluating the impact~~believe that this guidance will ~~have on disclosures covering certain assets~~result in substantially all of the hedge fund of funds and real estate investments held by our pension ~~plans.~~plans being removed from the fair value hierarchy within our year-end pension disclosures.

In April 2015, the FASB issued an amendment to provide explicit guidance about a customer's accounting for fees paid in a cloud computing arrangement. If a cloud computing arrangement includes a software license, then the customer ~~should~~must account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then the customer ~~should~~must account for the arrangement as a service contract. ~~The~~We adopted the new guidance is effective January 1, ~~2016 and can be adopted either prospectively~~2016. Applying the amendment to all arrangements entered into or materially modified after the effective date ~~or retrospectively. We are currently evaluating the~~did not have an impact ~~this guidance will have~~ on our consolidated financial statements.

In April 2015, the FASB issued guidance to provide for a practical expedient that permits an entity to measure defined benefit plan assets and obligations as of the month end that is closest to the ~~entity's fiscal year end or the month end that is closest to the~~ date of a significant event, ~~caused by the entity that occurred in an interim period. Significant events,~~ such as a plan amendment, settlement or curtailment, ~~call~~that calls for a remeasurement in accordance with existing requirements. An entity is required to disclose the accounting policy election and the date used to measure defined benefit plan assets and obligations. The new guidance iswas effective January 1, 2016 and ~~early adoption is permitted. The guidance will~~did not impact our consolidated financial statements.

In April 2015, the FASB issued guidance which changes the presentation of debt issuance costs. Debt issuance costs related to term debt will be presented on the balance sheet as a direct deduction from the related debt liability rather than recorded as a separate asset. The amendment does not affect the recognition and measurement of debt issuance costs. There is no effect on the statement of operations as debt issuance costs will continue to be amortized to interest expense. Subsequently, the SEC staff announced that it will not object when debt issuance costs related to a revolving debt arrangement are presented as an asset regardless of whether or not there is an outstanding balance on the revolving debt arrangement. The guidance becomes effective January 1, 2016 and requires retrospective application to all prior periods presented. We intend to early adopt the guidance effective December 31, 2015.

In February 2015, the FASB released updated consolidation guidance that entities must use to evaluate specific ownership and contractual arrangements that lead to a consolidation conclusion. The updates could change consolidation outcomes affecting presentation and disclosures. ~~This~~The new guidance ~~becomes~~was effective January 1, ~~2016. We are currently evaluating the~~2016 and did not impact ~~this guidance will have on~~ our consolidated financial statements.

In June 2014, the FASB issued guidance to provide clarity on whether to treat a performance target that could be achieved after the requisite service period as a performance condition that affects vesting or as a nonvesting condition that affects the grant-date fair value of a share-based payment award. Generally, an award with a performance target also requires an employee to render service until the performance target is achieved. In some cases, however, the terms of an award may provide that the performance target could be achieved after an employee completes the requisite service period. The amendment requires that a performance target that affects vesting and extends beyond the end of the service period be treated as a performance condition and not as a factor in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The new guidance ~~which is~~was effective January 1, 2016 and did not impact our consolidated financial statements.

Recently issued accounting pronouncements

In August 2016, the FASB released guidance intended to reduce diversity in practice in how certain cash receipts and cash payments are classified in the statement of cash flows. This guidance becomes effective January 1, 2018 and is applied on a retrospective basis. This guidance is not expected to have a material impact on our consolidated statement of cash flows.

In June 2016, the FASB issued new guidance for the accounting for credit losses on certain financial instruments. This guidance introduces a new approach to estimating credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. This guidance, which becomes effective January 1, 2020, is not expected to have a material impact on our consolidated financial statements.

In March 2016, the FASB issued simplification guidance to eliminate the requirement for an entity to retrospectively apply the equity method of accounting upon obtaining significant influence over an investment that it previously accounted for under the cost basis or at fair value. That is, it is no longer required to restate all periods as if the equity method had been in effect during all previous periods that the investment had been held. The guidance applies to covered transactions that occur after

December 31, 2016. Early adoption is permitted. The significance of this guidance for us is dependent on any qualifying future investments.

In March 2016, the FASB issued guidance that simplifies the embedded derivative analysis for debt instruments containing contingent call or put options. The amendment clarifies that an exercise contingency does not need to be evaluated to determine whether it relates to interest rates and credit risk in an embedded derivative analysis. That is, a contingent put or call option embedded in a debt instrument would be evaluated for possible separate accounting as a derivative instrument without regard to the nature of the exercise contingency. This guidance becomes effective January 1, 2017 and must be applied on a modified retrospective basis to all existing and future debt instruments. Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements.

In March 2016, the FASB issued guidance that clarifies the hedge accounting impact when there is a change in one of the counterparties to a derivative contract. The new guidance clarifies that a change in the counterparty to a derivative contract by itself does not require the dedesignation of a hedging relationship provided that all other hedge accounting criteria continue to be met. This guidance becomes effective January 1, 2018 and can be applied on either a prospective basis or a modified retrospective basis. Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements.

In February 2016, the FASB issued its new lease accounting standard. The primary focus of the standard addresses the accounting by lessees. This standard requires all lessees to recognize a right-of-use asset and a lease liability for virtually all leases (other than leases that meet the definition of a short-term lease) on the balance sheet. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current GAAP. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern in the income statement. Quantitative and qualitative disclosures are required to provide insight into the extent of revenue and expense recognized and expected to be recognized from leasing arrangements. We continue to evaluate the impact this guidance will have on our consolidated financial statements. This guidance becomes effective January 1, 2019. Early adoption is permitted.

In January 2016, the FASB issued an amendment that addresses the recognition, measurement, presentation and disclosure of certain financial instruments. Investments in equity securities currently classified as available-for-sale and carried at fair value, with changes in fair value reported in other comprehensive income (OCI), will be carried at fair value determined on an exit price notion and changes in fair value will be reported in net income. The new guidance also affects the assessment of deferred tax assets related to available-for-sale securities, the accounting for liabilities for which the fair value option is elected and the disclosures of financial assets and financial liabilities in the notes to the financial statements. This guidance, which becomes effective January 1, 2018, is not expected to have a material impact on our consolidated financial statements.

In November 2015, the FASB issued guidance that simplifies the balance sheet classification of deferred taxes. Current GAAP requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. This amendment simplifies the presentation to require that all deferred tax liabilities and assets be classified as noncurrent on the balance sheet. The guidance does not change the existing requirement that only permits offsetting within a jurisdiction. The change to noncurrent classification will have an impact on working capital. This guidance becomes effective January 1, 2017 and allows for prospective or retrospective application, with appropriate disclosures. Early adoption is permitted. We are currently evaluating the impact this guidance will have on our consolidated financial statements and expect to complete out assessment and early adopt the guidance in the fourth quarter of 2016.

In May 2014, the FASB issued guidance that requires companies to recognize revenue in a manner that depicts the transfer of promised goods or services to customers in amounts that reflect the consideration a company expects to be entitled to in exchange for those goods or services. The new guidance will also require new disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB adopted a one-year deferral of this guidance. AsIn March 2016, the FASB issued an amendment to clarify the principal versus agent assessment in a ~~result, this~~revenue transaction. In April 2016, the FASB finalized amendments on identifying performance obligations and accounting for licenses of intellectual property. In May 2016, the FASB finalized amendments on collectibility, noncash consideration, presentation of sales tax and transition. This guidance will be effective January 1, 2018 with the option to adopt the standard as

of the original ~~effective date,~~ January 1, ~~2017.~~2017 effective date. The guidance allows for either a full retrospective or a modified retrospective transition method. We are currently evaluating the impact this guidance will have on our consolidated financial statements.

Note 2. Acquisitions

On January 29, 2016, we acquired the aftermarket distribution business of Magnum^® Gaskets (Magnum), a U.S.-based supplier of gaskets and sealing products for automotive and commercial-vehicle applications, for a purchase price of $18 at closing and additional cash payments of up to $2 contingent upon the achievement of certain sales metrics over a future two-year period. As of the closing date of the acquisition, the contingent consideration was assigned a fair value of approximately $1. Assets acquired included trademarks and trade names, customer relationships and goodwill. The results of operations of Magnum are reported within our Power Technologies operating segment. We acquired Magnum using cash on hand. The pro forma effects of this acquisition would not materially impact our reported results for any period presented, and as a result no pro forma financial statements were presented.

Note 3. Disposal Groups ~~Discontinued Operations~~ and Impairment of Long-Lived Assets

Disposal of operations in Venezuela — In December 2014, we entered into an agreement to divest our Light Vehicle operations in Venezuela (the disposal group) to an unaffiliated company for no consideration. Upon classification of the disposal group as held for sale in December 2014, we recognized an $80 loss to adjust the carrying value of the net assets of our operations in Venezuela to fair value less cost to sell. The assets and liabilities of our operations in Venezuela were presented as held for sale on our balance sheet as of December 31, 2014. The carrying amounts of the major classes of assets and liabilities of our operations in Venezuela as of that date were as follows:

December 31,
2014
Cash and cash equivalents $ 27
Current assets classified as held for sale $ 27

Accounts payable $ 16
Accrued payroll and employee benefits 4
Other accrued liabilities 1
Current liabilities classified as held for sale $ 21

Pension obligations $ 11
Other noncurrent liabilities 6
Noncurrent liabilities classified as held for sale $ 17

Accumulated other comprehensive loss classified as held for sale $ (11 )

Upon completion of the divestiture of the disposal group in January 2015, we recognized a gain of $5 on the derecognition of the noncontrolling interest in a former Venezuelan subsidiary in other income, net. We also credited other comprehensive loss attributable to the parent for $10 and other comprehensive loss attributable to noncontrolling interests for $1 to eliminate the unrecognized pension expense recorded in accumulated other comprehensive loss.

~~Discontinued operations of Structural Products business~~ — In March 2010, we sold substantially all of the assets of our Structural Products business to Metalsa S.A. de C.V. (Metalsa). Upon cessation of all operations in August 2012, the former Structural Products business was presented as discontinued operations in the accompanying financial statements. We reached a final agreement on the remaining issues with the buyer in May 2014, resulting in the receipt of $9 from the escrow agent and a charge of $1 to other expense within discontinued operations during the second quarter of 2014. The loss from discontinued operations for the first nine months of 2014 also included legal fees and other costs associated with resolving claims of the buyer and a former customer.

Impairment of long-lived assets — On February 1, 2011, we entered into an agreement with SIFCO S.A. (SIFCO), a leading producer of steer axles and forged components in South America. In return for payment of $150 to SIFCO, we acquired the distribution rights to SIFCO's commercial vehicle steer axle systems as well as an exclusive long-term supply agreement for key driveline components. ~~During 2014, our~~Our Commercial Vehicle operating segment had ~~$225 of~~ sales attributable to SIFCO supplied axles and ~~parts.~~parts of $98 and $225 in 2015 and 2014.

This agreement was accounted for as a business combination for financial reporting purposes. The aggregate fair value of the net assets acquired were allocated primarily to the exclusivity provisions of the supply agreement as a contract-based intangible asset and recorded within our Commercial Vehicle operating segment. Fair value was also allocated to fixed assets and an embedded lease obligation. The intangible asset iswas being amortized and the fixed assets ~~are~~were being depreciated on a straight-line basis over ten years. The embedded lease ~~obligations are~~obligation was being amortized using the effective interest method over the ten-year useful lives of the related fixed assets.

On April 22, 2014, SIFCO and affiliated companies filed for judicial reorganization before Bankruptcy Court in São Paulo, Brazil and an ancillary Chapter 15 proceeding before the Bankruptcy Court of the Southern District of New York. The Brazilian bankruptcy case has subsequently been moved to the 5th Lower Civil Court in the Judicial District of Jundiai, the location of SIFCO's principal operations. Until the third quarter of 2015, SIFCO complied with the terms of the supply agreement. In August 2015, SIFCO discontinued production of our orders and failed to comply with provisions of the supply agreement. We obtained a judicial injunction requiring that SIFCO release any finished product in their possession that was produced pursuant to the supply agreement, resume production and parts supply pursuant to the terms of the supply agreement and cease communications with our customers regarding direct sale of parts. SIFCO contested the injunction we obtained, without success, and refused to comply with the injunction. Through a judicial seizure order issued on September 9, 2015, we were successful in obtaining the release of the finished product. However, to date, SIFCO has not complied with requirements to resume production pursuant to the supply agreement and cease direct sale of parts to our customers. Although we continue to pursue the legal rights and remedies available to us to enforce compliance with the supply agreement, the likelihood of success with these efforts is uncertain.

Based on SIFCO's refusal to comply with the terms of the supply agreement and the court injunctions as noted above, we believed that the carrying amount of the contract-based intangible asset iswas not recoverable and therefore tested the associated asset group for impairment as of September 30, 2015 under ASC 360-10. Based upon management's conclusion that there were no future economic benefit and related cash flows associated with the long-lived assets of this asset group, which is comprised predominantly of the intangible asset, management concluded that the fair value of the asset group was de minimis and accordingly recorded a full impairment charge of $36 in the third quarter of 2015.

On October 27, 2015, we entered into an interim agreement with SIFCO under which they have continued to supply us product while pursuing various mutually satisfactory longer-term alternatives. On October 10, 2016, we submitted a bid to the

Brazilian bankruptcy court overseeing SIFCO’s reorganization in the competitive process to sell SIFCO's commercial vehicle steer axle systems business and its related forged components business. The bid and the proposed transaction are governed by a purchase agreement entered into between certain of Dana’s affiliates and SIFCO and certain of its affiliates. The transaction is subject to certain closing conditions, including that Dana is the winning bidder pursuant to the bankruptcy court supervised competitive auction process and certain Brazilian regulatory approvals. If Dana’s bid is approved in the bankruptcy court supervised competitive auction process and the applicable Brazilian regulatory approvals are received, closing is expected to occur in the fourth quarter of 2016. The purchase price for the business being acquired is 275 Brazilian reals, which approximates $85 at current exchange rates.

Our ability to maintain continued uninterrupted product supply to satisfy our customer commitments is somewhat uncertain, dependent on SIFCO's compliance with the terms of the supply agreement until the closing of the transaction. We continue to preserve the ability to pursue the legal rights and remedies available to us to enforce compliance with the original supply agreement.

Note 3.4. Goodwill and Other Intangible Assets

Goodwill — ~~Our~~The carrying amount of goodwill ~~is assigned~~attributable to each of our operating segments at September 30, 2016 were as follows: Off-Highway ~~operating segment.~~— $83 and Power Technologies — $6. The change in the carrying amount of goodwill in ~~2015~~2016 is due to currency ~~fluctuation.~~fluctuation and the acquisition of an aftermarket distribution business. See Note 2 for additional information.

Components of other intangible assets —


		September 30, 2015							December 31, 2014								September 30, 2016							December 31, 2015
	Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount		Weighted Average Useful Life (years)	Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Impairment and Amortization			Net Carrying Amount
Amortizable intangible assets
Core technology	7	$	87	$	(83	)	$	4	$	90	$	(85	)	$	5	7	$	87	$	(85	)	$	2	$	86	$	(83	)	$	3
Trademarks and trade names	16	3		(2		)	1		3		(1		)	2		12	5		(2		)	3		3		(2		)	1
Customer relationships	7	387		(373		)	14		493		(416		)	77		7	399		(381		)	18		383		(370		)	13
Non-amortizable intangible assets
Trademarks and trade names		65					65		65					65			65					65		65					65
Used in research and development activities		20					20		20					20			20					20		20					20
		$	562	$	(458	)	$	104	$	671	$	(502	)	$	169		$	576	$	(468	)	$	108	$	557	$	(455	)	$	102

~~During the third quarter of 2015, we impaired the customer relationships intangible asset associated with our exclusive long-term supply agreement with SIFCO. See Note 2 for additional information.~~

The net carrying amounts of intangible assets, other than goodwill, attributable to each of our operating segments at September 30, ~~2015~~2016 were as follows: Light Vehicle — ~~$11~~,$23, Commercial Vehicle — ~~$37~~,$34, Off-Highway — ~~$48~~$36 and Power Technologies — $8.$15.

Amortization expense related to amortizable intangible assets —


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014		2016		2015		2016		2015
Charged to cost of sales	$	—	$	1	$	1	$	5	$	1	$	—	$	1	$	1
Charged to amortization of intangibles	4		10		13		33		2		4		6		13
Total amortization	$	4	$	11	$	14	$	38	$	3	$	4	$	7	$	14

The following table provides the estimated aggregate pre-tax amortization expense related to intangible assets for each of the next five years based on September 30, ~~2015~~2016 exchange rates. Actual amounts may differ from these estimates due to such factors as currency translation, customer turnover, impairments, additional intangible asset acquisitions and other events.

Remainder of 2015 2016 2017 2018 2019
Amortization expense $ 2
$ 8
$ 5
$ 2
$ 1



	Remainder of 2016		2017		2018		2019		2020
Amortization expense	$	2	$	6	$	3	$	2	$	1

Note 4.5. Restructuring of Operations

Our restructuring activities ~~primarily include~~have historically included rationalizing our operating footprint by consolidating facilities, positioning operations in lower cost locations and reducing overhead costs. In recent years, however, in response to lower demand and other market conditions in certain businesses, our focus has primarily been headcount reduction initiatives to reduce operating costs. Restructuring expense includes costs associated with current and previously announced actions and is comprised of contractual and noncontractual separation costs and exit costs, including costs associated with lease continuation obligations and certain operating costs of facilities that we are in the process of closing.

During the third quarter of ~~2015, restructuring expense of $1~~2016, we approved plans to implement certain headcount reduction initiatives, primarily ~~represented continuing exit~~in our Off-Highway business. Including costs associated with this action and with other previously announced ~~actions.~~initiatives, restructuring expense during the third quarter of 2016 was $17, including $16 of severance and benefits costs and $1 of exit costs.

During the first half of 2016, we approved and announced the closure of our Commercial Vehicle manufacturing facility in Glasgow, Kentucky. The closure is expected to be completed by mid-2017. We expect that completion of this action will require cash expenditures in the range of $15 to $20, of which $6 represents estimated restructuring charges for employee separation costs, $3 represents estimated restructuring charges for equipment relocation costs and the remainder represents expected capital investment costs for supplier tooling and other exit costs. Including costs associated with these actions and with other previously announced initiatives, restructuring expense for the nine months ended September 30, 2016 was $23, including $20 of contractual severance and benefits costs and $3 of exit costs.

During the first nine months of 2015, we ~~also~~ implemented certain headcount reduction initiatives, primarily in our Commercial Vehicle business in Brazil in response to lower demand in that region. Including costs associated with this action and with other previously announced initiatives, restructuring expense ~~for~~during the first nine months ~~ended September 30,~~of 2015 was $13, including $11 of severance and ~~related~~ benefits costs and $2 ~~of exit costs.~~

During the third quarter of 2014, we continued to execute our previously announced initiatives. Restructuring expense during the third quarter of 2014 was $2, including $1 of severance and related benefit costs and $1 of exit costs.

During the first nine months of 2014, we also implemented certain headcount reduction programs, primarily associated with the closure of our Commercial Vehicle foundry operation in Argentina. Including costs associated with this action and with other previously announced initiatives, restructuring expense for the nine months ended September 30, 2014 was $14, including $9 of severance and related benefit costs and $5 of exit costs.

Accrued restructuring costs and activity, including noncurrent portion —

Employee
Termination
Benefits

Exit
Costs
Total
Balance at June 30, 2015 $ 15
$ 9
$ 24
Charges to restructuring

1
1
Cash payments (1 ) (2 ) (3 )
Currency impact (2 )

(2 )
Balance at September 30, 2015 $ 12
$ 8
$ 20

Balance at December 31, 2014 $ 12
$ 9
$ 21
Charges to restructuring 11
2
13
Cash payments (8 ) (3 ) (11 )
Currency impact (3 )

(3 )
Balance at September 30, 2015 $ 12
$ 8
$ 20



	Employee Termination Benefits			Exit Costs			Total
Balance at June 30, 2016	$	9		$	7		$	16
Charges to restructuring	16			1			17
Cash payments	(2		)	(1		)	(3		)
Balance at September 30, 2016	$	23		$	7		$	30

Balance at December 31, 2015	$	9		$	8		$	17
Charges to restructuring	21			3			24
Adjustments of accruals	(1		)				(1		)
Cash payments	(6		)	(4		)	(10		)
Balance at September 30, 2016	$	23		$	7		$	30

At September 30, ~~2015~~2016, the accrued employee termination benefits include costs to reduce approximately ~~100~~400 employees to be completed over the next two years. The exit costs relate primarily to lease continuation obligations.

Cost to complete — The following table provides project-to-date and estimated future restructuring expenses for completion of our approved restructuring ~~initiatives.~~initiatives for our business segments at September 30, 2016.


	Expense Recognized						Future Cost to Complete		Expense Recognized						Future Cost to Complete
	Prior to 2015		2015		Total to Date		Future Cost to Complete		Prior to 2016		2016		Total to Date		Future Cost to Complete
Light Vehicle	$	9	$	1	$	10	$	1	$	9	$	1	$	10	$	1
Commercial Vehicle	23		12		35		10		25		6		31		17
Off-Highway											14		14
Corporate											2		2
Total	$	32	$	13	$	45	$	11	$	34	$	23	$	57	$	18

The future cost to complete includes estimated separation costs, primarily those associated with one-time benefit programs, and exit costs through 2021, including lease continuation costs, equipment transfers and other costs which are required to be recognized as closures are finalized or as incurred during the closure.

Note 5.6. Stockholders’ Equity

Common stock — Our Board of Directors declared a quarterly cash ~~dividend~~dividends of six cents per share of common stock in each of the ~~second and third~~first three quarters of ~~2015 and~~ ~~five~~ ~~cents per share of common stock in the first quarter of 2015.~~2016. Dividends accrue on restricted stock units (RSUs) granted under our stock compensation program and will be paid in cash or additional units when the underlying units vest.

Share repurchase program — Our Board of Directors approved aan expansion of our existing common stock share repurchase program offrom $1,400 ~~expiring~~to $1,700 on January 11, 2016. The program expires on December 31, ~~2015.~~2017. Under the program, we spent ~~$245~~$81 to repurchase ~~12,482,277~~6,612,537 shares of our common stock during the first nine months of ~~2015~~2016 through open market transactions. Approximately ~~$66~~$219 remained available under the program for future share repurchases as of September 30, ~~2015~~.2016.

Changes in equity —


	2015									2014									2016									2015
Three Months Ended September 30,	Attributable to Parent			Attributable to Non- controlling Interests			Total Equity			Attributable to Parent			Attributable to Non- controlling Interests			Total Equity			Attributable to Parent			Attributable to Non- controlling Interests			Total Equity			Attributable to Parent			Attributable to Non- controlling Interests			Total Equity
Balance, June 30	$	1,006		$	103		$	1,109		$	1,322		$	104		$	1,426		$	743		$	95		$	838		$	1,006		$	103		$	1,109
Total comprehensive income (loss)	66			—			66			(22		)	1			(21		)
Preferred stock dividends							—			(2		)				(2		)
Total comprehensive income																			33			4			37			66						66
Common stock dividends	(9		)				(9		)	(7		)				(7		)	(8		)				(8		)	(9		)				(9		)
Distributions to noncontrolling interests				(2		)	(2		)				(1		)	(1		)				(2		)	(2		)				(2		)	(2		)
Common stock share repurchases	(119		)				(119		)	(68		)				(68		)							—			(119		)				(119		)
Stock compensation	7						7			6						6			5						5			7						7
Stock withheld for employee taxes	(1		)				(1		)							—									—			(1		)				(1		)
Balance, September 30	$	950		$	101		$	1,051		$	1,229		$	104		$	1,333		$	773		$	97		$	870		$	950		$	101		$	1,051

Nine Months Ended September 30,
Balance, December 31	$	1,080		$	100		$	1,180		$	1,309		$	104		$	1,413		$	728		$	103		$	831		$	1,080		$	100		$	1,180
Total comprehensive income	128			14			142			114			8			122			142			10			152			128			14			142
Preferred stock dividends							—			(7		)				(7		)
Common stock dividends	(27		)				(27		)	(23		)				(23		)	(26		)				(26		)	(27		)				(27		)
Distributions to noncontrolling interests				(8		)	(8		)				(8		)	(8		)				(16		)	(16		)				(8		)	(8		)
Share conversion							—			3						3
Common stock share repurchases	(245		)				(245		)	(181		)				(181		)	(81		)				(81		)	(245		)				(245		)
Derecognition of noncontrolling interests				(5		)	(5		)							—									—						(5		)	(5		)
Stock compensation	17						17			16						16			11						11			17						17
Stock withheld for employee taxes	(3		)				(3		)	(2		)				(2		)	(1		)				(1		)	(3		)				(3		)
Balance, September 30	$	950		$	101		$	1,051		$	1,229		$	104		$	1,333		$	773		$	97		$	870		$	950		$	101		$	1,051

Changes in each component of accumulated other comprehensive income (AOCI) of the parent —



	Parent Company Stockholders															Parent Company Stockholders
																Foreign Currency Translation			Hedging			Investments			Defined Benefit Plans			Accumulated Other Comprehensive Income (Loss)
Balance, June 30, 2016																$	(603	)	$	(14	)	$	5		$	(551	)	$	(1,163	)
Other comprehensive income (loss):
Currency translation adjustments																(8		)										(8		)
Holding gains and losses																			(17		)	2						(15		)
Reclassification of amount to net income (a)																			6			(7		)				(1		)
Actuarial loss on census update																									(6		)	(6		)
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)																									7			7
Tax expense																									(1		)	(1		)
Other comprehensive loss																(8		)	(11		)	(5		)	—			(24		)
Balance, September 30, 2016																$	(611	)	$	(25	)	$	—		$	(551	)	$	(1,187	)
	Foreign Currency Translation			Hedging			Investments			Defined Benefit Plans			Accumulated Other Comprehensive Income (Loss)
Balance, June 30, 2015	$	(512	)	$	(7	)	$	5		$	(543	)	$	(1,057	)	$	(512	)	$	(7	)	$	5		$	(543	)	$	(1,057	)
Other comprehensive income (loss):
Currency translation adjustments	(66		)										(66		)	(66		)										(66		)
Holding gains and losses				(4		)	(5		)				(9		)				(4		)	(5		)				(9		)
Reclassification of amount to net income (a)				5									5						5									5
Actuarial gain on census update										13			13												13			13
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)										5			5												5			5
Tax expense										(1		)	(1		)										(1		)	(1		)
Other comprehensive income (loss)	(66		)	1			(5		)	17			(53		)	(66		)	1			(5		)	17			(53		)
Balance, September 30, 2015	$	(578	)	$	(6	)	$	—		$	(526	)	$	(1,110	)	$	(578	)	$	(6	)	$	—		$	(526	)	$	(1,110	)

Balance, June 30, 2014	$	(240	)	$	1		$	6		$	(478	)	$	(711	)
Other comprehensive income:
Currency translation adjustments	(113		)										(113		)
Holding gains and losses				(5		)	(2		)				(7		)
Venezuelan bolivar devaluation										1			1
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)										6			6
Tax expense				1									1
Other comprehensive income (loss)	(113		)	(4		)	(2		)	7			(112		)
Balance, September 30, 2014	$	(353	)	$	(3	)	$	4		$	(471	)	$	(823	)


	Parent Company Stockholders
Balance, December 31, 2015																$	(608	)	$	(4	)	$	2		$	(564	)	$	(1,174	)
Other comprehensive income (loss):
Currency translation adjustments																(3		)										(3		)
Holding gains and losses																			(30		)	5						(25		)
Reclassification of amount to net income (a)																			9			(7		)				2
Actuarial loss on census update																									(6		)	(6		)
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)																									20			20
Tax expense																									(1		)	(1		)
Other comprehensive income (loss)																(3		)	(21		)	(2		)	13			(13		)
Balance, September 30, 2016																$	(611	)	$	(25	)	$	—		$	(551	)	$	(1,187	)
	Foreign Currency Translation			Hedging			Investments			Defined Benefit Plans			Accumulated Other Comprehensive Income (Loss)
Balance, December 31, 2014	$	(427	)	$	(9	)	$	5		$	(566	)	$	(997	)	$	(427	)	$	(9	)	$	5		$	(566	)	$	(997	)
Other comprehensive income (loss):
Currency translation adjustments	(149		)										(149		)	(149		)										(149		)
Holding loss on net investment hedge	(2		)										(2		)	(2		)										(2		)
Holding gains and losses				(13		)	(5		)				(18		)				(13		)	(5		)				(18		)
Reclassification of amount to net income (a)				16									16						16									16
Actuarial gain on census update										13			13												13			13
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)										18			18												18			18
Elimination of net prior service costs and actuarial losses of disposal group										10			10												10			10
Tax expense										(1		)	(1		)										(1		)	(1		)
Other comprehensive income (loss)	(151		)	3			(5		)	40			(113		)	(151		)	3			(5		)	40			(113		)
Balance, September 30, 2015	$	(578	)	$	(6	)	$	—		$	(526	)	$	(1,110	)	$	(578	)	$	(6	)	$	—		$	(526	)	$	(1,110	)

Balance, December 31, 2013	$	(242	)	$	—		$	3		$	(488	)	$	(727	)
Other comprehensive income (loss):
Currency translation adjustments	(111		)										(111		)
Holding gains and losses				(4		)	3						(1		)
Reclassification of amount to net income (a)							(2		)				(2		)
Venezuelan bolivar devaluation										4			4
Reclassification adjustment for net actuarial losses included in net periodic benefit cost (b)										14			14
Tax expense				1						(1		)	—
Other comprehensive income (loss)	(111		)	(3		)	1			17			(96		)
Balance, September 30, 2014	$	(353	)	$	(3	)	$	4		$	(471	)	$	(823	)

(a) Foreign currency contract and investment reclassifications are included in other income, net.

(b) See Note 89 for additional details.

Upon completion of the divestiture of our operations in Venezuela in January 2015, we eliminated the unrecognized pension expense and the noncontrolling interest related to our former Venezuelan subsidiaries. See Note 23 for additional information regarding the disposal group held for sale at the end of 2014 and divested in January 2015.

Note 6.7. Earnings per Share

Reconciliation of the numerators and denominators of the earnings per share calculations —

Three Months Ended
September 30,
Nine Months Ended
September 30,
2015 2014 2015 2014
Income from continuing operations $ 122

$ 94

$ 259

$ 224
Less: Noncontrolling interests 3

3

18

10
Less: Preferred stock dividend requirements

2

7
Income from continuing operations available to common stockholders - Numerator basic 119

89

241

207
Preferred stock dividend requirements

2

7
Numerator diluted $ 119

$ 91

$ 241

$ 214

Net income available to common stockholders - Numerator basic $ 119

$ 88

$ 241

$ 203
Preferred stock dividend requirements

2

7
Numerator diluted $ 119

$ 90

$ 241

$ 210

Weighted-average number of shares outstanding - Denominator basic 158.0

156.5

161.6

154.6
Employee compensation-related shares, including stock options 0.9

1.3

1.1

1.2
Conversion of preferred stock

15.1

19.1
Denominator diluted 158.9

172.9

162.7

174.9



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Numerator - Basic and Diluted:
Net income attributable to the parent company	$	57	$	119	$	155	$	241

Denominator:
Weighted-average shares outstanding - Basic	144.0		158.0		146.7		161.6
Employee compensation-related shares, including stock options	0.6		0.9		0.4		1.1
Weighted-average shares outstanding - Diluted	144.6		158.9		147.1		162.7

The share count for diluted earnings per share is computed on the basis of the weighted-average number of common shares outstanding plus the effects of dilutive common stock equivalents (CSEs) outstanding during the period. We excluded ~~0.2~~2.1 million and ~~0.1~~0.2 million CSEs from the calculations of diluted earnings per share for the ~~quarter~~third quarters of 2016 and 2015 and excluded 2.1 million and 0.1 million CSEs for the year-to-date periods ~~ended September 30,~~of 2016 and 2015 as the effect of including them would have been anti-dilutive.

Note 7.8. Stock Compensation

The Compensation Committee of our Board of Directors approved the grant of RSUs and performance share units (PSUs) shown in the table below during the first nine months of ~~2015.~~2016.


		Weighted-average Per Share			Weighted-average Per Share
	Granted (In millions)	Grant Date Fair Value		Granted (In millions)	Grant Date Fair Value
RSUs	0.7	$	21.72	1.2	$	13.30
PSUs	0.4	$	22.97	0.4	$	13.21

We calculated the fair value of the RSUs at grant date based on the closing market price of our common stock at the date of grant. The number of PSUs that ultimately vest is contingent on achieving specified return on invested capital targets and specified total shareholder return targets relative to peer companies. For the portion of the award based on the return on invested capital performance metric, we estimated the fair value of the PSUs at grant date based on the closing market price of our common stock at the date of grant adjusted for the value of assumed dividends over the period because the award is not dividend protected. For the portion of the award based on shareholder returns, we estimated the fair value of the PSUs at grant date using various assumptions as part of a Monte Carlo simulation. The expected term represents the period from the grant date to the end of the three-year performance period. The risk-free interest rate of ~~0.89%~~1.00% was based on U.S. Treasury constant maturity rates at the grant date. The dividend yield of ~~0.98%~~1.40% was calculated by dividing the expected annual dividend by the average stock price over the prior year. The expected volatility of ~~33.9%~~33.4% was based on historical volatility over the prior three years using daily stock price observations.

~~Stock options and stock appreciation rights (SARs) related to~~ ~~0.2 million~~ ~~shares were exercised and a small number of shares were forfeited in 2015.~~ We ~~received~~ $2 ~~of cash from the exercise of stock options and we~~ paid $2$1 of cash to settle ~~SARs~~RSUs and ~~RSUs during 2015. We~~ issued ~~0.4~~0.5 million shares of common stock based on the vesting of ~~RSUs.~~

RSUs during 2016. We recognized stock compensation expense of $6$4 and $2$6 during the third quarter of 2016 and 2015 and ~~2014~~$11 and $14 ~~and $11~~ during the first nine months of ~~2015~~2016 and ~~2014.~~2015. At September 30, ~~2015~~,2016, the total unrecognized compensation cost related to the nonvested awards granted and expected to vest was ~~$22~~.$24. This cost is expected to be recognized over a weighted-average period of 2.0 years.

Note 8.9. Pension and Postretirement Benefit Plans

We have a number of defined contribution and defined benefit, qualified and nonqualified, pension plans covering eligible employees. Other postretirement benefits (OPEB), including medical and life insurance, are provided for certain employees upon retirement.

Components of net periodic benefit cost (credit) —


	Pension															Pension
	2015						2014					OPEB - Non-U.S.				2016						2015						OPEB - Non-U.S.
Three Months Ended September 30,	U.S.			Non-U.S.			U.S.			Non-U.S.		2015		2014		U.S.			Non-U.S.			U.S.			Non-U.S.			2016		2015
Interest cost	$	16		$	2		$	16		$	3	$	1	$	1	$	13		$	2		$	16		$	2		$	1	$	1
Expected return on plan assets	(27		)	(1		)	(28		)							(23		)	(1		)	(27		)	(1		)
Service cost				2						1		1							2						2					1
Other
Amortization of net actuarial loss	4			1			3			1						6			1			4			1
Net periodic benefit cost (credit)	$	(7	)	$	4		$	(9	)	$	5	$	2	$	1	$	(4	)	$	4		$	(7	)	$	4		$	1	$	2

Nine Months Ended September 30,
Interest cost	$	50		$	6		$	56		$	9	$	3	$	4	$	39		$	6		$	50		$	6		$	3	$	3
Expected return on plan assets	(82		)	(2		)	(83		)							(69		)	(2		)	(82		)	(2		)
Service cost				5						4		1							4						5					1
Other																			1
Amortization of net actuarial loss	14			4			11			3						16			4			14			4
Net periodic benefit cost (credit)	$	(18	)	$	13		$	(16	)	$	16	$	4	$	4	$	(14	)	$	13		$	(18	)	$	13		$	3	$	4

Pension expense for the nine months ended September 30, 2016 increased modestly versus the same period in 2015 as the effect of a lower assumed return on plan assets was mostly offset by a reduction in the interest component. The $11 reduction in interest resulted primarily from adopting a full yield curve approach to estimating interest expense effective at the beginning of 2016. The new method applies the specific spot rates along the yield curve used in the most recent remeasurement of the benefit obligation, resulting in a more precise estimate.

Note 9.10. Marketable Securities


	September 30, 2015						December 31, 2014						September 30, 2016						December 31, 2015
	Cost		Unrealized Gain (Loss)		Fair Value		Cost		Unrealized Gain (Loss)		Fair Value		Cost		Unrealized Gain (Loss)		Fair Value		Cost		Unrealized Gain (Loss)		Fair Value
U.S. government securities	$	39	$	—	$	39	$	38	$	—	$	38	$	34	$	—	$	34	$	38	$	—	$	38
Corporate securities	41				41		36				36		42				42		42				42
Certificates of deposit	17				17		23				23		24				24		18				18
Other	60				60		67		5		72		26				26		62		2		64
Total marketable securities	$	157	$	—	$	157	$	164	$	5	$	169	$	126	$	—	$	126	$	160	$	2	$	162

U.S. government securities include bonds issued by government-sponsored agencies and Treasury notes. Corporate securities ~~include~~are primarily debt securities. Other consists of investments in mutual and index funds. U.S. government securities, corporate debt and certificates of deposit maturing in one year or less, after one year through five years and after five years through ten years total ~~$40~~, ~~$55~~$41, $48 and $2$11 at September 30, ~~2015~~.2016.

Note ~~10.~~11. Financing Agreements

Long-term debt at —


	Interest Rate	September 30, 2015		December 31, 2014				September 30, 2016					December 31, 2015
Senior Notes due February 15, 2019	6.500%	$	—	$	55
						Interest Rate		Principal		Unamortized Debt Issue Costs			Principal		Unamortized Debt Issue Costs
Senior Notes due February 15, 2021	6.750%	350		350		6.750%		$	—	$	—		$	350	$	(4	)
Senior Notes due September 15, 2021	5.375%	450		450		5.375%		450		(6		)	450		(6		)
Senior Notes due September 15, 2023	6.000%	300		300		6.000%		300		(4		)	300		(5		)
Senior Notes due December 15, 2024	5.500%	425		425		5.500%		425		(6		)	425		(6		)
Senior Notes due June 1, 2026						6.500%	*	375		(7		)
Other indebtedness		67		79				119		—			66
Total		1,592		1,659				$	1,669	$	(23	)	$	1,591	$	(21	)
Less: current maturities		26		46
Total long-term debt		$	1,566	$	1,613


*	In conjunction with the issuance of the June 2026 Notes we entered into two 10-year fixed-to-fixed cross-currency swaps which have the effect of economically converting the June 2026 Notes to euro denominated debt at a fixed rate of 5.140%. See Note 12 for additional information.

Interest on the senior notes is payable semi-annually. Other indebtedness includes borrowings from various financial institutions, capital lease obligations and the unamortized fair value adjustment related to a terminated interest rate swap. See Note 1112 for additional information on the terminated interest rate swap. ~~During the third quarter of 2015, we reversed the $6 embedded capital lease obligation associated with our exclusive long-term supply agreement with SIFCO. See Note 2 for additional information.~~

Senior notes — ~~In December 2014, we completed the sale~~On May 27, 2016, Dana Financing Luxembourg S.à r.l., a wholly-owned subsidiary of ~~$425~~Dana, issued $375 in senior notes (June 2026 Notes). The June 2026 Notes were issued through a private placement and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act). The June 2026 Notes were offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act and, outside the United States, only to non-U.S. investors in reliance on Regulation S under the Securities Act. The June 2026 Notes rank equally with Dana's other unsecured senior notes. Interest on the ~~December 2024 Notes~~notes is payable on June 15 and December 15 of each year, beginning on December 15, 2016. The June ~~15, 2015.~~2026 Notes will mature on June 1, 2026. Net proceeds of the offering totaled ~~$418~~.$368. Financing costs of $7$7 were recorded as deferred costs and are being amortized to interest expense over the life of the notes. The ~~net~~ proceeds from the offering were used to redeem our February ~~2019 Notes.~~2021 Notes, to pay related fees and expenses and for general corporate purposes.

~~During December 2014,~~At any time prior to June 1, 2019, we may redeem up to 35% of the aggregate principal amount of the June 2026 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 106.500% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 50% of the original aggregate principal amount of the June 2026 Notes remains outstanding after the redemption.

Prior to June 1, 2021, we may redeem some or all of the June 2026 Notes at a redemption price of 100.000% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. We have not separated the make-whole premium from the underlying debt instrument to account for it as a derivative instrument as the economic characteristics and the risks of this embedded derivative are clearly and closely related to the economic characteristics and risks of the underlying debt.

We may redeem some or all of the June 2026 Notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period commencing on June 1 in the years set forth below:



Year		Redemption Price
2021		103.250%
2022		102.167%
2023		101.083%
2024		100.000%
2025		100.000%

On June 23, 2016, we redeemed ~~$345~~all of our February ~~2019~~2021 Notes ~~pursuant to a tender offer~~ at a ~~weighted average~~ price equal to ~~104.116%~~103.375% plus accrued and unpaid interest. The ~~$19~~$16 loss on extinguishment of debt ~~recorded in December 2014~~ includes the $12 redemption premium and ~~transaction costs associated with~~ the ~~tender offer and the~~$4 write-off ~~of $4~~ of previously deferred financing costs associated with the February ~~2019~~2021 Notes.

On December 9, 2014, we elected to redeem $40 of our previously outstanding February 2019 Notes effective January 8, 2015 at a price equal to 103.000% plus accrued and unpaid interest. ~~The notes redeemed on January 8, 2015 have been included in current portion of long-term debt as of December 31, 2014.~~ On March 16, 2015, we redeemed the remaining $15 of our February 2019 Notes at a price equal to 103.250% plus accrued and unpaid interest. The $2 loss on extinguishment of debt includes the redemption premium and the write-off of previously deferred financing costs associated with the February 2019 Notes.

Revolving facility — On June 9, 2016, we received commitments from new and existing lenders for a $500 amended and restated revolving credit facility (the Amended Revolving Facility) which expires on June 9, 2021. In connection with the Amended Revolving Facility, we paid $3 in deferred financing costs to be amortized to interest expense over the life of the facility. We wrote off $1 of previously deferred financing costs associated with our prior revolving credit facility to loss on extinguishment of debt. Deferred financing costs on our Amended Revolving Facility are included in other noncurrent assets.

The Amended Revolving Facility is guaranteed by all of our wholly-owned domestic subsidiaries, subject to certain exceptions, including exceptions for Dana Credit Corporation and Dana Companies, LLC and their respective subsidiaries (the guarantors), and grants a first-priority lien on substantially all of the assets of Dana and the guarantors, subject to certain exceptions.

Advances under ~~our $500 revolving facility~~the Amended Revolving Facility bear interest at a floating rate based on, at our option, the base rate or ~~LIBOR~~Eurodollar rate (each as described in the revolving credit agreement) plus a ~~margin based~~margin. The margins on the ~~undrawn amounts available under the agreement~~base rate and Eurodollar rate are 0.75% and 1.75% per annum respectively until September 30, 2016 and as set forth ~~below:~~below thereafter:

Remaining Borrowing Availability Base Rate LIBOR Rate
Greater than $350 0.50 % 1.50 %
Greater than $150 but less than or equal to $350 0.75 % 1.75 %
$150 or less 1.00 % 2.00 %



	Margin
Total Net Leverage Ratio	Base Rate		Eurodollar Rate
Less than or equal to 1.00:1.00	0.50	%	1.50	%
Greater than 1.00:1.00 but less than or equal to 2.00:1.00	0.75	%	1.75	%
Greater than 2.00:1.00	1.00	%	2.00	%

Commitment fees are applied based on the average daily unused portion of the available amounts under the ~~revolving facility. If the average daily unused portion of the revolving facility is less than~~ ~~50%, the applicable fee will be~~ ~~0.25%~~ ~~per annum. If the average daily unused portion of the revolving facility is equal to or greater than~~ ~~50%, the~~Amended Revolving Facility. The applicable fee will be 0.375% per ~~annum.~~ annum until September 30, 2016 and as set forth below thereafter:



Total Net Leverage Ratio	Commitment Fee
Less than or equal to 1.00:1.00	0.250	%
Greater than 1.00:1.00 but less than or equal to 2.00:1.00	0.375	%
Greater than 2.00:1.00	0.500	%

Up to $~~300~~275 of the ~~revolving facility~~Amended Revolving Facility may be applied to letters of credit, which reduces availability. We pay a fee for issued and undrawn letters of credit in an amount per annum equal to the applicable ~~LIBOR~~ margin for Eurodollar rate advances based on quarterly average availability under the revolving facility and a per annum fronting fee of 0.125%, payable quarterly.

There were no borrowings under the ~~revolving facility~~Amended Revolving Facility at September 30, ~~2015~~2016 but we had utilized ~~$40~~$22 for letters of credit. ~~Based on our borrowing base collateral of $389, we~~We had ~~potential~~ availability at September 30, ~~2015~~2016 under the ~~revolving facility~~Amended Revolving Facility of ~~$349~~$478 after deducting the outstanding letters of credit.

Debt covenants — At September 30, ~~2015~~2016, we were in compliance with the covenants of our financing agreements. Under the ~~revolving facility~~Amended Revolving Facility and the senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these ~~types.~~types and, in the case of the Amended Revolving Facility, a maintenance covenant that the first lien net leverage ratio not to exceed 2.00 to 1.00.

Note ~~11.~~12. Fair Value Measurements and Derivatives

In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate. Our valuation techniques include a combination of observable and unobservable inputs.

Fair value measurements on a recurring basis — Assets and liabilities that are carried in our balance sheet at fair value are as follows:


			Fair Value Measurements Using						Fair Value Measurements Using
			Quoted Prices in Active Markets		Significant Other Observable Inputs				Quoted Prices in Active Markets		Significant Other Observable Inputs
September 30, 2015	Total		(Level 1)		(Level 2)
September 30, 2016							Total		(Level 1)		(Level 2)
Marketable securities	$	157	$	60	$	97	$	126	$	26	$	100
Currency forward contracts - Accounts receivable other
Cash flow hedges	1				1		1				1
Undesignated	2				2		2				2
Currency forward contracts - Other accrued liabilities
Cash flow hedges	8				8		3				3
Undesignated	1				1		2				2
Currency swaps - Accounts receivable other
Undesignated	4				4		1				1
Currency swaps - Other accrued liabilities
Undesignated							12				12
Currency swaps - Other noncurrent liabilities
Undesignated	1				1
Cash flow hedges							28				28

December 31, 2014
December 31, 2015
Marketable securities	$	169	$	72	$	97	$	162	$	64	$	98
Currency forward contracts - Accounts receivable other
Cash flow hedges	1				1		1				1
Undesignated	1				1		2				2
Currency forward contracts - Other accrued liabilities
Cash flow hedges	11				11		5				5
Undesignated							1				1
Currency swaps - Accounts receivable other
Undesignated							4				4
Currency swaps - Other accrued liabilities
Undesignated	9				9		9				9

Fair value of financial instruments – The financial instruments that are not carried in our balance sheet at fair value are as follows:


	September 30, 2015				December 31, 2014				September 30, 2016				December 31, 2015
	Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value
Senior notes	$	1,525	$	1,528	$	1,580	$	1,643	$	1,550	$	1,611	$	1,525	$	1,552
Other indebtedness*	67		57		79		77		119		97		66		56
Total	$	1,592	$	1,585	$	1,659	$	1,720	$	1,669	$	1,708	$	1,591	$	1,608

* The carrying value includes an unamortized fair value adjustment related to a terminated interest rate swap at September 30, 2015.


*	The carrying value includes the unamortized portion of a fair value adjustment related to a terminated interest rate swap.

The fair value of our senior notes is estimated based upon a market approach (Level 2) while the fair value of our other indebtedness is based upon an income approach (Level 2).

Fair value measurements on a nonrecurring basis — Certain assets are measured at fair value on a nonrecurring basis. These are long-lived assets that are subject to fair value adjustments only in certain circumstances. These assets include intangible

assets and property, plant and equipment which may be written down to fair value when they are held for sale or as a result of impairment.

Interest rate derivatives — Our portfolio of derivative financial instruments periodically includes interest rate swaps designed to mitigate our interest rate risk. Near the end of the third quarter of 2015, we terminated a fixed-to-floating interest rate swap on our $425, 5.500% fixed-rate senior notes, due December 15, 2024 (the "designated fixed-rate debt"). This interest rate swap economically served to convert the designated fixed-rate debt into variable-rate debt, using the 3-month U.S. LIBOR as the benchmark interest rate plus a spread of 307 basis points. Of the $425 total notional amount of the interest rate swap, $340 had been designated as a fair value hedge of the $425 fixed-rate debt.

During the third quarter of 2015, prior to its termination, we realized a $2 interest expense reduction and cash savings from the interest rate swap. Upon termination, we also received a cash settlement of $4, indicative of the swap's favorable market value at that date. As a fair value hedge of the designated fixed-rate debt, the difference between the changes in fair value of the designated portion of the interest rate swap and the designated fixed-rate debt was treated as ineffectiveness and was recorded in the income statement as an adjustment to interest expense. Changes in the fair value associated with the undesignated portion of the interest rate swap do not represent ineffectiveness but were also recorded as an adjustment to interest expense. The total amount recorded as ineffectiveness and other such costs was $4 during the third quarter of 2015.

As of September 30, ~~2015,~~2016, no fixed-to-floating interest rate swaps remain outstanding. However, ~~the~~an $8 fair value adjustment to the carrying amount of ~~the designated fixed-rate debt~~our December 2024 Notes, associated with a fixed-to-floating interest rate swap that had been executed but was subsequently terminated during 2015, remains deferred at ~~that date.~~September 30, 2016. This amount ~~will be~~is being amortized as a reduction of interest expense through the period ending December 2024, the scheduled maturity date of the ~~designated fixed-rate debt.~~December 2024 Notes. The amount amortized as a reduction of interest expense was not material during the quarter or nine months ended September 30, 2016.

Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory through the next ~~seventeen~~fifteen months, as well as currency swaps associated with certain recorded external notes payable and intercompany loans receivable and payable. Periodically, our foreign currency derivatives also include net investment hedges of certain of our investments in foreign operations.

During May 2016, in conjunction with the issuance of the U.S. dollar-denominated June 2026 Notes by euro-functional Dana Financing Luxembourg S.à r.l. (euro-functional subsidiary), we executed two fixed-to-fixed cross-currency swaps with the same critical terms as the June 2026 Notes to eliminate the variability in the functional-currency-equivalent cash flows due to changes in the U.S. dollar / euro exchange rates associated with the forecasted principal and interest payments. Designated as a cash flow hedge of the forecasted principal and interest payments of the June 2026 Notes, or subsequent replacement debt, the swaps economically convert the June 2026 Notes from $375 of U.S. dollar-denominated debt at a fixed rate of 6.500% to €338 of euro-denominated debt at a fixed rate of 5.140%. The June 2026 Notes and any subsequent replacement debt have both been designated as the hedged items (collectively, the "designated debt") in the cash flow hedge relationship. See Note 11 for additional information about the June 2026 Notes.

The swaps are expected to be highly effective in offsetting the corresponding currency-based changes in cash outflows related to the designated debt. Based on our qualitative assessment that the critical terms of the June 2026 Notes and the swaps match and that all other required criteria have been met, we do not expect to incur any ineffectiveness. As an effective cash flow hedge, changes in the fair value of the swaps will be recorded in OCI during each period. Additionally, to the extent the swaps remain effective, the appropriate portion of AOCI will be reclassified to earnings each period as an offset to the foreign exchange gain or loss resulting from the remeasurement of the underlying U.S. dollar-denominated debt by the euro-functional subsidiary.

In the event our ongoing assessment demonstrates that the critical terms of either the swaps or the designated debt have changed, or that there have been adverse developments regarding counterparty risk, we will use the long haul method to assess ineffectiveness of the hedging relationship. To the extent the swaps are no longer effective, changes in their fair values will be recorded in earnings. At September 30, 2016, a deferred loss of $24 associated with the fixed-to-fixed cross-currency swaps remains in AOCI. The deferred loss represents the unfavorable fair value of the swaps, net of a $4 reclassification from AOCI to earnings as an offset to a foreign exchange remeasurement gain during the quarter and nine months ended September 30, 2016.

The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was ~~$196~~$136 as of September 30, ~~2015~~2016 and ~~$296~~$212 as of December 31, ~~2014~~.2015. The total notional amount of outstanding foreign currency swaps, including the fixed-to-fixed cross-currency swaps, was ~~$199~~$519 as of September 30, ~~2015~~2016 and ~~$10~~$219 as of December 31, ~~2014.~~2015.

The following currency derivatives were outstanding at September 30, ~~2015~~2016:


		Notional Amount (U.S. Dollar Equivalent)								Notional Amount (U.S. Dollar Equivalent)
Functional Currency	Traded Currency	Designated as Cash Flow Hedges		Undesignated		Total		Maturity	Traded Currency	Designated as Cash Flow Hedges		Undesignated		Total		Maturity
U.S. dollar	Mexican peso, euro	$	52	$	3	$	55	Dec-16	Mexican peso, euro	$	40	$	1	$	41	Sep-17
Euro	U.S. dollar, Canadian dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Russian ruble	44		27		71		Dec-16	U.S. dollar, Canadian dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Russian ruble	28		6		34		Sep-17
British pound	U.S. dollar, Euro	5		1		6		Sep-16	U.S. dollar, Euro	3				3		Sep-17
Swedish krona	Euro	15				15		Feb-17	Euro	10				10		Sep-17
South African rand	U.S. dollar, Euro			7		7		Feb-17	U.S. dollar, Euro			10		10		Dec-16
Thai baht	U.S. dollar, Australian dollar			11		11		May-16	U.S. dollar, Australian dollar			14		14		Jun-17
Canadian dollar									U.S. dollar			2		2		May-17
Brazilian real	U.S. dollar, Euro			4		4		Mar-16	Euro			1		1		May-17
Indian rupee	U.S. dollar, British pound, Euro			27		27		Feb-17	U.S. dollar, British pound, Euro			21		21		Dec-17
Total forward contracts		116		80		196				81		55		136

U.S. dollar	Euro			116		116		Dec-16	Mexican peso			76		76		Oct-16
Euro	Canadian dollar, British pound			83		83		Dec-16	U.S. dollar, Canadian dollar, British pound	375		68		443		Jun-26
Total currency swaps		—		199		199				375		144		519
Total currency derivatives		$	116	$	279	$	395			$	456	$	199	$	655

Cash flow hedges — With respect to contracts designated as cash flow hedges, changes in fair value during the period in which the contracts remain outstanding are reported in ~~other comprehensive income (OCI)~~OCI to the extent such contracts remain

effective. Effectiveness is measured by using regression analysis to determine the degree of correlation between the change in the fair value of the derivative instrument and the change in the associated foreign currency exchange rates. Changes in fair value of ~~those~~ contracts ~~that are~~ not designated as cash flow hedges or as net investment hedges are ~~reported~~recognized in other income, net in the period in which the changes occur. ~~Forward~~Realized gains and losses from currency-related forward contracts, ~~associated with product-related transactions~~including those that have been designated as cash flow hedges and those that have not been designated, are ~~marked to market~~recognized in ~~cost of sales while other contracts are marked to market through~~ other income, net.

~~Net investment hedges~~ — With respect to contracts designated as net investment hedges, we apply the forward method and report changes in fair value in the cumulative translation adjustment (CTA) component of OCI during the period in which the contracts remain outstanding to the extent such contracts remain effective.

During the second quarter of 2015, we settled our $98 forward contract that had been executed and designated as a net investment hedge of the equivalent portion of certain of our European operations during the first quarter of 2015. Although no net investment hedges remain outstanding at September 30, 2015, a deferred loss of $2 associated with this settled contract has been recorded in AOCI as of that date and will remain deferred until such time as the investment in the associated subsidiary is substantially liquidated. See also Note 5.

Amounts to be reclassified to earnings — Deferred gains or losses associated with effective cash flow hedges of forecasted transactions are reported in AOCI and are reclassified to earnings in the same periods in which the underlying transactions affect earnings. Amounts expected to be reclassified to earnings assume no change in the current hedge relationships or to September 30, ~~2015~~2016 exchange rates. Deferred losses of $7$1 at September 30, ~~2015~~2016 are expected to be reclassified to earnings during the next twelve months, compared to deferred losses of ~~$10~~$4 at December 31, ~~2014~~2015. Amounts reclassified from AOCI to earnings arising from the discontinuation of cash flow hedge accounting treatment were not material during the ~~third quarter~~first nine months of ~~2015. See also Note 5.~~2016.

Note ~~12.~~13. Commitments and Contingencies

Asbestos personal injury liabilities — As part of our reorganization in 2008, assets and liabilities associated with personal injury asbestos claims were retained in Dana Corporation which was then merged into Dana Companies, LLC (DCLLC), a consolidated wholly-owned limited liability company. The assets of DCLLC include insurance rights relating to coverage against these liabilities, marketable securities and other assets which are considered sufficient to satisfy its liabilities. DCLLC had approximately 25,000 active pending asbestos personal injury liability claims at both September 30, ~~2015~~2016 and December 31, ~~2014~~2015. DCLLC had accrued ~~$79~~$73 for indemnity and defense costs for settled, pending and future claims at September 30, ~~2015~~2016, compared to $8178 at December 31, ~~2014~~2015. A fifteen-year time horizon was used to estimate the value of this liability. In addition to claims and litigation experience, we consider additional qualitative and quantitative factors such as changes in legislation, the legal environment, our strategy in managing claims and obtaining insurance, including our defense strategy, and health related trends in the overall population of individuals potentially exposed to asbestos in determining whether a change in the estimate of its liability for pending and future claims and defense costs or insurance assets is warranted.

At September 30, ~~2015~~2016, DCLLC had recorded ~~$51~~$48 as an asset for probable recovery from insurers for the pending and projected asbestos personal injury liability claims, compared to $5251 recorded at December 31, ~~2014~~2015. The recorded asset represents our assessment of the capacity of our current insurance agreements to provide for the payment of anticipated defense and indemnity costs for pending claims and projected future demands. The recognition of these recoveries is based on our assessment of our right to recover under the respective contracts and on the financial strength of the insurers. DCLLC has coverage agreements in place with insurers confirming substantially all of the related coverage and payments are being received on a timely basis. The financial strength of these insurers is reviewed at least annually with the assistance of a third party. The recorded asset does not represent the limits of the insurance coverage, but rather the amount DCLLC would expect to recover if the accrued indemnity and defense costs were paid in full.

DCLLC continues to process asbestos personal injury claims in the normal course of business, is separately managed and has an independent board member. The independent board member is required to approve certain transactions including dividends or other transfers of $1 or more of value to Dana. Dana ~~Holding Corporation~~Incorporated has no obligation to increase its investment in or otherwise support DCLLC.

Other product liabilities — We had accrued $14 and $1 for non-asbestos product liability costs at September 30, ~~2015~~2016 and December 31, ~~2014~~2015~~, with no~~ and a $4 expected recovery ~~expected~~ from third parties at ~~either date.~~September 30, 2016. The increases in the liability and recoverable amounts at September 30, 2016 reflect the recognition of the estimated cost, net of payments made, and the expected recovery of an insured matter. We estimate these liabilities based on assumptions about the value of the claims and about the likelihood of recoveries against us derived from our historical experience and current information.

Environmental liabilities — Accrued environmental liabilities were ~~$11~~$9 at September 30, ~~2015~~2016 and $7$11 at December 31, ~~2014~~2015. ~~During the third quarter of 2015, in response to additional information provided by continuing studies at our former foundry operation in Argentina, we recognized a $6 increase to our liability.~~ We consider the most probable method of remediation, current laws and regulations and existing technology in estimating our environmental liabilities. ~~Other accounts receivable included a related recoverable from insurers or other parties of~~ $1 ~~at December 31, 2014.~~

Guarantee of lease obligations — 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 Metalsa. Under the terms of the sale agreement, we will guarantee the affiliate’s performance under the leases, which run through June 2025, including approximately $6 of annual payments. In the event of a required payment by Dana as guarantor, we are entitled to pursue full recovery from Metalsa of the amounts paid under the guarantee and to take possession of the leased property.

Other legal matters — We are subject to various pending or threatened legal proceedings arising out of the normal course of business or operations. In view of the inherent difficulty of predicting the outcome of such matters, we cannot state what the eventual outcome of these matters will be. However, based on current knowledge and after consultation with legal counsel, we believe that any liabilities that may result from these proceedings will not have a material adverse effect on our liquidity, financial condition or results of operations.

In November 2013, we received an arbitration notice from Sypris Solutions, Inc. (Sypris), formerly our largest supplier, alleging damage claims under the long-term supply agreement that expired on December 31, 2014. The arbitration proceedings related to these claims concluded in the second quarter of 2015 with Sypris being awarded immaterial damages. Sypris also alleged that Dana and Sypris entered into a new binding long-term supply agreement in July 2013. Dana filed suit against Sypris requesting declaratory judgment that the parties did not enter into a new supply agreement. During the first quarter of 2015, the court granted summary judgment in Dana’s favor, rejecting Sypris’ position that a new contract was formed in July 2013. The Ohio Sixth District Court of Appeals upheld the summary judgment ruling ~~has~~in December 2015 and that decision is no longer subject to appeal. We have been ~~appealed by Sypris. We continue~~advised that Sypris will not pursue its claim that Dana failed to ~~believe this Sypris claim is without merit~~.negotiate in good faith under the 2007 agreement.

On September 25, 2015, the Brazilian antitrust authority (“CADE”) announced an investigation of an alleged cartel involving a former Dana business in Brazil and various competitors related to sales of shock absorbers between 2000 and 2014. We divested this business as a part of the sale of our aftermarket business in 2004. ~~Dana’s policy is to cooperate with governmental investigations. We cannot predict the duration, scope or ultimate outcome~~The investigation of ~~this matter. Based on the information currently available to us, we do not believe~~Dana's involvement in this matter ~~will result~~concluded in the second quarter of 2016 without a material ~~liability to~~impact on Dana.

Note ~~13.~~14. Warranty Obligations

We record a liability for estimated warranty obligations at the dates our products are sold. We record the liability based on our estimate of costs to settle future claims. Adjustments are made as new information becomes available.

Changes in warranty liabilities —


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Balance, beginning of period	$	48		$	59		$	47		$	54		$	63		$	48		$	56		$	47
Amounts accrued for current period sales	6			7			20			16			6			6			19			20
Adjustments of prior estimates				3			4			14			7						19			4
Settlements of warranty claims	(7		)	(7		)	(23		)	(22		)	(10		)	(7		)	(28		)	(23		)
Currency impact	(1		)	(2		)	(2		)	(2		)	1			(1		)	1			(2		)
Balance, end of period	$	46		$	60		$	46		$	60		$	67		$	46		$	67		$	46

Note ~~14.~~15. Income Taxes

We estimate the effective tax rate expected to be applicable for the full fiscal year and use that rate to provide for income taxes in interim reporting periods. We also recognize the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur.

We have generally not recognized tax benefits on losses generated in several entities, including those in the U.S., where the recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for the recognition of deferred tax assets. Consequently, there is no income tax expense or benefit recognized on the pre-tax income or losses in these jurisdictions as valuation allowances are adjusted to offset the associated tax expense or benefit.

We record interest and penalties related to uncertain tax positions as a component of income tax expense. Net interest expense for the periods presented herein is not significant.

We reported income tax expense (benefit) related to ~~our continuing~~ operations of ~~$(77)~~$13 and ~~$29~~$(77) for the quarters ended September 30, 2016 and 2015 and ~~2014~~$66 and $(10) ~~and $96~~ for the respective nine-month periods. The third-quarter and nine-month net tax benefits in 2015 included a $100 release of valuation allowances on U.S. deferred tax assets in connection with the planned sale of an affiliate's stock and certain operating assets by a U.S. subsidiary of the company to a non-U.S. affiliate. As a consequence of proposed Internal Revenue Service regulations issued in last year's third quarter providing guidance on the tax treatment afforded a component of the tax planning actions we were undertaking, we revised the estimated forecasted income being generated upon completion of the transaction which led to the third quarter 2015 release. Upon completion of this intercompany transaction in the fourth quarter of 2015, we recognized a prepaid tax asset. Our effective tax rates were 26% and 37% in the first nine months of 2016 and 2015, exclusive of $8 from the amortization of the prepaid tax asset in 2016 and $100 of valuation allowance released on U.S. deferred tax assets in the third quarter of 2015. Our effective income tax rates vary from the U.S. federal statutory rate of 35% due to establishment, release and adjustment of valuation allowances in several countries, nondeductible expenses, local tax incentives in several countries outside the U.S., different statutory tax rates outside the U.S. and withholding taxes related to repatriations of international earnings to the U.S. Our effective tax rates were 37% and 31% in the first nine months of 2015 and 2014, exclusive of the $100 of valuation allowance released on U.S. deferred tax assets, as discussed below. The U.S. and certain foreignearnings. In 2016, jurisdictions with valuation allowances ~~were expected to generate~~reported higher aggregate pre-tax income, ~~in 2015 and 2014. Lower income in 2015 from jurisdictions with valuation allowances resulted in less valuation allowance release, as compared to 2014,~~ thereby ~~increasing~~decreasing the effective ~~tax rate as~~rate. In 2015, these jurisdictions had lower pre-tax income, which increased the ~~tax expense associated with this income is offset by valuation allowance release.~~effective rate.

We provide for U.S. federal income and non-U.S. withholding taxes on the earnings of our non-U.S. operations that are not considered to be permanently reinvested. Accordingly, we continue to analyze and adjust the estimated tax impact of the income and non-U.S. withholding tax liabilities based on the amount and source of these earnings. As part of the annual effective tax rate, we recognized net expense of $1 ~~and $2~~ for ~~the~~both quarters ended September 30, 2016 and 2015 and ~~2014~~$5 and $4 ~~and $5~~ in the ~~respective~~ nine-month periods of 2016 and 2015 related to future income taxes and non-U.S. withholding taxes on repatriations from operations that are not permanently reinvested. We ~~recognized expense~~also paid withholding taxes of $2 and $1 infor the ~~third quarter of~~quarters ended September 30, 2016 and 2015 and $4 and $7 for the respective nine-month periods related to the actual transfer of funds to the U.S. and ~~$5 in the first nine months~~transfers of ~~2015 and 2014 for withholding taxes associated with changes to planned repatriations of certain~~funds between foreign ~~earnings. We also accrued additional tax reserves of $2 in the second quarter of 2014 for settlements of outstanding tax matters in Italy.~~subsidiaries.

At September 30, ~~2015,~~2016, we have a ~~partial~~ valuation allowance against our deferred tax assets in the U.S. When evaluating the continued need for this valuation allowance we consider all components of comprehensive income, and we weight the positive and negative evidence, putting greater reliance on objectively verifiable historical evidence than on projections of future profitability that are dependent on actions that have not occurred as of the assessment date. We also consider ~~the pro forma effects on~~changes to historical profitability of actions occurring in the year of assessment that have a sustained effect on future profitability, the effect on historical profits of nonrecurring events, as well as tax planning strategies. These effects included items such as the

lost future interest income resulting from the prepayment on and subsequent sale of ~~the~~a payment-in-kind callable note receivable, ~~and~~ the additional interest expense resulting from the $750 senior unsecured notes payable issued in July ~~2013. A~~2013, the effects of a 2015 intercompany transfer of an affiliate's stock and certain operating assets by a U.S. subsidiary of the company to a non-U.S. affiliate and, as discussed in Note 11, the recent debt refinancing transaction which included an issuance of new debt by an international subsidiary and repayment of certain debt obligations held by the U.S. parent company. Management believes a sustained period of profitability, after ~~giving pro forma effect to~~considering historical changes from implemented actions and nonrecurring events, along with positive expectations for future profitability ~~are necessary~~is important evidence for a determination that a valuation allowance should be released. ~~Our~~

While our U.S. operations have experienced improved profitability, there is considerable uncertainty around demand levels in ~~recent years, but our analysis of the income of~~ the U.S. ~~operations, as adjusted for pro forma effects~~in certain of ~~developments through~~our end markets. After weighting the ~~current date~~positive and planned future actions, demonstrates historical losses through the year ended December 31, 2014 with an uncertain forecast of near break-even results in 2015. Therefore, we have not achieved a level of sustained historical profitability that would,negative evidence at September 30, 2016, in our judgment, ~~support a~~ release of the valuation allowance at September 30, 2015. Although we expect our U.S. operations to generate profits in the future, this positive evidence cannot be given as much weight in our analysis as the objectively verifiable lack of sustained historical profitability. To the extent that we achieve our forecasted levels of sustainable profits in 2015 and our projections of profitability beyond 2015 are sufficiently positive, it is reasonably possible that we could release up to $400 of the valuation allowances against ~~our~~ U.S. deferred tax assets inwas not appropriate. Within the next twelve ~~months. Until~~months, to the ~~valuation allowance is released, the income tax effect~~extent our operating performance demonstrates sustained profitability as defined above, certain of ~~any reported~~our end markets stabilize and we are able to affirm sustained profitability in our forecasts, we believe that release of U.S. ~~profits will reduce net deferred tax assets and the associated valuation allowance.~~

~~In the fourth quarter of 2014, we released~~ valuation allowances of $179 on U.S. deferred tax assets in connection with a tax planning action expected to be completed in this year's fourth quarter. As a consequence of proposed Internal Revenue Service regulations issued in this year's third quarter providing guidance on the tax treatment afforded a component of the tax planning action we are undertaking, we revised the estimate of forecasted income being generated upon completion of the transaction. Based on the revised estimate of forecasted income associated with the tax planning action, we released an additional $100 of valuation allowance on U.S. deferred tax assets in the third quarter of 2015. Although the actual gain and operating income may differ from the current estimate, we concluded that they were objectively verifiable andapproximating $500 is reasonably ~~estimated.~~possible.

Note ~~15.~~16. Other Income, Net


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Interest income	$	4		$	5		$	11		$	11		$	3		$	4		$	8		$	11
Government grants and incentives	1						2			2			2			1			5			2
Foreign exchange gain (loss)	(4		)	6			(10		)	8
Foreign exchange loss													(2		)	(4		)	(4		)	(10		)
Strategic transaction expenses	(1		)	(2		)	(3		)	(3		)	(3		)	(1		)	(6		)	(3		)
Gain on derecognition of noncontrolling interest							5															5
Gain on sale of marketable securities							1						7						7			1
Recognition of unrealized gain on payment-in-kind note receivable										2
Insurance recoveries				2			4			2									1			4
Other	2			9			8			13			2			2			6			8
Other income, net	$	2		$	20		$	18		$	35		$	9		$	2		$	17		$	18

Foreign exchange gains and losses on cross-currency intercompany loan balances that are not of a long-term investment nature are included above. Foreign exchange gains and losses on intercompany loans that are permanently invested are reported in OCI. ~~Effective March 31, 2014, we ceased using the official exchange rate of~~ ~~6.3~~ ~~and began using the Complementary System of Foreign Currency Administration (SICAD) rate, which was~~ ~~10.7~~ bolivars per U.S. dollar (as published by the Central Bank of Venezuela) at March 31, 2014, to remeasure the financial statements of our subsidiaries in Venezuela. The change to the SICAD rate resulted in a charge of ~~$17~~ during the first quarter of 2014. After remaining relatively unchanged during the second quarter the SICAD rate declined to 12.0 bolivars per U.S. dollar at September 30, 2014, resulting in a remeasurement charge of $3 during the third quarter. During the second and third quarters of 2014 we realized gains of $7 and $1 as the National Center for Foreign Commerce (CENCOEX) approved a portion of our pending claims to settle U.S. dollar obligations at the official exchange rate of 6.3. Also during the second and third quarters of 2014 we realized net gains of $6 and $8 on the sales and purchases of U.S. dollars through SICAD 2 at average rates of 49.9 bolivars per U.S. dollar. The foreign exchange gains and losses associated with our Venezuelan subsidiaries are included in the segment EBITDA of our Light Vehicle operating segment. See Note 1 to our consolidated financial statements in Item 8 of our 2014 Form 10-K for a comprehensive discussion of Venezuela's exchange rate environment.

Upon completion of the ~~divestiture~~disposal of our operations in Venezuela in January 2015, we recognized a gain on the derecognition of the noncontrolling interest in a former Venezuelan subsidiary.

The sale of our interest in a payment-in-kind callable note to a third-party in January 2014 resulted in the recognition of the remaining unrealized gain that arose following the valuation of the note receivable below its callable value at emergence from bankruptcy.

During the third quarter of 2014 we received a payment from the liquidation proceedings of insurers. During the second quarter of 2015 we reached a settlement with an insurance carrier for the recovery of previously incurred legal costs.

As part of correcting overstatements of our pension and postretirement obligations and goodwill in September 2014, we credited other income, net for $6 to effectively reverse a portion of the write-off of goodwill assigned to our former Driveshaft segment in 2008. See Note 1 for additional information.

Note ~~16.~~17. Segments

We are a global provider of high technology driveline, sealing and thermal-management products for virtually every major vehicle manufacturer in the on-highway and off-highway markets. Our driveline products – axles, driveshafts and transmissions – are delivered through our Light Vehicle, Commercial Vehicle and Off-Highway operating segments. Our fourth global operating segment – Power Technologies – is the center of excellence for the sealing and thermal 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 —


	2015							2014							2016							2015
Three Months Ended September 30,	External Sales		Inter-Segment Sales			Segment EBITDA		External Sales		Inter-Segment Sales			Segment EBITDA		External Sales		Inter-Segment Sales			Segment EBITDA		External Sales		Inter-Segment Sales			Segment EBITDA
Light Vehicle	$	605	$	28		$	63	$	608	$	37		$	70	$	631	$	27		$	73	$	605	$	28		$	63
Commercial Vehicle	367		24			31		487		25			47		294		21			23		367		24			31
Off-Highway	246		8			35		283		8			40		199		7			28		246		8			35
Power Technologies	250		5			40		259		5			37		260		3			42		250		5			40
Eliminations and other			(65		)					(75		)					(58		)					(65		)
Total	$	1,468	$	—		$	169	$	1,637	$	—		$	194	$	1,384	$	—		$	166	$	1,468	$	—		$	169

Nine Months Ended September 30,
Light Vehicle	$	1,883	$	100		$	193	$	1,862	$	108		$	176	$	1,913	$	91		$	202	$	1,883	$	100		$	193
Commercial Vehicle	1,231		75			102		1,407		71			138		976		64			81		1,231		75			102
Off-Highway	809		29			115		959		28			128		692		24			97		809		29			115
Power Technologies	762		13			117		807		15			120		798		11			120		762		13			117
Eliminations and other			(217		)					(222		)					(190		)					(217		)
Total	$	4,685	$	—		$	527	$	5,035	$	—		$	562	$	4,379	$	—		$	500	$	4,685	$	—		$	527

Reconciliation of segment EBITDA to consolidated net income —


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Segment EBITDA	$	169		$	194		$	527		$	562		$	166		$	169		$	500		$	527
Corporate expense and other items, net	(2		)	4			(4		)	6			2			(2		)	(6		)	(4		)
Depreciation	(39		)	(41		)	(117		)	(122		)	(45		)	(39		)	(129		)	(117		)
Amortization of intangibles	(4		)	(11		)	(14		)	(38		)	(3		)	(4		)	(7		)	(14		)
Restructuring	(1		)	(2		)	(13		)	(14		)	(17		)	(1		)	(23		)	(13		)
Stock compensation expense	(6		)	(2		)	(14		)	(11		)	(4		)	(6		)	(11		)	(14		)
Strategic transaction expenses and other items	(9		)	4			(11		)	4
Strategic transaction expenses													(3		)	(1		)	(6		)	(3		)
Other items																(4		)	(3		)	(4		)
Impairment of long-lived assets	(36		)				(36		)							(36		)				(36		)
Distressed supplier costs																			(1		)
Amounts attributable to previously divested/closed operations																(4		)	3			(4		)
Gain on derecognition of noncontrolling interest							5															5
Loss on extinguishment of debt							(2		)										(17		)	(2		)
Recognition of unrealized gain on payment-in-kind note receivable										2
Interest expense	(31		)	(30		)	(86		)	(89		)	(27		)	(31		)	(84		)	(86		)
Interest income	4			5			11			11			3			4			8			11
Income from continuing operations before income taxes	45			121			246			311
Income before income taxes													72			45			224			246
Income tax expense (benefit)	(77		)	29			(10		)	96			13			(77		)	66			(10		)
Equity in earnings of affiliates	—			2			3			9			2			—			6			3
Income from continuing operations	122			94			259			224
Loss from discontinued operations	—			(1		)	—			(4		)
Net income	$	122		$	93		$	259		$	220		$	61		$	122		$	164		$	259

Note ~~17.~~18. Equity Affiliates

We have a number of investments in entities that engage in the manufacture of vehicular parts – primarily axles, driveshafts and wheel-end braking systems – supplied to OEMs.

Equity method investments exceeding $5 at September 30, ~~2015~~2016 —


	Ownership Percentage	Investment		Ownership Percentage	Investment
Dongfeng Dana Axle Co., Ltd. (DDAC)	50%	$	126	50%	$	81
Bendix Spicer Foundation Brake, LLC	20%	49		20%	48
Axles India Limited	48%	7		48%	8
All others as a group		7			8
Investments in equity affiliates		189			145
Investments in affiliates carried at cost		2			2
Investments in affiliates		$	191		$	147

Summarized financial information for DDAC —


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended September 30,					Nine Months Ended September 30,
	2015			2014		2015			2014		2016		2015			2016		2015
Sales	$	114		$	167	$	402		$	590	$	145	$	114		$	425	$	402
Gross profit	$	8		$	17	$	31		$	61	$	21	$	8		$	53	$	31
Pre-tax income (loss)	$	(4	)	$	1	$	(8	)	$	15
Income (loss) before income taxes											$	5	$	(4	)	$	8	$	(8	)
Net income (loss)	$	(3	)	$	1	$	(6	)	$	12	$	2	$	(3	)	$	4	$	(6	)
Dana's equity earnings in affiliate	$	(3	)	$	—	$	(7	)	$	2
Dana's equity in earnings (loss) of affiliate											$	—	$	(3	)	$	—	$	(7	)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Dollars in millions)

Management's discussion and analysis of financial condition and results of operations should be read in conjunction with the financial statements and accompanying notes in this report.

Forward-Looking Information

Statements in this report (or otherwise made by us or on our behalf) that are not entirely historical constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can often be identified by words such as ~~"anticipates," "expects," "believes," "intends," "plans," "predicts," "seeks," "estimates," "projects," "outlook," "may," "will," "should," "would," "could," "potential," "continue," "ongoing"~~“anticipates,” “expects,” “believes,” “intends,” “plans,” “predicts,” “seeks,” “estimates,” “projects,” “outlook,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing” and similar expressions, variations or negatives of these words. These statements represent the present expectations of Dana ~~Holding Corporation~~Incorporated and its consolidated subsidiaries (Dana) based on our current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Our plans, actions and actual results could differ materially from our present expectations due to a number of factors, including those discussed below and elsewhere in this report and in our other filings with the Securities and Exchange Commission (SEC). All forward-looking statements speak only as of the date made and we undertake no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances that may arise after the date of this report.

Management Overview

Dana is headquartered in Maumee, Ohio and was incorporated in Delaware in 2007. As a global provider of high technology driveline, sealing and thermal-management products our customer base includes virtually every major vehicle manufacturer in the global light vehicle, medium/heavy vehicle and off-highway markets. Our driveline products – axles, driveshafts and transmissions – are delivered through our Light Vehicle Driveline Technologies (Light Vehicle), Commercial Vehicle Driveline Technologies (Commercial Vehicle) and Off-Highway Driveline Technologies (Off-Highway) operating segments. Our fourth operating segment – Power Technologies – is the center of excellence for the sealing and thermal technologies that span all customers in our on-highway and off-highway markets. We have a diverse customer base and geographic footprint which minimizes our exposure to individual market and segment declines. At September 30, ~~2015~~,2016, we employed approximately ~~23,400~~23,800 people, operated in 25 countries and had 90 major facilities housing manufacturing and distribution operations, technical and engineering centers and administrative offices.

External sales by operating segment for the ~~three and nine months~~periods ended September 30, ~~2015~~2016 and ~~2014~~2015 are as follows:


	Three Months Ended September 30,								Nine Months Ended September 30,								Three Months Ended September 30,								Nine Months Ended September 30,
	2015				2014				2015				2014				2016				2015				2016				2015
			% of				% of				% of				% of				% of				% of				% of				% of
	Dollars		Total		Dollars		Total		Dollars		Total		Dollars		Total		Dollars		Total		Dollars		Total		Dollars		Total		Dollars		Total
Light Vehicle	$	605	41.2	%	$	608	37.1	%	$	1,883	40.2	%	$	1,862	37.0	%	$	631	45.6	%	$	605	41.2	%	$	1,913	43.7	%	$	1,883	40.2	%
Commercial Vehicle	367		25.0	%	487		29.8	%	1,231		26.3	%	1,407		27.9	%	294		21.2	%	367		25.0	%	976		22.3	%	1,231		26.3	%
Off-Highway	246		16.8	%	283		17.3	%	809		17.3	%	959		19.1	%	199		14.4	%	246		16.8	%	692		15.8	%	809		17.3	%
Power Technologies	250		17.0	%	259		15.8	%	762		16.2	%	807		16.0	%	260		18.8	%	250		17.0	%	798		18.2	%	762		16.2	%
Total	$	1,468			$	1,637			$	4,685			$	5,035			$	1,384			$	1,468			$	4,379			$	4,685

See Note 1617 to our consolidated financial statements in Item 1 of Part I for further financial information about our operating segments.

Our internet address is www.dana.com. The inclusion of our website address in this report is an inactive textual reference only and is not intended to include or incorporate by reference the information on our website into this report.

Operational and Strategic Initiatives

~~In recent~~Over the past several years, we have ~~significantly improved our~~focused on maintaining a strong overall financial ~~prospects — improving the overall~~position – driving profitability ofin our business, simplifying our capital structure, maintaining strong cash flows and addressing structural costs. We have also strengthened ~~our leadership team~~ and streamlined our operating segments to focus on our core competencies of driveline technologies, sealing systems and thermal management. ~~As a result,~~With an experienced leadership team, we believe that we are well-positioned to place increasing focus on profitable growth and shareholder returns.

Shareholder returns and capital structure 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. Our strong financial position has enabled us to ~~provide~~simplify our capital structure while providing returns to our common shareholders in the form of cash dividends and ~~the~~ reduction in the number of common share equivalents outstanding. ~~We declared and paid four quarterly common stock dividends of five cents per share in each of~~Over the past three years, ~~and increased the dividend~~we returned $1,400 of cash to ~~six cents per share~~shareholders in ~~this year's second quarter. During 2013, we redeemed our Series A~~connection with redemption of preferred stock and repurchase of common shares. From program inception in 2012 through December 31, 2015, we repurchased 67 million shares, inclusive of the common share equivalent reduction resulting from redemption of ~~21 million common shares on an as converted basis, for $474.~~preferred shares. In ~~2014, we exercised our option to convert all remaining outstanding preferred shares to common shares, and~~January 2016, our Board of Directors approved the expansion of our ~~existing~~ share repurchase program from ~~$1,000~~$1,400 to ~~$1,400. Including~~$1,700, and during the ~~$245 used~~first six months of 2016 we repurchased 6.6 million shares for $81. No shares were repurchased in the third quarter and, at present, we are not expecting to repurchase shares during the remainder of 2016. We declared and paid quarterly common stock dividends over the past four years, raising the dividend from five cents to six cents per share in the ~~first nine months~~second quarter of ~~this year, we had repurchased 42 million common shares for $860 through September 30, 2015, leaving $66 available under the program.~~2015.

We have taken advantage of the lower interest rate environment to refinance our senior notes at lower rates while extending the maturities. In December 2014 and the first quarter of 2015, we completed the redemption of ~~our senior~~ notes maturing in 2019, replacing them with ~~senior~~ notes ~~having lower interest rates and~~ maturing in 2024. During the second quarter of 2016, we redeemed notes maturing in 2021, replacing them with notes maturing in 2026. Additionally, in ~~last year's~~the fourth quarter of 2014, we completed a voluntary program offered to deferred vested salaried participants in our U.S. pension plans. With this program, we reduced plan benefit obligations by $171 with lump sum payments of $133 from plan assets.

Technology leadership — With a clear focus on ~~market based~~market-based value drivers, ~~global mega~~global-mega trends and customer sustainability objectives and requirements, we are driving innovation to create differentiated value for our customers, ~~moving from a “product push” to~~enabling a “market pull” product pipeline. Our sealing and thermal engine expertise provides us with early insight into some of the critical design factors important to our customers. When combined with our drivetrain expertise, we are able to collaborate with our customers on complete power conveyance solutions, from the engine through the vehicle driveline. We are committed to making investments and diversifying our product offerings to strengthen our competitive position in our core driveline, sealing and thermal technologies businesses, creating value for our customers through improved fuel efficiency, emission control, electric and hybrid electric solutions, durability and cost of ownership, software integration and systems solutions. Our industry leading electronically actuated disconnecting all wheel drive technology, which we believe is the most fuel efficient rapidly disconnecting system in the market, was recently selected by one of our major customers for a significant new global vehicle platform – opening up new commercial channels for us in the passenger car, crossover and sport utility vehicle markets. A strategic alliance with Fallbrook Technologies Inc. (Fallbrook) provides us the opportunity to leverage leading edge continuously variable planetary (CVP) technology into the development of advanced drivetrain and transmission solutions for customers in our ~~end markets. In 2014, we opened a new technology center in Cedar Park, Texas to support our CVP technology development initiatives.~~light vehicle market.

Additional engineering and operational investment is being channeled into ~~reinvigorating~~ our product portfolio and ~~capitalizing on~~ technology advancement opportunities. Combined engineering centers ~~that support all~~of our ~~operating~~Light Vehicle and Commercial Vehicle segments allow us the opportunity to better share technologies among these businesses. New engineering facilities in India and China were opened in the past few years and are now on line, more than doubling our engineering presence in the Asia Pacific region with state-of-the-art development and test capabilities that globally support each of our businesses. Additionally, in 2014, we opened a new technology center in Cedar Park, Texas to support our CVP technology development initiatives.

Geographic expansion — Our manufacturing and technology center footprint positions us to support customers globally - an important factor as many of our customers are increasingly focused on common powertrain solutions for global platforms. While growth opportunities are present in each region of the world, we have a primary focus on building our presence and local capability in the Asia Pacific region, especially India and China. In addition to new engineering facilities in ~~India and China,~~those countries, new gear manufacturing facilities were recently established in India and Thailand, and we recently announced plans to establish a new gear manufacturing facility in ~~recent years. We completed two transactions in 2011 – increasing~~Hungary. Over the ownership interest in our China-based joint venture with Dongfeng Motor Co., Ltd. (Dongfeng) to 50% and acquiring the axle drive head and final assembly business from our Axles India Limited (AIL) joint venture – which significantly increased our commercial vehicle driveline presence in the region. Wepast few years, we expanded our China off-highway activities and we believe there is considerable opportunity for growth in this market.

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. In January 2016, we completed the acquisition of Magnum^®Gaskets' (Magnum) aftermarket distribution business which includes the Magnum brand, product portfolio, existing customer contracts and distribution rights. The Magnum brand is the third largest aftermarket sealing brand in the U.S. and Canada, providing us with access to new customers for sealing products and an additional aftermarket channel for other products.

Selective acquisitions — Our current acquisition focus is to identify “bolt-on” or adjacent acquisition opportunities that have a strategic fit with our existing core businesses, particularly opportunities that support our growth initiatives and enhance the

value proposition of our customer product offerings. 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.~~growth and increased shareholder value. As discussed more fully in Note 3 of the consolidated financial statements in Item 1 of Part I, we recently entered into a definitive purchase agreement with SIFCO S.A., a leading producer of forged and machined components located in Brazil, to acquire certain manufacturing and other assets. Completion of this purchase is subject to closing conditions, including Brazil bankruptcy court and regulatory approvals. If completed, this purchase would enhance our vertically integrated supply chain, further strengthen our our position as a leading supplier of forged and machined components in the region, and allow us to assist our vehicle manufacturing customers satisfy local content requirements.

New commercial channels — In each of our operating segments, we have customer, geographic and product growth opportunities. By leveraging our relentless pursuit of customer satisfaction, innovative technology and differentiated products, we believe there are opportunities to open new, as well as further penetrate existing, commercial channels.

~~Cost~~Manufacturing excellence/cost management — Although we have taken significant strides to improve our profitability and margins, particularly through streamlining and rationalizing our manufacturing activities and administrative support processes, we believe additional opportunities remain to further improve our financial performance. We have ramped up our material cost efforts to ensure that we are rationalizing our supply base and obtaining appropriate competitive pricing. We have embarked on information technology initiatives to reduce and streamline systems and supporting costs. With a continued emphasis on process improvements and productivity throughout the organization, we expect cost reductions to continue contributing to future margin improvement.

Trends in Our Markets

Global Vehicle Production (Full Year)


				Actual					Actual
(Units in thousands)	Dana 2015 Outlook			2014	2013	Dana 2016 Outlook			2015	2014
North America
Light Truck (Full Frame)	4,000	to	4,100	3,834	3,632	4,400	to	4,500	4,136	3,834
Light Vehicle Engines	15,100	to	15,500	15,079	14,233	16,000	to	16,500	15,474	15,119
Medium Truck (Classes 5-7)	205	to	225	226	201	230	to	240	237	226
Heavy Truck (Class 8)	315	to	320	297	245	220	to	230	323	297
Agricultural Equipment	55	to	60	64	75	50	to	55	58	64
Construction/Mining Equipment	155	to	165	155	157	145	to	155	158	158
Europe (including Eastern Europe)
Light Truck	8,000	to	8,300	7,792	7,276	9,200	to	9,300	8,546	7,790
Light Vehicle Engines	22,000	to	22,500	21,440	20,836	22,500	to	23,000	22,570	21,510
Medium/Heavy Truck	410	to	430	397	400	440	to	445	434	397
Agricultural Equipment	195	to	205	220	244	190	to	195	202	220
Construction/Mining Equipment	300	to	310	298	298	290	to	295	299	301
South America
Light Truck	950	to	1,000	1,147	1,302	900	to	950	940	1,146
Light Vehicle Engines	2,400	to	2,600	3,178	3,775	2,100	to	2,150	2,439	3,176
Medium/Heavy Truck	85	to	95	167	218	70	to	80	88	167
Agricultural Equipment	30	to	35	43	54	25	to	30	32	43
Construction/Mining Equipment	10	to	15	17	20	10	to	15	13	17
Asia-Pacific
Light Truck	22,300	to	23,300	22,298	20,515	26,000	to	27,000	24,160	22,337
Light Vehicle Engines	48,000	to	49,000	46,589	45,213	48,500	to	49,500	47,209	46,497
Medium/Heavy Truck	1,350	to	1,450	1,574	1,522	1,450	to	1,500	1,383	1,573
Agricultural Equipment	680	to	700	710	788	645	to	665	676	710
Construction/Mining Equipment	400	to	425	509	555	390	to	400	405	509

North America

Light vehicle markets — ~~North America~~Improving economic conditions during the past few years have contributed to increased light vehicle sales and production levels in ~~2015 continue to benefit from economic conditions that have been relatively strong the past two years.~~North America. Release of built-up demand to replace older vehicles, greater availability of credit, ~~reduced unemployment and improving~~stronger consumer confidence and other factors have ~~stimulated~~combined to stimulate new vehicle sales. ~~Lower fuel prices have also reduced vehicle operating costs and provided a sales stimulus, with the light truck segment especially receiving increased consumer interest.~~ Light vehicle sales in 2015 increased about 6% from 2014, with sales that year being up 6% from 2013. The market has remained strong in 2016 with sales in this year's first nine months up 2% from the same period of 2015. Many of our programs are focused in the full frame light truck segment. Sales in this segment were especially strong the past two years, being up about 9% in 2015 and 8% in 2014. Sales of vehicles in this segment during the first nine months of 2016 were 6% higher than the comparable period of last year. Production levels were reflective of the stronger light vehicle sales. Production of approximately 17.5 million light vehicles in 2015 ~~were about 5%~~was 3% higher than in 2014, after production increased about 5% the ~~same period last~~preceding year. Light vehicle engine production was similarly higher, up 2% in 2015 and 6% in 2014. In the key full frame light truck segment, ~~where more~~production levels increased about 8% in 2015 compared with an increase of ~~our programs are focused, sales~~6% in 2014. Production levels in the first nine months of this year ~~were about 9%~~continued to follow the sales pattern, with light vehicle production higher than ~~in 2014. Light vehicle production of around 13.2 million units was up about 3% from the~~last year's first nine months ~~of 2014, with~~by about 3%, light vehicle engine build up 5% and full frame light truck production up 9%. Days’ supply of total light vehicles in ~~this year's first nine months higher by 2%.~~the U.S. at the end of September 2016 was around 65 days, up slightly from 61 days at December 2015 and 59 days at the end of September 2015. In the full frame light truck segment, this year's strong nine-month ~~2015~~ production ~~was about 5% stronger than in the same period last year. Inventory~~raised inventory levels ~~of total light vehicles in the U.S. continue to be near normal levels. Inventory of around 59 days' supply~~ at the end of September ~~2015 compares with 61~~to 74 days, up from 62 days at the end of ~~2014~~2015 and ~~64 days at the end of last year's third quarter. With the increased level of light truck sales, inventories have declined in the past year. Full frame light truck inventory of~~ 69 ~~days' supply at the end of September 2015, although higher than the 63 days at the end of 2014, compares favorably with the 81~~ days at the end of September ~~2014.~~2015.

~~Our~~Steady employment levels, low fuel prices and favorably trending consumer confidence are expected to provide a generally solid economic climate in North America the remainder of this year. As such, we have maintained our full year ~~2015 production expectations~~2016 outlook for ~~full frame trucks and~~ light vehicle engine production ~~are unchanged from our July outlook. At 4.0~~at 16.0 to ~~4.1~~16.5 million units ~~for the year,~~and full frame light truck production of 4.4 to 4.5 million units. At these levels, we would ~~be up 4 to 7% from 2014, while~~expect light vehicle engine production ~~of 15.1~~ to ~~15.5 million units would~~ be ~~flat~~up 3 to ~~up 3% versus 2014.~~7% compared with 2015 and full frame light truck production to be higher by about 6 to 9%.

Medium/heavy vehicle markets — ~~As with~~Similar to the light vehicle market, ~~medium/heavy~~the commercial vehicle segment benefited from an improving North America economy in recent years, leading to increased medium duty Classes 5-7 truck production ~~in North America has increased over~~ the past ~~couple of years with improving economic conditions. Production~~two years. After increasing 12% in 2014, medium duty production increased another 4% in 2015. In the ~~heavy-duty~~ Class 8 ~~truck market, after increasing significantly~~segment, production levels increased 21% in ~~2011~~2014 and ~~2012, declined~~another 8% in ~~2013 as truck buyers in this segment were more cautious~~

~~regarding the pace of economic recovery and many opted~~2015 to defer the replacement of existing vehicles. During the last quarter of 2013 and continuing into 2014, the order book for Class 8 vehicles began strengthening. That trend continued through 2014 – annualreach roughly 323,000 units. Although medium duty production ~~was up more than 20% – and into the first quarter of 2015. New orders began slowing somewhat in this year's second quarter and remained at relatively consistent levels~~ in this year's third ~~quarter. As a result, year-over-year nine-month 2015~~quarter declined 12% from the same period last year, production ~~increases were relatively strong. Heavy-duty Class 8 production in~~over the first nine months of this year has been relatively stable, being up about 2% from the same period last year. In the Class 8 segment, order levels and production began declining in the second half of 2015. Class 8 production in this year's third quarter is about 39% lower than the comparable 2015 period, with nine-month production down about 29% from 2015.

Orders for Class 8 trucks continued to weaken in this year's third quarter, as on-highway freight demand levels are being met with existing trucks and operators are taking a cautious view until sustained increases in demand levels are apparent. As a result, we've reduced our full year Class 8 production outlook to 220,000 to 230,000 vehicles from our previous expectation of ~~around 248,000~~230,000 to 240,000 units, ~~was~~placing current year production about ~~12% higher~~29 to 32% lower than in 2015. Our medium duty production outlook is unchanged at 230,000 to 240,000 units. At this level, full year 2016 medium duty production will be about the same as last year, with build levels in the last half of this year being about 15% lower than in the first ~~nine months of 2014. Medium duty Classes 5-7 production of around 171,000 units in the first nine months of 2015 was about 2% higher than production during the same period last year.~~

With the North America economy continuing to show modest improvement and lower fuel prices reducing operating costs, our outlook for full year 2015 medium/heavy production levels is unchanged from July. We now expect full year 2015 Class 8 production to be in a range of 315,000 to 320,000 units, narrowing our July 2015 outlook, which would result in full year 2015 production being about 6 to 8% higher than in 2014. Our full year 2015 outlook for medium-duty Classes 5-7 production is 205,000 to 225,000 units, although we expect production will come in near the high end of this range – relatively comparable to 2014.six months.

Markets Outside of North America

Light vehicle markets — ~~Although~~Signs of an improved overall European economy have been evident, albeit mixed at times, ~~signs~~during the past few years. Reflective of ~~economic stability~~a modestly improved economy, light vehicle production levels have increased with light vehicle engine production being up about 5% in ~~Europe began to emerge in 2013, with modest improvements evident~~2015 after increasing 3% in 2014 ~~that have continued into 2015. Reflective of this~~and light truck production being higher by 9% in 2015 after being up about 7% in 2014. A stable to modestly improving ~~overall~~current economic environment ~~Europe~~contributed to continued year-over-year production increases, with light vehicle engine build in the first nine months of 2016 being about 2% higher than in the same period last year and light truck production in this year's first nine months increasing about 8%. The United Kingdom's recent decision to withdraw from the European Union has cast an element of uncertainty around continued economic improvement in the region. At present, the near-term effects on production levels are expected to remain relatively moderate. With stable to improving economic conditions across the entire region for the remainder of the year, our full year forecast that has light vehicle engine production about the same as last year is upunchanged, while we've increased our full year 2016 outlook for light truck production to a level that is about 8 to 9% ~~over~~higher than the previous year. The economic climate in most South America markets the past couple years has been weak, volatile and challenging. Light truck production declined 12% in 2014 and was down another 17% in 2015. Light vehicle engine production was similarly down 16% in 2014 and another 22% in 2015. During the first nine months of 2016, we have seen continuing market weakness. Nine-month light vehicle engine production was 18% lower than the same period of ~~2014~~2015. While third quarter 2016 year-over-year light truck production increased by about 5%, nine-month year-over-year production is down about 1%. Our full year forecast for South

America is unchanged and reflects an expectation that the region will remain relatively weak over the remainder of this year, with full year light truck production flat to down 4% and light vehicle engine ~~build is~~production down about 13% compared with 2015. The Asia Pacific markets have been relatively strong the past few years. Light truck production increased 9% in 2014 and was up another 8% in 2015, while light vehicle engine production increased 3% in 2014 and another 1% in 2015. In the first nine months of 2016, light truck production in the region was up about 11% compared with the same period of 2015, with year-over-year nine-month light vehicle engine build up 5%. ~~We expect~~On the ~~overall improving economic climate to continue~~strength of stronger demand, primarily in ~~this year's fourth quarter. Our~~China and India, we have increased our full year light truck production outlook to a level that reflects an increase of 8 to 12% from 2015. Our full year 2016 outlook for light vehicle engine production is ~~up slightly from July 2015 and we raised the lower end of our~~unchanged, with year-over-year light vehicle engine build ~~outlook, as we now expect~~expected to be ~~nearer the upper end of the range. Our current outlook for light truck and light vehicle engine production has us up~~higher by about 3 to 7% from 2014. Our South America markets have been challenging and volatile in recent years, and as anticipated a weak economic climate in those markets is adversely impacting us in 2015. Light truck production in this year's first nine months was down about 14% compared to the same period of 2014 and light vehicle engine production was down about 18%5%. We expect markets in South America to remain weak throughout 2015 and into 2016. Our current light truck and light vehicle engine production outlooks have been lowered from July 2015, reflecting expected full year 2015 light truck production now being down 13 to 17% from 2014 and light vehicle engine build being at a level 18 to 24% lower than last year. The Asia Pacific region has been relatively strong the past couple years, principally on the strength of stronger production in China. Although the rate of growth in China may be slowing, the overall economic climate in the region continues to be relatively strong. Light vehicle truck production levels in the Asia Pacific region increased about 6% in the first nine months of 2015 as compared to the same period in 2014 while light vehicle engine build was comparable to last year. For the full year of 2015, our outlook, which forecasts light truck production being flat to 4% higher than in 2014 and light vehicle engine build being up 3 to 5%, remains unchanged.

Medium/heavy vehicle markets — Some of the same factors referenced above that affected light vehicle markets outside of North America similarly affected the medium/heavy ~~markets. An improving economic environment~~markets, albeit with improvements in ~~Europe contributed~~the medium/heavy truck market being a little slower to manifest. Signs of a strengthening European market emerged in 2015 with medium/heavy truck production in 2015 being up about 10% from the preceding year. In this year's first nine months, medium/heavy truck production increased about 8% compared with the first nine months of ~~2015~~last year. For the full year 2016, our outlook is unchanged. We expect Europe medium/heavy truck production to be up modestly from 2015. A weakening South America economic climate in 2014 led to medium/heavy truck production declining about 23% in 2014 and another 49% in 2015. As with the light vehicle markets, we have seen additional weakness in South America in early 2016. This year's third quarter truck production was down 14% from an already weak third quarter in 2015. Nine-month medium/heavy truck production is down 21% from the same period last year. Our full year 2016 outlook for South America reflects continued weakness over the remainder of the year, with full year medium/heavy truck production down around 9 to 20%. The medium/heavy truck market in Asia Pacific was sluggish the past two years, being up a modest 3% in 2014 and declining about 8%12% in 2015 as a slowdown in the China market materialized. While the China market is expected to be comparable to up modestly in 2016, an improving India market is expected to help improve production in the region. Medium/heavy truck production in this year's first nine months was up about 13% from the same period of ~~2014.~~last year. With ~~a stable~~the slightly stronger demand levels of the third quarter expecting to ~~modestly improving business environment expected to persist through the rest of this year,~~continue near term, we have increased our ~~current outlook for~~ full year ~~2015 production in Europe was increased from July 2015, now reflecting a 3 to 8% increase compared with full year 2014. With the challenging economic climate in South America,~~2016 medium/heavy truck production ~~levels~~outlook to a level 5 to 8% higher than in the first nine months of this year were down about 47% from the same period of 2014. With continued market weakness in the fourth quarter of this year, we now expect the full year outlook for South America production to be down about 43 to 49% from a relatively weak level of production in 2014. Although the light vehicle markets in Asia Pacific have been relatively stable compared with 2014, medium/heavy truck production levels have been weaker, in part due to slowing construction activity in China. Asia Pacific medium/heavy truck production decreased about 14% in the first nine months of 2015 compared to the same period last year. With additional weakening in China, our current outlook is reduced slightly from July 2015, with full year 2015 production now expected to be down 8 to 14% relative to 2014.2015.

Off-Highway Markets — Our ~~Off-highway~~off-highway business has a large presence outside of North America, with more than 75% of its sales ~~supplied by operations in~~coming from Europe and ~~about~~more than 10% from South America and Asia Pacific combined. We serve several segments of the diverse off-highway ~~markets,~~market, including ~~construction/~~construction, agriculture, mining ~~agriculture~~ and material handling. Our largest markets are the construction/mining and agricultural equipment segments. ~~Demand levels were~~After experiencing increased global demand in 2011 and 2012, these markets have been relatively weak over the past three years. Global demand in the agriculture market was down about 11% in 2014 and ~~2013. Although market demand was relatively stable during the first half of 2015, some weakening is now appearing~~7% in ~~the second half of the year.~~2015. The construction/mining segment weakened about 4% in 2014 and 11% in 2015. Our global Off-highway sales exclusive of currency impacts for the first nine months of this year are down 1% from the same period of 2014, as new business has helped offset the somewhat weaker demand levels. We reduced our full year outlook is largely unchanged from our previous outlook in July, ~~2015 production expectation for the agriculture segment~~with demand levels in ~~all regions, while also reducing our prior outlook for construction/mining segment production in Asia Pacific. Our current full year 2015 outlook has global agriculture segment~~

~~production~~both segments now expected to range from down 4modestly to ~~7% from 2014, with global construction/mining segment production~~ down ~~7 to 12%~~5% compared to ~~last year.~~2015.

Foreign Currency and Brexit Effects

Weaker international currencies relative to the U.S. dollar ~~have~~ had a significant impact on our sales and results of operations ~~during~~in 2015. The United Kingdom's recent decision to exit the ~~year. For~~European Union ("Brexit") has provided further uncertainty and potential volatility around European currencies, along with uncertain effects of future trade and other cross-border activities of the United Kingdom with the European Union and other countries. Approximately 54% of our consolidated sales in the first nine months of ~~this year, approximately 54% of our consolidated sales~~2016 were outside the U.S., with euro zone countries, the United Kingdom and Brazil accounting for approximately ~~37%~~40%, 6% and 8%6% of our non-U.S. sales. Although sales in Argentina are less than 5% of our non-U.S. sales, a weaker Argentine peso has significantly impacted this year's sales. Translation of our international activities at average exchange rates ~~for the first nine months of~~in 2015 as compared to average rates ~~for the same period of~~in 2014 reduced sales by ~~$413,~~$516, with ~~$223~~$268 attributable to a weaker euro and ~~$73~~$91 to a weaker Brazil real. ~~Our current outlook for~~In this year's first nine months, weaker international currencies compared to the first nine months of last year reduced sales by $145. A weaker Brazil real and Argentina peso reduced South America sales by $70, with a weaker euro, British pound and South Africa rand reducing Europe region sales by $35. With a nominal net reduction of sales due to currency effects of $5 in this year's fourth quarter, our full year ~~2015~~2016 sales outlook anticipates overall weaker international currencies reducing year-over-year sales by about $150. Our fourth quarter outlook is based on aan assumed euro/U.S. dollar rate of ~~1.12 and~~1.10, a U.S. dollar/Brazil real rate of ~~3.80~~3.3 and a British pound/U.S. dollar rate of 1.30. At sales levels in our current outlook for calendar 2016, a 5% movement on the ~~fourth quarter, putting the currency impact of translating international operations at weaker rates at around $500 for the full year of 2015. A movement of 5% on these~~ euro, ~~and~~ Brazil real and British pound rates would impact ~~fourth-quarter 2015~~our annual sales ~~in our outlook~~ by approximately ~~$16~~$65, $10 and ~~$3,~~$10, respectively.

Brazil Market

Reduced market demand resulting from the weak economic environment in Brazil in 2015 ~~has~~ led to production levels in the light vehicle and medium/heavy duty vehicle markets that ~~are~~were lower by about ~~18%~~22% and ~~47% in the first nine months of this year when compared to the same period of~~44% from 2014. As a consequence, sales by our operations in Brazil for 2015 were $240, down from $505 the preceding year. Continuing weakness occurred in this year's first nine months, ~~of 2015 were $209, down from $408 for~~with third quarter and nine-month light vehicle production being about 9% and 16% lower than the same ~~period~~periods of 2015. In the medium/heavy truck market, third quarter 2016 production was down about 15% and nine-month 2016 production was lower by 22% from the comparable periods of last year. For the full year 2016, Brazil light vehicle and medium/heavy truck production is expected to be down about 12% and 20% from last year. Our medium/heavy duty presence is particularly significant, with approximately ~~74%~~75% of our 2015 and nine-month 2016 Brazil sales ~~in this year's first nine months~~ originating in our Commercial Vehicle operating segment. In response to the challenging economic conditions in this country, ~~we've~~we implemented restructuring and other cost reduction actions ~~this year.~~in 2015 and continue to trim costs to the extent practicable. As discussed in ~~the Critical Accounting Estimates section of this~~Note 3 to our consolidated financial statements in Item 2,1, one of our major suppliers is operating with judicial oversight under reorganization proceedings in Brazil.

~~Operations in Venezuela~~

~~The operating, political~~ We are continuing to operate under an interim agreement with this supplier while also pursuing the purchase of certain assets from this supplier through the judicial reorganization proceedings. Completion of this acquisition is subject to bankruptcy court and ~~economic environment in Venezuela in recent years was very challenging. Foreign exchange controls restricted~~regulatory approvals. If completed, this transaction will enhance our ~~ability~~vertically integrated supply chain capability and further assure uninterrupted product supply to ~~import required parts and material and~~ satisfy ~~the related U.S. dollar obligations. Production activities were curtailed for most of 2014 as~~ our major original equipment customers suspended production, with a limited amount of activity coming back on line later in the year. Our sales in Venezuela during 2014 approximated $110 as compared to $170 in 2013. Results of operations were adversely impacted by the reduced production levels making break-even operating performance a significant challenge. Further, devaluations of the bolivar along with other foreign exchange developments provided added volatility to results of operations and increased uncertainty around future performance.

In December 2014, we entered into an agreement to divest our operations in Venezuela (the disposal group) to an unaffiliated company for no consideration. We completed the divestiture in January 2015. In connection with the divestiture, we entered into a supply and technology agreement whereby Dana will supply product and technology to the operations at competitive market prices. Dana has no obligations to otherwise provide support to the operations. The disposal group was classified as held for sale at December 31, 2014, and we recognized a net charge of $77 – an $80 loss to adjust the carrying value of the net assets to fair value less cost to sell, with a reduction of $3 for the noncontrolling interest share of the loss. These assets and liabilities were presented as held for sale on our December 31, 2014 balance sheet. See Note 2 to our consolidated financial statements in Item 1 of Part I for additional information. With the completion of the sale in January 2015, Dana has no remaining investment in Venezuela.customer commitments.

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 and brass. The effects of changes in commodity prices are reflected directly in our purchases of commodities and indirectly through our purchases of products such as castings, forgings, bearings and component parts that include commodities. Most of our major customer agreements ~~have provisions which allow us to pass~~provide for the ~~effects~~sharing of significant commodity price changes ~~through to~~with those customers. Where such formal agreements are not present, we have historically been successful implementing price adjustments that largely compensate for the inflationary impact of material costs. Material cost changes will customarily have some impact on our financial results as ~~contractual recoveries and inflation-based~~customer pricing adjustments typically lag ~~the cost increases.~~commodity price changes.

~~Lower material~~Higher commodity prices, driven in part by inflationary costs ~~benefited~~in Argentina, increased our ~~results for~~costs by approximately $8 in the third quarter of ~~2015 as compared to the corresponding period~~2016, with higher commodity prices increasing costs in ~~2014~~this years first nine months by ~~$6 after having no net effect on~~$3. Lower commodity prices benefited our results ~~for the first half of the year. Last year's third quarter and nine-month results reflected increased costs of about $3 and $29 versus 2013. The net effect of material recovery and other pricing~~

~~actions reduced sales in this year's third quarter~~ by ~~$9, with the year-over-year nine-month impact being an increase in sales of $9. In 2014, these actions increased sales~~$6 in the third quarter and first nine months of ~~2014 by $26 and $39 versus~~2015 as compared to the corresponding periods in 2014. Material recovery and other pricing actions increased sales by $12 in this year's third quarter and by $7 for the first nine months of ~~2013.~~2016. In 2015, these actions reduced third-quarter sales by $9 and increased nine-month 2015 sales by $9.

Sales, Earnings and Cash Flow Outlook


	2015 Outlook	2014		2013		2016 Outlook	2015		2014
Sales	~ $6,050	$	6,617	$	6,769	~ $5,800	$	6,060	$	6,617
Adjusted EBITDA	~ $675	$	746	$	745	~ $655	$	652	$	746
Net cash provided by operating activities						~ $440	$	406	$	510
Purchases of property, plant and equipment						~ $320	$	260	$	234
Free Cash Flow	~ $170	$	276	$	368	~ $120	$	146	$	276

Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. See the Non-GAAP Financial Measures discussion below for definitions of our non-GAAP financial measures and reconciliations to the most directly comparable U.S. generally accepted accounting principles (GAAP) measures. We have not provided a reconciliation of our Adjusted EBITDA outlook to the most comparable GAAP ~~measures.~~measure of net income. Providing net income guidance is potentially misleading and not practical given the difficulty of projecting event driven transactional and other non-core operating items that are included in net income, including restructuring actions, asset impairments and income tax valuation adjustments. 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.

During the past ~~couple~~three years, weweaker international currencies relative to the U.S. dollar were the most significant factor reducing our sales. The sales reduction attributable to currency over the three-year period approximated $900, with a reduction of more than $500 occurring in 2015. We divested our Venezuela operation in January 2015, which further reduced consolidated sales by approximately $100. Adjusted for currency and divestiture effects, sales in the three preceding years have

been relatively stable. We experienced uneven end user markets, with some being relatively strong and others somewhat weak, and the conditions across the regions of the world differing quite dramatically. ~~Considering~~New business with customers has largely offset the lower sales attributable to overall weaker end user demand. For 2016, we now expect full year sales to approximate $5,800, the low end of the range of our ~~end markets and regional economies,~~July outlook. We expect the currency effect on ~~balance,~~sales for the remainder of this year to be nominal – about $5. When included with the currency effect ~~of market volumes~~ on our sales has been relatively stable. Weaker international currencies relative to the U.S. dollar were the most significant factor, with currency effects reducing sales by about $160 in 2013 and an additional $210 in 2014. In 2015, further weakening of international currencies has been significant, reducing sales in this year's first nine months, ~~by $413 versus~~ the ~~same period of 2014, with about 72% of the reduction being attributable~~full year currency effect in 2016 due to the euro and Brazil real. The full-year effect of weaker currencies in 2015 as compared to 2014 exchange rates is expected to approximate $500, with an additional $110 reduction in sales resulting from the January 2015 divestiture of our operations in Venezuela. These currency and divestiture impacts more than offset a net sales increase from overall stronger market demand and new business. The effects of weaker international currencies ~~and~~will approximate $150. The lower full year expectation compared with our July outlook is primarily attributable to weaker demand ~~in Brazil that caused us to lower our full year 2015 outlook earlier this year stabilized this past quarter and were not significant factors~~levels in the ~~reduction of our sales outlook to the current $6,050 from our July 2015 outlook of $6,200 to $6,300. Our most recent full year sales outlook reflects decreased customer demand in our~~ North America ~~commercial~~heavy truck, global off-highway and Brazil markets more than offsetting the benefits of stronger light vehicle business, in part due to supply chain constraints encountered during the first half of this year and competitive pressures. Our current outlook is also reflective of further weakening of demand in the off-highway construction and agriculture markets in North America and Europe.markets.

~~With the reduced sales outlook outlined above, we've reduced our full year 2015 Adjusted EBITDA outlook to about $675 from our July 2015 outlook of $720 to $730. Throughout~~Over the past ~~few~~three years, adjusted EBITDA margin as a percent of sales has remained relatively constant at around 11% despite certain markets being weak and volatile. Where practicable, we ~~placed significant~~have aligned our cost with weaker demand levels in certain markets. We continue to focus on margin improvement through right sizing and rationalizing our manufacturing operations, implementing other cost reduction initiatives and ensuring that customer programs ~~were~~are competitively priced. ~~In combination~~Although our sales outlook has weakened some, with a continued focus on cost and new business coming on at competitive rates, we expect full year 2016 adjusted EBITDA margin to be around 11.2% – the high end of our July outlook and an ~~improved~~improvement of 40 basis points over 2015. Further margin improvement beyond 2016 is anticipated as we expect to see increased end user demand in certain markets, along with continued benefit from additional new business and ~~relatively stable global economic environment, these efforts were the primary drivers enabling us to maintain Adjusted EBITDA margins of more than 11.0% of sales.~~cost reduction actions.

Free cash flow generation has been strong the past ~~couple~~three years as we benefited from strong earnings and closely managed working capital and capital spend requirements. Free cash flow in ~~2013 benefited, in part, from reduced inventory levels and the receipt of $28 of interest relating to a callable payment-in-kind note receivable. With the sale of this note in~~ 2014 ~~free cash flow~~ benefited from the ~~additional~~ receipt of $40 of ~~interest.~~interest from the sale of an in-kind note receivable. Lower pension contributions, restructuring payments and cash taxes also benefited free cash flow in 2014, while increased new program launches resulted in higher capital spending. ~~We currently expect~~The lower free cash flow in 2015 was primarily due to lower earnings and increased capital spend to support new program launches, with lower cash taxes and restructuring payments providing a partial offset. During the first quarter of 2016, we were successful in being selected by certain of our major customers for new programs. Although not scheduled to begin production until 2018, these programs require capital investment this year. As such, we increased our full year 2016 July outlook for capital spend by $40 to a range of $320 to $340 and correspondingly reduced our 2016 free cash flow outlook to $120 to $140. Our current outlook is full year free cash flow of $120. Capital spend is expected to be around ~~$170, down~~$320. Other free cash flow elements were largely unchanged from our July ~~2015 outlook principally as a result of lower earnings. Our capital spend requirements in 2015 are now expected to be about $280, higher than the past two years due to new program launches this year.~~outlook. Net interest will consume cash of around ~~$90,~~$100, with estimated cash taxes ~~will require~~being about $90, ~~and~~ restructuring expenditures ~~will approximate $20. Pension~~about $20 and pension contributions ~~are expected to again be relatively low at~~ around $15 ~~as we do not expect to make contributions to our U.S. defined benefit plans in 2015 based on their present funding levels.~~– all relatively comparable with 2015.

Among our Operational and Strategic Initiatives are increased focus on and investment in product technology – delivering products and technology that are key to bringing solutions to issues of paramount importance to our customers. This, more than anything, is what ~~we believe~~ will position us for profitable future growth. Our success on this front is measured, in part, by our sales backlog which is net new business ~~that we have~~ received that will be launching in the future and adding to our base annual sales. This backlog excludes replacement business and represents incremental sales associated with new programs for which we have received formal customer awards. At December 31, ~~2014,~~2015, our sales backlog of net new business for the ~~2015~~2016 through ~~2017~~2018 period was ~~$730.~~$750. This current backlog compares to a three-year sales backlog at the end of ~~2013~~2014 that approximated ~~$560~~$680 when adjusted for current exchange rates and market demand – an increase of ~~30%~~10%. ~~The higher returns associated with this new business are expected to help drive increased future Adjusted EBITDA margins.~~

~~Results of Operations~~

Summary Consolidated Results of Operations (Third Quarter, ~~2015~~2016 versus ~~2014)~~2015)


	Three Months Ended September 30,													Three Months Ended September 30,
	2015					2014								2016				2015
	Dollars			% of Net Sales		Dollars			% of Net Sales		Increase/ (Decrease)			Dollars		% of Net Sales		Dollars			% of Net Sales		Increase/ (Decrease)
Net sales	$	1,468				$	1,637				$	(169	)	$	1,384			$	1,468				$	(84	)
Cost of sales	1,255			85.5	%	1,397			85.3	%	(142		)	1,176		85.0	%	1,255			85.5	%	(79		)
Gross margin	213			14.5	%	240			14.7	%	(27		)	208		15.0	%	213			14.5	%	(5		)
Selling, general and administrative expenses	98			6.7	%	97			5.9	%	1			99		7.2	%	98			6.7	%	1
Amortization of intangibles	4					10					(6		)	2				4					(2		)
Restructuring charges, net	1					2					(1		)	17				1					16
Impairment of long-lived assets	(36		)								(36		)					(36		)			36
Other income, net	2					20					(18		)	9				2					7
Income from continuing operations before interest expense and income taxes	76					151					(75		)
Income before interest expense and income taxes														99				76					23
Interest expense	31					30					1			27				31					(4		)
Income from continuing operations before income taxes	45					121					(76		)
Income before income taxes														72				45					27
Income tax expense (benefit)	(77		)			29					(106		)	13				(77		)			90
Equity in earnings of affiliates	—					2					(2		)	2				—					2
Income from continuing operations	122					94					28
Loss from discontinued operations	—					(1		)			1
Net income	122					93					29			61				122					(61		)
Less: Noncontrolling interests net income	3					3					—			4				3					1
Net income attributable to the parent company	$	119				$	90				$	29		$	57			$	119				$	(62	)

Sales — The following table shows changes in our sales by geographic region.


	Three Months Ended September 30,							Amount of Change Due To									Three Months Ended September 30,							Amount of Change Due To
	2015		2014		Increase/(Decrease)			Currency Effects			Acquisitions (Divestitures)			Organic Change			2016		2015		Increase/(Decrease)			Currency Effects			Acquisitions (Divestitures)		Organic Change
North America	$	786	$	780	$	6		$	(14	)	$	—		$	20		$	726	$	786	$	(60	)	$	(4	)	$	2	$	(58	)
Europe	407		462		(55		)	(72		)				17			373		407		(34		)	(10		)			(24		)
South America	88		203		(115		)	(33		)	(22		)	(60		)	94		88		6			(15		)			21
Asia Pacific	187		192		(5		)	(17		)				12			191		187		4								4
Total	$	1,468	$	1,637	$	(169	)	$	(136	)	$	(22	)	$	(11	)	$	1,384	$	1,468	$	(84	)	$	(29	)	$	2	$	(57	)

Sales in the third quarter of ~~2015~~2016 were ~~$169~~$84 lower than in the same period in ~~2014.~~2015. Weaker international currencies decreased sales by ~~$136~~$29, and the ~~divestiture~~acquisition of ~~our operations in Venezuela reduced~~Magnum earlier this year added sales ~~by $22.~~of $2. The organic change in sales, which we define as the change in sales excluding currency and acquisition or divestiture impacts, includes a volume-related decrease of $69 that resulted primarily from ~~significantly~~weaker global Off-Highway demand and lower ~~unit~~commercial vehicle production ~~levels~~ in North America and Brazil, ~~that were~~ partially offset by stronger overall light vehicle volume ~~levels~~ in ~~other regions~~North America, Europe and Asia Pacific and contributions from new business. Cost recovery pricing actions increased sales by $12.

~~Stronger light vehicle production levels in~~The North America ~~were largely responsible for the 3%~~ organic sales ~~increase~~reduction of 7% was driven principally by a decline in ~~this region. Light vehicle engine~~Class 8 production of about 39% and weaker Off-Highway demand. These effects were partially offset by increases in full frame light truck production ~~were 4%~~ and ~~10% stronger than last year. New~~ light vehicle programs coming on line over the past year also contributed to increased year-over-year third quarter sales. Partially offsetting these favorable light vehicle market developments were lower production in the medium/heavy vehicle marketengine build of ~~about~~1% and 2% ~~and somewhat weaker off-highway market demand. Third quarter 2015~~respectively, along with higher sales ~~were also lower due to reduced demand~~ from ~~commercial vehicle customers, partly a result of supply chain constraints that also affected our first half 2015 performance.~~new customer programs.

Excluding currency effects, principally from a weaker ~~euro, third quarter~~South African rand and British pound, our sales in Europe in ~~2015~~the third quarter of 2016 were ~~4% higher~~down 6% from 2015. Weaker Off-Highway demand more than ~~in 2014. Growth in~~offset the benefit from light truck ~~and medium/heavy truck~~ production ofbeing higher by about ~~12% and an increase in light engine production of around 7% were the primary drivers, with reduced off-highway market demand providing a partial offset.~~4%.

South America sales in this year's third quarter were impacted by a weaker ~~currencies in Brazil, Argentina and Colombia and the divestiture of our operations in Venezuela.~~Argentine peso, partially offset by a stronger Brazilian real. Excluding ~~these~~currency effects, sales were ~~down 30%~~up 24% from the same period in ~~2014.~~2015. The organic sales ~~decrease in the region was primarily driven by reductions in medium/heavy truck production levels of around 49% and lower light truck and light vehicle engine build of about 15% and 21%.~~

~~Asia Pacific third quarter 2015 sales were down slightly from 2014 due to currency effects. The organic sales~~ increase ~~of 6%~~ in the region was driven ~~principally~~largely by ~~stronger~~pricing actions, primarily recovery of inflationary cost increases in Argentina, an increase in light truck production of about 5% and contributions from new customer programs. These items more than offset the effects of medium/heavy truck production levels being about 14% lower.

Asia Pacific sales ~~volumes~~ in this year's third quarter were relatively comparable to 2015. Weaker currencies in Thailand, China and India contributed to the currency-related sales reduction. The organic sales increase resulted primarily from increased light and ~~increased off-highway sales~~commercial vehicle production levels in ~~our operation in China.~~the region, partially offset by weaker Off-Highway vehicle demand.

Cost of sales and gross margin — Cost of sales ~~for~~declined $79, or 6%, in the third quarter of ~~2015 declined $142, or 10%,~~2016 when compared to the ~~third quarter of 2014.~~same period in 2015. Similar to the ~~reduction in~~factors affecting sales, the ~~change~~reduction was primarily due ~~primarily~~ to currency ~~effects.~~effects and lower overall sales volumes. Cost of sales as a percent of ~~sales in~~ this year's ~~third quarter~~sales was 2050 basis points ~~higher~~lower than in the same period of last year. ~~Material cost savings reduced~~Lower material costs contributed $12 to lower year-over-year cost of sales in ~~this~~2016 along with other cost reduction initiatives. The year-over-year comparison also benefited from a $6 charge in last year's third quarter ~~by $21, including $6 from lower commodity costs. Lower warranty activity reduced costs by $4. The material and warranty cost savings were~~for environmental remediation. These benefits more than offset ~~by a $6~~the underabsorption of cost associated with lower sales volumes and an increase in ~~environmental expense, a $2 increase in engineering and product development expense, higher new program launch costs~~warranty cost of ~~about $2 and other cost increases, partly due to the volume reductions in our South America commercial vehicle business where our actions to align cost with the lower demand level are limited.~~$7.

Gross margin of ~~$213~~$208 for the third quarter of ~~2015~~2016 decreased ~~$27~~$5 from the same period in ~~2014,~~2015, representing 15.0% of sales in 2016 as compared to 14.5% of sales in ~~2015 as compared to 14.7% of sales in 2014.~~2015. The 2050 basis point ~~reduction~~increase in gross margin was principally driven by ~~overall lower~~the cost of sales ~~volumes with net savings on material and warranty providing~~factors referenced above that contributed to costs being reduced by a ~~partial offset.~~higher rate than the decrease in sales.

Selling, general and administrative expenses (SG&A) — SG&A expenses in ~~2015~~2016 were ~~$98 (6.7%~~$99 (7.2% of sales) as compared to ~~$97 (5.9%~~$98 (6.7% of sales) in ~~2014. This year's third quarter included a one-time expense of $5 for executive separation and transition related actions. Exclusive of this item, salaries~~2015. Salary and benefits ~~expense was~~expenses in 2016 were $4 lower ~~by $2,~~than in 2015, while selling ~~expense~~ and other discretionary spending ~~also declined $2.~~increased $5, due in part to a higher level of trade show and project activity in this year's third quarter.

Amortization of intangibles — The reduction of $6$2 in amortization of intangibles iswas primarily attributable to certain customer related intangibles becoming fully amortized.

Restructuring charges — Restructuring charges of $17 in the third quarter of 2016 included charges of $14 for separation costs in connection with headcount reduction actions in our Off-Highway segment that are being implemented as a result of continuing weak demand levels in this business. The remaining expense in 2016 and that recognized in the third quarter of 2015 ~~and 2014 are~~ related primarily to ~~continuing employee separation and exit costs associated with~~ previously announced restructuring actions.

Impairment ~~charges~~ of long-lived assets~~— Reference~~ —Reference is made to Note 23 of the consolidated financial statements in Item 1 of Part I for discussion of charges recognized in the third quarter of 2015 in connection with an impairment of long-lived assets attributable to an exclusive supply relationship with a South American supplier.

Other income, net — The following table shows the major components of other income, net.

Three Months Ended
September 30,
2015 2014
Interest income $ 4
$ 5
Government grants and incentives 1

Foreign exchange gain (loss) (4 ) 6
Strategic transaction expenses (1 ) (2 )
Insurance recoveries

2
Other 2
9
Other income, net $ 2
$ 20

Effective March 31, 2014, we ceased using the official exchange rate of 6.3 bolivars per U.S. dollar and began using the Complementary System of Foreign Currency Administration (SICAD) rate, which was 10.7 bolivars per U.S. dollar (as published by the Central Bank of Venezuela) at March 31, 2014 to remeasure the financial statements of our Venezuelan subsidiaries. The SICAD rate declined to 12.0 bolivars per U.S. dollar in last year's third quarter, resulting in a remeasurement

charge of $3. During the third quarter of 2014, we realized a $1 gain as the National Center for Foreign Commerce (CENCOEX) approved a portion of our pending claims to settle U.S. dollar obligations at the official exchange rate of 6.3. Also during the third quarter of 2014, we realized a gain of $8 on the sale of U.S. dollars through SICAD 2 at an average rate of 49.9 bolivars per U.S. dollar. These Venezuela currency-related items resulted in a net currency gain of $6 in the third quarter of 2014. See Note 1 to our consolidated financial statements in Item 8 of our 2014 Form 10-K for a comprehensive discussion of Venezuela's exchange rate environment.

In the third quarter of 2014, we received a payment of $2 from the liquidation proceedings of an insolvent insurer carrier. Additionally, in last year's third quarter, as part of correcting overstatements of our pension and postretirement obligations and goodwill, we credited other income, net for $6 to effectively reverse a portion of the write-off of goodwill assigned to our former Driveshaft segment in 2008. See Note 1 to our consolidated financial statements in Item 1 of Part I for additional information.



	Three Months Ended September 30,
	2016			2015
Interest income	$	3		$	4
Government grants and incentives	2			1
Foreign exchange loss	(2		)	(4		)
Strategic transaction expenses	(3		)	(1		)
Gain on sale of marketable securities	7
Other	2			2
Other income, net	$	9		$	2

Interest expense — Interest expense was $27 and $31 in the three months ended September 30, 2016 and ~~$30~~2015. The decrease in ~~2015 and 2014.~~interest expense is primarily due to lower average interest rates partially offset by higher average debt levels in 2016. As discussed in Note 11 to our consolidated financial statements in Item 1 of Part I, ~~interest expense during the third quarter~~Dana Financing Luxembourg S.à r.l. issued $375 of ~~2015 was negatively impacted by $2 as a result~~its June 2026 Notes on May 27, 2016 and we redeemed $350 of ~~accounting associated with an interest rate swap. Average debt levels were comparable in the third quarters of 2015 and 2014.~~our February 2021 Notes on June 23, 2016. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 6.3% and ~~accounting associated with the interest rate swap, approximated~~ 7.1% in 2016 and ~~7.0% in the third quarter of 2015 and 2014.~~2015.

Income tax expense — ~~Income taxes were~~We recorded income tax expense of $13 in the third quarter of 2016 and a benefit of $77 in the ~~third quarter of 2015, compared to expense of $29 in the~~ same period ~~of 2014.~~in 2015. The effective income tax rates vary from the U.S. federal statutory rate of 35% primarily due to valuation allowances in several countries, nondeductible expenses, different statutory rates outside the U.S. and withholding taxes. As discussed in Note ~~14 of the~~15 to our consolidated financial statements in Item 1 of Part I, we released $100 of valuation allowance on U.S. deferred tax assets in the third quarter of 2015. The effective tax rate of 18% in this year's third ~~quarter.~~ quarter compares to an

effective rate of 51% in the third quarter of 2015 when adjusted to exclude the $100 of valuation allowance release. In 2016, the U.S. and other jurisdictions with valuation allowances reported higher pre-tax income, thereby decreasing the effective rate. In 2015, these jurisdictions had lower pre-tax income, which increased the effective rate. Also contributing to a higher effective tax rate in 2015 was $2 of expense for withholding taxes related to repatriation of foreign earnings, future income taxes and withholding taxes on earnings of foreign operations that are not permanently reinvested, and withholding taxes associated with changes to planned repatriations of certain foreign earnings. These withholding and foreign earnings related expenses were not significant in 2016.

In the U.S. and certain other countries, our recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for recognition of deferred tax assets. Therefore, there is generally no income tax recognized on the pre-tax income or losses in these jurisdictions as valuation allowance adjustments offset the associated tax effects. We believe that it is reasonably possible that up to $500 of the valuation allowance against our U.S. deferred tax assets could be released in the next twelve months. See Note 15 to our consolidated financial statements in Item 1 of Part I for a discussion of the factors considered in our quarterly evaluation of the valuation allowances against our U.S. deferred tax assets.

Equity in earnings of affiliates — Net earnings from equity investments was $2 in 2016 and de minimis in 2015. Equity in earnings from Bendix Spicer Foundation Brake, LLC (BSFB) was $2 in 2016 while earnings from Dongfeng Dana Axle Co., Ltd. (DDAC) were negligible. Equity in earnings from BSFB of $3 in 2015 was offset by a loss of $3 from DDAC.

Summary Consolidated Results of Operations (Year-to-Date, 2016 versus 2015)



	Nine Months Ended September 30,
	2016					2015
	Dollars			% of Net Sales		Dollars			% of Net Sales		Increase/ (Decrease)
Net sales	$	4,379				$	4,685				$	(306	)
Cost of sales	3,739			85.4	%	4,008			85.5	%	(269		)
Gross margin	640			14.6	%	677			14.5	%	(37		)
Selling, general and administrative expenses	303			6.9	%	299			6.4	%	4
Amortization of intangibles	6					13					(7		)
Restructuring charges, net	23					13					10
Impairment of long-lived assets						(36		)			36
Loss on extinguishment of debt	(17		)			(2		)			(15		)
Other income, net	17					18					(1		)
Income before interest expense and income taxes	308					332					(24		)
Interest expense	84					86					(2		)
Income before income taxes	224					246					(22		)
Income tax expense (benefit)	66					(10		)			76
Equity in earnings of affiliates	6					3					3
Net income	164					259					(95		)
Less: Noncontrolling interests net income	9					18					(9		)
Net income attributable to the parent company	$	155				$	241				$	(86	)

Sales — The following table shows changes in our sales by geographic region.



	Nine Months Ended September 30,							Amount of Change Due To
	2016		2015		Increase/ (Decrease)			Currency Effects			Acquisitions		Organic Change
North America	$	2,329	$	2,472	$	(143	)	$	(18	)	$	6	$	(131	)
Europe	1,231		1,326		(95		)	(35		)			(60		)
South America	251		315		(64		)	(71		)			7
Asia Pacific	568		572		(4		)	(21		)			17
Total	$	4,379	$	4,685	$	(306	)	$	(145	)	$	6	$	(167	)

Sales in the first nine months of 2016 were $306 lower than in the same period in 2015. Weaker international currencies decreased sales by $145 and the acquisition of Magnum earlier this year added sales of $6. A volume-related organic sales decrease of $174 resulted primarily from weaker global Off-Highway demand, lower commercial vehicle production in North America and Brazil and lower sales with a major North America commercial vehicle customer, partially offset by stronger overall light vehicle volume levels in North America, Europe and Asia Pacific and contributions from new customer programs. Cost recovery pricing actions reduced sales by $7.

The North America organic sales reduction of 5% was driven principally by a decline in Class 8 production of about 29%, reduced sales levels with a major commercial vehicle customer and weaker Off-Highway demand. These effects were partially offset by growth in full frame light truck production of around 9%, an increase in light vehicle engine build of 5% and higher sales from new customer programs.

Excluding currency effects, principally from a weaker South African rand and British pound, our sales in Europe in the first nine months of 2016 were 5% lower than in 2015. Weaker Off-Highway demand was the primary driver of this reduction in sales, with increased light vehicle engine and light truck production providing a partial offset.

South America sales in this year's first nine months were impacted by weaker currencies in Argentina and Brazil. Excluding these effects, sales were up slightly from the same period in 2015. The organic sales increase in the region was driven largely by pricing actions, primarily recovery of inflationary cost increases in Argentina and contributions from new customer programs. These increases were largely offset by medium/heavy truck production levels being around 21% lower and light truck production declining about 1%.

Asia Pacific sales in this year's first nine months were relatively comparable to 2015. Weaker currencies in Thailand, India and China contributed to the currency-related sales reduction. The 3% organic sales increase resulted primarily from increased production levels in the region along with new customer programs.

Cost of sales and gross margin — Cost of sales declined $269, or 7%, in the first nine months of 2016 when compared to the same period in 2015. Similar to the factors affecting sales, the reduction was primarily due to currency effects and lower overall sales volumes. Cost of sales as a percent of this year's sales was 10 basis points lower than last year. Underabsorption of cost as a result of lower sales volumes increased cost of sales as a percent of sales. Cost of sales in 2016 was also adversely impacted by increases in engineering and product development costs of $8 and in warranty expense of $14. More than offsetting these increases were savings from lower material costs of $48, avoidance of supplier transition costs in our Commercial Vehicle segment, which totaled $14 in the first nine months of 2015, and a charge of $6 in last year's results for environmental remediation.

Gross margin of $640 for the first nine months of 2016 decreased $37 from the same period in 2015. Gross margin as a percent of sales was 14.6% in 2016, 10 basis points higher than 2015. Margin improvement was driven principally by the cost of sales factors referenced above.

Selling, general and administrative expenses (SG&A) — SG&A expenses in 2016 were $303 (6.9% of sales) as compared to $299 (6.4% of sales) in 2015. Salary and benefits expenses in 2016 were $2 lower than in 2015, while selling and other discretionary spending increased $6, due in part to execution of certain project initiatives.

Amortization of intangibles — The reduction of $7 in amortization of intangibles was primarily attributable to certain customer related intangibles becoming fully amortized.

Restructuring charges — Restructuring charges of $23 in 2016 included a third quarter 2016 expense of $14 for separation costs in connection with headcount reduction actions in our Off-Highway segment that are being implemented as a result of continuing weak demand levels in this business. The remaining $9 of restructuring expense this year relates to the closure of our Commercial Vehicle manufacturing facility in Glasgow, Kentucky, headcount reduction actions at our corporate facilities in the U.S. and employee separation and exit costs associated with previously announced headcount reduction and facility closure actions. Restructuring charges of $13 in 2015 were primarily attributable to headcount reductions in our Commercial Vehicle segment operations in Brazil which were significantly impacted by lower demand levels, along with costs associated with previously announced restructuring actions.

Impairment of long-lived assets —Reference is made to Note 3 of the consolidated financial statements in Item 1 of Part I for a discussion of charges recognized in the third quarter of 2015 in connection with an impairment of long-lived assets attributable to an exclusive supply relationship with a South American supplier.

Loss on extinguishment of debt —During the second quarter of 2016, we redeemed our February 2021 Notes and incurred a redemption premium of $12. We also restructured our domestic revolving credit facility. In connection with these actions, we wrote off $5 of previously deferred financing costs. The prior year expense was attributable to the call premium and write-off of previously deferred financing costs associated with the redemption of $15 of our February 2019 Notes in the first quarter of 2015.

Other income, net — The following table shows the major components of other income, net.



	Nine Months Ended September 30,
	2016			2015
Interest income	$	8		$	11
Government grants and incentives	5			2
Foreign exchange loss	(4		)	(10		)
Strategic transaction expenses	(6		)	(3		)
Gain on derecognition of noncontrolling interest				5
Gain on sale of marketable securities	7			1
Insurance recoveries	1			4
Other	6			8
Other income, net	$	17		$	18

Upon completion of the divestiture of our operations in Venezuela in January 2015, we recognized a $5 gain on the derecognition of the noncontrolling interest in one of our former Venezuelan subsidiaries. See Note 3 to our consolidated financial statements in Item 1 of Part I for additional information.

Interest expense — Interest expense was $84 and $86 in the first three quarters of 2016 and 2015. The decrease in interest expense is primarily due to lower average interest rates partially offset by higher average debt levels in 2016. As discussed in Note 11 to our consolidated financial statements in Item 1 of Part I, Dana Financing Luxembourg S.à r.l. issued $375 of its June 2026 Notes on May 27, 2016 and we redeemed $350 of our February 2021 Notes on June 23, 2016. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 6.4% and 6.7% in 2016 and 2015.

Income tax expense — Income tax expense was $66 in the first nine months of 2016, whereas we had a tax benefit of $10 in the same period in 2015. The effective income tax rates vary from the U.S. federal statutory rate of 35% primarily due to valuation allowances in several countries, nondeductible expenses, different statutory rates outside the U.S. and withholding taxes. As discussed in Note 15 to our consolidated financial statements in Item 1 of Part I, we released $100 of valuation allowance on U.S. deferred tax assets in the third quarter of 2015 in connection with a planned intercompany transaction. Completion of the transaction in the fourth quarter of 2015 resulted in the recognition of a prepaid tax asset. Excluding the effects of this valuation allowance release, the effective tax rate for the first nine months of 2015 was ~~51% in 2015 as compared to 24% in 2014. Lower income in 2015 from~~37%. Excluding $8 of amortization of the prepaid tax asset, the effective tax rate for the comparable nine-month period of 2016 was 26%. In 2016, jurisdictions with valuation allowances ~~resulted~~reported higher aggregate pre-tax income, thereby decreasing the effective rate. In 2015, these jurisdictions had lower pre-tax income, which increased the effective rate. We recognized future income taxes and withholding taxes on earnings of foreign operations that are not permanently reinvested of $5 in ~~less valuation allowance release than~~the first nine months of 2016 and $4 in ~~last year's third quarter.~~the same period in 2015 and we paid withholding taxes related to repatriation of foreign earnings of $4 in 2016 and $7 in 2015. Overall lower tax rates in jurisdictions outside the U.S. also reduced the effective tax rate in both periods.

In the U.S. and certain other countries, our recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for recognition of deferred tax assets. Therefore, there is generally no income tax recognized on the pre-tax income or losses in these jurisdictions as valuation allowance adjustments offset the associated tax effects. We believe that it is reasonably possible that up to ~~$400~~$500 of the valuation ~~allowances~~allowance against our U.S. deferred tax assets could be released in the next twelve months. See Note 1415 to our consolidated financial statements in Item 1 of Part I for a discussion of the factors considered in our quarterly evaluation of the valuation allowances against our U.S. deferred tax assets.

Equity in earnings of affiliates — Net earnings from equity investments ~~were de minimis~~was $6 in ~~2015~~2016 and $2$3 in ~~2014.~~2015. Equity in earnings from Bendix Spicer Foundation Brake, LLC (BSFB) ~~of $3~~was $7 in ~~2015 were offset by a loss of $3~~2016 while earnings from Dongfeng Dana Axle Co., Ltd. (DDAC)~~. Equity in earnings from BSFB~~ were ~~$3 in 2014.~~

~~Loss from discontinued operations~~ ~~— Loss from discontinued operations activity relates to our Structural Products business. See Note 2 to our consolidated financial statements in Item 1 of Part I.~~

~~Summary Consolidated Results of Operations (Year-to-Date, 2015 versus 2014)~~

Nine Months Ended September 30,
2015 2014
Dollars % of
Net Sales Dollars % of
Net Sales Increase/
(Decrease)
Net sales $ 4,685
$ 5,035
$ (350 )
Cost of sales 4,008
85.5 % 4,313
85.7 % (305 )
Gross margin 677
14.5 % 722
14.3 % (45 )
Selling, general and administrative expenses 299
6.4 % 310
6.2 % (11 )
Amortization of intangibles 13
33
(20 )
Restructuring charges, net 13
14
(1 )
Impairment of long-lived assets (36 )

(36 )
Loss on extinguishment of debt (2 )

(2 )
Other income, net 18
35
(17 )
Income from continuing operations before interest expense and income taxes 332
400
(68 )
Interest expense 86
89
(3 )
Income from continuing operations before income taxes 246
311
(65 )
Income tax expense (benefit) (10 ) 96
(106 )
Equity in earnings of affiliates 3
9
(6 )
Income from continuing operations 259
224
35
Loss from discontinued operations —
(4 ) 4
Net income 259
220
39
Less: Noncontrolling interests net income 18
10
8
Net income attributable to the parent company $ 241
$ 210
$ 31

~~Sales~~ ~~— The following table shows changes in our sales by geographic region.~~

Nine Months Ended
September 30, Amount of Change Due To
2015 2014 Increase/(Decrease) Currency Effects Acquisitions (Divestitures) Organic Change
North America $ 2,472
$ 2,350
$ 122
$ (36 ) $ —
$ 158
Europe 1,326
1,532
(206 ) (259 ) 53
South America 315
593
(278 ) (87 ) (69 ) (122 )
Asia Pacific 572
560
12
(31 ) 43
Total $ 4,685
$ 5,035
$ (350 ) $ (413 ) $ (69 ) $ 132

Sales in the first nine months of 2015 were $350 lower than in the same period in 2014. Weaker international currencies decreased sales by $413 and the divestiture of our operations in Venezuela reduced sales by $69. The organic sales increase resulted from stronger overall volume levels that added $123 and cost recovery pricing which contributed $9.

Stronger light vehicle and medium/heavy truck production levels in North America were largely responsible for the 7% organic sales increase in this region. Full frame light truck production was 5% stronger than last year, while medium/heavy truck production levels were about 8% higher. New light vehicle programs coming on line over the past year also contributed to increased year-over-year nine-month sales.

Excluding currency effects, principally from a weaker euro and British pound, our sales in Europe in the first nine months of 2015 were 3% higher than in 2014. Higher sales from increases in light vehicle engine and light truck production of around 5% and 9%, growth in medium/heavy truck production of about 8% and new light vehicle programs were partially offset by weaker off-highway demand levels.

South America sales in this year's first nine months were impacted by weaker currencies in Brazil, Argentina and Colombia and the divestiture of our operations in Venezuela. Excluding these effects, sales were down 21% from the same period in 2014.

The organic sales decrease in the region was primarily driven by reductions in medium/heavy truck production levels of about 47%, a decline in light truck production of 14% and weaker off-highway demand. Partially offsetting weaker demand levels in the region were higher sales associated with light vehicle new business, content increases and cost recovery pricing.

Asia Pacific sales in the first nine months of 2015 were up slightly from 2014. The organic sales increase of 8% in the region was driven principally by stronger light vehicle and medium/heavy truck sales volumes in Thailand and India and increased off-highway sales levels in our operation in China.

~~Cost of sales and gross margin~~ — Cost of sales declined $305, or 7%, in the first nine months of 2015 when compared to the same period in 2014. Similar to our reduction in sales, the change was due primarily to currency effects with a partial offset provided by higher sales volumes. Cost of sales as a percent of sales in this year's first nine months was 20 basis points lower than the same period of last year. In addition to the benefit of strong volume levels, savings from material cost reduction initiatives reduced cost by $43, with lower commodity costs contributing an additional $6. Lower warranty expense reduced cost by $7. These benefits were partially offset by costs attributed to supply chain disruptions in our Commercial Vehicle segment of $14 incurred during the first half of this year, an increase in engineering and product development expense of $11, an increase in environmental remediation expense of $6 and other cost increases.

Gross margin of $677 for the first nine months of 2015 decreased $45 versus the same period in 2014, representing 14.5% of sales in 2015 as compared to 14.3% of sales in 2014. The 20 basis point improvement in gross margin was principally driven by stronger sales volumes and overall better cost performance, principally from material cost reduction initiatives.

~~Selling, general and administrative expenses (SG&A)~~ — SG&A expenses in 2015 were $299 (6.4% of sales) as compared to $310 (6.2% of sales) in 2014. Salary and benefits expenses in 2015 were $4 lower than in 2014, while selling expense and other discretionary spending declined $7.

~~Amortization of intangibles~~ ~~— The reduction of $20 in amortization of intangibles is primarily attributable to certain customer related intangibles becoming fully amortized.~~

~~Restructuring charges~~ — Restructuring charges of $13 in 2015 included $10 related to headcount reductions in our Brazil operations, primarily in our Commercial Vehicle segment, which have been significantly impacted by lower demand levels. The remaining 2015 cost was primarily attributable to exit costs associated with previously announced facility closure and realignment actions. The restructuring expense of $14 in 2014 represented employee separation costs associated with the closure of our Commercial Vehicle foundry in Argentina and continuing employee separation and exit costs associated with previously announced actions.

~~Impairment charges~~ — Reference is made to Note 2 of the consolidated financial statements in Item 1 of Part I for discussion of charges recognized in connection with an impairment of long-lived assets attributable to an exclusive supply relationship with a South American supplier.

~~Other income, net~~ ~~— The following table shows the major components of other income, net.~~

Nine Months Ended
September 30,
2015 2014
Interest income $ 11
$ 11
Government grants and incentives 2
2
Foreign exchange gain (loss) (10 ) 8
Strategic transaction expenses (3 ) (3 )
Gain on derecognition of noncontrolling interest 5

Gain on sale of marketable securities 1

Recognition of unrealized gain on payment-in-kind note receivable

2
Insurance recoveries 4
2
Other 8
13
Other income, net $ 18
$ 35

Effective March 31, 2014, we ceased using the official exchange rate of 6.3 bolivars per U.S. dollar and began using the SICAD rate, which was 10.7 bolivars per U.S. dollar (as published by the Central Bank of Venezuela) at March 31, 2014 to remeasure the financial statements of our Venezuelan subsidiaries. The change to the SICAD rate resulted in a charge of $17

during the first quarter of 2014. After remaining relatively unchanged during the second quarter, the SICAD rate declined to 12.0 bolivars per U.S. dollar at September 30, 2014, resulting in a remeasurement charge of $3 during last year's third quarter. During the first nine months 2014, we realized gains of $8 as CENCOEX approved a portion of our pending claims to settle U.S. dollar obligations at the official exchange rate of 6.3. Also during the first nine months of 2014, we realized net gains of $14 on the sales and purchases of U.S. dollars through SICAD 2 at an average rate of 49.9 bolivars per U.S. dollar. See Note 1 to our consolidated financial statements in Item 8 of our 2014 Form 10-K for a comprehensive discussion of Venezuela's exchange rate environment. These Venezuela currency-related items resulted in a net currency gain of $2 in the first nine months of 2014. Upon completion of the divestiture of our operations in Venezuela in January 2015, we recognized a $5 gain on the derecognition of the noncontrolling interest in one of our former Venezuelan subsidiaries. See Notes 2 and 15 to our consolidated financial statements in Item 1 of Part I for additional information.

In the first quarter of 2014, the sale of a payment-in-kind note resulted in the recognition of $2 of unrealized gain that arose following the valuation of the note below its callable value at emergence from bankruptcy. During the second quarter of 2015, we reached a $3 settlement with an insurance carrier for the recovery of previously incurred legal costs, while last year's third quarter included a payment of $2 from the liquidation proceedings of an insolvent insurer carrier. Additionally, in last year's third quarter, as part of correcting overstatements of our pension and postretirement obligations and goodwill, we credited other income, net for $6 to effectively reverse a portion of the write-off of goodwill assigned to our former Driveshaft segment in 2008. See Note 1 to our consolidated financial statements in Item 1 of Part I for additional information.

~~Loss on extinguishment of debt~~ —Actions to refinance a portion of our long-term debt that commenced in last year's fourth quarter were completed in the first quarter of 2015, with expense recognized for the call premium incurred and write-off of unamortized financing costs associated with debt extinguished in this year's first quarter.

~~Interest expense~~ — Interest expense was $86 and $89 in 2015 and 2014. The impact of higher average debt levels was more than offset by a lower average effective interest rate. As discussed in Note 10 to our consolidated financial statements in Item 1 of Part I, we completed the sale of $425 of 5.5% senior unsecured notes in December 2014 and redeemed $400 of 6.5% senior unsecured notes during the four-month period ended March 2015. Average effective interest rates, inclusive of amortization of debt issuance costs, approximated 6.7% and 7.0% in 2015 and 2014.

~~Income tax expense~~ — Income taxes were a benefit of $10 for the first nine months of 2015, compared with expense of $96 in the nine-month period of 2014. The effective income tax rates vary from the U.S. federal statutory rate of 35% primarily due to valuation allowances in several countries, nondeductible expenses, different statutory rates outside the U.S. and withholding taxes. As discussed in Note 14 of the consolidated financial statements in Item 1 of Part I, we released $100 of valuation allowance on U.S. deferred tax assets in this year's third quarter. Excluding this valuation allowance release, the effective tax rate was 37% in 2015 as compared to 31% in 2014. Lower income in 2015 from jurisdictions with valuation allowances resulted in less valuation allowance release, as compared to 2014, thereby increasing the effective tax rate as the tax expense associated with this income is offset by valuation allowance release. Additionally, we recognized expense of $7 and $5 in 2015 and 2014 for withholding taxes relating to repatriation of foreign earnings and provisions of $4 and $5 in 2015 and 2014 for future income taxes and withholding taxes on earnings of foreign operations that are not permanently invested. An additional expense of $2 was recognized in 2014 for settlement of tax matters in Italy.

In the U.S. and certain other countries, our recent history of operating losses does not allow us to satisfy the “more likely than not” criterion for recognition of deferred tax assets. Therefore, there is generally no income tax recognized on the pre-tax income or losses in these jurisdictions as valuation allowance adjustments offset the associated tax effects. We believe that it is reasonably possible that up to $400 of the valuation allowances against our U.S. deferred tax assets could be released in the next twelve months. See Note 14 to our consolidated financial statements in Item 1 of Part I for a discussion of the factors considered in our quarterly evaluation of the valuation allowances against our U.S. deferred tax assets.

~~Equity in earnings of affiliates~~ ~~— Equity investments provided net earnings of $3 and $9 in 2015 and 2014.~~negligible. Equity in earnings from BSFB of $9 in 2015 ~~were~~was partially offset by a loss of $7 from DDAC. ~~Equity in earnings from BSFB and DDAC were $8 and $2 in 2014.~~

Noncontrolling interests net income —As more fully discussed in Note 1 to our consolidated financial statements in Item ~~1 of Part~~ 1, the first quarter of 2015 included $9 for correction of previously reported noncontrolling interests net income.

Segment Results of Operations ~~(2015~~(2016 versus ~~2014)~~2015)

Light Vehicle


	Three Months								Nine Months								Three Months								Nine Months
	Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin
2014	$	608		$	70		11.5	%	$	1,862		$	176		9.5	%
2015																	$	605		$	63		10.4	%	$	1,883		$	193		10.2	%
Volume and mix	57			9					165			28					43			8					118			19
Divestiture	(22		)	(6		)			(69		)	4
Performance	(9		)	(3		)			(5		)	(2		)			16			8					23			7
Currency effects	(29		)	(7		)			(70		)	(13		)			(33		)	(6		)			(111		)	(17		)
2015	$	605		$	63		10.4	%	$	1,883		$	193		10.2	%
2016																	$	631		$	73		11.6	%	$	1,913		$	202		10.6	%

Light Vehicle sales in ~~the third quarter and first nine months of 2015~~2016 were reduced by currency translation effects, primarily as a result of a weaker ~~British pound sterling, Brazil real,~~Mexico peso, Argentina peso, Thailand baht, ~~and~~ South ~~African~~Africa rand, and ~~the divestiture of our Venezuela operations~~British pound sterling. Sales in ~~January 2015. Sales,~~this year's third quarter and first nine months, exclusive of currency ~~and divestiture~~ effects, were 8%10% and 9%7% higher ~~in 2015~~ than in ~~2014.~~2015. The ~~volume related~~volume-related increases were driven ~~in part~~primarily by stronger production levels. North America full frame light truck production in ~~this year's~~the third quarter and first nine months of 2016 was up ~~10%~~1% and 9% from the same ~~period~~periods of ~~2014, and light~~2015. Light truck production in Europe and Asia Pacific was stronger by ~~12%~~4% and ~~7%. Higher production levels in these regions also contributed to the volume increase in~~14% for the comparative third quarter periods and stronger by 8% and 11% for the year-over-year nine-month periods. ~~Light Vehicle volume increases~~Sales in ~~the third quarter and nine-month periods~~this segment also benefited by $13 from ~~new~~the inclusion of a customer ~~programs~~program in this segment that ~~came on line over~~was previously reported in our Commercial Vehicle segment. Partially offsetting these increases were lower sales from a discontinued program in Europe and weaker South America demand. Cost recovery actions, including inflationary cost recovery in Argentina, were the ~~past year.~~primary drivers of the sales increase categorized as performance.

Light Vehicle segment EBITDA of ~~$63 in this year's~~$73 for the third quarter of 2016 is ~~down $7 from~~$10 higher than the same period of ~~2014, while~~2015, with segment EBITDA ~~of $193~~ for the first nine months of ~~2015 is $17~~2016 being $9 higher than ~~the same period last year. The Venezuela divestiture-related reduction~~2015. Weaker international currencies reduced segment EBITDA by $6 in the third quarter ~~includes~~and $17 for this year's first nine months. Higher sales volumes from overall stronger production levels and new business provided a ~~net~~ benefit of ~~$6 from currency-related transaction gains of $9~~$8 and devaluation charges of $3 that were recognized in 2014. For the comparative nine-month periods, Venezuela bolivar devaluation charges of $20 in last year's first and third quarters were more than offset by transaction gains of $22 in last year's second and third quarters. Performance-related segment EBITDA$19 in the third quarter ~~was lower~~and first nine months. The year-over-year third-quarter performance-related improvement of $8 is primarily attributable to $16 from pricing and cost recovery actions and $9 from material cost savings initiatives. These cost recovery pricing actions and material savings benefits more partially offset by ~~$3, primarily as a result~~increased material commodity and other costs of a$8, higher ~~level~~warranty expense of ~~pricing recovery in 2014 of $9~~$4, and ~~increased~~ program start-up and launch costs of ~~$2 in this year's third quarter, partially offset by~~$5. The comparative nine-month period performance-related EBITDA included pricing and material recovery benefit of $23, with material cost savings actions providing additional benefit of $18. Partially offsetting these items was increased material commodity and ~~lower commodity~~other costs of ~~$9. The nine-month year-to-date segment EBITDA performance decrease is largely due to increased program launch~~$18, higher warranty costs of ~~$2, higher~~$6, start-up and launch related costs of $7, and increased engineering and product development expense net of customer ~~reimbursement,~~recoveries of $10, a higher level of pricing recovery in 2014 of $5, increased warranty expense of $3 and other net cost increases of $5. Largely offsetting these items were lower commodity costs of $11 and other material cost savings of $12.$3.

Commercial Vehicle


	Three Months								Nine Months								Three Months								Nine Months
	Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin
2014	$	487		$	47		9.7	%	$	1,407		$	138		9.8	%
2015																	$	367		$	31		8.4	%	$	1,231		$	102		8.3	%
Volume and mix	(85		)	(19		)			(80		)	(22		)			(78		)	(19		)			(237		)	(46		)
Performance	5			8					19			(2		)			2			12					3			30
Currency effects	(40		)	(5		)			(115		)	(12		)			3			(1		)			(21		)	(5		)
2015	$	367		$	31		8.4	%	$	1,231		$	102		8.3	%
2016																	$	294		$	23		7.8	%	$	976		$	81		8.3	%

~~The currency related reduction in~~Currency effects benefited third quarter 2016 sales, ~~was~~ primarily due to a year-over-year stronger Brazil real, whereas currency reduced comparative nine-month sales due primarily to a weaker ~~euro,~~ Brazil real and Mexico peso. After adjusting for the effects of currency, ~~third quarter~~third-quarter and ~~first nine months 2015~~nine-month 2016 sales in our Commercial Vehicle segment decreased ~~16%~~21% and 4%19% compared to ~~the same~~2015. The volume-related reduction in both periods ~~of 2014. Weaker~~was primarily attributable to weaker end market demand in Brazil, where medium/heavy truck production in the third quarter and first nine months was down ~~49%~~about 15% and 22% from last year and a year-over-year decline in third-quarter and nine-month North America Class 8 production of about 39% and 29%. Also contributing to the volume-related reduction was the transfer of a program having sales of $13 from this segment to Light Vehicle in this year's third quarter and ~~47% for the nine-month period contributed $55 and $124~~lower share of ~~volume-related~~ sales ~~reduction in the respective periods. The remaining volume reduction in this year's third quarter occurred primarily in~~with a major North America where year-over-year medium/heavy truck production was down about 2% and we experienced lower demand with certain customers in part due to residual effects of supply chain inefficiencies in the first half of this year. Lower sales in this year's first half resulting from a weaker Brazil were largely offset by stronger North America medium/heavy truck production of about 13%. As such, the nine-month volume related sales reduction resulted from this year's third quarter developments. Pricing recoveries provided a partial offset to the currency and volume impacts on third quarter and nine-month sales.customer.

Commercial Vehicle segment EBITDA of ~~$31~~$23 in this year's third quarter was ~~$16~~$8 lower than in ~~2014,~~2015, with nine-month year-to-date segment EBITDA down $21 from last year. Lower sales volumes reduced segment EBITDA by $19 and $46 in this year's third quarter and first nine months. Partially offsetting the effects of lower volume was improved performance-related segment EBITDA of ~~$102 for~~$12 in the third quarter and $30 in the first nine months of ~~2015 down $36 compared to the~~this year. Year-over-year third quarter performance benefited by $4 from material cost savings actions, pricing actions of $2 and other net cost reduction initiatives of $6. Nine-month year-over-year performance benefited from $12 of material cost savings, avoidance of supplier transition costs incurred in last year's first nine months of ~~last year. Weaker Brazil market demand contributed $11 and $24~~$14, pricing actions of the volume related EBITDA reduction in the comparative third quarter and nine-month periods of 2015. Year-over-year performance-related segment EBITDA in the third quarter benefited by $5 from cost recovery pricing and $6 from lower material cost, partially offset by a net increase in other costs. For the nine-month period, performance-related EBITDA benefited from year-over-year higher cost recovery pricing of $19 and $9 of lower material cost. These benefits were more than offset by supplier transition inefficiency costs of $14 in the first half of this year$3 and other ~~items providing a~~ net ~~reduction~~cost reductions of ~~$16.~~$5. Partially offsetting these nine-month improvements was higher warranty expense of $4.

Off-Highway


	Three Months								Nine Months								Three Months								Nine Months
	Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin
2014	$	283		$	40		14.1	%	$	959		$	128		13.3	%
2015																	$	246		$	35		14.2	%	$	809		$	115		14.2	%
Volume and mix	2			1					(12		)	(1		)			(44		)	(11		)			(102		)	(28		)
Performance	(2		)	1								13					(2		)	4					(7		)	9
Currency effects	(37		)	(7		)			(138		)	(25		)			(1		)	—					(8		)	1
2015	$	246		$	35		14.2	%	$	809		$	115		14.2	%
2016																	$	199		$	28		14.1	%	$	692		$	97		14.0	%

~~Reduced year-over-year~~Currency-adjusted third-quarter and nine-month 2016 sales due to currency effects resulted principally from a weaker euro. Off-Highway segment sales for the third quarter, excluding currency effects, were comparable to last year's third quarter. Currency-adjusted sales for the first nine months of 2015 were down ~~slightly~~19% and 13% compared to 2015, primarily from ~~the same period of 2014. New business gains in this business are largely offsetting the impact of continued weakness in~~lower global end-market demand.

Off-Highway segment EBITDA of ~~$35~~$28 in ~~this year's~~the third quarter of 2016 was down $5$7 from ~~2014, while nine-month~~2015, with segment EBITDA ~~of $115 is $13 lower that~~for the first nine months lower by $18 compared with the previous year. The impact of ~~last year. Currency effects are the primary driver of the reduced EBITDA, with year-to-date performance-related~~lower sales volumes on segment EBITDA ~~benefiting~~was partially offset by performance related earnings improvement, principally from material cost savings in the year-over-year three-month and nine-month periods of ~~$14~~$4 and ~~lower warranty expense~~$13. Pricing actions in the year-over-year third quarter results were offset by cost reduction initiatives. For the comparative nine-month periods, the benefit from material cost savings was reduced by pricing actions of ~~$5 which more than offset~~$7, with other net ~~increases in other costs.~~cost reductions providing a net benefit to segment EBITDA of $3.

Power Technologies


	Three Months								Nine Months								Three Months								Nine Months
	Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin		Sales			Segment EBITDA			Segment EBITDA Margin
2014	$	259		$	37		14.3	%	$	807		$	120		14.9	%
2015																	$	250		$	40		16.0	%	$	762		$	117		15.4	%
Volume and mix	24			6					50			10					12			4					53			13
Performance	(3		)	2					(5		)	4					(4		)	(2		)			(12		)	(8		)
Currency effects	(30		)	(5		)			(90		)	(17		)			2			—					(5		)	(2		)
2015	$	250		$	40		16.0	%	$	762		$	117		15.4	%
2016																	$	260		$	42		16.2	%	$	798		$	120		15.0	%

Power Technologies primarily serves the light vehicle market but also sells product to the medium/heavy truck and off-highway markets. A stronger Japanese yen provided a currency benefit in the comparative third quarter results, with the currency-related nine-month sales reduction primarily attributable to a weaker ~~euro and~~ Canadian ~~dollar were the primary drivers of the reduced sales due to currency.~~dollar. Net of currency effects, sales in the third quarter and first ~~nine-months sales in 2015~~nine months of 2016 increased about 8%3% and 6%5% compared to the same periods of ~~last year,~~2015, principally from stronger market demand. ~~Increases in year-over-year light~~Light vehicle engine build ~~of 4%~~in North America was up about 2% in the comparative third-quarter periods, with comparative nine-month production up 5% in North America and ~~7% in Europe were the primary drivers of the third quarter volume increase. Nine-month volume increases were driven by stronger light vehicle engine build of~~ 2% in ~~North America and 5% in Europe, with higher medium/heavy truck production of 8% in both North America and Europe also contributing to increased sales in the nine-month period.~~Europe.

Segment EBITDA of ~~$40~~$42 in ~~this year's third quarter~~2016 was $3$2 higher than ~~the same period of 2014,~~2015, with nine-month 2016 segment EBITDA ~~of $117 for the first nine months of 2015 coming in~~being up $3 ~~lower than~~from the same period of last year. ~~The performance-related improvement in third~~Third quarter 2016 segment EBITDA was ~~primarily driven~~impacted by lower pricing and recovery actions of $4 and increased warranty expense of $4, with material ~~costs of $3~~cost savings and other items providing a partial offset. Nine-month performance-related comparative segment EBITDA is reflective of lower customer pricing and recovery of $12 and increased warranty expense of $2 which was partially offset by net cost reductions of ~~$2. Partially offsetting these benefits were pricing actions which reduced segment earnings by $3. Year-over-year nine-month performance-related segment EBITDA benefited by lower warranty expense of~~ $6, ~~and lower~~primarily from material ~~costs of $3, offset by pricing actions of $5.~~cost savings initiatives.

Non-GAAP Financial Measures

Adjusted EBITDA

We have defined adjusted EBITDA as ~~earnings from continuing and discontinued operations~~net income before interest, taxes, depreciation, amortization, equity grant expense, restructuring expense and other ~~nonrecurring items~~adjustments not related to our core operations (gain/loss on debt extinguishment, pension settlements, divestitures, impairment, etc.). Adjusted 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. We use adjusted EBITDA in assessing the effectiveness of our business strategies, evaluating and pricing potential acquisitions and as a factor in making incentive compensation decisions. In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate financial performance of our company relative to other Tier 1 automotive suppliers. Adjusted EBITDA should not be considered a substitute for income before income taxes, net income or other results reported in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

The following table provides a reconciliation of segment EBITDA and adjusted EBITDA to net income.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2016			2015			2016			2015
Segment EBITDA
Light Vehicle	$	63		$	70		$	193		$	176		$	73		$	63		$	202		$	193
Commercial Vehicle	31			47			102			138			23			31			81			102
Off-Highway	35			40			115			128			28			35			97			115
Power Technologies	40			37			117			120			42			40			120			117
Total Segment EBITDA	169			194			527			562			166			169			500			527
Corporate expense and other items, net	(2		)	4			(4		)	6			2			(2		)	(6		)	(4		)
Adjusted EBITDA	167			198			523			568			168			167			494			523
Depreciation and amortization	(43		)	(52		)	(131		)	(160		)	(48		)	(43		)	(136		)	(131		)
Restructuring	(1		)	(2		)	(13		)	(14		)	(17		)	(1		)	(23		)	(13		)
Interest expense, net	(27		)	(25		)	(75		)	(78		)	(24		)	(27		)	(76		)	(75		)
Other*	(51		)	2			(58		)	(5		)	(7		)	(51		)	(35		)	(58		)
Income from continuing operations before income taxes	45			121			246			311
Income before income taxes													72			45			224			246
Income tax expense (benefit)	(77		)	29			(10		)	96			13			(77		)	66			(10		)
Equity in earnings of affiliates	—			2			3			9			2			—			6			3
Income from continuing operations	122			94			259			224
Loss from discontinued operations	—			(1		)	—			(4		)
Net income	$	122		$	93		$	259		$	220		$	61		$	122		$	164		$	259

Other includes stock compensation expense, strategic transaction expenses, ~~impairment of long-lived assets, loss on extinguishment of debt,~~ gain on derecognition of noncontrolling interest, ~~recognition~~distressed supplier costs, amounts attributable to previously divested/closed operations, loss on extinguishment of ~~unrealized gain on payment-in-kind note receivable~~debt and other items. See Note 1617 to our consolidated financial statements in Item 1 of Part I for additional details.

Free Cash Flow

We have defined free cash flow as ~~net~~ cash provided by ~~(used in)~~ operating activities less purchases of property, plant and equipment. We believe this measure is useful to investors in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations. Free cash flow is neither intended to represent nor be an alternative to the measure of net cash provided by operating activities reported under GAAP. Free cash flow may not be comparable to similarly titled measures reported by other companies.

The following table reconciles free cash flow to net cash flows provided by operating activities.

Three Months Ended
September 30, Nine Months Ended
September 30,
2015 2014 2015 2014
Net cash provided by operating activities $ 138
$ 104
$ 266
$ 327
Purchases of property, plant and equipment (70 ) (43 ) (192 ) (169 )
Free cash flow $ 68
$ 61
$ 74
$ 158

~~Note: Prior period amounts have been revised. See Note 1 to our consolidated financial statements in Item 1 of Part I of this Form 10-Q.~~



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net cash provided by operating activities	$	42		$	138		$	182		$	266
Purchases of property, plant and equipment	(68		)	(70		)	(198		)	(192		)
Free cash flow	$	(26	)	$	68		$	(16	)	$	74

Liquidity

~~Our global~~The following table provides a reconciliation of our operating liquidity, a non-GAAP measure, to cash and cash equivalents at September 30, ~~2015~~2016 ~~was as follows:~~:


Cash and cash equivalents	$	817		$	727
Less: Deposits supporting obligations	(11		)	(8		)
Available cash	806			719
Additional cash availability from revolving facility	349			478
Marketable securities	157			126
Total global liquidity	$	1,312
Total liquidity				1,323
Less: Liquidity at subsidiary*				(143		)
Operating liquidity				$	1,180


*	Cash and marketable securities, net of deposits supporting obligations, held by a wholly-owned subsidiary can be transferred out of this subsidiary only if approved by its independent board member.

Cash deposits are maintained to provide credit enhancement for certain agreements and are reported as part of cash and cash equivalents. For most of these deposits, the cash may be withdrawn if a comparable security is provided in the form of letters of credit. Accordingly, these deposits are not considered to be restricted.

Marketable securities are included as a component of global liquidity as these investments can be readily liquidated at our discretion.

Cash and marketable securities of $144 held by a wholly-owned subsidiary at September 30, 2015 can be transferred out of this subsidiary only if approved by its independent board member. Accordingly, accessing this component of global liquidity is uncertain.

The components of our September 30, ~~2015~~2016 consolidated cash balance were as follows:


	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Cash and cash equivalents	$	330	$	394	$	724	$	210	$	437	$	647
Cash and cash equivalents held as deposits	2		9		11		2		6		8
Cash and cash equivalents held at less than wholly-owned subsidiaries	1		81		82		1		71		72
Consolidated cash balance	$	333	$	484	$	817	$	213	$	514	$	727

A portion of the non-U.S. cash and cash equivalents is utilized for working capital and other operating purposes. Several countries have local regulatory requirements that significantly restrict the ability of our operations to repatriate this cash. Beyond these restrictions, there are practical limitations on repatriation of cash from certain subsidiaries because of the resulting tax withholdings and subsidiary by-law restrictions which could limit our ability to access cash and other assets.

The principal sources of liquidity available for our future cash requirements are expected to be (i) cash flows from operations, (ii) cash and cash equivalents on hand and (iii) borrowings from our revolving facility. We believe that our overall liquidity and operating cash flow will be sufficient to meet our anticipated cash requirements for capital expenditures, working capital, debt obligations, common stock repurchases and other commitments during the next twelve months. 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.

In May 2016, Dana Financing Luxembourg S.à r.l. completed the issuance of $375 of its June 2026 Notes. Net proceeds of the offering after transaction costs totaled $368, of which $362 was used to redeem all of our February 2021 Notes at a price of 103.375%.

In June 2016, we received commitments from new and existing lenders for a $500 amended and restated revolving credit facility (the Amended Revolving Facility) which expires in June 2021. At September 30, ~~2015,~~2016, we had no borrowings under the ~~revolving facility~~Amended Revolving Facility but we had utilized ~~$40~~$22 for letters of credit. ~~Based on our borrowing base collateral, we~~We had availability ~~as of that date~~at September 30, 2016 under the ~~revolving facility~~Amended Revolving Facility of ~~$349~~$478 after deducting the outstanding letters of credit.

In December 2014, we completed the sale of $425 in senior unsecured notes. Net proceeds of the offering after transaction costs totaled $418. Net proceeds of $359 were used to redeem $345 of our senior notes due February 15, 2019 (February 2019 Notes) pursuant to a tender offer at a weighted average price of 104.116%. In January 2015, net proceeds of $41 were used to redeem $40 of our February 2019 Notes at a price of 103.000%. In March 2015, net proceeds of $16 were used to redeem the remaining $15 of our February 2019 Notes at a price of 103.250%.

At September 30, ~~2015,~~2016, we were in compliance with the covenants of our financing agreements. Under the ~~revolving facility~~Amended Revolving Facility and ~~the~~our senior notes, we are required to comply with certain incurrence-based covenants customary for facilities of these types. The incurrence-based covenants in the ~~revolving facility~~Amended Revolving Facility permit us to, among other things, (i) issue foreign subsidiary indebtedness, (ii) incur general secured indebtedness subject to a pro forma first lien net leverage ratio not to exceed 1.50:1.00 in the case of first lien debt and a pro forma secured net leverage ratio of 2.50:1.00 in the case of other secured debt and (iii) incur additional unsecured debt ~~so long as the~~subject to a pro forma ~~minimum fixed charge coverage~~total net leverage ratio ~~is at least 1.0:1.0.~~not to exceed

3.50:1.00. We may also make dividend payments in respect of our common stock as well as certain investments and acquisitions ~~so long as there is (i) at least $100 of~~subject to a pro forma ~~excess borrowing availability or (ii) at least $75~~total net leverage ratio of ~~pro forma excess borrowing availability and~~2.75:1.00. In addition, the ~~pro forma minimum fixed charge coverage~~Amended Revolving Facility is subject to a financial covenant requiring us to maintain a first lien net leverage ratio ~~is at least 1.0:1.0.~~not to exceed 2.00:1.00. The indentures governing the senior notes include ~~similar~~other incurrence-based covenants that may subject us to additional specified limitations.

Our Board of Directors approved aan expansion of our existing common stock share repurchase program offrom $1,400 ~~that expires~~to $1,700 on ~~December 31, 2015.~~January 11, 2016. During the first ~~nine months~~half of ~~2015,~~2016, we paid ~~$245~~$81 to acquire ~~12,482,277~~6,612,537 shares of common stock in the open ~~market, leaving $66 available under~~market. We did not repurchase any shares during the program for further share repurchases. We plan to repurchase shares utilizing available excess cash either in the open market or through privately negotiated transactions. The stock repurchases are subject to prevailing market conditions and other considerations.third quarter of 2016.

From time to time, depending upon market, pricing and other conditions, as well as our cash balances and liquidity, we may seek to acquire our senior notes or other indebtedness or our common stock through open market purchases, privately negotiated transactions, tender offers, exchange offers or otherwise, upon such terms and at such prices as we may determine (or as may be provided for in the indentures governing the notes), for cash, securities or other consideration. There can be no assurance that we will pursue any such transactions in the future, as the pursuit of any alternative will depend upon numerous factors such as market conditions, our financial performance and the limitations applicable to such transactions under our financing and governance documents.

Cash Flow

Nine Months Ended
September 30,
2015 2014
Cash used for working capital $ (92 ) $ (95 )
Other cash provided by operations 358
422
Net cash provided by operating activities 266
327
Net cash used in investing activities (188 ) (177 )
Net cash used in financing activities (318 ) (219 )
Net decrease in cash and cash equivalents $ (240 ) $ (69 )

~~Note: Prior period amounts have been revised. See Note 1 to our consolidated financial statements in Item 1 of Part I of this Form 10-Q.~~



	Nine Months Ended September 30,
	2016			2015
Cash used for working capital	$	(142	)	$	(92	)
Other cash provided by operations	324			358
Net cash provided by operating activities	182			266
Net cash used in investing activities	(187		)	(188		)
Net cash used in financing activities	(72		)	(318		)
Net decrease in cash and cash equivalents	$	(77	)	$	(240	)

The table above summarizes our consolidated statement of cash flows. During 2014 we sold a payment-in-kind note receivable to a third party for $75. The proceeds included $40 of interest related to prior years and $35 of principal. The principal portion has been classified as cash provided by investing activities and the interest portion has been classified as cash provided by operating activities.

Operating activities — Exclusive of working capital, other cash provided by operations was $324 and $358 in 2016 and ~~$422 in 2015 and 2014.~~2015. The year-over-year decrease in other cash provided by operations is primarily attributable to ~~the receipt of $40 of interest related to prior years upon the sale of a payment-in-kind note receivable in 2014, as discussed above, and~~ lower operating earnings in ~~2015.~~2016.

Working capital used cash of $142 and $92 in ~~the first nine months~~2016 and 2015. Cash of ~~2015~~$152 and ~~$95 in last year's first nine months. Cash of~~ $80 was used ~~in 2015~~ to finance increased receivables in 2016 and ~~$142~~2015. The higher level of cash required for receivables in 2016 was due primarily to timing of customer payments. Cash of $57 and $82 was used ~~in 2014. We also used cash of $82 and $84~~ to fund higher inventory levels in 2016 and 2015. Higher inventory requirements in 2015 ~~and 2014.~~were due in part to a supplier transition initiative in our Commercial Vehicle operating segment. Partially offsetting ~~the~~ cash used for higher receivables and inventory in both ~~2015~~2016 and ~~2014~~2015 was cash provided by increases in accounts payable and other net liabilities of ~~$70 in 2015~~$67 and ~~$131 in 2014.~~$70.

Investing activities — Expenditures for property, plant and equipment were $198 and $192 in 2016 and 2015. During 2016, we paid $18 to acquire the ~~first nine months~~aftermarket distribution business of ~~2015~~Magnum. During 2016 and $169 in the first nine months of 2014. As discussed above, during the first nine months of 2014 we received $35 of principal upon the sale of a payment-in-kind note receivable. During the first nine months of 2015, purchases of marketable securities were funded by proceeds from sales and maturities of marketable securities. During the first nine months of 2014, purchases of marketable securities were primarily funded by cash receipts related to our payment-in-kind note receivable. During the first nine months of 2014, we received $9 from the escrow agent upon reaching final agreement on all pending claims related to the sale of our Structural Products business in 2010.

Financing activities — During 2016, Dana Financing Luxembourg S.à r.l. completed the ~~nine months~~issuance of $375 of its June 2026 Notes and paid financing costs of $10 related to the notes and the Amended Revolving Facility. We redeemed all of our February 2021 Notes at a $12 premium. Also during 2016, we made scheduled repayments of $28 and took out $66 of additional long-term debt at international locations. During 2015, we redeemed $55 of our February 2019 Notes at a $2 premium, made scheduled long-term debt repayments at international locations and took out additional long-term debt at international locations. ~~During the nine months of 2014, we made scheduled long-term debt repayments at international locations.~~ We used $26 and $27 for dividend payments to common stockholders in 2016 and 2015. We used $81 to repurchase 6,612,537 common shares and $245 to repurchase 12,482,277 common shares in 2016 and ~~$181 to repurchase 8,295,202 common shares during the first nine months of 2015 and 2014.~~2015.

Contractual Obligations

~~There~~Aside from the impacts of the financing activities described in Note 11 to our consolidated financial statements in Item 1 of Part I, there have been no material changes at September 30, ~~2015~~2016 in our contractual obligations from those reported or estimated in the disclosures in Item 7 of our ~~2014~~2015 Form 10-K.

Contingencies

~~See~~For a summary of litigation and other contingencies, see Note 1213 to our consolidated financial statements in Item 1 of Part ~~I for a summary of litigation and other contingencies.~~I. We believe that any liabilities beyond the amounts already accrued that may result from these contingencies will not have a material adverse effect on our liquidity, financial condition or results of operations.

Critical Accounting Estimates

The preparation of our consolidated financial statements in accordance with GAAP requires us to use estimates and make judgments and assumptions about future events that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. There have been no material changes in the application of our significant accounting policies or critical accounting estimates. Our significant accounting policies are described in Note 1 to our consolidated financial statements in Item 1 of Part I, as well as in Note 1 to our consolidated financial statements in Item 8 of our ~~2014~~2015 Form 10-K. Our critical accounting estimates are described in Item 7 of our ~~2014~~2015 Form 10-K.

~~Long-lived asset impairment~~Income Taxes — SIFCO S.A. (SIFCO), a key supplier to our Commercial Vehicle business in Brazil, is operating with judicial oversight under reorganization proceedings in Brazil. In 2014, our Commercial Vehicle operating segment had $225 of sales attributable to SIFCO supplied axles and parts. In August of this year, SIFCO discontinued supplying us with parts pursuant to our long-term exclusive supply agreement (the supply agreement). We are pursuing the legal rights and remedies available to us in an effort to enforce resumption of production pursuant to the supply agreement or obtain an alternative satisfactory outcome that enables us to maintain the supply of parts produced by SIFCO to our customers.

Assuming SIFCO does not resume supplying us with parts, subsequent to October 2015 or thereabouts, we would no longer be able to satisfy customer requirements for SIFCO-produced parts. We are working with SIFCO and our customers in an effort to address and minimize supply disruptions to the extent practicable. Currently, SIFCO is the only practical near-term supply source for certain component products and developing alternative supply sources would require considerable time, effort and investment. In the ~~event that~~second quarter of 2016, we ~~are not successful in effecting resumption~~completed a refinancing of ~~production by SIFCO or otherwise obtaining access to~~senior notes, redeeming our February 2021 Notes and issuing the ~~SIFCO-produced parts, our sales will be adversely impacted and we will be unable to satisfy our customer requirements for these parts.~~

~~Assessments of impairment require significant judgment about potential outcomes and the resultant financial implications.~~June 2026 Notes through a wholly-owned subsidiary, Dana Financing Luxembourg S.à r.l. As ~~discussed more fully~~referenced in Note 215 to our consolidated financial statements in Item 1, we evaluated the effects of ~~Part I,~~this transaction along with other factors as part of our assessment of valuation allowances against U.S. deferred tax assets. Based on our assessment, we determined that no release of valuation allowance in the ~~net long-lived assets associated with~~third quarter of 2016 was appropriate. However, we believe that within the next twelve months, to the extent our ~~long-term exclusive supply agreement with SIFCO were impaired at September 30, 2015,~~operating performance demonstrates sustained profitability, certain of our end markets stabilize and we ~~recorded a pre-tax charge~~are able to affirm sustained profitability in our forecasts, release of ~~$36 to write off their remaining value.~~U.S. valuation allowances approximating $500 is reasonably possible.

~~Equity affiliate~~ — We have an equity method investment in Dongfeng Dana Axle Co., Ltd., a China-based joint venture with an affiliate of Dongfeng Motor Co., Ltd., that supplies axles to our Dongfeng affiliate partner and other customers operating in the commercial vehicle medium/heavy truck and bus markets. Our 50% ownership investment in DDAC is $126, inclusive of approximately $51 of goodwill and amortizable intangible asset value attributable to amounts paid for our ownership interest in excess of the carrying value of DDAC's net assets. During 2015, the financial performance of DDAC has been adversely impacted by macroeconomic developments in China which have contributed to a decrease in commercial vehicle production

levels of around 30%. To the extent that any decline in the value of our investment in DDAC is subsequently determined to be other than temporary, an impairment charge for all or a portion of the $51 of investment value in excess of DDAC net asset carry value could result.

~~U.S.~~ Pension Plans — Long-term interest rates on high quality corporate debt instruments, which are used to determine the discount rate, have ~~increased moderately~~decreased during ~~2015.~~2016. The ~~higher~~lower interest rates, if unchanged during the fourth quarter, would result in a year-end discount rate of ~~4.12%, which is 41 basis points higher than~~3.33% versus the ~~December 31, 2014~~4.13% discount ~~rate.~~rate used for our plans in the U.S. at the end of 2015. Our ~~2015~~2016 pension fund asset return through the first nine months has been ~~near breakeven through September 30, 2015 versus~~significantly better than our 6.5% annual expected return on plan ~~assets of 7.00%.~~assets. The year-end valuation, assuming no ~~change in~~ interest ~~rates~~rate change and asset earnings at the expected rate during the fourth quarter, would result in an actuarial loss of approximately $35 being charged to other comprehensive income. Based on these assumptions, ~~our~~the funded status of our defined benefit pension plans in the U.S. at the end of ~~2015~~2016 would approximate ~~90%~~89%, ~~comparable to~~slightly better than our position at December 31, ~~2014.~~2015. We currently expect there to be no minimum funding requirement for ~~2016.~~our U.S. plans in 2017.

Long-term interest rates on high quality corporate debt instruments have also declined significantly outside the U.S., especially in Germany where we maintain unfunded plans that comprise the vast majority of our non-U.S. pension obligations. Rates there are approximately 100 basis points lower now than at the end of 2015. If the current discount rate is used in the year-end valuation of our defined benefit pension plans in Germany, we would expect an actuarial loss approximating $35 to be charged to other comprehensive income.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We continue to execute forward contracts to mitigate our foreign currency exposure associated with forecasted transactions, recorded assets or liabilities and firm commitments, as appropriate. Periodically, we also execute forward contracts as net investment hedges of foreign operations, as appropriate. During the second quarter of ~~2015, at~~2016, we executed certain refinancing activities and entered into derivative instruments to manage our debt portfolio. We redeemed our February 2021 Notes and issued the ~~scheduled maturity date,~~June 2026 Notes through a wholly-owned subsidiary, Dana Financing Luxembourg S.à r.l. In conjunction with the issuance of the June 2026 Notes, we ~~settled our forward contract for a U.S. dollar equivalent notional amount of $98 which had been designated~~executed two fixed-to-fixed cross-currency swaps with the same critical terms as ~~a net investment hedge of an equivalent portion of certain of our European operations. No such net investment hedges remain outstanding at September 30, 2015.~~the June 2026 Notes. See ~~Note~~Notes 11 and 12 to our consolidated financial statements in Item 1 of Part I for additional information.

~~We also continually monitor our debt portfolio and evaluate our underlying exposure to interest rate risk. During~~Other than the third quarter of 2015, we terminated a fixed-to-floating interest rate swap on the $425 of our 5.5% senior notes, due 2024. The total notional amount of the interest rate swap was $425, of which $340 had been designated as a fair value hedge of the associated debt. The interest rate swap economically served to convert this portion of our fixed-rate debt to variable-rate debt. No interest rate swaps remain outstanding at September 30, 2015. See Note 11 to our consolidated financial statements in Item 1 of Part I for additional information.

~~There~~refinancing activities described above, there have been no material changes to market risk exposures related to changes in currency exchange rates, interest rates or commodity costs from those discussed in Item 7A of our ~~2014~~2015 Form 10-K.

Item 4. Controls and Procedures

Disclosure controls and procedures — We maintain disclosure controls and procedures that are designed to ensure that the information disclosed in the reports we file with the SEC under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Report on Form 10-Q. Our CEO and CFO have concluded that, as of the end of the period covered by this Report on Form 10-Q, our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective.

Changes in internal control over financial reporting — There was no change in our internal control over financial reporting that occurred during our fiscal quarter ended September 30, ~~2015~~2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

CEO and CFO certifications — The certifications of our CEO and CFO that are attached to this report as Exhibits 31.1 and 31.2 include information about our disclosure controls and procedures and internal control over financial reporting. These certifications should be read in conjunction with the information contained in this Item 4 and in Item 9A of Part II of our ~~2014~~2015 Form 10-K for a more complete understanding of the matters covered by the certifications.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are a party to various pending judicial and administrative proceedings that arose in the ordinary course of business. After reviewing the currently pending lawsuits and proceedings (including the probable outcomes, reasonably anticipated costs and expenses and our established reserves for uninsured liabilities), we do not believe that any liabilities that may result from these proceedings are reasonably likely to have a material adverse effect on our liquidity, financial condition or results of operations. Legal proceedings are also discussed in Note 1213 to our consolidated financial statements in Item 1 of Part I of this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes in our risk factors disclosed in Item 1A of our ~~2014~~2015 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer's purchases of equity securities —- Our Board of Directors approved aan expansion of our existing common stock share repurchase program offrom $1,400 ~~that~~to $1,700 on January 11, 2016. The share repurchase program expires on December 31, ~~2015.~~2017. We repurchase shares utilizing available excess cash either in the open market or through privately negotiated transactions. The stock repurchases are subject to prevailing market conditions and other considerations. ~~Under~~During the ~~program, we used cash~~third quarter of ~~$119 to repurchase~~2016, there were no shares of our common stock ~~during~~repurchased under the ~~third quarter~~program. Approximately $219 remained available under the program for future share repurchases as of ~~2015.~~September 30, 2016.

Calendar Month Class or Series of Securities Number
of Shares Purchased
Average
Price Paid
per Share

Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs

Approximate
Dollar Value of
Shares that May Yet
be Purchased Under
the Plans or Programs
July Common 1,252,198
$ 19.61
1,252,198
$ 161
August Common 2,472,125
$ 18.08
2,472,125
$ 116
September Common 2,935,933
$ 17.04
2,935,933
$ 66

Item 6. Exhibits

The Exhibits listed in the “Exhibit Index” are filed or furnished with this report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.



		DANA ~~HOLDING CORPORATION~~INCORPORATED
Date:	October ~~22, 2015~~20, 2016	By:	/s/ ~~William G. Quigley III~~Jonathan M. Collins
			~~William G. Quigley III~~ Jonathan M. Collins
			~~Executive~~Senior Vice President and
			Chief Financial Officer

EXHIBIT INDEX



Exhibit No.	Description

3.1	Certificate of Amendment to the Second Restated Certificate of Incorporation of Dana Holding Corporation, effective as of August 1, 2016. Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed August 1, 2016 and incorporated by reference herein.

3.2	Amended and Restated Bylaws of Dana Incorporated, effective as of August 1, 2016. Filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed August 1, 2016 and incorporated by reference herein.

31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. Filed with this Report.

31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. Filed with this Report.

32	Section 1350 Certifications (pursuant to Section 906 of the Sarbanes-Oxley Act of 2002). Filed with this Report.

101	The following materials from Dana ~~Holding Corporation’s~~Incorporated’s Quarterly Report on Form 10-Q for the quarter ended September 30, ~~2015,~~2016, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Statement of Operations, (ii) the Consolidated Statement of Comprehensive Income, (iii) the Consolidated Balance Sheet, (iv) the Consolidated Statement of Cash Flows and (v) Notes to the Consolidated Financial Statements. Filed with this Report.

4948



	December 31,
	2014
Cash and cash equivalents	$	27
Current assets classified as held for sale	$	27

Accounts payable	$	16
Accrued payroll and employee benefits	4
Other accrued liabilities	1
Current liabilities classified as held for sale	$	21

Pension obligations	$	11
Other noncurrent liabilities	6
Noncurrent liabilities classified as held for sale	$	17

Accumulated other comprehensive loss classified as held for sale	$	(11	)



	Remainder of 2015		2016		2017		2018		2019
Amortization expense	$	2	$	8	$	5	$	2	$	1



Remaining Borrowing Availability	Base Rate		LIBOR Rate
Greater than $350	0.50	%	1.50	%
Greater than $150 but less than or equal to $350	0.75	%	1.75	%
$150 or less	1.00	%	2.00	%



Calendar Month	Class or Series of Securities	Number of Shares Purchased	Average Price Paid per Share		Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
July	Common	1,252,198	$	19.61	1,252,198	$	161
August	Common	2,472,125	$	18.08	2,472,125	$	116
September	Common	2,935,933	$	17.04	2,935,933	$	66