Dana Incorporated

Good morning and welcome to Dana Incorporated's fourth quarter and full year 2025 financial webcast and conference 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 a 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'd like to ask an additional question, please return to the queue. At this time, I'd 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 and welcome, everyone. Today's presentation includes forward-looking statements about our expectations for Dana's future performance. Actual results could differ from what we discussed today. For more details about the factors that may affect future results, please refer to our safe harbor statement found in our public filings and other reports at the SEC. I encourage you to visit our investor website where you'll find this morning's press release and presentation. As stated, today's call is being recorded and the supporting materials are the property of Dana Incorporated. They may not be recorded, copied, or rebroadcast without our written consent. With us this morning is Bruce McDonald, Dana's Chairman and Chief Executive Officer, Byron Foster, Senior Vice President and President of Light Vehicle Systems Group, and Timothy Krause, Senior Vice President and Chief Financial Officer.

Bruce, I'll now turn the call over to you. Thanks, Craig. Good morning, everyone, and thanks for joining us on our Q4 earnings call. With us today, in addition to the usual cast of characters, we have Byron Foster, our Income and CEO with us. I've known Byron and worked with him for many years. He and the rest of the management team here at Dana have been instrumental in our cost reduction activities and our transformation plans, as well as the development of our Dana 2030 strategy. And so I think the board and myself have the utmost confidence in the team under Byron's leadership. And I'm very confident in the team's ability to deliver on the financial objectives that we're going to share with you today. Turning to the business overview, excuse me, our final results for the fourth quarter came in higher than our preliminary estimates. So you can see here for the fourth quarter, our margins at 11.1 were 10 million, 40 basis points higher, $10 million higher than our pre-announcement numbers. Turned to full year cash flow, we came in at 331, which is 16 million higher. And I'd point out that that cash flow is the highest the company has delivered since 2013. We completed the sale of the off, excuse me, the off highway business on January 1st and used the most of the two proceeds to repay down debt. And Tim will take you through what our new debt profile looks like later on in the pack. In terms of cost reduction, great job by the team. You know, we had originally committed to a $200 million run rate. We upped that to 300 and we delivered 248 in a year and a run rate of 325 going into 2026. You know, we've talked before about our stranded costs post the sale of off highway being about 40 million. We're very confident in our guidance. We're assuming that we're going to be able to substantially eliminate those in next year. In terms of new business, we shared our backlog. A couple of weeks ago at $750 million. So despite, I'd say the turmoil in the EV side of our business, the teams secured a higher backlog than we had last year, of which $200 million is going to flow through in 2026. And then I think if you look at our capital return, we returned just over $700 million for our shareholders last year. and we've grown our dividends. I think you know where Dana sits exiting 2025, I think we're extremely well positioned. We have strong momentum and I think we've got a strong plan going forward here. Just a little bit more on the capital return plan, which we upped to $2 billion of share repurchase through through 2030 and that really reflects our confidence in delivery of the longer term financial targets that we're going to share on the call later today for 2025 we bought back just the shade over 34 million shares which on an average cost of 1896 and paid 54 million in dividends in the first quarter here we've already bought back 100 million dollars worth of share a little bit over 27 dollars a share In the balance of the year, we forecast buying back another couple hundred million, which, you know, at current prices, five, six million, something like that. Lastly, on the dividend, we upped our dividend by 20%, 12 cents a quarter. And the way we're sort of thinking about this is we're going to grow our dividend as our share count declines. So we got a lot of confidence in the value that we're creating. I think if you look at the company right now, while we're able to accelerate growth investments and margin-enhancing investments in our business, we're also deleveraging, growing our dividend, and comfortably buying back a significant amount of stock every year. So, Byron, I'll turn it over to you.