# Dear Fellow
Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/consumer-cyclical-auto-parts/NYSE_DAN_2019/NYSE_DAN_2019.mmd` · pages 5-11_

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Dear Fellow
Shareholders,

The Dana of today is much different than what some long-term shareholders may remember. While our customer-centric culture and expertise in bringing innovative technologies to market remain the same, we have taken strategic steps to transform the company and position Dana as a leader in vehicle electrification across all mobility markets and geographies.

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The investments we made over the last year are already delivering positive results for our business. In 2019, we continued our track record of growth, achieving record sales, profit, and diluted adjusted earnings per share, while increasing our adjusted free cash flow by 12 percent over 2018.

■ Record sales, profit, and diluted adjusted EPS

■ $25 million in acquisition cost synergies

■ 5 strategic
electrodynamic acquisitions

■ 35+ customer and industry honors

■ 6 additional facilities in Asia

PACE Award winner

■ First full electric powertrain program with complete Dana content

■ $700 million new business backlog through 2022
Last year, we updated our corporate strategy, as we exceeded the original targets we set for the company. The updated strategy, titled "Powering into e-Drive," sets Dana's focus on maintaining a profitable growth trajectory, delivering an additional $2 billion of sales growth, expanding profit margin by 100 basis points, and adding approximately $200 million of adjusted free cash flow through 2023. To achieve these goals, Dana will continue to leverage the core, drive customer centricity, expand global markets, deliver innovative solutions, and lead electric propulsion.

While the principles of the strategy are likely familiar, one area where shareholders may notice the most change is our focus on leading the charge in electric propulsion. And leaders we have already become. Today, electrification yields more than $100 million of sales, and we expect that number to grow significantly, to nearly $500 million annually by 2023.

Over the past year, Dana has accelerated our capabilities in vehicle electrification, securing our position as the only supplier capable of delivering all elements of a complete, fully integrated electrified system across all mobility markets in any region of the world. While our customers are at varying phases in their electrification journeys, our strategy remains focused on supporting them with industry-leading technologies and expertise for all vehicle architectures. In addition to our targeted investment in mechatronics research and development, a number of acquisitions have positioned us for success amidst this shift toward electrification.

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In early 2019, Dana completed the purchase of the Oerlikon Group's drive systems segment, including the high-performance transmission capabilities of Graziano, torque-hub drive technology of Fairfield, software solutions from VOCIS, and electric motors from Ashwoods. As a result, we have added a wide range of electric propulsion technologies, transmission systems, custom gears, drives, and more into our product portfolio. We also finalized the acquisition of the SME Group, which augmented our electrodynamic offering with low-voltage electric motors, inverters, and controls. Together, these acquisitions have significantly increased our opportunities for added content per vehicle.

Additionally, Dana acquired Nordresa, a recognized leader in the development and integration of electric commercial vehicles. This strategic transaction provided Dana with the in-house capabilities to deliver complete, fully integrated e-Powertrains in partnership with our customers. From the battery packs that store the energy, to the e-Propulsion systems that propel the vehicle forward, to the hardware and software that control the various functions, Dana can now offer and integrate it all. In fact, we are already collaborating with customers such as Kenworth and Peterbilt to transform traditional medium-duty chassis into complete e-Powertrains. These programs alone are expected to generate approximately $200 million in incremental sales to Dana.

Furthering our strategy in electrification and advancing our goal to expand global markets, Dana also announced a collaboration with Valeo to develop and supply 48-volt electric-vehicle systems for new mobility applications. This provides Dana with new opportunities for our light vehicle business to support low-speed electric vehicles and hybrid e-AWD passenger vehicles.

These investments in electrification further amplify our commitment to sustainability and social responsibility, which remain central to the vision of the company.

Nevertheless, we remain energy-source agnostic and continue to develop products to meet our customers' needs – whether they're working with a traditional engine or an electric, hybrid, or fuel cell powertrain. Last year, for example, our Spicer \( ^{®} \)  AdvanTEK Ultra \( ^{TM} \)  axle went into production with Ford. An Automotive News PACE Award winner, this revolutionary axle system delivers up to a 45 percent reduction in energy loss, compared with a typical axle. This ongoing innovation, in combination with our exceptional delivery and quality performance, has resulted in more than 35 customer and industry honors. I am proud to report that we have secured multiple new programs, including the Jeep \( _{®} \)  Gladiator, Sandvik TH663i underground mining truck, and the all-electric Lion8 bus — just to name a few.

In 2019, we also focused on expanding our global presence in Europe, India, and China to capitalize on the growth of our customers in these critical markets.

Despite facing softer demand in 2019, we have confidence in our ability to manage the company through the cyclical nature of the business to continue delivering shareholder value through 2020 and beyond.

We have positioned the company for significant growth as electrification adoption accelerates, and we have made the acquisitions that will be key to exceeding our long-term financial targets. Our new business backlog of $700 million through 2022 positions us for strong future growth.

As we look to the year ahead, there's not a doubt in my mind that Dana will lead the charge across all mobility markets, worldwide — and we couldn't do it without our dedicated people, esteemed customers, and valued investors. Together with the Board of Directors and the global Dana team, I thank you for your support as we focus on "Powering into e-Drive" and delivering maximum value to everyone with whom we work.

My personal best,

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James K. Kamsickas
Chairman and Chief Executive Officer

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