Dana Incorporated

Good morning and welcome to Dana Incorporated's Business Update Call. My name is Regina and I will be your conference facilitator. Please be advised that our meeting today, both the speaker's remarks and Q&A session, will be recorded for replay purposes. For those participants who would like to access the call from the webcast, please reference the URL on our website and sign in as guest. There will be a question and answer period after the speaker's remarks and we will take questions from the telephone only. To ensure that everyone has an opportunity to participate in today's Q&A, we ask that callers limit themselves to one question at a time. If you would like to ask an additional question, please return to the queue. At this time, I would like to begin the presentation by turning the call over to Dana's Senior Director of Investor Relations and Corporate Communications, Craig Barber. Please go ahead, Mr. Barber.

Thank you, Regina. Good morning, everyone. Thank you for joining us today for Dana Incorporated's January Business Update Call. As a reminder, we will be hosting our 2024 Q4 full-year earnings call on February 20th. We wish you a release with the date and time and details shortly. Today's presentation includes forward-looking statements about our expectations for Dayton's future performance. Actual results could differ from what we discussed today. For more details about the factors that could affect future results, please refer to our Safe Harbor Statement found in our public filings and reports with the SEC. Before we proceed, I'll remind you to visit our investor website where you will find this morning's press release and presentation. As always, today's call is being recorded, and the supporting materials of the property of Dana Incorporated may not be recorded, copied, or rebroadcast without our written consent. On the call this morning is Bruce McDonald, Dana Chairman and Chief Executive Officer, and Timothy Krause, Senior Vice President and Chief Financial Officer. Now let's get started, and I'll turn the call over to Bruce.

Okay, thank you, Craig, and good morning, everyone, and thanks for joining us here on our business update call. In November, we announced that we were going to proceed with the sale of our off-highway business, and we also announced a major cost reduction initiative with the intent of having new Dana margin fee in line with where Dana is today for 2026. So that was kind of our original goal. I'm going to really spend most of my time today with Tim and I talking about the cost reduction side of things, but I will spend just a brief minute here on what's happening in terms of off highway. And obviously, you know, we're well into a process, and so I can't really get into a lot of specifics. But we do have a very robust process going on right now. We have several strategic buyers going through management presentations, site visits, plant tours, things like that. We feel really good in terms of where we're at. We're encouraged with the values that we've seen so far, and we remain hopeful that we'll be able to come out with an announcement on a transaction around the time of our Q1 earnings. With regards to the cost reduction initiatives, I'm really pleased with the progress that the team's made, and in particular, the speed at which we're going to start to see the numbers flow through our P&L. You'll even see we had some benefits in in the fourth quarter here and Tim will kind of get into it for run rate and phasing and things like that. I think before I get into the details of of of of the cost side of things here, I think it's kind of it'd be worthwhile to go through the strategic context and and and what's changed from a year ago. So if you think about. We're in by the way, we're on slide four. If you think about the where we were a year ago, obviously we're focusing on three businesses off highway as well as commercial and light vehicle, those three markets. Right now we've got to reassess that and focus on two end markets being commercial and light vehicle. In terms of electrification, we had an extremely robust outlook and growth aspirations for that business. You know, just stepping back, I would say that Dana with the full support of our board, positioned itself to be electrification in the leader in all of our markets. And if you sort of were to size the opportunity that we had in front of us this time last year, it was looking at like a $4 or $5 billion growth opportunity over the next five years. Obviously, things have changed since then. Over the last six months, we've seen significant deterioration in the timing and the volume projections And with the new administration here in the United States, it's likely we'll see further deterioration in the end markets. And this requires us to reassess our strategy as it relates to EV. And I think I'll just do a little double click on that. So what it means for us is, and I'll be very granular here, is First of all, our battery cooling business, we're fully committed to that. This is a business that is profitable today and is capable of delivering a creative double digit EBITDA margins. So we're going to invest and grow that business. Where we currently have ICE business, we're committed to being our partner, a partner to our customers, and we want to be technology agnostic. So we will invest in EV electrification alongside of our customers to make sure we are their partner of choice. For all other currently awarded programs, we are in active negotiations regarding pricing, engineering, and CapEx recoveries. And for all programs that we are pursuing, we've adopted a much more stringent approach to going after this incremental business opportunities, where we're no longer willing to risk our capital and ER&D upfront. So we're looking basically on opportunistic new business that we fully funded by our customers. So the bottom line on this one is it generates significant ER&D savings, which are in our numbers here, and also will make us less capital intensive effective immediately. Third, we had an infrastructure in place to support our growth aspirations and business profile. And with the sale of our off-highway business, we now need to focus on right-sizing our corporate structure The CNR announcement here, we're talking about we're going to take our power technology segment and split that into two pieces. We'll put the aftermarket part of that business into commercial vehicle, and that way we can run all of our aftermarket operations under the leadership of Brian Poor in that business. And secondly, the rest of power technology will fold into our light vehicle business under Byron Foster. Turning to slide five, I just want to talk more about new Dana financial commitments. You'll see here we're upping our cost reduction targets from two to 300 million. Tim will walk you through the details in his later slide, and I don't want to steal a lot of thunder here on that one. But what I would just remind people is we're talking about $300 million of run rate savings that will be in our 2026 number. 12 months or I guess 11 months from now, that's the run rate saving that we're focusing on. In terms of margins, we previously talked about margins in the 8.5% range for 2026, basically showing you a range here of 2025 new data margins of 8.1 to 8.6. And we see 2026 with the impact of our cost reduction actions, our margins for new data being in the 9.5 to 10.5. uh range uh you also see you make a comment here in terms of stranded costs associated with the sale of the off-highway business obviously the natural question is can we take some of these costs out in the guidance that we've provided here today we're assuming no uh which i say would be a would be a conservative assumption um we just really can't go after that that cost bucket until we have a little bit more clarity on who the buyer of the business is, what TSA support requirements are going to need, and when the sale is going to happen. So stay tuned on that one. I would expect us to chip away at that in future updates. And then lastly, just in terms of the balance sheet, Now, the sale of our off-highway business is a once-in-a-lifetime opportunity for us to transform our financial profile and strengthen our balance sheet, as well as return significant capital to our shareholders. We expect to have new data with a net leverage ratio of about one times and a free cash flow of a percent of sales, about 4%, through the cycle. So, obviously, in the Good years will do better than that, and in down years will do worse. Before turning it over to Tim, I just want to make sure everybody understands how excited I am with the progress that our teams made, and I really have to thank the team here at Dana in helping us to get to this point. So Tim, with that, I'll turn it over to you.

Thanks, Bruce. We just turned to slide seven, give you an overview here for the results for 2024. Looking at the left side of the page, so about $10.3 billion in revenue, which is in line with the guidance that we provided at the end of the third quarter. Adjusted EBITDA came in at about $885. Again, that's at the high end of the range. And as we'll see here in a page or two, it's reflective of the cost savings actions that we'd already had underway flowing through in the quarter. A margin at 8.6%, again, higher than where we were expecting, again, reflective of the better earnings. Cash flow at 70 million, a little bit below guidance. There we, given some of the softness in our end markets, we did have a bit higher working capital in the business than we were anticipating. So we have some work to do there as we move through 25 to continue the drive to get more efficient. relative to our working capital. If you turn to the next page, I'll take you through the walk here. Sales for the full year, you know, obviously will be lower, really due to off-highway volumes and weakness from an EV perspective. And those were offset by additional revenue in both LV and PT. Again, and then we had some FX and commodity headwinds as we continue to to see and provide some pricing back to customers related to the commodity programs that we have. On the profit side, really good conversion on lower sales. So again, this has been a story most of the year as we continue to drive efficiencies throughout the organization, and especially on the plant floor. And as our customers continue to improve the run rate and mix changes that had really plagued us over the last few years. Then we've added a new column here, cost savings. So you can see about $10 million of the cost saving actions flowing through in the quarter. I'll talk a little bit more about that here as we get into the 2025 guidance. And then the balance of it is really around bit currency and then the commodity headwinds. So really good operating performance for the business as we had a difficult top line here. So if you turn to page nine, you know, we're looking at a 2025 sales of about $9.8 billion, $9,775 on the page. That's down a half a billion dollars. We'll walk through the components of that on the next page. Adjusted EBITDA is going to be up nearly $100 million at 975. And again, that's really reflective of the cost-saving actions that we're going to see going through. That gives you an implied profit margin in the range of somewhere between 9.7% to 10.2%. And free cash flow, obviously, here we're going to see above $200 million given the strength in both EBITDA and the actions we're taking around CapEx and improved working capital. If you turn to page 10, I'll take you through the walk. So our half a billion dollar sales drop, about half of that is related to volume and mix. The other half is really driven by currencies and commodities. So we're seeing, you know, much, much, much, much more impact than we did this year from commodity, specifically the Euro, the Brazilian Rai, Indian Rupee, and the Canadian dollar. And again, this reflects the entirety of Dana, so this includes off-highway. If you, on the previous page, we did give a breakout, which I'll cover here in a minute, between the segments. On a full year adjusted EBITDA basis, about $40 million lower contribution on those lower sales. And then you can see $175 million flow through on the cost saving actions. So as Bruce mentioned, we've taken our target up from the 200 that we were talking about in November to 300. It's really reflective of the amount of progress that we've been able to make. And you can see this reflected here. When we get through to the end of 2025, between the 10 million from last year and what's here, we already have 185 million that'll be reflective in the numbers. And well over 100 million of this 175 has already been actioned. So in the third quarter, we took a charge related to some of the actions we're taking. We'll see a an additional charge taken in the fourth quarter here for some of the additional actions. So then if we go to the last page on a cash flow, so you can see the walk from the 975 and adjusted EBITDA, really it's about $150 million increase in cash flow, really driven by the higher earnings, lower taxes, and lower capital spending, and that's really offsetting of higher one-time costs, again, related to both the transaction and the cost savings initiatives that we're taking, and then slightly higher interest rates due to timing on some of the payments. So with that, I'll turn the call back over to Regina and open it up for questions.

At this time, I'd like to remind everyone, in order to ask a question, simply press star followed by the number one on your telephone keypad. And our first question today comes from the line of Joe Spack with EBS. Please go ahead.

Thanks. Good morning, everyone, and thanks for hosting this call. I guess just to start on the cost savings update, not to be sort of too semantic, but when you sort of say, you know, 300 million run rate, does that mean – If we add the total cost savings from 24 to 26, we'll get to a $300 million total. Or at some point in 26, if we annualize that savings in that quarter, we get to 300. And then also on the cost savings, can you help us understand how much of that is just the true sort of reduction of some of the spending, which it sounds like was pretty high on EV in the past versus restructuring actions you've taken?

Yeah, why don't you start with that, Tim? So, you know, the buckets, you know, you've got headcount. You can think about engineering, overall EV spending, and then general overhead. Those are probably the four big buckets. I would characterize that it's a balance between the two. I mean, even this year alone, I think the EV portion of the cost save is in excess of $50 million. So, you know, obviously pretty significant reduction from our side in terms of what we had been spending on a run rate basis around EV. That's not just engineering, but that includes all the program management, all the other infrastructure that we have around that business. So, and then, you know, the balance is really, you know, really getting the cost structure and the overhead to where, we think it needs to be and what we need to run the business. And so that's really the head count. And a lot of those actions have already been taken and some more to take throughout this year. But like I said, more than 100 million of this has already been actioned and will start flowing through quite considerably in the first quarter.

Yeah, maybe just a lot more on the EV side there, Joel, is in addition to sort of the savings associated with the quoting disciplines that I talked about in my comments, I'd also remind folks, if you think about our commercial vehicle EV portfolio, it's more of a catalog of products, and 95% of the spend is done. So it just finished because we've developed the products. We would still have applications engineering for new business, but the core engineering to develop our suite of products is behind us. So that falls out there too.

And then, Joe, on your question on the 300, yeah, essentially, you know, the way to think about this is the 10 to 75, and then we'll have an incremental to get to 300 million in 2026. Now, you have to back off the 40 million of stranded costs that we would expect to, at least we're forecasting to have still. Again, as Joe Bruce mentioned, we're going to go after those costs. We just have to sort of sort through where we end up on the transaction and how long we need to provide some of the transitional services and how we rework the business. But it's really, you know, if you think about it, without the stranded costs, it's 300. You can just add the numbers up through the years. That'll be a full run rate in all of 26, less the 40. So you can take 260. So I think the The incremental in 2026 is, you know, $75-ish million if I'm doing the math right.

Okay.

So, yeah, so you'll get that.

And it's mainly annualization.

Yeah. Okay. Most of the stuff coming in, right, will be the rest of the annualization because obviously we're taking actions in the back half of 25 that will then actualize for the full year. Right.

Yeah. Okay. Thank you. That's helpful. And then just... Maybe one on 25. I know you gave some color on off-highway expectations for 25 and then the combined remain code. But can you give us any just color on what you're seeing and are expecting in the light vehicle and commercial vehicle markets and maybe the shape of the year given it seems like? Some of your light vehicle customers have some maybe challenges in the beginning of the year, and then obviously there's some commercially aligned market dynamics to deal with.

Yeah, I think the way to think about this is we think the first half of the year is going to be weaker than the back. We do expect recovery coming in, especially when you get into the latter parts of the third quarter and into the fourth quarter, but continued weakness in the first quarter. And when we report the full results in February, we'll give a lot more color around the calendarization and some first quarter specifics so that it's a little bit easier for you guys to understand. Because it won't follow probably what we would typically see.

Yeah. I mean, the way to think about it is if you think about light vehicle, the last Q1 you had sort of the recovery is associated with the strike in GM the year before. And in this Q4 of this year, we had lower volumes as Stellantis took some production out to rebalance inventory. So just looking at light vehicle overall, we got a negative comp in Q1 and a positive in Q4. If you look at CV, I would say the market is soft, which we reflected in our guidance. And then If you think about off-highway, its volumes were declining throughout the year. So as we look into Q1, it's well down versus prior year. So again, like Tim said, we know there's a lot of moving parts here. So we're going to be more inclusive in terms of our guidance. And we will give Q1 guidance. And we will show things new Dana and off-highway going forward.

I appreciate that, guys. Thanks a lot. Thank you.

Our next question will come from the line of Dan Levy with Barclays. Please go ahead.

Hi, good morning. Thanks for taking questions and thanks for hosting this call. First, I know you're going through the process now on the sale process for all of Highwood, but maybe you could just give us a sense of perhaps the types of buyers you're in discussion with. What's the tone and tenor of the discussion? Is this much more sort of demand-driven versus you pushing this out? How are they looking at the business? And maybe just a comment on how the softer off-highway market in 25 factors into the valuation.

Okay. So let me, I'll just have a few comments and I'll let Tim take it because Tim was over in Europe last week and has had more face time with them. But what I would tell you is, you know, strong strategic interest. I would tell you that, you know, we've been surprised at some of the people, some of the strategic people on the list. And I think what we're sort of hearing is there's people out there that have growth challenges in their current markets, and they're looking at near adjacencies as a way to deploy uh to boost their growth and and that's the part I'd say in terms of the buyer that we've been surprised with um but we're talking about um you know obviously you certainly can't get into any names but what brand name large well capitalized buyers um and Tim what you you can give a bit more color maybe on the discussions and things like that yeah I I think you know the the the

to echo Bruce's comment, we, you know, after the announcement, you know, the level of increased interest was, we expected it and very high quality interest in the business. So super happy with kind of where we're at. All of the buyers that are engaged in the process are really heavily engaged. I mean, we have, unfortunately for the team, right, they're trying to run the business and obviously deal with the transaction, but highly engaged, really want to understand the business and and how it works and what the drivers are. So very, very happy. I mean, I'm on the phone almost daily with some combination of the buyers that are in the process. In terms of your question on weakness, that's not really a huge concern, at least from the buyers that we've been discussing. They understand the... the market and where it's at in the cycle so i i think most of the buyers are looking at this in a very long-term view and um we still expect um you know to be able to to have the the valuation on the business that that we're expecting and we know that the intrinsic value is for it and your your comments of plans or hopes to announce something uh around the one cue call i recognize there's a lot of moving pieces there but

based on where you are, you see maybe a line of sight that's in place, or is that more just an aspiration?

We have a timetable that we're working towards. Because we have a competitive process, we're able to have maybe more influence on the timeline than if it was just one buyer. So we have a timeline where it's been in place for several months, and we're right on schedule.

Yeah, and look, when we When we spoke or had the calls, you know, last November, I mean, one of the things we made, the comment we made is we were well down the path already. So it's not like we started, you know, fresh in November. The process had been ongoing for a number of months. And so we were in a really good situation to be able to really push the process along. So I wouldn't call it aspirational. I think we're going to be in good shape in early Q2 to be able to announce something.

Great, thank you. As a follow-up, I wanted to ask about free cash flow of RemainCo. And I recognize a big part of that is the underlying EBITDA will improve, so that helps. But maybe you can talk about some of the other pieces within free cash flow. In the past, if you looked at CapEx of commercial vehicle and especially light vehicle, it was a disproportionate piece of your total CapEx profile. Other items that had also weighed down your free cash flow as well, working capital, et cetera. Maybe you could just double click on the opportunity to improve the free cash flow profile of Remainco outside of the EBITDA.

Sure. Yeah. I mean, I think there's a couple of buckets. So your point on CapEx is correct, right? You know, the higher CapEx businesses are really LV at the end of the day, not so much on the CVs. but mostly because we've been really moving to improve and restructure that business. But the big buckets, right, so we should see better working capital or lower working capital intensity. We are selling the business that has the highest working capital intensity in it. And then the other two really big buckets, so first will be cash interest, right? So as we drastically improve the balance sheet and the leverage profile, we'll obviously have a lot less much lower claim on the EBIT from debt service. And then the other is on cash taxes. So a disproportionate amount of the cash taxes relate to the off-highway business. And so those taxes will be lower by more than just the percentage loss in terms of the top line. So those are the big buckets. Plus, as we continue to change how we're thinking about and what we're doing around EV and that business, we should have better or lower capex than we may have otherwise been thinking about in the light vehicle business.

The capex in light vehicle... Hey, Dan, I think we've got to be respectful of the other guys on the call. Thank you. We can follow up with you. Yeah, we'll follow up. That's not a problem.

Yeah.

Our next question comes from the line of Tom Narayan with RBC Capital Markets. Please go ahead.

Thanks, guys. Just a couple of kind of clarifications on some of the answers you've already given. So on the discussions you're already having with potential buyers, I think you mentioned that the off-highway weakness is not a huge concern. They're looking past the cycle. Does that mean that you're already at the point where you're discussing the kind of valuation, like the actual purchase price? That's my first question. Okay.

And like Tim said, we obviously put a – we knew the market was going to be soft. So the numbers that we gave the buyers as part of this process showed 26 being – 25, I'm sorry, being weaker than 24. It's not new news. Yeah. It's not a surprise.

Yeah. And the cycle for a father, I know there's different end markets. How long, what is the typical cycle?

Just generally it depends on the end market, but they, if you think about it, like in, in contrast to say, like, they tend to be shorter and in, in deeper and they recover very quickly. So that's the other part here, right? They tend to be down, down sharply for a small period of time and then, and then rebound quite, quite quickly.

Got it. Okay. And then my last question. Okay. You mentioned that initially you guys are targeting $4 to $5 billion in EV spend. I understand most of your EV exposure was on the commercial vehicle side. And you cited what was going on in the U.S. with the administration change. On the light vehicle side, we're seeing a pretty strong recovery already happening in the U.S. and in Europe. Just curious, that $4 to $5 billion, where was that mostly? I guess it's Market vehicle.

What about geographic? No, no, no. It was $4 to $5 billion in revenue. So hopefully, yeah.

But it was spread across a really light vehicle and commercial vehicle. But don't forget, from our perspective, we don't play in past car. So we're talking about heavy trucks and that market. Okay. So that's the one thing. We're not supplying into regular pass car on EV. Ours is still in our mainstay light truck platforms. Got it. All right. Thanks.

Yep. Our next question comes from the line of Colin Langen with Wells Fargo. Please go ahead.

Oh, great. Thanks for taking my questions. Just to follow up on the $300 million, I thought in the past you talked about all the savings were going to be sort of above the plant. When I look at, I mean, sort of 2023, SG&A and engineering were like $900 million for the entire company. That would include off-highway. So to cut $300 from above the plant, wouldn't that require like cutting almost half of your SG&A and engineering? It seems like quite a high percent to cut for the remaining income?

Yeah, so one thing to understand is like some of, we tend to have probably a higher portion of what you would traditionally think of as company SG&A. uh in in our cogs um i think we get the the way we allocate those costs end up in cost of goods sold versus in the um in the true s g a line that's recorded so like We think of them as being above the plants because that's where they organically sit. When we think about how they get allocated, some of those do end up on the COGS line, but they're not physically on the plant floor because they're sitting here in different buildings. So that is a bit of the difference. But, I mean, we are taking considerable amounts of those costs out, yes.

There is a huge reduction in engineering. But just to maybe give you an example, if you think about – what we would consider costs above the line. We have a fairly large bucket of, I'll say, regional costs, costs outside of North America, Brazil, India, China, Korea, Europe, you name it, right? And if you look at the profile of New Dana versus Dana today, it's much, much more North American centric and obviously two lines of business versus three. And as a result of that, we are looking like a 50% tight cut in those costs. So there's definitely areas where there's big opportunity.

Got it. And then to circle back on the market assumption, if I look at the walk, it implies like I think only a 2.5% organic sales decline. If I think about things like Super Duty, I think S&P is forecasting it down double digit. It's a big customer. Volumes globally are down. So what's driving that? And I guess maybe is it the backlog? I think last year you had 300 million supposedly rolling on. Is that embedded in that number?

Obviously, that's a net number. Like, we still have backlog. We still have programs rolling on. So that's part of it. Some of it's the mix on it. So, yeah, we'll give more detail around that in February. But we do have backlog that's offsetting some of the markets.

And any color on the size of the backlog, that 300 last year?

We'll take you through it in February.

Got it. All right. Thanks for taking my questions.

Sure. Our next question comes from the line of James Piccariello with B&P Paribas. Please go ahead.

Hey, everybody. Hi. So once the off-highway sale closes by year end, Can you just walk us through again what pro forma net leverage might look like? I believe you have that target to get to a half to full turn, that half to full turn range. And then just let me know what I might have wrong here and walk through the scenario as you see it. The majority of the off-highway proceeds then go towards immediate debt reduction, if I have that right. And then from there, any free cash flow goes towards buybacks plus Dana's ability to lever up since you'll likely be in a net cash position once that off-highway sale is completed? What do I have right or wrong there?

Well, I guess that one thing is buyback and or special dividends.

But some sort of capital return.

Exactly. So, you know, in that we will evaluate at the time, you know, based on where we think our stock price is versus its intrinsic value and also Given our market cap, there's a limit in terms of how much stock we can probably buy back over a certain amount of time that may lead to a combination of dividend versus buyback. So we don't know. But we do expect to have surplus cash and be having those discussions when we make the announcement.

But James, yeah, your sort of walk makes sense. That makes sense. I mean, that is correct. But yeah, on leverage, we're looking at, you know, we want to get the business to sort of one times through the cycle. And don't forget, we see New Dana having better EBITDA than what you see today, obviously, because of the cost takeouts and the other changes we're making.

Yeah, it can get to some some big capital return numbers, which is exciting. And then just my follow-up is, on the $175 million in cost savings for this year, can you just help to mention roughly what portion of that will sit within the commercial vehicle business? And then to achieve the $260 million in net cost savings over this year and next, what will be the restructuring cash cost to achieve that, right?

Yeah, so I think we – We called out about 50 million, I think, in one of the slides, so that's about right. Some of that's been spent, some of that gets spent over the following, over 25, I mean, maybe some timing into 26, we're still kind of working through it. But I think when you think about the payback on that, it's a really, really great return relative to what we have to spend to achieve those savings. And some of the reason for that is, you know, a lot of these costs are coming out of North America where obviously the cost to reduce heads is far more manageable. And the other is, you know, on the engineering side, a lot of that was really contract. So because we were bringing on and growing the spend quite quickly, we weren't actually hiring all those people. We brought on a lot of contractors. Those tend to be more expensive, but you can get rid of them pretty quickly and at no cost.

But I mean... we'll sort of hold off on on like how much goes to what segment, because, you know, like I said in my remarks, we are going to change our segment reporting so that you'll you won't really and we'll show pro forma numbers to get everybody up to speed with how to go into the other two businesses. But but the way to think about it is largely we're talking about costs that generally get allocated based on sales. So, you know, it's going to be LV versus CV sales, and that's probably how the costs split, roughly.

Got it.

Thank you. Thank you.

Our final question will come from the line of Doug Carson with Bank of America. Please go ahead.

Thanks, Bruce and Tim. I appreciate taking my question. This question is, is debt related? I spoke to many of your bondholders that are excited about the future of the company. I just wanted to do a little sanity check here. If we're targeting roughly one turn in net leverage through the cycle, and we use the midpoint EBITDA, which I know may be a little low of $600 million at the Remain Co., we get a figure of debt reduction or quantum of debt maybe about $1.8 billion, maybe $1.5 billion to $2 billion, a pretty large number, which is about two-thirds of your current debt balance. So first, is that math sensible? It seems reasonable. Okay, great. I guess the second question is, if I'm a bondholder and I'm sitting with this bond, my natural curiosity is, how are you looking to mechanically take out the debt? And there's some covenants related to significant asset sale proceeds, and some could suggest that those bonds potentially could be required to be paid at par to take them out. This may be getting a little ahead of the program here, but is there anything mechanically you could just share a little bit with bondholders as we kind of sit with these bonds, like wondering what our future holds?

Yeah, and I think the way you've thought about it is accurate. Obviously, many of the bond tranches are either currently callable or will be within the call period. So I don't think, and by the way, any call premiums, just assuming that they're called. But even in some places where we're in the call period, the coupons are relatively low on a lot of these. Even when you're in the early parts of the call, the premiums are pretty small relative to or what you usually think about. So I don't, and obviously we thought through the covenants inside of the indentures and whatnot. So I think, you know, we'll obviously, when we announce the transaction, we'll, you know, we'll go through that completely. But I think, you know, the good news for the bondholders is, you know, we're going to have a much, from a credit perspective and a leverage perspective, we have a much better balance sheet coming on the other side of this thing.

Great. Well, we'll look forward to getting that detail in the future. And thanks for taking my question.

Okay, thanks. That's the last question we had. So maybe just a few concluding comments. Thanks, everybody, for listening and your interest in Dana. You know, a lot of this really rides on on our confidence in delivering our cost savings here. And I'll just share with you a comment I had at our last board meeting where our board asked me, what's your confidence level on delivering these cost savings, Bruce? And I said, I'm certain that we'll deliver them. So it's not in the bag, but I am highly, highly certain that we can hit the numbers that we've laid out here. What we won't be doing is in 60 more days coming out and saying, hey, now the 300, 400 million, we're done in terms of how much cost that we can wring out of the system. Not to say there's not more opportunity in terms of footprint and in our plants and things like that, because there certainly is and we'll be tacking those next with their longer tail. My focus is going to be around the 40 million of stranded costs, making sure we don't lose sight of that. But more importantly, bringing home these cost reductions quicker so that we get more of the benefit in 2025 as opposed to 2026. I'm really excited where we stand in terms of off highway disposal. Tim and myself between the two of us have done an awful lot of transactions and I feel in terms of people participating, the questions, the process, I feel very good about where we are and And I hope to be able to announce the next piece of the new Dana story in line with our Q1 numbers. And with that, we'll shut things down. Thank you again.

That will conclude today's call. Thank you all for joining. You may now disconnect.