Dana Q1 2025 Earnings Report

Dana EPS Results

• Actual EPS: $0.13
• Consensus EPS: $0.17
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: $0.02

Dana Revenue Results

• Actual Revenue: $2.35 billion
• Expected Revenue: $2.28 billion
• Beat/Miss: Beat by +$69.70 million
• YoY Revenue Growth: -14.00%

Dana Announcement Details

• Quarter: Q1 2025
• Date: 4/30/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, April 30, 2025
• Conference Call Time: 9:00AM ET

Dana (NYSE:DAN), together with its subsidiaries, provides power-conveyance and energy-management solutions for vehicles and machinery in North America, Europe, South America, and the Asia Pacific. The company operates through four segments: Light Vehicle Drive Systems, Commercial Vehicle Drive and Motion Systems, Off-Highway Drive and Motion Systems, and Power Technologies. It offers drive systems, including axles, driveshafts, transmission, and wheel and track drives; motion systems, such as winches, slew drives, and hub drives; and electrodynamic technologies comprised of motors, inverters, software and control systems, battery-management systems, and fuel cell plates. The company also provides sealing solutions, such as gaskets, seals, cam covers, and oil pan modules; thermal-management technologies, including transmission and engine oil cooling, battery and electronics cooling, charge air cooling, and thermal-acoustical protective shielding; and digital solutions that include active and passive system controls, as well as descriptive and predictive analytics. It serves vehicle manufacturers in the global light vehicle, medium/heavy vehicle, and off-highway markets, as well as the stationary industrial market. The company was formerly known as Dana Holding Corporation and changed its name to Dana Incorporated in August 2016. Dana Incorporated was founded in 1904 and is headquartered in Maumee, Ohio.

Dana Q1 2025 Earnings Call Transcript

Key Takeaways

• Dana’s off-highway divestiture process remains active with multiple bidders and is expected to close late in Q2, helping fund debt reduction and strategic priorities.
• First-quarter sales of $2.4 billion and adjusted EBITDA of $188 million (8% margin) were in line with expectations despite a $6 million tariff headwind, while net income rose to $25 million from $3 million last year.
• The company has accelerated its cost-reduction program, raising the 2025 target to $225 million (of a $300 million run-rate), with 70% of savings driven by headcount and engineering actions already more than 70% completed.
• Dana expects to recover virtually all Section 232 tariff costs within one quarter, aided by steel and aluminum index mechanisms and detailed customer claims, making tariffs a manageable issue.
• Full-year 2025 guidance remains unchanged: midpoint targets of $975 million in adjusted EBITDA (10% margin), $225 million in free cash flow, and a focus on deleveraging to ~1× net debt/EBITDA through the cycle.

Presentation

[Operator]

Good morning and welcome to Dana Incorporated First Quarter twenty twenty five 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 speakers' remarks and Q and 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 speakers' remarks and we will take questions from the telephone only.

[Operator]

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.

[Craig Barber, Senior Director - Investor Relations & Corporate Communications at Dana]

Good morning and welcome to Dana Incorporated's first quarter twenty twenty five earnings call. Today's presentation includes forward looking statements about our expectations for Dana's future performance. Actual results could differ from what we discuss here 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 our reports with the SEC. I encourage you to visit our investor website where you'll find this morning's press release and presentation.

[Craig Barber, Senior Director - Investor Relations & Corporate Communications at Dana]

And as Regina said, the call today is being recorded and supporting materials the property of Dana Incorporated. They may not be recorded, copied, or rebroadcast without our written consent. With me this morning is Bruce McDonald, Dana Chairman and Chief Executive Officer and Timothy Krause, Senior Vice President and Chief Financial Officer. Bruce, now I'll turn the call over to you to get us started.

[Bruce McDonald, Chairman & CEO at Dana]

Alright. Thank you, Craig, and good morning, everybody. I'll just start with on slide four here in terms of some highlights for the fourth quarter. I know there was a lot of interest in the off highway divestiture process, and we're really not in a position where we can say a lot. You know, what I would tell you is the process continues to be underway.

[Bruce McDonald, Chairman & CEO at Dana]

We're pleased with the progress that we've made. It's been competitive, and we have multiple bidders. If you look at the quarter, I would I would say, you know, pleased with q one. Our our results came in, you know, generally speaking, in line with expectations. I I would note that we did have a little bit of a headwind on tariffs of $6,000,000 in the quarter.

[Bruce McDonald, Chairman & CEO at Dana]

Absent that, we would have had comparable margins to last Q1 despite a pretty big reduction on the top line. So good result there. And we see that $6,000,000 coming back. It's just we just couldn't get the the paperwork into our customers to get the recovery in the in the quarter. Real importantly for us, and we talked about this on our last earnings call is we said we're gonna look at our cost reduction plans and see what we could do to bring those forward.

[Bruce McDonald, Chairman & CEO at Dana]

So I'm pleased to announce that we're accelerating the realization of the of our of our cost program here in twenty in twenty twenty five from what was a hundred and 75,000,000 to 225,000,000. We completed the integration of our former power technology segment into our after and aftermarket business into light vehicle and CV respectively. That's gone real well. Of of the of the 300,000,000 cost reduction, this this integration is worth about 30 to 35,000,000 of that. I think we're gonna see further benefits, not sort of SG and A related benefits as we leverage best practices across our aftermarket businesses.

[Bruce McDonald, Chairman & CEO at Dana]

And I think as we bring some of the operational rigor and processes that we have in Light Vehicle to Power Technologies, I see operational improvements falling through in the back half of this year. So more to come on that. Then lastly, free cash flow, Q1 is always a seasonal outflow, but we had a good start with despite lower revenues and profitability. On an absolute basis, we our q one cash outflow was an improvement year over year of $67,000,000 We continue to focus on opportunities to reduce our CapEx, and I'm I'm hoping that we can we can squeeze some money out of that in the back half of the year. And then not to defend free cash flow, but we are focused on a portfolio of noncore, nonstrategic assets and things like that.

[Bruce McDonald, Chairman & CEO at Dana]

We expect to deliver $50,000,000 here in the second quarter and could see our way maybe to another 50,000,000 in the back half of the year. Generally, a good start to the year. In terms of the outlook and what we're seeing, I guess I would start with a very dynamic situation that that, especially on the tariff front, you know, changes significantly on a daily basis. But based on what we see right now, I guess I would just say our tariff situation is manageable. We can get into a lot more detail in some of the questions, but it's a manageable issue for for for Dana.

[Bruce McDonald, Chairman & CEO at Dana]

Our our with several mitigation actions have been completed. We've got recoveries into our customers with the right level of detail to support, them being our claims being processed. And I guess the other thing I would note, if you look at the steel and aluminum, tariffs, we've seen North America indices move up such that we expect we substantially recover the steel and aluminum through already negotiated mechanisms, that we have in place with our customers. Could be some timing issues because those tend to work in a little bit of a lag, but I would say the impact of steel and aluminum tariffs with with the way the indices have moved would would be kind of a nonissue for us as we see things right now. In terms of what we're seeing in the market, the the the the the first, I guess, thing what we are seeing is a reduction in in schedules for our North American commercial vehicle customers, and, you know, you see that in some of the calls that have come out before us with people taking their assumptions for North America down.

[Bruce McDonald, Chairman & CEO at Dana]

And and we've reflected that in our outlook. So that that's sort of been a bit of a headwind for us. In Off Highway, we're seeing a little bit of pre buy interest here in the second quarter. Nothing significant, but but it's it's nice to see we're getting a little bit of a lot. And we are starting to see outside of North America some green shoots in terms of improvements in orders in the second half of the year.

[Bruce McDonald, Chairman & CEO at Dana]

In North America, we aren't seeing anything on in terms of of of LV schedules, any deterioration at this point in time. If you look at the mix of vehicles that we're exposed to, you know, you guys all know where where where we've got, where our our our money is made. We feel pretty good about gaining our customers gaining share in our in our space. And we while we acknowledge there's some risk in the back half of the year, which worth being cautious right now. We don't we don't see it reflected up in our schedules.

[Bruce McDonald, Chairman & CEO at Dana]

We we talked earlier about the 50,000,000 of incremental cost reduction. And then I guess I would just say if you you know, absent tariffs, we'd be sitting here this morning raising our guidance by about $50,000,000 to reflect the acceleration on the cost reduction side. We're just holding back until we get a little bit more clarity on what happens in LV, particularly in the second half. And lastly, just a little bit of a, something to brag about here, but we won our tenth PACE award. It's quite an honor in in the industry.

[Bruce McDonald, Chairman & CEO at Dana]

This for us is a this this hybrid transmission, is is kind of a niche product. It's about $25,000,000 of sales this year. It's product that we that we're we're we've rolled out across, the highest end of the automotive spectrum. So customers like Aston Martin, Lamborghini, McLaren, we see this as a as a business opportunity to grow to, you know, 200, 2 50, maybe even up to 300,000,000 over the next few years at a highly accretive, EBITDA margin. This this this product pushes 20%.

[Bruce McDonald, Chairman & CEO at Dana]

So not not a huge item, but it's an important, I think, margin expansion arrow in our quiver. And And I congratulate the technical team for winning the award. So with that, Tim, I'll turn it over to you.

[Timothy Kraus, Senior VP & CFO at Dana]

Thank you, Bruce, and good morning to everyone. If you please turn to Slide eight for a review of our first quarter results. Sales were $2400000000.0.03 $83,000,000 lower than last year, driven by lower demand across all of our end markets. Adjusted EBITDA was $188,000,000 for a profit margin of 8%, just 20 basis points lower than last year on lower sales as the benefits of our cost improvement actions begin to take hold. Net income attributable to Dana was $25,000,000 in the first quarter of twenty twenty five compared with $3,000,000 last year.

[Timothy Kraus, Senior VP & CFO at Dana]

The difference was primarily due to the proposed divestiture of a non of our non core hydraulics business in 2024. A $29,000,000 loss was recorded to adjust the carrying value of net assets to fair value in last year's first quarter. Income taxes for the first quarter of twenty twenty five were $29,000,000 lower due to jurisdictional mix of profits and timing of payments. Finally, operating cash flow was a use as is normally the case in the first quarter of '30 '7 million dollars This was an improvement of $65,000,000 over the first quarter of last year due to lower working capital requirements. Please turn with me now to slide nine for the drivers of the sales and profit change.

[Timothy Kraus, Senior VP & CFO at Dana]

Beginning this quarter, we have revised our walk presentation to better detail the impacts of volume mix and performance of the operations. Previously, these two drivers were combined. We continue to show the benefit of our cost saving initiative and we have added the actual impact of tariffs as part of our walk. Beginning with volume and mix on the left, we saw $345,000,000 lower sales driven by lower demand in all of our end markets, specifically when compared to Q1 of last year when light vehicle production increased dramatically coming off of the UAW strike at the end of twenty twenty three. This year, we are seeing a slowdown in production as vehicle inventories remain high.

[Timothy Kraus, Senior VP & CFO at Dana]

We did not see any distinct change in order patterns from our key customers on key programs related to tariffs during the quarter. Adjusted EBITDA from sales volume and mix was lower by $90,000,000 This was a decremental margin of about 25%. We are breaking out performance, which includes efficiency gains in our manufacturing separately. Performance increased sales by $27,000,000 mostly through commercial actions, while profit increased by $35,000,000 due to efficiency improvements across the company.

[Timothy Kraus, Senior VP & CFO at Dana]

For the

[Timothy Kraus, Senior VP & CFO at Dana]

first quarter of twenty twenty five, cost savings added $41,000,000 in profit to the various actions we have taken. As Bruce mentioned, we have accelerated some actions. We now expect to realize about $50,000,000 more of our $300,000,000 in total cost savings this year. To the left of the slide, we included a breakdown of where the permanent cost savings are coming from. You can see it's well distributed across the cost structure.

[Timothy Kraus, Senior VP & CFO at Dana]

The tariff impact in the quarter was just $6,000,000 Since our tariff recoveries will have a lag associated with them, we did not immediately recover the tariffs in the quarter, but we expect to receive recoveries throughout the year. Foreign currency translation decreased sales by 53,000,000 primarily driven by the lower value of the euro, real and rupee compared to the U. S. Dollar. Profit was lower by $4,000,000 with no impact to margin.

[Timothy Kraus, Senior VP & CFO at Dana]

Finally, commodity cost recoveries in the first quarter was $10,000,000 lower than last year due to the timing of cost mechanisms within the commodity recovery agreements with our customers. Profit was $11,000,000 lower as the prices fall through to profit. Next, I will turn to slide 10, the details of the first quarter adjusted free cash flow. Adjusted free cash flow in the first quarter of twenty twenty five was a use of $101,000,000 which is $67,000,000 higher than the first quarter last year. Lower adjusted EBITDA and higher one time costs related to the cost saving actions and the sale of the Off Highway business were offset by lower working capital requirements.

[Timothy Kraus, Senior VP & CFO at Dana]

Finally, capital spending net of proceeds of sales of fixed assets was about the same as last year. Please turn with me now to slide 11 for our guidance for 2025. Our 2025 full year guidance ranges remain unchanged. As a reminder, our guidance includes the Off Highway business for the full year and includes the estimated impact of disclosed tariffs. First thing you will note is that we are expecting sales to be up above the midpoint of our range.

[Timothy Kraus, Senior VP & CFO at Dana]

The higher sales expectations are taking into account some of the softening in commercial vehicle end markets offset by the recovery of expected tariffs that will flow through sales and the improved outlook on currency translation. To date, we've not seen a change in the volume expectations of our major light vehicle programs. Our initial expectations were for slightly weaker end market demand for light trucks. If that market weakens further, we will adjust our outlook. Adjusted EBITDA is still expected to be $975,000,000 at the midpoint of the range.

[Timothy Kraus, Senior VP & CFO at Dana]

This is approximately $90,000,000 higher than 2024 and implies a profit margin of about 10%, a 140 basis points increase over 2024. Full year adjusted free cash flow is expected to be $225,000,000 at the midpoint of the range for the year. This is approximately $155,000,000 higher than last year. Our adjusted EPS guidance is expected to be $1.4 per share at the midpoint of the range. This is down from our previous estimates solely due to the change in expected tax expense driven by our expected regional mix of profits.

[Timothy Kraus, Senior VP & CFO at Dana]

Lastly, please turn with me to slide 12 for an outlook of our adjusted free cash flow for 2025. We anticipate full year 2025 adjusted free cash flow to be about $225,000,000 at the midpoint of the guidance range. We expect about $90,000,000 of higher free cash flow from increased adjusted EBITDA. One time costs will be about $20,000,000 higher as we invest in our cost savings program and we work to finalize the Off Highway divestiture. Working capital requirements will be about $50,000,000 lower and capital spending net is expected to be about $325,000,000 this year, which is $45,000,000 lower than 2024.

[Timothy Kraus, Senior VP & CFO at Dana]

Thank you. And I'll now ask Regina to open the call for questions.

[Operator]

Our first question comes from the line of Joe Spak with UBS. Please go ahead.

[Joseph Spak, Managing Director at UBS Group]

Thanks. Good morning, everyone. Maybe just to start on the guidance. I know you listed a number of things, some tariff headwinds and some negative market assumptions in what is, I guess, going to be new Dana, but then cost savings. And then in the off highway business, you mentioned some of pre buy commentary.

[Joseph Spak, Managing Director at UBS Group]

I guess the question is back in the beginning of the year you provided some guidance for new Dana versus the off highway. And with all those factors you listed is there any meaningful change to those assumptions we should consider?

[Timothy Kraus, Senior VP & CFO at Dana]

Yes. So commercial vehicle is going to be a bit lower than what we had seen just a couple of months ago. That's largely being offset

[Timothy Kraus, Senior VP & CFO at Dana]

by

[Timothy Kraus, Senior VP & CFO at Dana]

amounts in light vehicle and in a little bit in off highway. And then obviously, the balance of that is coming from what we believe will be additional revenue from tariff offsets.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. And I guess maybe just a couple other things like, obviously, three the incremental cost reduction target is all relates to corporate. So, you know, get sort of smeared based on sales. I would say, you know, in off in in off highway, you know, we are benefit if in in our outlook, we we are picking up some some translation on the euro. So that would be disproportionate to to, Off Highway.

[Bruce McDonald, Chairman & CEO at Dana]

Correct. And but, I mean, generally speaking, if if you sort of you know, 50,000,000 cost reductions are pulled forward. But if you think about when we we gave sort of guidance around New Dana post off highway sale in 2026, I think the the message is is, look, q one, you know, full New Dana is is up year over year margins, and all and and off highway is on a year over year basis down. So so the the the path to get, new data in 2026 to the to the type of number that we commit to, the ten, ten and a half, is thoroughly on track.

[Joseph Spak, Managing Director at UBS Group]

Okay. And then just for '25, again, I know you provided some some ranges and seems like some moving parts, but generally those ranges are still valid?

[Timothy Kraus, Senior VP & CFO at Dana]

Yes. They're generally valid. I mean the sales are going to move around as Bruce mentioned, right, between tariffs and translation. We're going to have some tailwind on the top line. And that's largely going to offset the headwinds that we're seeing in Commercial Vehicle from a volume perspective.

[Bruce McDonald, Chairman & CEO at Dana]

Yes. And I guess if you think about tariffs overall, you know, we don't we don't bring in an awful lot of product from Europe into North America. So so when we talk about our tariff headwind, the the commercial sorry, the Off Highway impact is relatively small.

[Timothy Kraus, Senior VP & CFO at Dana]

Okay. That business is primarily European. We do have bit of business here in North America, but that's relatively small portion of the overall business.

[Joseph Spak, Managing Director at UBS Group]

Okay. And then Bruce, appreciate you're limited in what you could say about the process. I think it's some relatively encouraging commentary, but maybe you could just sort of indicate to us if sort of any of this market uncertainty has had any impact on the process even in terms of sort of, you know, potential management distraction for potential buyers or or or anything there? Or are things sort of mostly on track of what you thought?

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I mean, guess I would say, obviously, if you look at the last ninety days, I think the tariff situation is becoming clear. You know, it was swinging around pretty wildly when some of the I e plus stuff was coming up and the China thing was escalating and things like that. I think I think now with some of the rules, we've had a little bit of stability. We're getting clarification in terms of what's in and out, how we handle USMCA, non USMCA.

[Bruce McDonald, Chairman & CEO at Dana]

So we're so we're I I would say we definitely had maximum uncertainty. And and, you know, in that environment, yeah, people are nervous and wanna understand things. Spending a little bit more time with our with our teams. So I'd say, I I I really can't say a a lot, but we're we're we're a few week I I guess we've sort of talked about being in a position to say something, to a resolution here in in early in the in the in the second quarter. Now, I guess, I would just say that's that's prob our timing's probably more like late in the quarter.

[Joseph Spak, Managing Director at UBS Group]

Okay. Appreciate that.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I I mean, I I wish I could say more, but the guy is probably one that yanked me out of the room already.

[Operator]

Our next question comes from the line of Edison Yu with Deutsche Bank. Please go ahead.

[Edison Yu, Analyst at Deutsche Bank]

Hi. Thank you for taking our questions. Just want to come back on tariff. Can

[Edison Yu, Analyst at Deutsche Bank]

you share, I guess, what is the exposure at the moment? And in terms of the timing of recovery, how long do you think that will take on average?

[Timothy Kraus, Senior VP & CFO at Dana]

So I don't want to get into the overall exposure mostly because I don't really want to negotiate with my customers in public. But what I can say is from a recovery perspective, we expect it's probably going to be less than a quarter on a lag. And of course, that depends on the customer and the end market that we're dealing with. But most of our largest customers have set up a regimented process. And as Bruce mentioned, we've already started to provide invoices the detailed backup that's required by our customers in order to obtain recovery.

[Timothy Kraus, Senior VP & CFO at Dana]

So that process is well underway, and we see it working well given the level of detail that we're providing the customer. But I'm guessing it's probably when they get through it, obviously, the customers are going be pretty inundated. It's, we're looking at somewhere probably not longer than a quarter, but I think it'll end up being a little bit less given the impact that this will have across the supply base.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I mean, I I I'd I'd expect us it it to be a cash flow timing issue in the quarter. I think by the time we we were here three months time, we will know what our recoveries and have that process nailed down sufficiently, so we'll be accruing, the impact. But the cash associated with it, like, we have to pay that out much sooner than we're gonna get it back. I don't think that's gonna be a major bridge item for us, but I I feel pretty comfortable that it's not gonna be a problem for us.

[Edison Yu, Analyst at Deutsche Bank]

And in terms of the, the the amount, is is it your, is it baked in that you would recover essentially a %, or is there some, like, wiggle room or haircut to the to the recovery?

[Timothy Kraus, Senior VP & CFO at Dana]

Our our view is that we're going to be recovering a % of the tariffs.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. Yeah.

[Bruce McDonald, Chairman & CEO at Dana]

I think

[Bruce McDonald, Chairman & CEO at Dana]

I think you may be just a little bit of help there is is, first of all, if if you think about our commercial our our our commercial vehicle business and our off highway business, we we have very little risk of a % recovery. So that part of it, we're we're we're not worried about at all. I I I mentioned that the aluminum and steel will be recovered through normal indices that we already have in place. So once you sort of back out those three things and some mitigation actions that we've taken where we were the importer of record of finished goods, so so, like, we bring some axles up from Mexico to to North America, they're picked up at a warehouse in Laredo. We've we've we negotiate those exposures away.

[Bruce McDonald, Chairman & CEO at Dana]

So now you're left with a fairly minor amount in the scheme of the $10,000,000,000 company. We have all the documentation submitted, to to our light vehicle customers, and they have they've they've brought in external resource to process our claims. And in one case, we know our our claim has been processed and approved, but I haven't seen the check yet. So we'll see where we end up.

[Edison Yu, Analyst at Deutsche Bank]

Understood. And just one last thing to clarify. So is the I I really not, you know, quantifying the the the exposure, but in terms of the the the mechanics, is it basically the the non USMCA part that it that you're assuming for for the that that gets exempt, or are you assuming that that there there there's more there's more than that or the the USMCA actually goes away?

[Timothy Kraus, Senior VP & CFO at Dana]

Well, so we're we're our our

[Timothy Kraus, Senior VP & CFO at Dana]

the what what we've put out in terms of our our guidance now is based on what we what we see coming out of Washington as of today. That will change tomorrow. Have no doubt. It changed last night. So but, you know, the way that the the mechanisms are working with our customers are that we need to be able to prove the actual amount of tariffs that we've incurred and be able to trace them back by part number.

[Timothy Kraus, Senior VP & CFO at Dana]

And that's the documentation that we're providing. And our expectation is that level of detail will allow us to recover the tariffs from our customers.

[Bruce McDonald, Chairman & CEO at Dana]

And it's a little bit more nuanced than your question. Let me just give you an example. So so everything that we're talking about is for is for auto parts. It does not include our parts the way the definition and the h t's HDF. HDF codes are written.

[Bruce McDonald, Chairman & CEO at Dana]

It does not include things like our off highway and commercial vehicle products nor does it even include some of our Super Duty business. So they aren't in this whole two thirty two switch that happened yesterday. They're they're still into the other buckets, Aipa, reciprocals, things like that.

[Edison Yu, Analyst at Deutsche Bank]

Gotcha. Very much appreciated. Thank you.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. And yeah.

[Operator]

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

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

Oh, great. Thanks for taking my questions. Any way to frame what are you you're assuming for light vehicle production? Is it very in line with the recent S and P forecast? Yeah.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

Is there any way to frame that? Because, you know, obviously, lot of uncertainty with tariffs.

[Timothy Kraus, Senior VP & CFO at Dana]

Sure. Yeah. I I I think the way like, you know, obviously, you know, when you when you think about the the light vehicle outlook, we we try to steer everybody back to the light truck production. We currently aren't seeing any substantial change from where we were when we came out in February. So that's what's currently baked into our forecast for North American light truck.

[Timothy Kraus, Senior VP & CFO at Dana]

And if that changes in any material way, we'll have to revisit our outlook. But right now, we haven't seen anything and don't have anything from our customers on the horizon. That doesn't mean it won't change, but at this point, that's currently we're looking at it largely the same as we did two months ago. And the only thing I'd add to that, Colin, is we acknowledge there's a risk there, and that's why we're not up in our guide.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

Got it. But on the SMP side, I mean, is it

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

consistent with what SMP just provided or more optimistic, less optimistic?

[Bruce McDonald, Chairman & CEO at Dana]

I I I would say the the latest SMP data, which which there's we don't think is accurate, especially here in the short term in some of it. But if you looked at the latest SMP information and then we we were to factor that in, we'd have more than enough coverage in in the extra cost save to hold our guide.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

Got it. That's helpful.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

And then, you know, if I look at

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

I think you said early, didn't wanna provide, like, a number on the the tariff impact. But, I mean, in the EBIT walk, it's 6,000,000. I mean, is that not a a run rate we should think about?

[Timothy Kraus, Senior VP & CFO at Dana]

Well, you have you have to I mean, the the the tariffs were were not for the entire quarter. They were staged in. You can't use the first quarter as sort of a viewpoint for the tariffs. They've also changed from week to week. And so depending on when we imported the material and how it was classified determines what we ended up what the impact was in the quarter.

[Timothy Kraus, Senior VP & CFO at Dana]

That's going to be different going forward. So you cannot use the first quarter and try to do some sort of extrapolation. The the the the rules and and and how these things are classified have changed dramatically from week to week. Yeah.

[Bruce McDonald, Chairman & CEO at Dana]

So $44,000,000 of the 6,000,000, Colin, is is related to where Dana was the import of record, the example I gave in the previous caller. And and we've already remediated that and build it, and we we're not at all worried about getting that 4,000,000 back. But, yeah, like Tim said, there's there's things that have come on and come off. There's there's bucketing issues, except there's h t s code issues, etcetera, etcetera.

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah.

[Timothy Kraus, Senior VP & CFO at Dana]

You you

[Timothy Kraus, Senior VP & CFO at Dana]

have to remember. Right? There's a lot of this stuff is coming out in either an executive order or or in in a in a in a in a press release or or a a press conference, it then gets published in the commercial register. And then that's then translated by the by the commerce department into and and and at at the customs and border to determine how and what HTS codes are going to collect what tariffs on which. So it is exceedingly complex and is changing as, you know, both the the the rules get more clarification and the rules change.

[Bruce McDonald, Chairman & CEO at Dana]

May maybe just, like, a few sorta, you know, scene setters on it, that they kinda get your feel get your understanding a bit better. Overall, our our flow of goods from Mexico back up here to United States is $7,800,000,000, and our Canada flow of goods is, like, a hundred. And so, you know, that that split, 55 ish percent is USMCA compliant. Some of that is also doesn't have anything to do with its two thirty two because it it relates to our commercial vehicle business. Our other exposure that we have is reciprocal tariffs on on castings and things like that that us, like everybody else, buys from Korea and particularly India.

[Bruce McDonald, Chairman & CEO at Dana]

So those are those are the, you know, the headlines of where our exposures come from and and kind of magnitude.

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah. And I'll also point out that that some of the material that's coming in that's non USMCA compliant is directed sourced by the customer. So we we we don't have a choice on on where we're bringing in, some some of the parts based on, based on the customer requirements. So again, that is recover $1 right away because we don't have any choice.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

And you said 708 hundred million dollars Mexico, dollars 1 hundred million in Canada. Any number on what's from the rest of the world brought into The United States?

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah. We're talking, you know, a few hundred millions more. I mean, it it obviously depends on on, on production and and where we're at, but largely those sorts of numbers.

[Operator]

Got it. Right. Thank you very much.

[Colin Langan, Automotive & Mobility Analyst at Wells Fargo]

Thanks for taking my question. Thank you.

[Operator]

Our next question comes from the line of James Picariello with BNP Paribas. Please go ahead.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

Hey, good morning, everybody. Just as we think about the Off Highway sale and if we just consider the tariff exposure, the tariff exposure for the Off Highway business, we know Off Highway, as was mentioned, does not fall under the Section two thirty two auto's tariffs. It would be subject to the broader Liberation Day tariffs. That's a question, just to confirm. And then just regarding Off Highway's regional sales mix, right, we know about 65% of total sales get produced in Europe.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

Can you just size up what portion of that or what portion properly constitutes North America U. S. Sales for Off Highway and what portion gets gets imported to understand the trade flow there? Thanks.

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah. You know, North America is a a a few hundred million dollars. You know, that a portion of that gets imported. It's I mean, I I I have to I have to go look at the specifics, and we can get you that. But the the tariff overall, US tariff exposure for off highway is is very small and is 100% recoverable from the customer.

[Timothy Kraus, Senior VP & CFO at Dana]

We've already proactively actioned those, with those customers, to get recovery. So it's the tariff impact is not the issue around off highway. I think the broader issue, and this is true for tariff generally is, hey. How does this affect the macroeconomic environment? And and how might it affect volume, you know, in all the end markets at the end of the day?

[Timothy Kraus, Senior VP & CFO at Dana]

That that and especially for off highway, that's probably the the bigger issue. Right? As they as they pass these things through, how how is it gonna affect the various end markets within off highway?

[Timothy Kraus, Senior VP & CFO at Dana]

To date, we're not seeing we

[Timothy Kraus, Senior VP & CFO at Dana]

haven't seen anything, and and we've seen a little bit of prebuy. And and, you know, when you look out at the the back half of the of the year, we are starting to see the the green shoots we were expecting. So right now, you know, things are are are holding up pretty well, but, you know, it's a it's a pretty fluid situation, and and, you know, we're monitoring it pretty closely.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

And then that's really helpful.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

Then just my

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

follow-up. I I know there's there's a sensitive question, sensitive answer. Previous timing of the Off Highway sale did point to like something around the second quarter. Just curious if you have if you could share any thoughts there. And then just within the revenue guidance, two things that are not tied to tariffs, right, FX and commodities in your revenue.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

Can you just confirm what those guidance assumptions, those guidance updates are? Thanks.

[Timothy Kraus, Senior VP & CFO at Dana]

So I won't I'm not going to provide the update because then you can sort of back into what our what the tariff assumptions are. But they're they're in terms of commodities, we would expect to be up a little bit. And and obviously, the FX is going to be an additional tailwind. But I I don't want to get into into specifics. We'll obviously be able to show that to you when we bring out second quarter.

[Timothy Kraus, Senior VP & CFO at Dana]

On the Off Highway sales, as Bruce mentioned earlier, we were expecting early to mid second quarter given the amount of work that's being done by the bidders, we would expect that to move a little bit and probably be later in the second quarter.

[James Picariello, Director & Sr. Automotive Analyst at BNP Paribas]

Thank you.

[Operator]

Our next question comes from the line of Ryan Brinkman with JPMorgan. Please go ahead.

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

Hi. Thanks for taking my question, which is in regard to the cost savings, including after know, following the acceleration this quarter, the 225,000,000 you're looking for this year. It's now up to 25% of last year's EBITDA. So that's really just a huge step change in cost. So I wanted to check-in again on the source of those savings, including the incremental savings.

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

I think I heard you say largely corporate in nature. Also, your confidence and the ability to achieve the savings. Last quarter, you were very confident. And then finally, you know, just, like, whether the costs are sustainable or don't have any associated drawbacks. So, for example, are you mostly cutting through corporate bureaucracy or layers of of management, discretionary spending, not r and d?

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

I I'm asking only because the magnitude of savings is so impressive that it sort of begs the question of, like, if there really was all this fat to to cut, you know, why had it maybe not been targeted before?

[Timothy Kraus, Senior VP & CFO at Dana]

Thanks, Ryan. That's a that's a lot. I'll try to unpack it in some reasonable manner. But so I'll take the one that I like the most. In terms of our confidence, we are absolutely confident that we will one, deliver the $225,000,000 and two, deliver the $300,000,000 on a run rate basis.

[Timothy Kraus, Senior VP & CFO at Dana]

If you just look at the first quarter, right, it's $41,000,000 of incremental save. We had $10,000,000 of savings in the fourth quarter. So if you just take that, that's $51,000,000 multiply that by four, that's 200,000,000 of the $225,000,000 when you think about it, right, on a run rate base already. And we took costs out all through the first quarter. So our run rate action number is already trending to where we need to be to deliver the 02/25 We've got additional actions to happen throughout the year, but we are in very, very good shape to deliver the 02/25.

[Timothy Kraus, Senior VP & CFO at Dana]

We wouldn't be here telling you we're going to deliver the 02/25 if we weren't absolutely positive we're going to deliver it. To give you some idea, and we broke out, a little bit on the slide sort of the percentages. But the really big buckets that if you want to think about the $300,000,000 70 percent of that number is coming from headcount and engineering alone. And then an additional about 10% is related to the consolidation actions around the segments. So if you just get through that, that's 80% of the number in those buckets.

[Timothy Kraus, Senior VP & CFO at Dana]

If we look at the headcount, we've actioned over 70% of the headcount that we have slated to reduce within the organization has already been actioned. The balance of that will be done through the rest of the year with a large chunk of that coming out late in the second quarter. So we have visibility to where these costs are coming out and what are driving our ability to deliver them. When you think about it, what's really to get your question, hey, there a lot of fat? What was it?

[Timothy Kraus, Senior VP & CFO at Dana]

Well, you think about engineering and even some of the headcount, a lot of that's related to the change in how we're addressing the EV business and where we think we need to be sized for where the EV business is today and where it's likely to go. So it's a big part of that cost reduction is coming from the shift in strategy and expectation around our EV business. The balance is, yes, we took a really hard look at what we need to run the business and how we can get better at how we're running the business, especially around the corporate and overhead functions, whether they be, you know, physically here at corporate or or or in the in the the business units themselves.

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

Very

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

helpful. Thank you. And then just maybe on the segmentation change, I see also the power technology is being absorbed into the various different, you know, driveline motion segments. Previously, you'd explored the sale or not explored, but, you know, contemplated. And and I think you've been moving away from that already because of the growing importance of power technologies and, you know, thermal regulation for electrification, etcetera.

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

But does this kind of definitively kinda close the door on that? And, or is it sort of reflect the how you go to market? Or what was some of the thought process behind that?

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I it definitely closes the door on it. Power technology is not for sale. It it it's it's a it's a good business, and it it was really just a reflection of we we think we can run leaner by having one less segment. Like, you know, like I mentioned earlier, that alone is worth $3,035,000,000 in terms of doing the consolidation, and I expect that we will get further improvement, not not s g and a.

[Bruce McDonald, Chairman & CEO at Dana]

So we won't won't be counting it in our 300,000,000. But I I do expect we're gonna see significant opportunities to drive our margins as we leverage best practices across, aftermarket and we bring in some of the, rigor that we have in light vehicle that was not as strong in our power technologies operations.

[Ryan Brinkman, Equity Research Analyst at JP Morgan]

Very helpful. Thank you.

[Bruce McDonald, Chairman & CEO at Dana]

All right. Thanks. Thanks, Brian. Our

[Operator]

next question comes from the line of Dan Levy with Barclays. Please go ahead.

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

Hi, good morning. Thanks for taking the question. Bruce, in your prepared remarks, you mentioned some actions around non core assets and getting some proceeds in the second quarter, another $50,000,000 in the back half of the year. Could you maybe just talk about what some of those assets are? And maybe how deep is the set of assets out there that, you view to be noncore at Dana?

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I'll let I'll let Tim Tim take it on. But I I mean, you know, this is really, you know, with me coming in saying, hey. What what are what are some bits and pieces of non core minority JVs, etcetera, etcetera, etcetera, surplus assets, land, you know, those types of things. And there there's not a lot of I I wouldn't say there's hundreds of millions, but, you know, there's lots of things, one, two, five million that that we can action a couple in the $3,040,000,000 range.

[Bruce McDonald, Chairman & CEO at Dana]

But, like, you go ahead and give a Yeah. I'll just give you the the best thing.

[Timothy Kraus, Senior VP & CFO at Dana]

So we, you know, we we we had a we had a nonconsolidated joint venture in India that was in the commercial vehicle space. We own 48% of the business. It was it's noncore. It's a supplier both to us and to others. We sold that in the quarter for over 40,000,000 or in the second quarter for over $40,000,000 That is an asset that is sitting on the books at a far lower value than that and doesn't change anything related to how we run the business.

[Timothy Kraus, Senior VP & CFO at Dana]

So I think those types of assets and we have a handful of those types of things where when we if you go back over time, we felt it was important to have equity interests in some of these types of operations. We don't think that that's true anymore. And some of that's just because, hey, these joint ventures have grown and matured, and we don't need to be that close to them. And valuations in some of these places are pretty high, and so we're using the opportunity to divest them. And, you know, mean, to the extent they're a supplier, put a put a supply agreement in that that gives us preferential supply and and then take the capital and redeploy it into something that has a a far better return from our perspective.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. And just like, you know, the our dividends from that joint venture less than a million a year. And like Tim said, we we've got I think it was just in the low forties pretax Yeah. Earlier this week. So it's just just looking at things like that.

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

Oh, okay. Thank you. And then as

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

a follow-up, Kim, you had mentioned that, obviously, a piece of the cost saves relates to EVs and, you know, maybe changes in the program schedule. But, you know, we actually haven't even seen yet any through modifications to to OEM plans. So understand that some of this is maybe proactive, but wondering if the cancellations or delays or shifts start to come in, is there maybe further opportunity to pull back on some

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

the TV stuff that we need, like, TV is a small piece now. Thank you.

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I'll take that one here. It's it's it's it's not really what you just said.

[Bruce McDonald, Chairman & CEO at Dana]

It it is when when we, changed our our our strategy, what we said was we're, you know, we're we're we have ice business and EV. You know, we we we wanna be our partner's technology of choice, and therefore, we're willing to invest our our capital and our engineering to to to chase that type of business and but making sure we get the right level of risk sharing. Where we don't have any ICE business and we're chasing, incremental volumes or we're dealing with customers where we're in the next generation investment and the first generation that has volumes that are five or 10% of what we thought, we are saying it needs to be a % funded. Otherwise, we're just not willing to bear the risk. So it's it's more a question of us lowering our pursuit of new electric business to reflect, the massive increase in risk.

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah. And I I think the the the the it's that. And then, you know, our engineering has always shown net. Right? We we we you know?

[Timothy Kraus, Senior VP & CFO at Dana]

And so to the extent programs are continuing, so they haven't been canceled, but now instead of us outflowing the engineering dollars, you know, the customer is responsible for that on a pay as you go basis. And that's some of it. And then there is a big chunk where we had a lot of development plans where we were developing products and technologies that given the slowdown in the market, we don't need to create the second, third or the third generation of a product today. Our customers are more than happy to continue to use the first or the second generation of those products for a much longer period of time, and that's allowed us to reduce the amount of engineering dollars we have to spend on those next gen programs.

[Bruce McDonald, Chairman & CEO at Dana]

And I and I guess the kind of your question on where you're going is is as our customers look at their product plans, because I'm sure they're leaving no stone unturned in terms of what actions they can take to mitigate the impact of tariffs. I'm sure looking at some of their easy pipeline is is is going to be on the table. And to the extent, they decide to push some programs, I I would say there's one or two that that could if if they were to push them out, would have a favorable impact on mainly our capital, but it wouldn't be a $20.25 savings. It would be a '26 and '27 type number that would come down.

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

Great. Thank you. Very helpful.

[Operator]

Our next question comes from the line of Emmanuel Rosner with Wolfe Research. Please go ahead.

[Emmanuel Rosner, Managing Director - Senior Autos & Auto Technology Analyst at Wolfe Research LLC]

Thank you. Good morning. I was hoping you can help us with how to think about cadence of revenue and earnings for the rest of the year. What's assumed in your reiterated guidance? And in particular sort of like back half versus first half?

[Timothy Kraus, Senior VP & CFO at Dana]

Yes. I mean largely the same as we talked about, Emmanuel, a couple of months ago. We do expect the first half to be weaker first quarter to be the weakest and then we would expect to see again under our current volume assumptions to see a recovery in the back half of the year. And that's still our expectation for revenue.

[Bruce McDonald, Chairman & CEO at Dana]

I guess as we go out though, the sort of headwind that we saw in revenue starts to decline sequentially.

[Craig Barber, Senior Director - Investor Relations & Corporate Communications at Dana]

Correct.

[Emmanuel Rosner, Managing Director - Senior Autos & Auto Technology Analyst at Wolfe Research LLC]

Okay. And so that's a volume assumption around the back half. And I I guess in terms of the headwind you're describing, you're talking about some of the the destocking?

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. It's it's it's not so much it's not so much of our volume assumption. It's it's we're going against easier comps. So if you think about Right. Q one of last year, we we volumes were up because of customers rebuilding from the strike.

[Bruce McDonald, Chairman & CEO at Dana]

We had off highway, you know, hadn't sort of started to slow down. So as as we go through get into the second quarter, there's less of a year over year headwind on on on off highway, and and on same thing on LV. So so when in this quarter, we're down 300 and something million. That that delta drops sequentially quarter on quarter here.

[Timothy Kraus, Senior VP & CFO at Dana]

Yeah. Exactly. I mean, the and that's and and the big the big drivers, you know, when we we were we were having this conversation a couple months ago were really around Light Vehicle and Off Highway. We're seeing a little bit of additional weakness from a CV perspective, but that's more than being offset by from a top line anyway from tariffs and our expected gains on the FX assuming the FX stays kind of where we're seeing today, especially around the euro.

[Emmanuel Rosner, Managing Director - Senior Autos & Auto Technology Analyst at Wolfe Research LLC]

Got it. Then on so on the tariff side, it's obviously encouraging to see that you expect to recover, you know, everything from your customers. Have there been some discussions with them around longer term moves that will be needed to address some of, you know, where the capacity is? Will there be need for reshoring? Do you need to move anything?

[Bruce McDonald, Chairman & CEO at Dana]

Yeah. I I mean, it's a good question. And what I would tell you is there's been so much volatility in what the rules are that as an industry, we have not had enough time to to to to know what the rule is to start to do exactly what you just said. And and I think right now, you know, some of the information that came out last night, you know, we'll have to snorkel through that. But we're definitely now in a position and and we're having early discussions about what okay.

[Bruce McDonald, Chairman & CEO at Dana]

What are the types of things that we can do to mitigate the issue from either reshoring or changing some suppliers, flipping things that that aren't m c USMCA compliant compliant, etcetera, etcetera, etcetera. But what is a % clear, though, is there some things that in if if you take a two year window are not gonna be addressed. So I just use castings as an example. Everybody buys castings from India. And in the next two years, we're not going to be in a position where we can reassure that.

[Bruce McDonald, Chairman & CEO at Dana]

So so, you know, they're subject to the 10% reciprocals right now. You know, before, it was there was a higher list of of of additional reciprocal tariffs, so we're just gonna have to wait and see how those play out as the administration negotiates some of these trade deals. And we're running against our time, so I'm gonna have to wrap it up right now. We have one more question? I'm sorry.

[Operator]

We'll take our final question from the line of Doug Carson at Bank of America. Please go ahead.

[Douglas Karson, Financial Analyst at Bank of America Merrill Lynch]

Great, guys. Thanks for letting me in the last question here. Really appreciate it. Bondholders have been pretty excited about the future of debt reduction and leverage coming down. I know we can't talk about the sale of Off Highway.

[Douglas Karson, Financial Analyst at Bank of America Merrill Lynch]

Could you just refresh us or just reconfirm that balance sheet delevering is still a focus and we could see a meaningful reduction in debt? That still the game plan?

[Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank]

That is. Absolutely.

[Douglas Karson, Financial Analyst at Bank of America Merrill Lynch]

All right. That's helpful for us. And I think the last target we had was leverage being in the like the one to two turn kind of range through the cycle. I'm not going to pin you down on that, but is that still kind of directionally

[Timothy Kraus, Senior VP & CFO at Dana]

Yes. We've been talking about sort of one turn through the cycle on a net basis.

[Douglas Karson, Financial Analyst at Bank of America Merrill Lynch]

Net basis. Okay. All right. That's good.

[Timothy Kraus, Senior VP & CFO at Dana]

So again, through the cycle, so at different points, it might be a little lower, different points, it might be higher. But on a net basis, one turn.

[Bruce McDonald, Chairman & CEO at Dana]

I mean, again, just to help you out, we believe that upon the sale of Off Highway, we'd be required to tender our bonds.

[Douglas Karson, Financial Analyst at Bank of America Merrill Lynch]

Good. Helpful. Thank you.

[Bruce McDonald, Chairman & CEO at Dana]

Okay. Alright. Maybe with that, I'll just, you know, first of all, obviously, a big thank you to the Dana Global team. I mean, we have a lot going on. And tariffs was something that we certainly weren't thinking was gonna get thrown at us three months ago.

[Bruce McDonald, Chairman & CEO at Dana]

And so I just couldn't be prouder of the results our teams have delivered in in in the environment that that we're in here. You know, we feel really good about the things that we have control on. We're a % certain on our cost reduction savings that we can bring those forward. I think from an overall point of view, the things that we can control and manage, our teams are doing a great job. And we look forward to sharing further progress on things in ninety days.

[Bruce McDonald, Chairman & CEO at Dana]

Thank you everybody.

[Timothy Kraus, Senior VP & CFO at Dana]

Thanks guys.

[Operator]

This will conclude today's meeting. Thank you all for joining. You may now disconnect.

Participants

Executives

• Craig Barber, Senior Director - Investor Relations & Corporate Communications
• Bruce McDonald, Chairman & CEO
• Timothy Kraus, Senior VP & CFO

Analysts

• Joseph Spak, Managing Director at UBS Group
• Edison Yu, Analyst at Deutsche Bank
• Colin Langan, Automotive & Mobility Analyst at Wells Fargo
• James Picariello, Director & Sr. Automotive Analyst at BNP Paribas
• Ryan Brinkman, Equity Research Analyst at JP Morgan
• Dan Levy, Senior Equity Research Analyst at Barclays Corporate & Investment Bank
• Emmanuel Rosner, Managing Director - Senior Autos & Auto Technology Analyst at Wolfe Research LLC
• Douglas Karson, Financial Analyst at Bank of America Merrill Lynch