UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 21, 2004
Dana Corporation
Virginia (State or other jurisdiction of incorporation) |
1-1063 (Commission File Number) |
34-4361040 (IRS Employer Identification Number) |
4500 Dorr Street, Toledo, Ohio (Address of principal executive offices) |
43615 (Zip Code) |
Registrant’s telephone number, including area code: (419) 535-4500
This Current Report on Form 8-K and the attached exhibits are being furnished by Dana Corporation (Dana) pursuant to (i) Item 9 of Form 8-K in satisfaction of the public disclosure requirements of Regulation FD and (ii) Item 12 of Form 8-K, insofar as they disclose historical information regarding Dana’s results of operations and financial condition for the fiscal quarter and six-month period ended June 30, 2004.
Item 7. Exhibits.
(c) Exhibits
99.1
|
Slide Presentation for July 21, 2004 Conference Call (furnished but not filed pursuant to Item 9) | |
99.2
|
Press Release of Dana Corporation (furnished but not filed pursuant to Item 12) |
Item 9. Regulation FD Disclosure.
During a conference call scheduled to be held at 11:00 a.m. EDT on July 21, 2004, Dana’s Chairman and Chief Executive Officer Michael J. Burns and Chief Financial Officer Robert C. Richter intend to present the slide presentation that is furnished as Exhibit 99.1 to this Current Report.
Certain slides in this presentation include financial measures which are not presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP). These include slide 4, which presents earnings per share excluding unusual items, and slides 14, 15, 16 and 17, which include Dana Credit Corporation (DCC) on an equity basis, rather than on the consolidated basis required by GAAP. The presentation also includes, in Slides 25 and 26, a quantitative reconciliation of certain of the differences between the non-GAAP financial measures disclosed and the most directly comparable financial measures calculated and presented in accordance with GAAP. Item 12 below and Dana’s earnings release in the attached Exhibit 99.2 also contain information about the reconciliation of these non-GAAP financial measures to comparable GAAP financial measures and an explanation of why management believes the non-GAAP financial measures provide useful information to investors.
Item 12. Results of Operations and Financial Condition.
On July 21, 2004, Dana issued a news release regarding its earnings for the fiscal quarter and six months ended June 30, 2004. A copy of that release is being furnished as Exhibit 99.2 to this Current Report.
The earnings release includes tables showing: (i) Dana Corporation (Including Dana Credit Corporation on an Equity Basis), Condensed Statements of Income (Unaudited) — for the Three Months and Six Months Ended June 30, 2004 and 2003; (ii) Dana Corporation (Including Dana Credit Corporation on an Equity Basis), Condensed Balance Sheets (Unaudited) — as of June 30, 2004 and December 31, 2003; and (iii) Dana Corporation (Including Dana Credit Corporation on an Equity Basis), Cash Flow Impacts on Net Debt — for the Three Months and Six Months Ended June 30, 2004 and 2003. As GAAP requires DCC to be included on a consolidated basis, these tables contain non-GAAP financial measures. For each of these tables the earnings release also includes: (i) a presentation of the most directly comparable financial measures calculated and presented in accordance with GAAP and (ii) a quantitative reconciliation of the differences between the non-GAAP financial measures disclosed and the most directly comparable GAAP financial measures. Management believes that the presentation
2
of the non-GAAP financial measures provides useful information to investors regarding Dana’s financial condition and results of operations because management evaluates Dana’s operating segments and regions as if DCC were accounted for on the equity method of accounting. This is done because DCC is not homogenous with Dana’s manufacturing operations, its financing activities do not support the sales of the other operating segments and its financial and performance measures are inconsistent with those of the other operating segments. Moreover, the financial covenants contained in Dana’s long-term bank facility are measured with DCC accounted for on an equity basis.
In accordance with General Instructions B.2 and B.6 of Form 8-K, the information in this Current Report, including the attached exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.
3
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dana Corporation (Registrant) |
||
Date: July 21, 2004
|
By: /s/ Robert C. Richter Name: Robert C. Richter Title: Chief Financial Officer |
4
Exhibit Index
99.1 Slide Presentation for July 21, 2004 Conference Call
5
Exhibit 99.1
| Dana Corporation Second-Quarter Conference Call July 21, 2004 (c) Dana Corporation, 2004 |
| Forward-Looking Statements Statements herein about our forecasts, beliefs, and expectations constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Dana's actual results could differ materially from those that we anticipate or project due to a number of factors. These factors include the impact of national and international economic conditions; adverse effects from terrorism or hostilities; the strength of other currencies relative to the U.S. dollar; the cyclical nature of the global vehicular industry; the performance of the global aftermarket sector; changes in business relationships with our major customers and in the timing, size and continuation of their and our programs; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and pricing; increases in production or material costs that cannot be recouped in product pricing; the impact of our collective bargaining negotiations; the continued success of our cost reduction and cash management programs and our long-term transformation strategy, and the success and timing of the divestiture of the automotive aftermarket business. Additional factors are contained in our public filings with the SEC. We do not undertake to update any forward-looking statements contained herein. (c) Dana Corporation, July 21, 2004 3 |
| Key Topics Solid Second-Quarter Performance Aftermarket Sale & Potential Use of Anticipated Proceeds New Business Growth New Global Purchasing Initiative Financial Review 5 |
| Financial Summary Q2 - 2004 Q2 - 2003 Sales $2.3 billion $2.0 billion Net Income Earnings per Share $108 million $0.72 $52 million $0.35 Net Income, excluding unusual items $75 million $47 million Earnings Per Share, excluding unusual items $0.50 $0.31 7 |
| 2nd Quarter Segment Comparison Sales OPAT 2004 2004 2003 2003 Chg. Chg. (Millions) 9 Automotive 1,767 1,532 15 72 66 9 Heavy Vehicle 601 519 16 31 19 63 DCC 5 6 (16) Other (37) (39) 5 (51) (52) 2 Results from Cont. Operations 2,331 2,012 16 57 39 46 Discontinued Ops.* 18 8 Unusual Items 33 5 Consolidated 2,331 2,012 16 108 52 108 % % % % % $ $ $ $ $ $ $ $ $ $ $ $ * Q2 Sales from Discontinued Operations were $557 in 2004 vs. $603 in 2003 % |
| 2004 Consecutive Quarter Segment Comparison Sales OPAT 2nd Qtr 2nd Qtr 1st Qtr 1st Qtr Chg. Chg. (Millions) 11 * 2004 Sales from Discontinued Operations were $557 in Q2 vs. $510 in Q1. Automotive 1,767 1,757 1 72 71 1 Heavy Vehicle 601 587 2 31 24 29 DCC 5 7 (29) Other (37) (33) (12) (51) (54) 6 Results from Cont. Operations 2,331 2,311 1 57 48 19 Discontinued Ops.* 18 13 Unusual Items 33 2 Consolidated 2,331 2,311 1 108 63 71 % % % % % $ $ $ $ $ $ $ $ $ $ $ $ % |
| Aftermarket Business Divestiture Signed definitive agreement to sell aftermarket business to The Cypress Group for $1.1 billion in cash Transaction expected to close in third quarter Will provide strategic and financial flexibility Potential uses of proceeds: Contribute to pension plans Reduce leverage Reinvest in our core businesses 13 |
| Dana Corporation Where We've Been Where We're Going Decentralized Company SBU Organization Disconnected Functions OE/Aftermarket Global Footprint w/NA Bias 2001 Restructuring Program Integrated Company Top-Line Growth & Continually Improving Cost Structure Market-Focused Organization Fully Leveraged Functions Strategic Focus - Vehicular OEM Truly Global Footprint w/Balance 15 What We've Done Combined ASG/EFMG; Integrating Operations Closed Remaining Plants; Focused on Improving Gross Margins Renewed Focus on Key Customers & Markets Established Global Purchasing Organization Agreed to Sell Automotive Aftermarket Business Negotiations with Dong Feng (China) |
| Net New Business ($ Millions) Estimates based on Dana's review of the projected production schedules of our customers 17 Automotive Systems Group Heavy Vehicle Technologies & Systems Group Net $420M vs. 2003 2004 2005 2006 Pluses Minuses $2,000 $1,600 $1,200 $800 - -$400 - -$800 $400 - -$1,200 Cumulative Net $300M vs. 2004 Net $40M vs. 2005 |
| Exciting New Programs 19 (c) Dana Corporation. Dated July 21, 2004. Slide may contain forward-looking information. Actual results may differ materially due to factors discussed on slide 2 F-150 Tacoma Navistar X3/X5 Model 357 Colorado Titan Gator Blue Diamond |
| 21 NAFTA Heavy-Truck Overview Backlog (000) Net Orders, Sales, Inventory & Build (000) Backlog Net Orders Build Sales Inventory 2001 69963 14785 13119 13888 47703 70726 12300 12184 13042 47415 67233 11085 13633 15836 44381 65214 10947 12199 15688 40345 60894 9656 13629 16679 38557 58728 10710 12863 15684 35290 57415 9541 10800 13446 33297 53620 9043 12128 13833 31908 52796 10042 11086 12110 30938 47005 7932 13924 14543 29642 50737 14453 11439 12133 29018 52665 10988 8845 13446 24667 2002 59201 15261 10281 10474 24389 68722 20705 11815 10528 25980 83944 29139 12814 13393 25602 97028 28004 14514 14350 26706 95689 17806 17282 16960 26381 89647 10388 16952 15390 27250 76166 5973 17831 16770 28195 64701 7071 19800 17197 31089 54739 7823 18331 16709 33022 44856 9961 19120 18545 34226 42417 10729 12207 14858 31160 44537 11584 10136 13647 27980 2003 48364 15466 11840 10821 29474 51826 15702 11644 10799 31241 52219 13928 12418 11551 33014 52787 15435 14524 15594 31966 54760 17261 14957 15597 31892 56123 16872 15233 15550 32057 58055 17357 15150 16402 30924 56383 14845 15049 14166 31412 55179 15026 16161 16622 31180 52787 17437 19022 17915 33108 54419 17628 15188 15117 32827 64356 25732 15432 18525 29743 2004 81413 31752 15382 14008 30398 |
| N.A. Light-Vehicle Overview Production, U.S. Sales & U.S. Inventory (Units by Month) 2004 2002 Production/Sales 2003 Inventory 23 May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Production 1690059 1684636 857651 1555057 1444783 1560803 1347387 1058883 1221541 1229925 1467589 1312441 1531361 1406145 840382 1233702 1224142 1431725 1349914 1506078 1315223 1360385 1395887 1547157 1576133 1435876 987887 1341043 1337312 1559553 1312046 1010511 1397108 1344221 1363255 1356007 1412721 1371368 928292 1274961 1322997 1527000 1233235 1150379 1224080 1346490 1576554 1403556 1352941 1419456 Inventory 3742581 3795140 3345570 3386946 3436217 3634887 3817731 3803462 3837245 3734663 3732946 3634387 3558455 3459805 3032134 3081543 3117207 2865270 2992431 2953763 3128666 3238074 3243969 3298629 3383639 3416690 2963914 2838078 3013588 3345454 3641547 3457653 3713848 3874969 3938113 3934786 3888575 3888194 3437104 3227971 3362715 3640779 3797787 3737410 3883828 4021507 4176968 4270856 4096943 4159006 Sales 1619687 1613913 1432073 1539551 1474450 1333981 1232425 1240330 1167984 1353052 1593602 1346348 1599710 1619638 1346923 1448462 1289119 1722297 1324542 1310692 1108479 1307061 1514816 1441890 1506880 1536677 1524600 1705761 1223914 1301012 1203337 1441965 1088162 1218968 1453996 1408423 1576342 1473866 1509013 1628365 1300052 1302735 1258320 1424315 1122845 1274701 1504160 1419390 1625290 1443615 |
| Global Purchasing Initiative Goals: Transform decentralized structure Harmonize processes Drive "commonization" Achieve economies of scale Deliver savings Actions to Date: Appointed Paul Miller Global V.P. of Purchasing Established matrix organizational structure Two Supplier Week events - have met with 175 suppliers to date with very positive results 25 |
| 2003 2002 27 Excluding Unusual Items Tax Adjustment * NOTE: Comparable GAAP measures available at www.dana.com Transaction Costs As Reported Q2 Income Statement With DCC on an Equity Basis* Unusual Items Aftermarket DCC |
| 2003 2002 29 2004 2003 Second Quarter * NOTE: Comparable GAAP measures available at www.dana.com 2004 2003 Year-to-Date Income Statement With DCC on an Equity Basis* |
| Cash Flow Statement With DCC on an Equity Basis * (Millions) 31 2004 2003 Second Quarter 2004 2003 Year-to-Date * NOTE: Comparable GAAP measures available at www.dana.com |
| 33 Capital Structure With DCC on an Equity Basis* * NOTE: Comparable GAAP measures available at www.dana.com |
| June 30, 2004 Debt Portfolio ($ Millions) 32 16 35 2004 2005 2006 2008 2009 2010 2011 2028 2029 A/R Sec'n 180 Revolver Sr Notes 150 350 250 819 165 268 Other 32.7 15.8 Maturities do not reflect swap valuation adjustments |
| 5-year bank facility $ 400 $ - $ 400 Accts receivable program* 300 180 120 Bridge facility* 100 - 100 Total short-term committed facilities $ 800 $ 180 $ 620 Plus: Cash 498 Total $1,118 Committed Drawn Available 37 (Millions) June 30, 2004 Liquidity Excluding DCC * Maximum size of Bridge facility is $200. In combination, draws against facilities cannot exceed $400. |
| 12/01 Total Portfolio Assets - $2,200 DCC Portfolio Analysis ($ Millions) VASG 85 50 45 RESG 170 705 195 CMG 610 Value-Added Services Retained Real Estate Capital Markets 6/04 Total Portfolio Assets - $1,210 VASG 120 10 50 RESG 170 900 0 CMG 410 39 |
| 2004 Guidance ($ Millions, except per share data) Sales > $8,500 Net Income* > 285 EPS* > 1.90 41 * Excludes unusual items |
| 2004 Free Cash Flow Projection Excluding DCC * Excludes proceeds from aftermarket divestiture 43 (Millions) |
| Summary 45 Q2 performance: 16% Sales, 60% Profit* Pleased, but not satisfied We are taking action ... ASG Consolidation Better focus on markets we serve Improvement in Structures Purchasing Initiatives Help offset raw material costs Close AAG transaction Redeployment of proceeds Enhanced Customer Approach Improved revenue growth * Excludes Unusual items |
| 47 Questions |
| 49 Capital Structure Reconciliation as of December 31, 2003 |
| 51 Capital Structure Reconciliation as of June 30, 2004 |
Exhibit 99.2
Contact:
|
Michelle L. Hards (419) 535-4636 michelle.hards@dana.com |
DANA CORPORATION REPORTS SIGNIFICANTLY IMPROVED OPERATIONAL RESULTS
Net Income Also Includes Net Gains Triggered by Transactions
TOLEDO, Ohio, July 21, 2004 – Dana Corporation (NYSE: DCN) today announced that its 2004 second-quarter sales were $2.3 billion, compared to $2.0 billion during the same period last year. Net income for the quarter (including $33 million of unusual net gains) totaled $108 million, or 72 cents per share. This compares to net income (including $5 million of unusual net gains) of $52 million, or 35 cents per share, for the period in 2003.
“We are pleased to have delivered another solid quarter of operational performance with net income, exclusive of unusual items, up 60 percent,” said Dana Chairman and CEO Mike Burns. “At the same time, we’re far from satisfied and continue to pursue greater focus, integration, and productivity in line with our commitment to meeting the needs of our global customers.”
Second-quarter sales were up 16 percent over the same period last year with the majority of the increase being driven by our new business programs and higher production volumes in the principal markets served by Dana, particularly the North American heavy-truck sector.
“Our solid sales growth contributed to stronger bottom-line results,” Mr. Burns said. “In addition, we continued to see growth in our gross margin – both year-over-year and sequentially by quarter – as we achieved further cost efficiencies and made progress in addressing the launch costs associated with our structures programs. It’s important to note that these improvements were achieved in spite of the higher cost of steel and certain other raw materials that we experienced during the quarter.
“We are also enthused by the positive strategic and financial flexibility that we will have when we complete the sale of our automotive aftermarket business,” Mr. Burns said. On July 9, Dana announced that it had reached a definitive agreement to sell its automotive aftermarket business to The Cypress Group for approximately $1.1 billion in cash.
(more)
Transactions Trigger Recognition of $33 Million of Unusual Net Gains
The $33 million of unusual net gains included in the second quarter of 2004
included the recognition of $38 million in anticipated tax benefits triggered
by the sale of the automotive aftermarket business and transactions that are
part of the continuing program to divest assets of Dana Credit Corporation
(DCC), which are expected to close during the third quarter. This was
partially offset by $5 million of transaction-related expenses.
Dana Vice President and Chief Financial Officer Bob Richter explained, “These transactions are expected to generate capital gains. We had capital loss carryforwards from prior periods that were fully reserved. Since we now expect to be able to use the carryforwards to offset the gains, accounting rules require us to recognize the anticipated tax benefit by releasing a portion of the reserve at this time.
“While we’re happy to benefit from the additional income, we’re pleased that even without these unusual items, we still achieved second-quarter net profit of $75 million, or 50 cents per share, which is up substantially over the prior year.”
First-Half Results Significantly Improved
Dana’s six-month consolidated sales were $4.6 billion, up from $4.0 billion
during the same period last year. Net income during the first half of 2004 was
$171 million, or $1.14 per share, including $35 million in unusual net gains.
This compares to net income of $93 million, or 63 cents per share, including
$15 million in unusual net gains during the initial six months of 2003.
“Excluding our unusual items and the results of businesses held for sale, our net income from continuing operations improved by more than 60 percent during the first half of 2004, compared to the same period last year,” Mr. Burns said. “Again, this improvement was largely the result of new business and strong production volumes in our principal markets.”
Full-Year EPS Guidance “While we are optimistic about production levels in the North American heavy-truck sector, the second half of the year will not be without its challenges,” Mr. Burns said. “We will continue to be impacted by many of the challenges that we experienced during the first six months of the year, particularly higher raw material costs. In addition, rising North American light-vehicle inventory levels also point to the potential for reductions in production schedules in that sector during the second half of the year.
“So even though we will continue to consolidate the results of the automotive aftermarket business until the sale closes, we are not changing our earnings guidance of at least $1.90 per share, excluding unusual items, in 2004.”
(more)
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Quarterly Conference Call Scheduled Today at 11 a.m.
Dana will discuss its second-quarter results in a conference call at 11 a.m.
(EDT) today. The call may be accessed via Dana’s web site (www.dana.com),
where it will be accompanied by a brief slide presentation, or by dialing (800)
275-3210. Please dial into the conference five minutes prior to the call. An
audio recording of this conference call will be available after 2 p.m. today.
To access this recording, please dial (800) 537-8823. A webcast replay of the
call will be available after 4 p.m. today and will be accessible via the Dana
web site.
Dana Corporation is a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicles. Delivering on a century of innovation, the company’s continuing operations employ approximately 45,000 people worldwide dedicated to advancing the science of mobility. Founded in 1904 and based in Toledo, Ohio, Dana operates technology, manufacturing, and customer-service facilities in 30 countries. Sales from continuing operations totaled $7.9 billion in 2003. Dana’s Internet address is: www.dana.com.
Forward-Looking Statements
Certain statements contained in this release constitute “forward-looking”
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements represent Dana’s expectations based on our current
information and assumptions. Forward-looking statements are inherently subject
to risks and uncertainties. Dana’s actual results could differ materially from
those that are anticipated or projected due to a number of factors. These
factors include national and international economic conditions; adverse effects
from terrorism or hostilities; the strength of other currencies relative to the
U.S. dollar; the cyclical nature of the global vehicular industry; changes in
business relationships with our major customers and in the timing, size and
continuation of their and our programs; the ability of our customers and
suppliers to achieve their projected sales and production levels; competitive
pressures on our sales and pricing; increases in production or material costs
that cannot be recouped in product pricing; the continued success of our cost
reduction and cash management programs and of our long-term transformation
strategy for the company; the success and timing of the divestiture of the
automotive aftermarket business; and other factors set out in our public
filings with the Securities and Exchange Commission. Dana does not undertake
to update any forward-looking statements in this release.
# # #
3
Dana Corporation
Financial Summary (Unaudited)
(in millions, except per share amounts)
| Three Months Ended June 30 | Percent | |||||||||||
| 2004 | 2003 | Change | ||||||||||
Sales |
$ | 2,331 | $ | 2,012 | 16 | % | ||||||
Income from continuing operations |
$ | 73 | $ | 46 | 59 | % | ||||||
Income from discontinued operations |
35 | 6 | 483 | % | ||||||||
Net income |
$ | 108 | $ | 52 | 108 | % | ||||||
Income from continuing operations |
$ | 73 | $ | 46 | 59 | % | ||||||
Reduction in deferred tax allowance related to |
||||||||||||
DCC asset sales |
(18 | ) | (9 | ) | 100 | % | ||||||
Expenses relating to DCC sale activity |
2 | 2 | ||||||||||
Income from continuing operations,
excluding unusual items |
$ | 57 | $ | 39 | 46 | % | ||||||
Income from automotive aftermarket business |
$ | 35 | $ | 9 | 289 | % | ||||||
Loss from engine management business |
(3 | ) | ||||||||||
Income from discontinued operations |
35 | 6 | 483 | % | ||||||||
Loss on engine management sale |
2 | |||||||||||
Reduction in deferred tax allowance related to
aftermarket sale |
(20 | ) | ||||||||||
Expenses relating to sale of aftermarket |
3 | |||||||||||
Income from discontinued operations,
excluding unusual items |
$ | 18 | $ | 8 | 125 | % | ||||||
Diluted earnings per share: |
||||||||||||
Income from continuing operations |
$ | 0.49 | $ | 0.30 | 63 | % | ||||||
Income from discontinued operations |
0.23 | 0.05 | 360 | % | ||||||||
Net income |
$ | 0.72 | $ | 0.35 | 106 | % | ||||||
Income from continuing operations,
excluding unusual items |
$ | 0.38 | $ | 0.26 | 46 | % | ||||||
Income from discontinued operations,
excluding unusual items |
0.12 | 0.05 | 140 | % | ||||||||
Net income, excluding unusual items |
0.50 | 0.31 | 61 | % | ||||||||
Unusual items |
0.22 | 0.04 | 450 | % | ||||||||
Net income |
$ | 0.72 | $ | 0.35 | 106 | % | ||||||
Page 1
Dana Corporation
Financial Summary (Unaudited)
(in millions, except per share amounts)
| Six Months Ended June 30 | Percent | |||||||||||
| 2004 | 2003 | Change | ||||||||||
Sales |
$ | 4,642 | $ | 3,988 | 16 | % | ||||||
Income from continuing operations |
$ | 123 | $ | 82 | 50 | % | ||||||
Income from discontinued operations |
48 | 11 | 336 | % | ||||||||
Net income |
$ | 171 | $ | 93 | 84 | % | ||||||
Income from continuing operations |
$ | 123 | $ | 82 | 50 | % | ||||||
Gains associated with DCC asset sales |
(20 | ) | (19 | ) | 5 | % | ||||||
Expenses relating to DCC sale activity |
2 | 2 | ||||||||||
Income from continuing operations,
excluding unusual items |
$ | 105 | $ | 65 | 62 | % | ||||||
Income from automotive aftermarket business |
$ | 48 | $ | 19 | 153 | % | ||||||
Loss from engine management business |
(8 | ) | ||||||||||
Income from discontinued operations |
48 | 11 | 336 | % | ||||||||
Loss on engine management sale |
2 | |||||||||||
Reduction in deferred tax allowance related to
aftermarket sale |
(20 | ) | ||||||||||
Expenses relating to sale of aftermarket |
3 | |||||||||||
Income from discontinued operations,
excluding unusual items |
$ | 31 | $ | 13 | 138 | % | ||||||
Diluted earnings per share: |
||||||||||||
Income from continuing operations |
$ | 0.82 | $ | 0.55 | 49 | % | ||||||
Income from discontinued operations |
0.32 | 0.08 | 300 | % | ||||||||
Net income |
$ | 1.14 | $ | 0.63 | 81 | % | ||||||
Income from continuing operations,
excluding unusual items |
$ | 0.70 | $ | 0.44 | 59 | % | ||||||
Income from discontinued operations,
excluding unusual items |
0.21 | 0.09 | 133 | % | ||||||||
Net income, excluding unusual items |
0.91 | 0.53 | 72 | % | ||||||||
Unusual items |
0.23 | 0.10 | 130 | % | ||||||||
Net income |
$ | 1.14 | $ | 0.63 | 81 | % | ||||||
Page 2
Dana Corporation
Condensed Statement of Income (Unaudited)
(in millions, except per share amounts)
| Three Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net sales |
$ | 2,331 | $ | 2,012 | ||||
Revenue from lease financing
and other income |
25 | 43 | ||||||
| 2,356 | 2,055 | |||||||
Costs and expenses |
||||||||
Cost of sales |
2,101 | 1,838 | ||||||
Selling, general and
administrative expenses |
126 | 141 | ||||||
Interest expense |
51 | 55 | ||||||
| 2,278 | 2,034 | |||||||
Income before income taxes |
78 | 21 | ||||||
Income tax benefit (expense) |
(6 | ) | 9 | |||||
Minority interest |
(3 | ) | (1 | ) | ||||
Equity in earnings
of affiliates |
4 | 17 | ||||||
Income from continuing operations |
73 | 46 | ||||||
Income from discontinued operations |
35 | 6 | ||||||
Net income |
$ | 108 | $ | 52 | ||||
Basic earnings per share |
||||||||
Income from continuing operations |
$ | 0.49 | $ | 0.30 | ||||
Income from discontinued operations |
0.23 | 0.05 | ||||||
Net income |
$ | 0.72 | $ | 0.35 | ||||
Diluted earnings per share |
||||||||
Income from continuing operations |
$ | 0.49 | $ | 0.30 | ||||
Income from discontinued operations |
0.23 | 0.05 | ||||||
Net income |
$ | 0.72 | $ | 0.35 | ||||
Average shares outstanding - |
||||||||
For Basic EPS |
149 | 148 | ||||||
For Diluted EPS |
151 | 149 | ||||||
Page 3
Dana Corporation
Condensed Statement of Income (Unaudited)
(in millions, except per share amounts)
| Six Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net sales |
$ | 4,642 | $ | 3,988 | ||||
Revenue from lease financing
and other income |
39 | 72 | ||||||
| 4,681 | 4,060 | |||||||
Costs and expenses |
||||||||
Cost of sales |
4,206 | 3,639 | ||||||
Selling, general and
administrative expenses |
262 | 277 | ||||||
Interest expense |
102 | 114 | ||||||
| 4,570 | 4,030 | |||||||
Income before income taxes |
111 | 30 | ||||||
Income tax benefit (expense) |
(3 | ) | 21 | |||||
Minority interest |
(6 | ) | (3 | ) | ||||
Equity in earnings
of affiliates |
21 | 34 | ||||||
Income from continuing operations |
123 | 82 | ||||||
Income from discontinued operations |
48 | 11 | ||||||
Net income |
$ | 171 | $ | 93 | ||||
Basic earnings per share |
||||||||
Income from continuing operations |
$ | 0.83 | $ | 0.55 | ||||
Income from discontinued operations |
0.32 | 0.08 | ||||||
Net income |
$ | 1.15 | $ | 0.63 | ||||
Diluted earnings per share |
||||||||
Income from continuing operations |
$ | 0.82 | $ | 0.55 | ||||
Income from discontinued operations |
0.32 | 0.08 | ||||||
Net income |
$ | 1.14 | $ | 0.63 | ||||
Average shares outstanding - |
||||||||
For Basic EPS |
148 | 148 | ||||||
For Diluted EPS |
150 | 149 | ||||||
Page 4
Dana Corporation
Condensed Balance Sheet (Unaudited)
(in millions)
| June 30 | December 31 | |||||||
| 2004 | 2003 | |||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 597 | $ | 731 | ||||
Accounts
receivable |
||||||||
Trade |
1,310 | 1,048 | ||||||
Other |
317 | 326 | ||||||
Inventories |
747 | 743 | ||||||
Assets of discontinued operations |
1,324 | 1,254 | ||||||
Other current assets |
459 | 431 | ||||||
Total current assets |
4,754 | 4,533 | ||||||
Investment in leases |
540 | 622 | ||||||
Investments and other assets |
2,286 | 2,252 | ||||||
Property, plant and equipment, net |
2,086 | 2,210 | ||||||
Total assets |
$ | 9,666 | $ | 9,617 | ||||
Liabilities and Shareholders’ Equity |
||||||||
Current liabilities |
||||||||
Notes payable |
$ | 384 | $ | 493 | ||||
Accounts payable |
1,241 | 1,076 | ||||||
Liabilities of discontinued operations |
348 | 307 | ||||||
Other current liabilities |
1,135 | 1,089 | ||||||
Total current liabilities |
3,108 | 2,965 | ||||||
Long-term debt |
2,508 | 2,605 | ||||||
Deferred employee benefits
and other noncurrent liabilities |
1,807 | 1,901 | ||||||
Minority interest |
101 | 96 | ||||||
Shareholders’ equity |
2,142 | 2,050 | ||||||
Total liabilities and
shareholders’ equity |
$ | 9,666 | $ | 9,617 | ||||
Page 5
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
(in millions)
| Three Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net income |
$ | 108 | $ | 52 | ||||
Depreciation and amortization |
90 | 99 | ||||||
Asset impairment |
1 | 3 | ||||||
Gain on divestitures and asset sales |
(21 | ) | (11 | ) | ||||
Working capital decrease (increase) |
58 | (47 | ) | |||||
Deferred taxes |
(46 | ) | (6 | ) | ||||
Other |
(73 | ) | (11 | ) | ||||
Net cash flows — operating activities |
117 | 79 | ||||||
Purchases of property, plant and equipment |
(63 | ) | (66 | ) | ||||
Payments received on leases |
3 | 7 | ||||||
Net loan repayments from customers |
1 | 9 | ||||||
Divestitures |
145 | |||||||
Asset sales |
52 | 75 | ||||||
Other |
(41 | ) | 3 | |||||
Net cash flows — investing activities |
(48 | ) | 173 | |||||
Net change in short-term debt |
38 | (184 | ) | |||||
Payments on long-term debt |
(45 | ) | (37 | ) | ||||
Dividends paid |
(18 | ) | (2 | ) | ||||
Other |
5 | 18 | ||||||
Net cash flows — financing activities |
(20 | ) | (205 | ) | ||||
Net change in cash and cash equivalents |
49 | 47 | ||||||
Net change in cash — discontinued operations |
2 | 1 | ||||||
Cash and cash equivalents — beginning of period |
546 | 584 | ||||||
Cash and cash equivalents — end of period |
$ | 597 | $ | 632 | ||||
Page 6
Dana Corporation
Condensed Statement of Cash Flows (Unaudited)
(in millions)
| Six Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net income |
$ | 171 | $ | 93 | ||||
Depreciation and amortization |
183 | 202 | ||||||
Asset impairment |
2 | 9 | ||||||
Gain on divestitures and asset sales |
(25 | ) | (22 | ) | ||||
Working capital increase |
(164 | ) | (284 | ) | ||||
Deferred taxes |
(41 | ) | (13 | ) | ||||
Other |
(71 | ) | (17 | ) | ||||
Net cash flows — operating activities |
55 | (32 | ) | |||||
Purchases of property, plant and equipment |
(142 | ) | (142 | ) | ||||
Payments received on leases |
6 | 16 | ||||||
Net loan repayments from customers |
2 | 11 | ||||||
Divestitures |
145 | |||||||
Asset sales |
155 | 179 | ||||||
Other |
(40 | ) | 9 | |||||
Net cash flows — investing activities |
(19 | ) | 218 | |||||
Net change in short-term debt |
153 | (97 | ) | |||||
Proceeds from long-term debt |
5 | |||||||
Payments on long-term debt |
(304 | ) | (43 | ) | ||||
Dividends paid |
(36 | ) | (3 | ) | ||||
Other |
10 | 17 | ||||||
Net cash flows — financing activities |
(172 | ) | (126 | ) | ||||
Net change in cash and cash equivalents |
(136 | ) | 60 | |||||
Net change in cash — discontinued operations |
2 | 1 | ||||||
Cash and cash equivalents — beginning of period |
731 | 571 | ||||||
Cash and cash equivalents — end of period |
$ | 597 | $ | 632 | ||||
Page 7
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Income (Unaudited)
(in millions)
| Three Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net sales |
$ | 2,331 | $ | 2,012 | ||||
Other income |
13 | 27 | ||||||
| 2,344 | 2,039 | |||||||
Costs and expenses |
||||||||
Cost of sales |
2,108 | 1,849 | ||||||
Selling, general and
administrative expenses |
125 | 125 | ||||||
Interest expense |
39 | 39 | ||||||
| 2,272 | 2,013 | |||||||
Income before income taxes |
72 | 26 | ||||||
Income tax expense |
(27 | ) | (6 | ) | ||||
Minority interest |
(3 | ) | (1 | ) | ||||
Equity in earnings
of affiliates |
31 | 27 | ||||||
Income from continuing operations |
73 | 46 | ||||||
Income from discontinued operations |
35 | 6 | ||||||
Net income |
$ | 108 | $ | 52 | ||||
Page 8
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Statement of Income (Unaudited)
(in millions)
| Six Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Net sales |
$ | 4,642 | $ | 3,988 | ||||
Other income |
20 | 40 | ||||||
| 4,662 | 4,028 | |||||||
Costs and expenses |
||||||||
Cost of sales |
4,222 | 3,663 | ||||||
Selling, general and
administrative expenses |
247 | 241 | ||||||
Interest expense |
77 | 81 | ||||||
| 4,546 | 3,985 | |||||||
Income before income taxes |
116 | 43 | ||||||
Income tax expense |
(38 | ) | (12 | ) | ||||
Minority interest |
(6 | ) | (3 | ) | ||||
Equity in earnings
of affiliates |
51 | 54 | ||||||
Income from continuing operations |
123 | 82 | ||||||
Income from discontinued operations |
48 | 11 | ||||||
Net income |
$ | 171 | $ | 93 | ||||
Page 9
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Condensed Balance Sheet (Unaudited)
(in millions)
| June 30 | December 31 | |||||||
| 2004 | 2003 | |||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 498 | $ | 664 | ||||
Accounts receivable |
||||||||
Trade |
1,310 | 1,048 | ||||||
Other |
300 | 300 | ||||||
Inventories |
747 | 743 | ||||||
Assets of discontinued operations |
1,324 | 1,254 | ||||||
Other current assets |
430 | 399 | ||||||
Total current assets |
4,609 | 4,408 | ||||||
Investments and other assets |
2,657 | 2,580 | ||||||
Property, plant and equipment, net |
1,927 | 2,014 | ||||||
Total assets |
$ | 9,193 | $ | 9,002 | ||||
Liabilities and Shareholders’ Equity |
||||||||
Current liabilities |
||||||||
Notes payable |
$ | 213 | $ | 260 | ||||
Accounts payable |
1,241 | 1,076 | ||||||
Liabilities of discontinued operations |
348 | 307 | ||||||
Other current liabilities |
1,302 | 1,235 | ||||||
Total current liabilities |
3,104 | 2,878 | ||||||
Long-term debt |
2,050 | 2,087 | ||||||
Deferred employee benefits
and other noncurrent liabilities |
1,798 | 1,893 | ||||||
Minority interest |
99 | 94 | ||||||
Shareholders’ equity |
2,142 | 2,050 | ||||||
Total liabilities and
shareholders’ equity |
$ | 9,193 | $ | 9,002 | ||||
Page 10
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Three Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Sources |
||||||||
Net income |
$ | 108 | $ | 52 | ||||
Depreciation |
82 | 85 | ||||||
Asset sales |
19 | 19 | ||||||
Divestitures |
145 | |||||||
Working capital decrease (increase) |
65 | (30 | ) | |||||
| 274 | 271 | |||||||
Uses |
||||||||
Capital spend |
(63 | ) | (61 | ) | ||||
Dividends |
(18 | ) | (2 | ) | ||||
Restructuring cash payments |
(26 | ) | (20 | ) | ||||
Deferred taxes |
(54 | ) | (2 | ) | ||||
Investment in and undistributed earnings of equity affiliates |
(43 | ) | (32 | ) | ||||
Net changes in other accounts |
(64 | ) | 12 | |||||
| (268 | ) | (105 | ) | |||||
Cash change in net debt |
$ | 6 | $ | 166 | ||||
Page 11
Dana Corporation
(Including Dana Credit Corporation on an Equity Basis)
Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Six Months Ended June 30 | ||||||||
| 2004 | 2003 | |||||||
Sources |
||||||||
Net income |
$ | 171 | $ | 93 | ||||
Depreciation |
165 | 171 | ||||||
Asset sales |
33 | 43 | ||||||
Divestitures |
145 | |||||||
Working capital increase |
(115 | ) | (222 | ) | ||||
| 254 | 230 | |||||||
Uses |
||||||||
Capital spend |
(139 | ) | (133 | ) | ||||
Dividends |
(36 | ) | (3 | ) | ||||
Restructuring cash payments |
(49 | ) | (64 | ) | ||||
Deferred taxes |
(50 | ) | (6 | ) | ||||
Investment in and undistributed earnings of equity affiliates |
(64 | ) | (59 | ) | ||||
Net changes in other accounts |
(31 | ) | 35 | |||||
| (369 | ) | (230 | ) | |||||
Cash change in net debt |
$ | (115 | ) | $ | - | |||
Page 12
Dana Corporation
Condensed Consolidating Statement of Income (Unaudited)
(in millions)
| Three Months Ended June 30, 2004 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Net sales |
$ | 2,331 | $ | $ | $ | 2,331 | ||||||||||
Other income |
13 | 24 | (12 | ) | 25 | |||||||||||
| 2,344 | 24 | (12 | ) | 2,356 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of sales |
2,108 | (7 | ) | 2,101 | ||||||||||||
Selling, general and
administrative expenses |
125 | 6 | (5 | ) | 126 | |||||||||||
Interest expense |
39 | 12 | 51 | |||||||||||||
| 2,272 | 18 | (12 | ) | 2,278 | ||||||||||||
Income before income taxes |
72 | 6 | — | 78 | ||||||||||||
Income tax benefit (expense) |
(27 | ) | 21 | (6 | ) | |||||||||||
Minority interest |
(3 | ) | (3 | ) | ||||||||||||
Equity in earnings
of affiliates |
31 | (2 | ) | (25 | ) | 4 | ||||||||||
Income from continuing operations |
73 | 25 | (25 | ) | 73 | |||||||||||
Income from discontinued operations |
35 | 35 | ||||||||||||||
Net income |
$ | 108 | $ | 25 | $ | (25 | ) | $ | 108 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 13
Dana Corporation
Condensed Consolidating Statement of Income (Unaudited)
(in millions)
| Six Months Ended June 30, 2004 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Net sales |
$ | 4,642 | $ | $ | $ | 4,642 | ||||||||||
Other income |
20 | 46 | (27 | ) | 39 | |||||||||||
| 4,662 | 46 | (27 | ) | 4,681 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of sales |
4,222 | (16 | ) | 4,206 | ||||||||||||
Selling, general and
administrative expenses |
247 | 26 | (11 | ) | 262 | |||||||||||
Interest expense |
77 | 25 | 102 | |||||||||||||
| 4,546 | 51 | (27 | ) | 4,570 | ||||||||||||
Income (loss) before income taxes |
116 | (5 | ) | — | 111 | |||||||||||
Income tax benefit (expense) |
(38 | ) | 35 | (3 | ) | |||||||||||
Minority interest |
(6 | ) | (6 | ) | ||||||||||||
Equity in earnings
of affiliates |
51 | 4 | (34 | ) | 21 | |||||||||||
Income from continuing operations |
123 | 34 | (34 | ) | 123 | |||||||||||
Income from discontinued operations |
48 | 48 | ||||||||||||||
Net income |
$ | 171 | $ | 34 | $ | (34 | ) | $ | 171 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 14
Dana Corporation
Condensed Consolidating Statement of Income (Unaudited)
(in millions)
| Three Months Ended June 30, 2003 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Net sales |
$ | 2,012 | $ | $ | $ | 2,012 | ||||||||||
Other income |
27 | 36 | (20 | ) | 43 | |||||||||||
| 2,039 | 36 | (20 | ) | 2,055 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of sales |
1,849 | (11 | ) | 1,838 | ||||||||||||
Selling, general and
administrative expenses |
125 | 25 | (9 | ) | 141 | |||||||||||
Interest expense |
39 | 16 | 55 | |||||||||||||
| 2,013 | 41 | (20 | ) | 2,034 | ||||||||||||
Income (loss) before income taxes |
26 | (5 | ) | — | 21 | |||||||||||
Income tax benefit (expense) |
(6 | ) | 15 | 9 | ||||||||||||
Minority interest |
(1 | ) | (1 | ) | ||||||||||||
Equity in earnings
of affiliates |
27 | 5 | (15 | ) | 17 | |||||||||||
Income from continuing operations |
46 | 15 | (15 | ) | 46 | |||||||||||
Income from discontinued operations |
6 | 6 | ||||||||||||||
Net income |
$ | 52 | $ | 15 | $ | (15 | ) | $ | 52 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 15
Dana Corporation
Condensed Consolidating Statement of Income (Unaudited)
(in millions)
| Six Months Ended June 30, 2003 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Net sales |
$ | 3,988 | $ | $ | $ | 3,988 | ||||||||||
Other income |
40 | 74 | (42 | ) | 72 | |||||||||||
| 4,028 | 74 | (42 | ) | 4,060 | ||||||||||||
Costs and expenses |
||||||||||||||||
Cost of sales |
3,663 | (24 | ) | 3,639 | ||||||||||||
Selling, general and
administrative expenses |
241 | 54 | (18 | ) | 277 | |||||||||||
Interest expense |
81 | 33 | 114 | |||||||||||||
| 3,985 | 87 | (42 | ) | 4,030 | ||||||||||||
Income (loss) before income taxes |
43 | (13 | ) | — | 30 | |||||||||||
Income tax benefit (expense) |
(12 | ) | 33 | 21 | ||||||||||||
Minority interest |
(3 | ) | (3 | ) | ||||||||||||
Equity in earnings
of affiliates |
54 | 11 | (31 | ) | 34 | |||||||||||
Income from continuing operations |
82 | 31 | (31 | ) | 82 | |||||||||||
Income from discontinued operations |
11 | 11 | ||||||||||||||
Net income |
$ | 93 | $ | 31 | $ | (31 | ) | $ | 93 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 16
Dana Corporation
Condensed Consolidating Balance Sheet (Unaudited)
(in millions)
| June 30, 2004 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Assets |
||||||||||||||||
Current assets |
||||||||||||||||
Cash and cash equivalents |
$ | 498 | $ | 99 | $ | $ | 597 | |||||||||
Accounts receivable
|
||||||||||||||||
Trade |
1,310 | 1,310 | ||||||||||||||
Other |
300 | 26 | (9 | ) | 317 | |||||||||||
Inventories |
747 | 747 | ||||||||||||||
Assets of discontinued operations |
1,324 | 1,324 | ||||||||||||||
Other current assets |
430 | 238 | (209 | ) | 459 | |||||||||||
Total current assets |
4,609 | 363 | (218 | ) | 4,754 | |||||||||||
Investment in leases |
682 | (142 | ) | 540 | ||||||||||||
Investments and other assets |
2,657 | 536 | (907 | ) | 2,286 | |||||||||||
Property, plant and equipment, net |
1,927 | 16 | 143 | 2,086 | ||||||||||||
Total assets |
$ | 9,193 | $ | 1,597 | $ | (1,124 | ) | $ | 9,666 | |||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Current liabilities |
||||||||||||||||
Notes payable |
$ | 213 | $ | 171 | $ | $ | 384 | |||||||||
Accounts payable |
1,241 | 1,241 | ||||||||||||||
Liabilities of discontinued operations |
348 | 348 | ||||||||||||||
Other current liabilities |
1,302 | 50 | (217 | ) | 1,135 | |||||||||||
Total current liabilities |
3,104 | 221 | (217 | ) | 3,108 | |||||||||||
Long-term debt |
2,050 | 458 | 2,508 | |||||||||||||
Deferred employee benefits
and other noncurrent liabilities |
1,798 | 591 | (582 | ) | 1,807 | |||||||||||
Minority interest |
99 | 2 | 101 | |||||||||||||
Shareholders’ equity |
2,142 | 325 | (325 | ) | 2,142 | |||||||||||
Total liabilities and
shareholders’ equity |
$ | 9,193 | $ | 1,597 | $ | (1,124 | ) | $ | 9,666 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 17
Dana Corporation
Condensed Consolidating Balance Sheet (Unaudited)
(in millions)
| December 31, 2003 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Assets |
||||||||||||||||
Current assets |
||||||||||||||||
Cash and cash equivalents |
$ | 664 | $ | 67 | $ | $ | 731 | |||||||||
Accounts receivable |
||||||||||||||||
Trade |
1,048 | 1,048 | ||||||||||||||
Other |
300 | 26 | 326 | |||||||||||||
Inventories |
743 | 743 | ||||||||||||||
Assets of discontinued operations |
1,254 | 1,254 | ||||||||||||||
Other current assets |
399 | 212 | (180 | ) | 431 | |||||||||||
Total current assets |
4,408 | 305 | (180 | ) | 4,533 | |||||||||||
Investment in leases |
802 | (180 | ) | 622 | ||||||||||||
Investments and other assets |
2,580 | 559 | (887 | ) | 2,252 | |||||||||||
Property, plant and equipment, net |
2,014 | 16 | 180 | 2,210 | ||||||||||||
Total assets |
$ | 9,002 | $ | 1,682 | $ | (1,067 | ) | $ | 9,617 | |||||||
Liabilities and Shareholders’ Equity |
||||||||||||||||
Current liabilities |
||||||||||||||||
Notes payable |
$ | 260 | $ | 233 | $ | $ | 493 | |||||||||
Accounts payable |
1,076 | 1,076 | ||||||||||||||
Liabilities of discontinued operations |
307 | 307 | ||||||||||||||
Other current liabilities |
1,235 | 34 | (180 | ) | 1,089 | |||||||||||
Total current liabilities |
2,878 | 267 | (180 | ) | 2,965 | |||||||||||
Long-term debt |
2,087 | 518 | 2,605 | |||||||||||||
Deferred employee benefits
and other noncurrent liabilities |
1,893 | 604 | (596 | ) | 1,901 | |||||||||||
Minority interest |
94 | 2 | 96 | |||||||||||||
Shareholders’ equity |
2,050 | 291 | (291 | ) | 2,050 | |||||||||||
Total liabilities and
shareholders’ equity |
$ | 9,002 | $ | 1,682 | $ | (1,067 | ) | $ | 9,617 | |||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.
Page 18
Dana Corporation
Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Three Months Ended June 30, 2004 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Sources |
||||||||||||||||
Net income |
$ | 108 | $ | 25 | $ | (25 | ) | $ | 108 | |||||||
Depreciation |
82 | 8 | 90 | |||||||||||||
Asset sales |
19 | 36 | (3 | ) | 52 | |||||||||||
Working capital decrease |
65 | 7 | 12 | 84 | ||||||||||||
| 274 | 76 | (16 | ) | 334 | ||||||||||||
Uses |
||||||||||||||||
Capital spend |
(63 | ) | (3 | ) | 3 | (63 | ) | |||||||||
Dividends |
(18 | ) | (18 | ) | ||||||||||||
Restructuring cash payments |
(26 | ) | (26 | ) | ||||||||||||
Deferred taxes |
(54 | ) | 8 | (46 | ) | |||||||||||
Investment in and undistributed earnings of equity affiliates |
(43 | ) | 27 | 25 | 9 | |||||||||||
Net changes in other accounts |
(64 | ) | (56 | ) | (12 | ) | (132 | ) | ||||||||
| (268 | ) | (24 | ) | 16 | (276 | ) | ||||||||||
Cash change in net debt |
$ | 6 | $ | 52 | $ | — | $ | 58 | ||||||||
Analysis of components of decrease in net debt: |
||||||||||||||||
Net change in short-term debt |
$ | 38 | $ | $ | $ | 38 | ||||||||||
Net payments on long-term debt |
3 | (48 | ) | (45 | ) | |||||||||||
Change in cash — continuing operations |
(47 | ) | (4 | ) | (51 | ) | ||||||||||
Cash change in net debt |
(6 | ) | (52 | ) | — | (58 | ) | |||||||||
Non-cash changes in net debt |
(49 | ) | (49 | ) | ||||||||||||
Total change in net debt |
$ | (55 | ) | $ | (52 | ) | $ | — | $ | (107 | ) | |||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis.
Page 19
Dana Corporation
Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Six Months Ended June 30, 2004 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Sources |
||||||||||||||||
Net income |
$ | 171 | $ | 34 | $ | (34 | ) | $ | 171 | |||||||
Depreciation |
165 | 18 | 183 | |||||||||||||
Asset sales |
33 | 125 | (3 | ) | 155 | |||||||||||
Working capital increase |
(115 | ) | (1 | ) | 1 | (115 | ) | |||||||||
| 254 | 176 | (36 | ) | 394 | ||||||||||||
Uses |
||||||||||||||||
Capital spend |
(139 | ) | (6 | ) | 3 | (142 | ) | |||||||||
Dividends |
(36 | ) | (36 | ) | ||||||||||||
Restructuring cash payments |
(49 | ) | (49 | ) | ||||||||||||
Deferred taxes |
(50 | ) | 9 | (41 | ) | |||||||||||
Investment in and undistributed earnings of equity affiliates |
(64 | ) | 30 | 34 | — | |||||||||||
Net changes in other accounts |
(31 | ) | (82 | ) | (1 | ) | (114 | ) | ||||||||
| (369 | ) | (49 | ) | 36 | (382 | ) | ||||||||||
Cash change in net debt |
$ | (115 | ) | $ | 127 | $ | — | $ | 12 | |||||||
Analysis of components of increase (decrease) in net debt: |
||||||||||||||||
Net change in short-term debt |
$ | 183 | $ | (30 | ) | $ | $ | 153 | ||||||||
Net payments on long-term debt |
(234 | ) | (65 | ) | (299 | ) | ||||||||||
Change in cash — continuing operations |
166 | (32 | ) | 134 | ||||||||||||
Cash change in net debt |
115 | (127 | ) | — | (12 | ) | ||||||||||
Non-cash changes in net debt |
(33 | ) | (27 | ) | (60 | ) | ||||||||||
Total change in net debt |
$ | 82 | $ | (154 | ) | $ | — | $ | (72 | ) | ||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis.
Page 20
Dana Corporation
Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Three Months Ended June 30, 2003 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Sources |
||||||||||||||||
Net income |
$ | 52 | $ | 15 | $ | (15 | ) | $ | 52 | |||||||
Depreciation |
85 | 14 | 99 | |||||||||||||
Asset sales |
19 | 57 | (1 | ) | 75 | |||||||||||
Divestitures |
145 | 145 | ||||||||||||||
Working capital decrease (increase) |
(30 | ) | 4 | (1 | ) | (27 | ) | |||||||||
| 271 | 90 | (17 | ) | 344 | ||||||||||||
Uses |
||||||||||||||||
Capital spend |
(61 | ) | (3 | ) | (2 | ) | (66 | ) | ||||||||
Dividends |
(2 | ) | (2 | ) | ||||||||||||
Restructuring cash payments |
(20 | ) | (20 | ) | ||||||||||||
Deferred taxes |
(2 | ) | (4 | ) | (6 | ) | ||||||||||
Investment in and undistributed earnings of equity affiliates |
(32 | ) | 11 | 16 | (5 | ) | ||||||||||
Net changes in other accounts |
12 | 20 | 3 | 35 | ||||||||||||
| (105 | ) | 24 | 17 | (64 | ) | |||||||||||
Cash change in net debt |
$ | 166 | $ | 114 | $ | — | $ | 280 | ||||||||
Analysis of components of decrease in net debt: |
||||||||||||||||
Net change in short-term debt |
$ | (162 | ) | $ | (26 | ) | $ | $ | (188 | ) | ||||||
Proceeds from long-term debt |
18 | 18 | ||||||||||||||
Debt assumed by buyer |
(32 | ) | (32 | ) | ||||||||||||
Payments on long-term debt |
(18 | ) | (12 | ) | (30 | ) | ||||||||||
Change in cash — continuing operations |
(4 | ) | (44 | ) | (48 | ) | ||||||||||
Cash change in net debt |
(166 | ) | (114 | ) | — | (280 | ) | |||||||||
Non-cash changes in net debt |
28 | 28 | ||||||||||||||
Total change in net debt |
$ | (138 | ) | $ | (114 | ) | $ | — | $ | (252 | ) | |||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis.
Page 21
Dana Corporation
Consolidating Cash Flow Impact on Net Debt (Unaudited)
(in millions)
| Six Months Ended June 30, 2003 | ||||||||||||||||
| Dana | ||||||||||||||||
| with DCC on | Elimination | Dana | ||||||||||||||
| Equity Basis | DCC | Entries | Consolidated | |||||||||||||
Sources |
||||||||||||||||
Net income |
$ | 93 | $ | 31 | $ | (31 | ) | $ | 93 | |||||||
Depreciation |
171 | 31 | 202 | |||||||||||||
Asset sales |
43 | 137 | (1 | ) | 179 | |||||||||||
Divestitures |
145 | 145 | ||||||||||||||
Working capital increase |
(222 | ) | (4 | ) | 6 | (220 | ) | |||||||||
| 230 | 195 | (26 | ) | 399 | ||||||||||||
Uses |
||||||||||||||||
Capital spend |
(133 | ) | (8 | ) | (1 | ) | (142 | ) | ||||||||
Dividends |
(3 | ) | (3 | ) | ||||||||||||
Restructuring cash payments |
(64 | ) | (64 | ) | ||||||||||||
Deferred taxes |
(6 | ) | (7 | ) | (13 | ) | ||||||||||
Investment in and undistributed earnings of equity affiliates |
(59 | ) | 21 | 32 | (6 | ) | ||||||||||
Net changes in other accounts |
35 | 11 | (5 | ) | 41 | |||||||||||
| (230 | ) | 17 | 26 | (187 | ) | |||||||||||
Cash change in net debt |
$ | — | $ | 212 | $ | — | $ | 212 | ||||||||
Analysis of components of increase (decrease) in net debt: |
||||||||||||||||
Net change in short-term debt |
$ | (5 | ) | $ | (96 | ) | $ | $ | (101 | ) | ||||||
Proceeds from long-term debt |
18 | 18 | ||||||||||||||
Debt assumed by buyer |
(32 | ) | (32 | ) | ||||||||||||
Payments on long-term debt |
(18 | ) | (18 | ) | (36 | ) | ||||||||||
Change in cash — continuing operations |
5 | (66 | ) | (61 | ) | |||||||||||
Cash change in net debt |
— | (212 | ) | — | (212 | ) | ||||||||||
Non-cash changes in net debt |
36 | 36 | ||||||||||||||
Total change in net debt |
$ | 36 | $ | (212 | ) | $ | — | $ | (176 | ) | ||||||
This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis.
Page 22
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
For the three months
Ended June 30,2004
(in millions)
| Inter- | ||||||||||||||||||||||||||||||||||||||||||||||||
| External Sales | Segment Sales | EBIT | Operating PAT | Net Profit | Net Assets | |||||||||||||||||||||||||||||||||||||||||||
| 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | |||||||||||||||||||||||||||||||||||||
Automotive Systems Group |
$ | 1,719 | $ | 1,497 | $ | 48 | $ | 35 | $ | 109 | $ | 88 | $ | 72 | $ | 66 | $ | 43 | $ | 35 | $ | 2,986 | $ | 2,980 | ||||||||||||||||||||||||
Heavy Vehicle Technologies and Systems Group |
592 | 499 | 9 | 20 | 51 | 30 | 31 | 19 | 18 | 5 | 621 | 643 | ||||||||||||||||||||||||||||||||||||
Dana Commercial Credit |
5 | 6 | 5 | 6 | 325 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Other |
20 | 16 | 1 | 2 | (48 | ) | (53 | ) | (51 | ) | (52 | ) | (9 | ) | (7 | ) | (50 | ) | ||||||||||||||||||||||||||||||
Continuing Operations |
2,331 | 2,012 | 58 | 57 | 112 | 65 | 57 | 39 | 57 | 39 | 3,882 | 3,929 | ||||||||||||||||||||||||||||||||||||
Discontinued Operations |
30 | 19 | 18 | 8 | 18 | 8 | ||||||||||||||||||||||||||||||||||||||||||
Unusual Items Excluded from
Performance Measurement |
(8 | ) | (8 | ) | 33 | 5 | 33 | 5 | ||||||||||||||||||||||||||||||||||||||||
Consolidated |
$ | 2,331 | $ | 2,012 | $ | 58 | $ | 57 | $ | 134 | $ | 76 | $ | 108 | $ | 52 | $ | 108 | $ | 52 | $ | 3,882 | $ | 3,929 | ||||||||||||||||||||||||
North America |
$ | 1,577 | $ | 1,387 | $ | 25 | $ | 23 | $ | 80 | $ | 59 | $ | 48 | $ | 40 | $ | 23 | $ | 11 | $ | 2,162 | $ | 2,242 | ||||||||||||||||||||||||
Europe |
442 | 377 | 31 | 21 | 37 | 27 | 26 | 23 | 18 | 15 | 1,096 | 1,051 | ||||||||||||||||||||||||||||||||||||
South America |
153 | 107 | 50 | 42 | 27 | 18 | 17 | 11 | 14 | 9 | 327 | 293 | ||||||||||||||||||||||||||||||||||||
Asia Pacific |
159 | 141 | 13 | 10 | 13 | 7 | 8 | 3 | 5 | 159 | 167 | |||||||||||||||||||||||||||||||||||||
Dana Commercial Credit |
5 | 6 | 5 | 6 | 325 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Other |
(42 | ) | (52 | ) | (46 | ) | (49 | ) | (6 | ) | (7 | ) | (187 | ) | (130 | ) | ||||||||||||||||||||||||||||||||
Continuing Operations |
2,331 | 2,012 | 119 | 86 | 112 | 65 | 57 | 39 | 57 | 39 | 3,882 | 3,929 | ||||||||||||||||||||||||||||||||||||
Discontinued Operations |
30 | 19 | 18 | 8 | 18 | 8 | ||||||||||||||||||||||||||||||||||||||||||
Unusual Items Excluded from
Performance Measurement |
(8 | ) | (8 | ) | 33 | 5 | 33 | 5 | ||||||||||||||||||||||||||||||||||||||||
Consolidated |
$ | 2,331 | $ | 2,012 | $ | 119 | $ | 86 | $ | 134 | $ | 76 | $ | 108 | $ | 52 | $ | 108 | $ | 52 | $ | 3,882 | $ | 3,929 | ||||||||||||||||||||||||
Information for Discontinued Operations |
557 | 603 | 5 | 4 | 970 | 962 | ||||||||||||||||||||||||||||||||||||||||||
The performance and net assets of Clevite are now included in ASG.
Page 23
See Notes 20 and 21 in Dana’s 2003 Annual Report for further information (www.dana.com).
FOR MORE INFORMATION
(www.dana.com) — Dial-For-Dana U.S. or Canada 800-537-8823; OH 800-472-8810
E-Mail michelle.hards@dana.com or karen.crawford@dana.com
Dana Investor Relations 419-535-4635
Investor Relations
Dana Corporation
Quarterly Financial Information (Unaudited)
For the Six Months Ended June 30, 2004
(in millions)
| Inter- | ||||||||||||||||||||||||||||||||||||||||||||||||
| External Sales | Segment Sales | EBIT | Operating PAT | Net Profit | Net Assets | |||||||||||||||||||||||||||||||||||||||||||
| 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | 04 | 03 | |||||||||||||||||||||||||||||||||||||
Automotive Systems Group |
$ | 3,431 | $ | 3,004 | $ | 93 | $ | 71 | $ | 212 | $ | 164 | $ | 143 | $ | 123 | $ | 82 | $ | 62 | $ | 2,986 | $ | 2,980 | ||||||||||||||||||||||||
Heavy Vehicle Technologies and Systems Group |
1,170 | 954 | 18 | 41 | 90 | 55 | 55 | 34 | 28 | 9 | 621 | 643 | ||||||||||||||||||||||||||||||||||||
Dana Commercial Credit |
12 | 12 | 12 | 12 | 325 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Other |
41 | 30 | 3 | 3 | (109 | ) | (98 | ) | (105 | ) | (104 | ) | (17 | ) | (18 | ) | (50 | ) | ||||||||||||||||||||||||||||||
Continuing Operations |
4,642 | 3,988 | 114 | 115 | 193 | 121 | 105 | 65 | 105 | 65 | 3,882 | 3,929 | ||||||||||||||||||||||||||||||||||||
Discontinued Operations |
55 | 31 | 31 | 13 | 31 | 13 | ||||||||||||||||||||||||||||||||||||||||||
Unusual Items Excluded from
Performance Measurement |
(9 | ) | (8 | ) | 35 | 15 | 35 | 15 | ||||||||||||||||||||||||||||||||||||||||
Consolidated |
$ | 4,642 | $ | 3,988 | $ | 114 | $ | 115 | $ | 239 | $ | 144 | $ | 171 | $ | 93 | $ | 171 | $ | 93 | $ | 3,882 | $ | 3,929 | ||||||||||||||||||||||||
North America |
$ | 3,171 | $ | 2,796 | $ | 52 | $ | 47 | $ | 163 | $ | 113 | $ | 102 | $ | 72 | $ | 47 | $ | 16 | $ | 2,162 | $ | 2,242 | ||||||||||||||||||||||||
Europe |
880 | 738 | 61 | 40 | 67 | 56 | 48 | 48 | 32 | 33 | 1,096 | 1,051 | ||||||||||||||||||||||||||||||||||||
South America |
283 | 193 | 94 | 80 | 45 | 26 | 28 | 16 | 23 | 12 | 327 | 293 | ||||||||||||||||||||||||||||||||||||
Asia Pacific |
308 | 261 | 14 | 1 | 18 | 24 | 12 | 15 | 5 | 9 | 159 | 167 | ||||||||||||||||||||||||||||||||||||
Dana Commercial Credit |
12 | 12 | 12 | 12 | 325 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Other |
(100 | ) | (98 | ) | (97 | ) | (98 | ) | (14 | ) | (17 | ) | (187 | ) | (130 | ) | ||||||||||||||||||||||||||||||||
Continuing Operations |
4,642 | 3,988 | 221 | 168 | 193 | 121 | 105 | 65 | 105 | 65 | 3,882 | 3,929 | ||||||||||||||||||||||||||||||||||||
Discontinued Operations |
55 | 31 | 31 | 13 | 31 | 13 | ||||||||||||||||||||||||||||||||||||||||||
Unusual Items Excluded from
Performance Measurement |
(9 | ) | (8 | ) | 35 | 15 | 35 | 15 | ||||||||||||||||||||||||||||||||||||||||
Consolidated |
$ | 4,642 | $ | 3,988 | $ | 221 | $ | 168 | $ | 239 | $ | 144 | $ | 171 | $ | 93 | $ | 171 | $ | 93 | $ | 3,882 | $ | 3,929 | ||||||||||||||||||||||||
Information for Discontinued Operations |
1,067 | 1,150 | 9 | 8 | 970 | 962 | ||||||||||||||||||||||||||||||||||||||||||
The performance and net assets of Clevite are now included in ASG.
Page 24
See Notes 20 and 21 in Dana’s 2003 Annual Report for further information (www.dana.com).
FOR MORE INFORMATION
(www.dana.com) - Dial-For-Dana U.S. or Canada 800-537-8823; OH 800-472-8810
E-Mail michelle.hards@dana.com or karen.crawford@dana.com
Dana Investor Relations 419-535-4635