Dana Incorporated Price & Performance (DAN)

Good morning, everyone, and thanks for joining us today for Dana Incorporated twenty twenty four Q4 and Full Year Earnings Call. Today's presentation includes forward looking statements about our expectations for Dana's future performance, Actual results could differ from what we've discussed today. For more details about the factors that could affect our future results, please refer to our Safe Harbor statement found in our public filings our reports with the SEC. Will find this morning's press release and presentation on our investor website. And as a reminder, today's call is being recorded and the supporting materials of the property of Dana may not be recorded, copied or rebroadcast without our written consent. Our call this morning is Bruce McDonald Dana the Chairman and Chief Executive Officer and Timothy Krause, Senior Vice President and Chief Financial Officer. Now I'd like to turn the call over to Bruce to get us started. All right. Thank you, Craig, and good morning, everybody. Probably a little bit less than normal for me on the call given we just spoke with with Street here a month ago. But just on Slide four, just a high level perspective on our financials. For the full year sales, down about nearly $300,000,000 really reflecting softness, I would say, in a few key areas.

One would be EV and some of our sales to the programs that we are currently in production on. And then as the year progressed, we saw increasingly weak markets in off highway. In terms of our profitability, we benefited from strong operating performance with our sales with our sort of EBITDA EBITDA, EA up $40,000,000 on lower volumes and driving our our operating margins up by 60 basis points. Again, just a little bit of color there, strong operation performance, We're starting to see the early benefits of some of our footprinting actions and plant consolidation. And really good to see here in the fourth quarter as we previously talked about, the benefits of our cost reduction, our $300,000,000 cost reduction program flowing through in the quarter dollars 10,000,000 in Q4 here and as I mentioned, last month, about $100,000,000 of the $300,000,000 is actioned and you could think about in the bag. Lastly, in terms of free cash flow, big improvement getting from a slightly negative position in 2023 to $70,000,000 in 2024. We're pleased with the improvement, but it's nowhere near where it needs to be and the guidance that we're going to share with you later on, we have free cash flow more than tripling in 2025.

Turning to Slide five. Again, this is sort of a lift from the deck a month ago. Focusing on very, Kim and I and and the team are very heavily focused on completing the off highway divest [indiscernible] versus a month ago. There's a robust process with strong interest and we execute the legal agreements and announce a transaction somewhere early Q2 with a closing by the end of our fiscal twenty twenty five. In terms of EV, and our approach to the marketplace, that's been fully implemented and communicated. That's been critical for us. I think it de risks some of the capital that we've committed in the future. And the fact that we're taking a much more measured approach really reduces our the CapEx intensity of our business on a go forward basis. Little bit of more information here in terms of power technology. Consolidation or well underway in terms of completing that initiative. It's been kind of fully rolled out. But that savings is worth somewhere in the $15,000,000 to $20,000,000 level. That's kind of the run rate we hope to get from that initiative. And under Byron Foster leadership I feel good about that. In terms of financial commitments, we're fully committed to getting new data margins up to the 8.1 to 8.6 here in 2025.

And pushing towards double digit in 2026. Really benefiting from strong continued operation performance and of course the benefits of the $300,000,000 cost reduction that will be fully in our base in 2026. In terms of use of proceeds, again, committed to a strong balance sheet Our discussions that we're having with our Board would suggest we're targeting a net leverage of both one times through the cycle. That does not mean we'll be at one times when we on day one, what will probably be lower than that. But that we want to have a conservative balance sheet so that we're strong throughout the cycle. Lastly for me on Page six, just a few comments on our our markets and our backlog for this year I guess I'd categorize our our outlook in terms of light vehicles. Flattish year over year. That seems to be generally consistent with what other suppliers and OEs are talking about right now. [indiscernible] sort of been reflected in the releases that we've seen so far. Terms of the commercial vehicle, a little bit of softness in the market. We do anticipate to see off sorry, commercial vehicle stabilize here towards the end of this year and look forward to start to see the beneficial impacts of pre buys associated with the 2026 emissions legislation changes.

Terms of Off Highway, similar type weakness in the market. I guess I would say, I haven't seen our our numbers for January and early view on on February. It's actually the market is actually doing a little bit better than we had talked about. A month ago. So I'm not going to call it a turnaround yet. But it seems to be holding up a little bit better than we had feared. Tim is going to get into our quarterly phasing later on, but one thing I would point out is we are going to have difficult comp comps here in Q1 and to a lesser extent in Q2. In light vehicle, obviously, last year, we benefited from volume pickup associated with the the strikes in North America. And then we've got Tough. Year over year comps in both off highway and CV.

In terms of our backlog, dollars $650,000,000 You can see how that flows by year. Obviously, it's a little it's down about $300,000,000 from our backlog the year before. That really reflects, I would say largely lower volumes on the EV programs that we have in our our backlog. But nonetheless, we've got strong growth in each of the next three years. And I guess I'd just remind folks that 80% tight plus of our backlog tends to be in new Dana as opposed to off highway. So that Tim, I'll turn it over to you to sort of deep dive in the financials. Thanks, Bruce, and good morning to everyone. Please turn to Slide eight for a review of our fourth quarter and full year results for 2024.

Beginning on the left column with fourth quarter sales were $2,340,000,000 $159,000,000 below last year due to lower vehicle production and currency impacts.

For the full year, sales were $10,280,000,000 down $271,000,000 driven again by end market [indiscernible] Adjusted EBITDA was $186,000,000 in the fourth quarter for profit margin of 8%. That is 170 basis point improvement over last year's fourth quarter. Full year adjusted EBITDA was $885,000,000 $40,000,000 higher than the previous year for a profit margin of 8.6%, 60 basis points better than last year.

The profit improvement is primarily due to cost saving actions and better efficiencies through throughout the organization. Net loss attributable to Dana was $80,000,000 for the fourth quarter, dollars 41,000,000 lower than last year, primarily driven by $31,000,000 higher restructuring charges, this year to implement our long term cost savings plan and divestiture expenses. Full year net loss was $57,000,000 compared to net income of $38,000,000 last year.

Primary difference of $51,000,000 and higher restructuring charges and the $26,000,000 loss recorded for the planned divestiture, of our non core hydraulics business that was announced earlier this year. The transaction did not occur the third quarter as expected and was no longer classified as held for sale. However, this loss was recognized to adjust the carrying value of the net assets to fair value remains due to account per share compared to a loss of $0.08 last year. For the full year, adjusted EPS was $0.94 per share, $0.1 better than the prior year.

And finally, free cash flow was $149,000,000 for the quarter, dollars 70,000,000 for the full year, a $13,000,000 improvement for the quarter and $95,000,000 improvement for the year.

Please turn with me now to Slide nine for the drivers of the sales and profit change for the fourth quarter of twenty twenty four. Beginning on the left, organic sales were $135,000,000 lower, driven by lower OEM production of heavy vehicles. Adjusted EBITDA on organic sales was $33,000,000 higher. This strong incremental margin was due to improved cost efficiencies across the entire company generated 175 basis points improvement in margin. As we detailed in our business update call in January, we are showing the impact of our cost saving programs For the fourth quarter of twenty twenty four, cost savings added $10,000,000 in profit through the various actions we took since we began the program in the fourth quarter. Foreign currency translation decreased sales by $15,000,000 primarily driven by lower value of the euro and real compared to the U. S. Dollar. Profit was lower by $1,000,000 with no impact to margin. Finally, due to falling commodity prices, commodity cost recovery in the fourth quarter was $8,000,000 lower than last year. The profit benefit of the lower commodity prices was offset by the timing cost mechanisms within the commodity recovery agreements with our customers resulting in profit being lower by $12,000,000 a 45 basis point Next, I will turn to Slide 10 for the drivers of the sales and profit change for the full year 2024.

For the full year, organic sales were $164,000,000 lower driven by lower end market demand in the second half of the year. Adjusted EBITDA on organic sales was $76,000,000 higher. This strong incremental margin again was due to improved cost efficiencies across the organization resulting in 90 basis points improvement in margin.

The cost saving program which began in the fourth quarter added the same $10,000,000 to adjusted EBITDA was shown in the previous page for fourth quarter. Foreign currency translation lowered sales by $49,000,000 and profit by $6,000,000 with no impact to margin.

Just as the fourth quarter just as in the fourth quarter, the benefit of the lower commodity prices was offset by timing cost mechanisms with our customer agreements. Commodity cost recovery was $53,000,000 lower than last year, and profit was lowered by $40,000,000 a 40 basis point impact to margins. Please turn with you now to Slide 11 for the details of the full year free cash flow. Free cash flow for 2024 totaled $70,000,000 $95,000,000 higher than last year. Higher adjusted EBITDA was partially offset by higher one time costs related to cost saving actions and the sale of the off highway business as well as higher net interest due to the timing of interest payments and higher taxes driven by payment timing and regional mix of income. Working capital use was $17,000,000 lower than last year. The use was due to the timing of payables and other working capital.

Finally, capital spending was $121,000,000 lower driven by a normalized launch cadence and lower investment for EV programs. Please turn to Slide 12, for a review of our 2025 guidance. Our 2025 full year guidance remains unchanged from our business update on January.

As a reminder, our guidance includes the off highway business for the full year and does not include any impact from unidentified [indiscernible] We are expecting sales for this year of about $9,750,000,000 at the midpoint of our range.

That is about $500,000,000 lower than last year driven by lower end market demand, and the delay in some EV programs as well as currency translation [indiscernible] Adjusted EBITDA is expected to be $975,000,000 at the midpoint of the tighter ranges. This is approximately $90,000,000 higher than 2024 and implies a profit margin of 10%. 140 basis points increase over 2024. Full year free cash flow is expected to $225,000,000 at 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 $165 per share at the midpoint of the range. Please turn with you now to Slide 13, I will highlight the drivers. Of the full year expected sales and profit changes compared to 2024. [indiscernible] We are expecting about $285,000,000 of lower organic sales for 2025, driven by lower demand in all end markets partially offset by new business. Adjusted EBITDA change on organic sales growth is expected to be approximately $40,000,000 for a decremental margin of just 14%. This is due to the continued manufacturing and purchasing efficiency improvements in the organization.

Cost saving actions are expected to total $175,000,000 this increasing margin by 180 basis points.

Foreign currency translation on sales is expected to be a headwind of approximately $195,000,000 with a profit impact of about $25,000,000 expected to be a headwind to sales of about $30,000,000 due to lower recoveries driven by falling steel and other commodity prices. We expect a $20,000,000 profit headwind due to the true up in pricing governed by our two way commodity recovery mechanisms with our customers.

Please turn with me now to Slide 14 for our outlook on free cash flow for 2025. We anticipate full year 2025 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 work to finalize the off highway divestiture. Working capital requirements will be about $40,000,000 lower and capital spending is expected to be about $325,000,000 this year which is $55,000,000 lower than last year. Lastly, please turn with me to Slide 15 for an outlook of our quarterly phasing. [indiscernible] Page 15 shows our sales by quarter for 2024 and our expected sales for 2025.

There are a few market drivers in 2024 that disrupted our normal quarterly cadence beginning in the first quarter where light vehicle production increased dramatically coming off the 2023 UAW strike in North America. This year, we are seeing a slowdown in production as vehicle inventory remain high for a number of our programs. Back half of the year will see improved demand as we see inventories normalize and off highway markets return to growth.

In the near term, the impact to Q1 will be a $500,000,000 in lower sales than last year due to lower end market demand.

We will see between $35,000,000 and $40,000,000 in cost saving improvements in Q1 and are expecting about 8% adjusted EBITDA margins for the quarter. Thank you for joining us this morning and I will now turn the call back over to Regina to start the Q and A session. Take our first question from the line of Tom Narayan with RBC Capital Markets.

Hi, thanks for taking the question.

Try to keep it to one. I just have a quick follow-up, if that's okay. So the robust process and strong interest and I know a lot of this is covered on the January 25 call, [indiscernible] signing in Q2, that's only like two months away. So I guess, is this time line based on just a predict [indiscernible] is this something farther along specific interest from one or two bidders? And then I just have a quick follow-up.

Yes, Tom. So as we mentioned, we have a a very robust process with a number of interest parties. I'm not going to get into the specific numbers, but we are well along in the process and we expect to be able to sign a [indiscernible] second quarter.

Okay. If it's okay to follow-up, So on the 25 guidance, Yes, the market for light vehicle flat. We have heard some from some other suppliers noting kind of get down mid single digits Is this specific to your light vehicle OEM exposure or perhaps to your graphics? And then on the backlog that you guys have, the $150,000,000 Is that could you split that out on across the segments just so we can just understand how that works off highway? Thanks. Yes. I saw on your first the light vehicle our light vehicle view is really related to our programs.

Not to the overall market. You got to remember, one, we really only play in full frame truck. And even within full frame truck, we have a disproportionate number of our sales in a number of key programs with FORWARD and Stellantis in particularly.

And on the backlog question, the vast majority of the predominant of that is is not off or is LV and PT. So it's still the majority of that is in the light vehicle driveline parts of the business.

Got it. Thanks. I'll turn it over. Our next question comes from the line of Colin Langan with Wells Fargo. Great. Thanks for taking my questions. Just a basic question here, but what is going on with the tax and guidance? It seems like EPS is moving a lot more than the EBITDA guide.

There a change in the valuation allowances that we should be thinking about? Why it seems like I assume that's the big driver why EPS is jumping a lot more?

Yes. I mean, Colin, this is Tim. So yes, I mean, because we have the value you don't get a normalized rate, right, as as mix changes. If a lot more of income comes into The U. S, it it ends up being taxed essentially at a zero rate because of the evaluation allowance. So until we kind of get through this period and and on the other side of the off highway sale, we're going to continue to see a fair amount of volatility around the rate And it's also a bit more difficult to sort of predict and deal just due to the mix of income. Especially from year to year quarter to quarter.

Yes. And I guess, just Colin is following up on that. I guess, after we get through the other side of selling off highway deleveraging our balance sheet and we get the benefit of the $300,000,000 that we're road mapping. We'll be back to sort of like a normal company in terms of a tax rate Yes, I would agree. I mean, we would anticipate we obviously won't know till we get there, but given the changes in interest expense as well as the cost saving program, we would anticipate that we could probably be be able to relieve the valuation allowance at some point after that. And start talking about EPS being more normal flowing.

Correct.

Yes. So this would be a sign though that your U. S. Operations have went from unprofitable and are turning profitable and that those profits no longer have a tax [indiscernible] Yes, that's correct. And obviously, a big chunk of our cost saving program is is predominantly or disproportionately in North America Dana specifically in The U. S. So that should help as well.

Yes. And so you think about why it's high now, it's like we have losses in The U. S. That are not tax benefited. Correct.

Yep.

Okay. And then just a follow-up on the prior question about customer mix, because S and P has like the Super Duty down double digits. Are you assuming a similar assumption there because that is a pretty big the that's the case, what is offsetting that to keep it only [indiscernible] Yes. So I mean, the way we're the way our forecast is built is based on the mix of models that we're seeing. And so even within Super Duty, there's a pretty big difference between the mix And so even though overall Super Duty could be down single digits or even double digits depending on that mix, it will have a a different impact to us. We do most of the super duty, but not all. So some of it's still done in house, especially the the low end 250s that are generally gasoline powered. Yes.

They're really glorified F150s with a few extra Yes. And it's also somewhat offset Super Duty by the fact that we don't we're not expecting the inventory correction on some of the Jeep products to occur a second a second shift coming on. I think it's for [indiscernible] Got it. Okay, great. Thanks for taking my questions.

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

Hey, good morning. Thanks for taking our questions. I just wanted to come back to commercial vehicle.

It seemed the quarter was a bit weak. And I mean just thinking more high level about it, when could we start seeing that kind of turnaround?

Yes, Edison, to talk with you. Hey, this is Tim. So, a couple of things in the quarter for CD. I think that your last question, you should start seeing that in the first quarter. There's a couple of one time items that really impacted fourth quarter. So we did end up taking some adjustments for EV bad debt and inventory in the quarter given where that business has gone. And then we did have an inventory or a warranty item that we ended up recording as well.

So and don't forget, there's going to be significant cost savings coming through in CV as part of the $300,000,000 program.

Got it. And just a quick follow-up Got you. Just quick follow-up on the contrasting that light vehicle was quite strong. Is that a good kind of jumping off point for 25?

Yes, I think we're going to continue to see strong improvement really across all the all the markets all of our end markets as we go in, but yes, we do expect there to be continued growth in both core profit and the margin in light vehicle. As we sort of see production stabilize and we start seeing the benefits of the cost savings flow through. [indiscernible] add, we do tend to see a bit of lumpiness, though, in timing of custom recovery We incur costs in some quarters and get sort of catch up recoveries in different quarters. So that business is always sort of lumpy and things like that. So Yes, some of that. But yes, I mean, if you think about the first quarter, sales are we would anticipate sales being down quarter over quarter given given how strong first quarter twenty twenty four was coming off of the strike. So even despite that, I still believe that we'll have a strong margin that we can turn in on first quarter given the work we're doing on the cost side of the business. Got it. Thank you. Our next question comes from the line of James Picariello with BNP Paribas.

Hey, guys. This is Jake on for James.

As we think about Let's think about the discussions with Hydro Quebec. Around their TM4 put option. Can you just provide any clarity on the timing or the magnitude of potential payment you're expecting? Yes. So I don't want to get into anything specific, but we continue to work through that with Hydro Quebec.

But I'm pretty confident we'll be able to get something done here this year. At some point. So All right. Thank you. And then just one piece of housekeeping. When do you guys expect to actually implement the resegmentation with Powertec getting folded into light vehicle and commercial vehicle. Thank you. Yes. We'll be doing that during here in Q1.

So we'll when we report first quarter, you'll see Power Tech having been folded into into LVCV. [indiscernible] Our next question comes from the line of Ryan Brinkman with JPMorgan. [indiscernible] supplier this quarter, your guidance excludes the impact of obviously difficult to predict tariffs. I'm curious though what early scenario planning you may be doing around tariffs on Canada and Mexico in particular?

Mexico especially and what your exposure there might be how you're thinking about the ability to either mitigate or pass potential tariff costs along to the cost So I think the we're obviously looking at the impacts across the business It's hard to predict, as we said, what they ultimately will be or really what the impacts will be. What I can tell you is that we have put all of our customers formally on notice that we intend to pass every dollar of any tariff impacts through to them. And that's our position and we're not planning to waiver Good to hear. Thank you. And then regarding the $175,000,000 of targeted cost saves, [indiscernible] very impressive amount. How much of this end of the $55,000,000 of lower CapEx how much would you say relates to the change ED strategy or maybe less percent of other future revenue opportunities versus more simply drifting and greater efficiency on your part? Yes. I mean, there's a sizable piece of the 175 that's that's related to EV. I don't want to get into all this specifics, but there is a large portion of the total 300 related to the change in our EV strategy.

That's flowing through, so you would have expected that. I think when you think about the $175,000,000 as Bruce mentioned, we've already actioned $100,000,000 of that number. And if you look at where we think we're going to end up first quarter between $35,000,000 and $40,000,000 Our ability to hit that $175,000,000 for the full year is we think is very, very, very certain.

Yes. And then just on your question about capital, I guess I would say is we'll get be able to return back to the sort of roughly 4% type capital reinvestment. In the business. Obviously, we were significantly higher than that last few years. In the next couple of years, we still have a few programs that we have that will require some capital expenditure and we you'll see a little bit of change in the balance sheet, but what we do expect to have suppliers sorry, customers providing us with offset to the capital expenditure beginning this fiscal year.

Okay, thanks. And then just lastly, I think one of the reasons why there has been such a positive shift as reaction to your multiyear cost savings plan is that it comes at the same time as the off highway sale and it sounds like it's maybe been catalyzed by the sale. Given the simpler corporate structure that it can allow. But earlier, I remember management highlighting the cost synergies of supplying across multiple end markets and you will still be supplying across the light and for us, but just wanted to check-in on that and what you think there may be from a dissynergies perspective or are most of those synergies between the light and the commercial four or five, etcetera? Just curious.

Yes. I mean, I'll do a few and maybe I guess first of all, there definitely a dissynergy associated with stranded costs and we've talked about that We're continuing to chip away, but basically it's our corporate costs that get allocated to off highway and how some of them are very variable. Some of our corporate costs would go with the sale, but that is a dissynergy that we have to chip away at. Secondly, if you think about we buy steel and a lot of common components, and we do similar things like make gears and things like that. So yes, for sure there is a benefit of having the off highway in terms of purchasing scale and maybe leveraging our footprint. But in the scheme of things, it's manageable. And to your point about So all things being equal, we're certainly not doing it to capture synergies. We're doing it the driver for the off highway business is very straightforward. It's what's the value of that business in terms of the multiple it trades at it will sell for versus the value that's reflected in our stock price. It's just not being recognized at the market. And the market has spoken.

Our stock prices reacted very favorably we're going to encapture that delta. Tim, you may have a few other Yes. I think the the CV and LV business is certainly are much more aligned in terms of both process and product, but also GI geography. So those are just two businesses that are primarily North American businesses. So there are certainly more synergies there than between those and the off highway business. But the other thing to think about here is like we any of those dissynergies, we've taken those into consideration as we've thought about how the value unlock happens. And and where new data margins end up. So when we think about new data margins in the the 10%, 10.5% when we get on the other side of this thing. That already those impacts. So, and as Bruce mentioned, we are currently showing that we have about $40,000,000 where the stranded [indiscernible] related to the transaction that we are are fully focused on actioning and reducing as we after we get through the sale.

Very helpful. Thank you. Our next question will come from the line of Joseph Spak with UBS.

Please go ahead. Hi, good morning. It's Alejandra on for Joe.

Maybe just following up on the backlog question. I think you highlighted roughly 20% will be in off highway. So should I be thinking about the sort of the remainder or the remaining 80% in LV or how I think about that LV and CV split? Yes. I mean, look, I think those are rough numbers in terms of 20 ish percent or whatever they move around. You got to remember the backlog number we're looking at there is is typically through the three years. But yes, mean there isn't a lot of backlog in the in the CV business. It's a catalog based business and usually market share based, not not backlog. There is a little bit of backlog in there, but it's not significant.

Got it.

Okay. And maybe as a follow-up, you mentioned some weakness in in your prepared remarks. You maybe just give us some additional color on that? Yes, it won't be as dramatic as first quarter, but we'll see a little bit of additional weakness across the end market.

In Q2. And then we'll see that recovery start to really come through in Q3 and Q4. And I think if you look at Page 15 of the deck, you can see the bars [indiscernible] sort of that cadence.

Great. Thank you.

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

Hi, good morning. Thank you for taking the questions. I'm joined late, so I apologize if it's mentioned earlier. But if you could just talk to the backlog within the light vehicle side, how much of that is reflecting extensions of current light vehicle programs. And given this idea of there could be a potential super cycle here as automakers see the longer tail of ICE How much incremental activity could we see added to the backlog in subsequent periods? Yes. Hey, Dan. So a couple of things. Remember, the way we the way we calculate backlog is it's truly incremental. So we don't count additional vehicle volume [indiscernible] you should be able if you will hold you were to hold FX commodity and volume constant across the three year period, you should be able to just just you will just add the amounts in the backlog to our sales to get what our resulting sales would be in 2025, 2026, 2027. So So the idea that, hey, there's going to be a lot more volume on our our current programs, that would not be in our back log. It would be in our market outlook but it won't. Now if they bring out a brand new variant or something like that, that would go to backlog, something we haven't previously made or sold to the automakers, but not pure volume.

Great. Okay. Thank you. And then just as a follow-up, with the news of potential tariffs on and aluminum, can you just remind us of how this played out?

When we saw this in 2018 and just what the timing effects are of you passing this onto your customers? [indiscernible] this came up a little bit earlier. What we we've obviously looking at the what the impacts are likely to be on the business and we continue to kind of work through that. And as we know more about like how they're going to deal with Matilas and some of the other the other nuances within the supply chain. We'll know more. But one thing we have done is we have put all of our customers on formal notice. So we formally notified them that that we're it is our intention to pass through every dollar of tariff that comes through as a result of it.

And that we expect them that they're going to pay.

Yes. I guess I'll maybe add to that Dan is if you think about the light vehicle business, we're far more indexed now than we would have been back then. So to the extent the tariffs drive up the cost, the recovery mechanism through indexes we already have [indiscernible] Higher than it was back in 2018. Yes.

And that at least gets you 75%. But our view is we're not going to eat the 25%.

Percent that doesn't get recovered in our current commodity agreement. Also don't know if it will be reflected in the indexes or not and maybe surcharge. We just don't know. But at the end of the day, our intention and our expectation is that our customers will Got it. Thank you.

Okay. Maybe just in a few concluding remarks, I guess, first of all, I'd like to thank the Dana team and our leaders for delivering our improved financial [indiscernible] For me personally, I feel really good about progress the team is making in actioning the $300,000,000 cost reduction roadmap that we have. 2025 for us is going to be its a transformational year for Dana Dana. The sale of our off highway business is going to unlock significant shareholder value while at the same time enabling us to return capital to our shareholders and be left with a best in class balance sheet in our space. I'm really excited to be here and I look forward to sharing our progress in three months' time.

Thank you, everyone.