our vision - dana incorporated/media/danacom/files/media-asset/...daimler 2% others 42% *sales to...
TRANSCRIPT
Dana Incorporated 2015 Sustainability Report
47372.indd 1 3/4/16 10:19 AM
OUR VISIONTo be the global technology leader in efficient power
conveyance and energy-management solutions that enable our customers to achieve their sustainability objectives 1
47372.indd 2 3/4/16 10:19 AM
D e a r F e l l o w S t a k e h o l d e r s ,
D a n a ' s S t r a t e g i c V i s i o n t o " e n a b l e o u r c u s t o m e r s t o a c h i e v e t h e i r s u s t a i n a b i l i t y o b j e c t i v e s " s e r v e s a s t h e b a s i s t o i m p r o v e o u r o w no p e r a t i o n a l a n d f i n a n c i a l s u s t a i n a b i l i t y .
D a n a ' s f o c u s o n s u s t a i n a b i l i t y i s b a l a n c e d a m o n g o u r s t r o n g f i n a n c i a l p e r f o r m a n c e a n d o p e r a t i o n a l i n d i c a t o r s , l e a d e r s h i p i n p r o t e c t i n g a n d a d v a n c i n g o u r e m p l o y e e s , a n d c o m m i t m e n t i n e n s u r i n g t h a t t h e c o m m u n i t i e s a n d s u r r o u n d i n g a r e a s i n w h i c h o u rf a c i l i t i e s a r e l o c a t e d a r e n o t a d v e r s e l y i m p a c t e d b y o u r p r e s e n c e .
I n c o r p o r a t i n g t h e p r i n c i p l e s o f t h e D a n a O p e r a t i n g S y s t e m , D a n aw i l l c o n t i n u e t o d e v e l o p e f f i c i e n t p r o c e s s e s t o m i n i m i z e a d v e r s e i m p a c t s t o o u r f i n a n c i a l , h u m a n , a n d e n v i r o n m e n t a l r e s o u r c e s .
2
FINANCIAL SUMMARY For the year ended Dec. 31, 2015
$ in millions except per share amounts
Annual Operating Results 2015 2014Sales $6,060 $6,617
Net Income Attributable to Dana1 $159 $319
Adjusted EBITDA2 $652 $746
Margin 10.8% 11.3%
Diluted Adjusted Earnings per Share3 $1.74 $1.99
Capital Spend $260 $234
Free Cash Flow2 $146 $276
Employees at Year End 23,100 22,600
Major Facilities at Year End 90 90
Balance Sheet Total Cash and Marketable Securities: $953 Net Debt: $643 Liquidity2: $1,205
1 2015 includes net charges of $68 relating to an impairment of a 50-percent-owned equity affi liate and an impairment charge for certain assets associated with a distressed supplier relationship in Brazil. 2014 includes a tax benefi t of $179 for partial release of U.S. income tax valuation allowances and net charges of $138 relating to loss on divestiture of Venezuela operations, settlement of pension liabilities, and loss on debt extinguishment.
2 See Pages 30 and 31 of Dana’s 2015 Form 10-K, included herein, for explanation and reconciliation of non-GAAP fi nancial measures, adjusted EBITDA and free cash fl ow, and Dana’s calculation of liquidity.3 Diluted adjusted EPS is a non-GAAP fi nancial measure, which we have defi ned as adjusted net income divided by adjusted diluted shares. See the “Quarterly Financial Information and Reconciliations of Non-GAAP Information” on
Dana’s Investor Relations website at www.dana.com/investors for explanation and calculation of diluted adjusted EPS.4 Includes $150 voluntary U.S. pension contribution in 2012.
Sales Adjusted EBITDA Margin Free Cash Flow 2,4
and Capital Spending
Capital spending Free cash fl ow
Diluted Adjusted EPS3
47372.indd 3 3/4/16 10:19 AM
3
DANA AT A GLANCE
G L O B A L S A L E SAs of December 31, 2015
Light Vehicle Driveline TechnologiesDana is a world-leading supplier of light-vehicle driveline
technologies, producing complete drivetrain systems and
components for passenger cars, CUVs, SUVs, vans, and
light trucks. Dana works collaboratively with original-
equipment manufacturers and the aftermarket to deliver
Dana axles, Spicer® propshafts, and complete systems
with best-in-class effi ciency.
Off-Highway Driveline TechnologiesDana delivers fully optimized Spicer® drivetrain systems and
individual product solutions to customers in construction,
agriculture, material-handling, underground-mining, and
forestry markets. We bring our global expertise to the local
level with technologies customized to individual requirements
through a network of strategically located technology centers,
manufacturing locations, and distribution facilities.
Commercial Vehicle Driveline TechnologiesDana is one of the world’s premier providers of driveline
and tire-management systems, as well as genuine service
parts for medium- and heavy-duty commercial vehicles.
Our cutting-edge Spicer® innovations increase fuel effi ciency
and decrease weight while reducing maintenance and total
cost of ownership.
Power Technologies GroupDana provides Victor Reinz® sealing solutions and Long®
thermal-management technologies to help reduce fuel
consumption and emissions, while improving vehicle durability
and performance. Our engineers anticipate industry trends
to provide innovation, value, and quality in every technology,
and our strong engineering know-how leads to high product
performance, fl exibility, and speed to market.
North America 53%
Europe 29%
Asia Pacifi c 12%
South America 6%
Markets Regions Customers
Light Vehicle 54%
Heavy Vehicle 27%
Off-Highway 19%
Ford 20%
FCA* 9%
PACCAR 8%
Nissan 4%
Tata 4%
GM 4%
Deere 3%
Toyota 2%
Ab Volvo 2%
Daimler 2%
Others 42%
* Sales to Fiat Chrysler Automobiles include sales to Hyundai Mobis.
One of the ways we
create value is by
locating our technical
and manufacturing
resources wherever
customers need
us globally.
Charts to the right represent consolidated sales only.
47372.indd 4 3/4/16 10:19 AM
4
M A R K E T B R E A D T H
Passenger Cars
Buses and RVs
Reach Stackers
Wheeled Excavators
Micro Cars
Delivery Trucks
Telehandlers
Single Drum Rollers
CUVs/SUVs
Cement Mixers
Rough Terrain Cranes
Harvesters and Combines
Pickup Trucks
Refuse Haulers
Tractors
Mining Trucks
Minivans Cargo Vans
Heavy-Duty Trucks Fork Lifts
Wheel Loaders Log Skidders
Mining DrillsLoad-Haul Dump Trucks
C O R E T E C H N O L O G I E S
Driveline Technologies
Brands: Spicer®, Dana, GWB®,
VariGlide®, Spicer® Rui Ma™
Axles, driveshafts, off-highway
transmissions, tire management,
and complete driveline systems
Sealing Solutions
Brands: Victor Reinz®,
Glaser®, Magnum®
Gaskets and seals, transmission
separator plates, plastic cam cover
and oil pan modules, heat shields,
and fuel-cell plates
Thermal Management
Brands:
Long®, TruCool®
Transmission and engine oil cooling,
battery and electronics cooling,
charge air cooling, and exhaust-gas
heat recovery
47372.indd 5 3/4/16 10:19 AM
5
SUSTAINABLE PRODUCT SOLUTIONSDana endeavors to position itself at the forefront of technology’s leading edge. Each day, our engineers are identifying sustainable solutions to challenges faced by customers on six continents.
Spicer® AdvanTEK® Dual Range Disconnect™ technology drives line-haul truck efficiencyDana’s Spicer® AdvanTEK® Dual Range Disconnect™ tandem axle technology combines the best of both 6x2 and 6x4 axle configurations for Class 8 line-haul applications. Optimized for trucks that implement engine
downspeeding, this innovation improves efficiencywithout sacrificing performance by seamlessly combining the traction and dependability offered by a 6x4 with the
reduced drivetrain losses and improved fuel economy of a 6x2.
In environments where additional traction is needed, Spicer AdvanTEK Dual Range Disconnect technology allows the tandem axle to operate as a 6x4, with a traditional starting ratio that delivers the optimal tractive effort needed. As the truck nears highway speed, the inter-axle shaft is disconnected from the power divider, allowing the axle to operate in a more efficient 6x2 mode. At the same time, the forward axle is shifted to a faster ratio.
This can improve overall powertrain system efficiency from 2 to 5 percent compared with conventional 6x4 tandem axles paired with overdrive transmissions.
47372.indd 8 3/4/16 10:19 AM
Dana sourced on global disconnecting all-wheel-drive programOne of Dana’s latest technologies – our disconnecting all-wheel-drive (AWD) system – delivers the improved safety and traction global light-vehicle customers seek,
while providing the fuel efficiency of a front-wheel-
drive system.
While standard AWD enhances traction, fuel economy is compromised. As such, Dana’s disconnecting AWD system rapidly connects and disconnects the rear wheels
only as required, which provides best-in-class efficiency. This performance-enabling innovation
disconnects when not in use to maximize efficiency when the AWD is not required,
reconnecting as needed for enhanced mobility. As the AWD market grows, this technology will help expand Dana’s influence in the passenger car and small SUV categories.
6
47372.indd 9 3/4/16 10:19 AM
Lightweight beam for Spicer® D-Series and E-Series steer axles improves performanceImproving the maintenance and safety of vehicles without compromising payload and fuel economy, Spicer® D-Series and E-Series steer axles help truck owners seeking to offset the added weight of today’s emissions systems. Spicer D-Series steer axles feature integrated air disc brake knuckle that lets fleets specify air disc brakes with no net increase in weight over most S-cam drum brake axle systems. This innovation
eliminates up to 76 pounds (34.5 kg) from the steer axle assembly. The lightweight
E-Series steel-forged beam design cuts 35 pounds(15.9 kg) from the axle with no sacrifice in
strength or braking performance. The axles are targeted for on-highway, city delivery, and bus chassis applications.
Dana named 2015’s “Best Battery Solution Provider” in ChinaIn recognition of Dana’s innovations and contributions to thermal-management technologies for hybrid-electric and battery-electric vehicles, the China Decision Makers
Consultancy named Dana the Best Battery Solution Provider of the Year for 2015.
Through the Long® brand of thermal-management technologies, Dana works with manufacturers of vehicles, electronics, and batteries to develop innovations for the next generation of hybrid, battery, and fuel-cell vehicles. Dana produces customizable components for cooling systems, designed to optimize the efficient operation of electrical systems, extend battery life, and allow faster battery charging.
7
Spicer® optimized tire-pressure management system provides superior mobility technologyFor decades, Dana’s tire-management innovations have optimized the performance of the world’s most advanced military and vocational vehicles. Dana is bringing the benefits of this battle-tested technology to commercial vehicles worldwide – helping to enhance
safety and uptime, while improving fuel economy by up to 2 percent and tire life by up
to 15 percent.
The completely automated Spicer® optimized tire-pressure management system saves time and money by automatically maintaining target tire pressure for drive and steer axles. Unlike manual pressure checks, or tire-pressure monitoring systems that simply report data, fleets will be able to identify their target pressure and be assured that tires are performing optimally at all times.
Dana Rexroth advances R3 hydromechanical-variable transmissionImproving fuel economy while maintaining performance, Dana Rexroth Transmission Systems engineers have completed final validation testing of the R3 hydromechanical-variable transmission (HVT), with the start of production expected in late 2016. This follows the launch of the HVT R2 platform. A product of the Dana/Bosch Rexroth joint venture, Dana Rexroth HVTs
significantly reduce fuel consumption by
decreasing engine speeds throughout the duty cycle and at idle, to speeds as low as 650 RPM. These HVTs enable responsive, precise vehicle positioning with a stepless drive, offering improved acceleration while maintaining tractive effort. Both versions of HVT technology from Dana Rexroth feature a modular design that can be adapted for various off-highway equipment applications.
47372.indd 13 3/4/16 10:19 AM
8
D a n a ' s c o m m i t m e n t t o t h e e n v i r o n m e n t i s d e t a i l e d i n i t s S t a n d a r d s o f B u s i n e s s C o n d u c t e m p h a s i z i n g t h e m u t u a l l y a c h i e v a b l e o b j e c t i v e s o f a p r o f i t a b l e i n d u s t r i a l e n t e r p r i s e a n d s i m u l t a n e o u s e n v i r o n m e n t a l p r o t e c t i o n . T h e s t a n d a r d a p p l i e s r e g a r d l e s s o f l o c a t i o n , p o s i t i o n o r b a c k g r o u n d .
D a n a r e c o g n i z e s t h a t s u s t a i n a b l e o p e r a t i o n s r e q u i r e a b a l a n c e a m o n g s o c i a l p r o g r e s s , e c o n o m i c p ro s p e r i t y a n d e n v i r o n m e n t a l p r o t e c t i o n . D a n a w i l l a t t a i n t h o s e o v e r r i d i n g s u s t a i n a b i l i t y m e a s u r e s b y i m p l e m e n t i n g a n e n v i r o n m e n t a l m a n a g e m e n t s y s t e m t h a t f a c t o r s i n t h e r e l a t e d s o c i a l a n d f i n a n c i a l o b l i g a t i o n s i n a d d i t i o n t o e n v i r o n m e n t a l p r o t e c t i o n t o m a k e o u r s o l u t i o n s t r u l y s u s t a i n a b l e .
A s t h e c o r n e r s t o n e o f D a n a ' s e n v i r o n m e n t a l m a n a g e m e n t s y s t e m , t h e E n v i r o n m e n t a l P o l i c y d e t a i l s t h e c o m m i t m e n t s m a d e b y t h e e n v i r o n m e n t a l m a n a g e m e n t s y s t e m o f e f f i c i e n t n a t u r a l r e s o u r c e c o n s u m p t i o n , p o l l u t i o n p r e v e n t i o n , c o m p l i a n c e w i t h a p p l i c a b l e r u l e s a n d r e g u l a t i o n s a n d c o n f o r m a n c e t o c u s t o m e r a n d c o m p a n y e x p e c t a t i o n s . A l l e m p l o y e e s a r e r e m i n d e d t o m i n i m i z e w a s t e , p r e v e n t p o l l u t i o n , a n d c o n s e r v e e n e r g y .
D a n a ' s e n v i r o n m e n t a l m a n a g e m e n t s y s t e m p r o v i d e s t h e f r a m e w o r k f o r e s t a b l i s h i n g e n v i r o n m e n t a l c o n t i n u a l i m p r o v e m e n t o b j e c t i v e s , i n c l u d i n g :
A 1 0 % r e d u c t i o n i n n o r m a l i z e d e n e r g y c o n s u m p t i o n b y t h e e n d o f 2 0 1 8 , u s i n g 2 0 1 3 a s t h e b a s e l i n e y e a r . C o n s u m p t i o n d a t a i s e x p r e s s e d i n t e r m s o f t o t a l B T U s c o n s u m e d p e r m a n - h o u r w o r k e d .
A 5 % r e d u c t i o n i n n o r m a l i z e d w a t e r c o n s u m p t i o n b y t h e e n d o f 2 0 1 8 , u s i n g 2 0 1 3 a s t h e b a s e l i n e y e a r . C o n s u m p t i o n d a t a i s e x p r e s s e d i n t e r m s o f t o t a l c u b i c m e t e r s c o n s u m e d p e r m a n - h o u r w o r k e d .
F o c u s e d e n v i r o n m e n t a l s u s t a i n a b i l i t y w o r k s h o p s a n d t h e r e s u l t i n g p r o j e c t s a r e u s e d a s a m e a n s t o a d v a n c e D a n a ' s c o n t i n u a l i m p r o v e m e n t e f f o r t s , w h i c h i s a t e n a n t o f t h e D a n a E n v i r o n m e n t a l M a n a g e m e n t S y s t e m . T h e w o r k s h o p s a n d p r o j e c t s a r e d e s i g n e d t o l e s s e n t h e i m p a c t s t o D a n a ' s t r i p l e b o t t o m l i n e o f p e o p l e , p r o f i t , a n d p l a n e t a s s o c i a t e d w i t h D a n a ' s m a n u f a c t u r i n g p r o c e s s e s . T h e a c t i v i t i e s d r i v e r e d u c t i o n s i n g e n e r a t e d s o l i d s , r e d u c t i o n s i n w a t e r c o n s u m p t i o n , r e d u c t i o n s i n e n e r g y c o n s u m p t i o n , r e d u c t i o n s i n e m i t t e d a i r p o l l u t a n t s , a n d r e d u c t i o n s i n c h e m i c a l c o n s u m p t i o n .
T h e e n s u i n g g r a p h s d e p i c t t h e p r o g r e s s t h a t D a n a h a s m a d e i n t e r m s o f w a t e r a n d e n e r g y c o n s u m p t i o n r e d u c t i o n i m p r o v e m e n t s b e g i n n i n g w i t h t h e 2 0 1 3 b a s e l i n e y e a r t h r o u g h t h e e n d o f 2 0 1 5 .
9
ENVIRONMENTAL SUMMARY
ENVIRONMENTAL PERFORMANCEN o r m a l i z e d W a t e r C o n s u m p t i o n N o r m a l i z e d Ene r g y C o n s u m p t i o n
G o a l : 5 % r e d u c t i o n i n n o r m a l i z e d w a t e r c o n s u m p t i o n b y 2 0 1 8 u s i n g 2 0 1 3 a s t h e b a s e l i n e
C o m b i n e d w a t e r c o n s u m p t i o n r e d u c t i o n p r o j e c t s c o n d u c t e d a t t h e D a n a s i t e s i n D a n v i l l e , K e n t u c k y , F o r t W a y n e , I n d i a n a , a n d T o l u c a , M e x i c o h a v e r e s u l t e d i na p p r o x i m a t e l y 5 5 m i l l i o n g a l l o n s i n w a t e r r e d u c t i o n f r o m 2 0 1 3 t o 2 0 1 5 .
D a n a s i t e s h a v e c o m p l e t e d 4 0 + w o r k s h o p s g l o b a l l y d e s i g n e d t o r e d u c e i t s e n v i r o n m e n t a l i m p a c t i n t e r m s o f s o l i d w a s t e g e n e r a t i o n , w a t e r c o n s u m p t i o n , e n e r g y c o n s u m p t i o n , a i r e m i s s i o n s g e n e r a t i o n a n d c h e m i c a l c o n s u m p t i o n s i n c e 2 0 1 4 .
G o a l : 1 0 % r e d u c t i o n i n n o r m a l i z e d e n e r g y c o n s u m p t i o n b y 2 0 1 8 u s i n g 2 0 1 3 a s t h e b a s e l i n e ( S c o p e 1 & 2 c o n s u m p t i o n o n l y )
E n e r g y r e d u c t i o n l i g h t i n g p r o j e c t s c o n d u c t e d a t t h e D a n a s i t e s i n Q u e r e t a r o , M e x i c o ( C V C ) , O a k v i l l e , O n t a r i o , a n d C a m b r i d g e , O n t a r i o h a v e r e s u l t e d i n a p p r o x i m a t e l y 4 7 7 m e t r i c t o n n e s o f C O 2 - e r e d u c t i o n i n 2 0 1 5 .
E n e r g y r e d u c t i o n a i r c o m p r e s s o r p r o j e c t s c o n d u c t e d a t t h e D a n a s i t e l o c a t i o n s i n H u m b o l d t , T e n n e s s e e , Q u e r e t a r o , M e x i c o ( C V C ) , a n d R o b i n s o n , I l l i n o i s h a v e r e s u l t e d i n a p p r o x i m a t e l y 1 , 4 4 9 m e t r i c t o n n e s o f C O 2 - e r e d u c t i o n i n 2 0 1 5 .
R e n e w a b l e e n e r g y p r o j e c t c o n d u c t e d i n P u n e , H i n j e w a d i , I n d i a p r o d u c e d 2 5 7 M W h o f e l e c t r i c i t y i n 6 m o n t h s f r o m s o l a r p a n e l s i n s t a l l e d a t t h e D a n a I n d i a T e c h n o l o g y C e n t e r .
ENVIRONMENTAL SUMMARY
10