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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): October 20, 2004
Dana Corporation
| Virginia | 1-1063 | 34-4361040 | ||
| (State or other jurisdiction | (Commission File Number) | (IRS Employer | ||
| of incorporation) | Identification Number) |
| 4500 Dorr Street, Toledo, Ohio | 43615 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (419) 535-4500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Signatures | ||||||||
| Exhibit Index | ||||||||
| PRESS RELEASE DATED OCTOBER 20, 2004 | ||||||||
| EX-99.2 SLIDE PRESENTATION FOR OCTOBER 20, 2004 | ||||||||
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Item 2.02. Results of Operations and Financial Condition.
On October 20, 2004, Dana issued a news release regarding its earnings for the three months and nine months ended September 30, 2004. A copy of that release is furnished as Exhibit 99.1 to this Current Report.
The earnings release includes an expectation for 2004 earnings per share (EPS), excluding unusual items, in the range of $1.60 to $1.65 per share. As a result of excluding unusual items, this EPS range was not determined in accordance with accounting principles generally accepted in the United States (GAAP). Management uses this measure because the full-year effect of unusual items, such as gains or losses on the sale of Dana Credit Corporation (DCC) assets and the divestiture of Dana’s automotive aftermarket business, cannot reasonably be quantified at this time.
The earnings release also includes tables showing (i) Dana Corporation (Including Dana Credit Corporation on an Equity Basis), Condensed Statements of Income (Unaudited) for the Three Months and Nine Months Ended September 30, 2004 and 2003; (ii) Dana Corporation (Including Dana Credit Corporation on an Equity Basis), Condensed Balance Sheets (Unaudited) as of September 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 Nine Months Ended September 30, 2004 and 2003. As GAAP requires that DCC 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 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.
Item 7.01. Regulation FD Disclosure.
During a conference call scheduled to be held at 10:00 a.m. EDT on October 20, 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 99.2 to this Current Report.
Certain slides in this presentation include financial measures which are not presented in accordance with GAAP. These include slides 4 and 25 (which present EPS excluding unusual items); slides 5 through 9, 11 and 26 (which include DCC on an equity basis); and slides 4 and 13 (which present net income excluding unusual items). Some of these slides contain on their face a quantitative reconciliation of the differences between the non-GAAP financial measures disclosed and the most directly comparable financial measures calculated and presented in accordance with GAAP. Slides 29 and 30 of the presentation; Item 2.02, above; and Dana’s earnings release in the attached Exhibit 99.1 also contain information about the reconciliation of some of these non-GAAP financial measures to comparable GAAP financial measures and an
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explanation of why management believes the non-GAAP financial measures provide useful information to investors.
In addition, slide 24 of the presentation and Dana’s earnings release in the attached Exhibit 99.1 indicate that management now expects the sale of the company’s automotive aftermarket businesses to The Cypress Group to be completed in November 2004. This updates information contained in Dana’s Current Report on Form 8-K filed on September 28, 2004, that the transaction was expected to close in October.
Item 9.01. Financial Statements and Exhibits.
(c)
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Exhibits | |||||
| 99.1 | Press release of Dana Corporation dated October 20, 2004 (furnished but not filed pursuant to Item 2.02) | |||||
| 99.2 | Slide presentation for October 20, 2004 conference call (furnished but not filed pursuant to Item 7.01) | |||||
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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) |
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Date: October 20, 2004
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By: /s/ Robert C. Richter | |
| Name: Robert C. Richter | ||
| Title: Chief Financial Officer |
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Exhibit Index
99.1
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Press release of Dana Corporation dated October 20, 2004 | |
99.2
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Slide presentation for October 20, 2004 conference call |
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Exhibit 99.1 NEWS RELEASE [DANA CORPORATION LOGO] Contact: Michelle L. Hards (419) 535-4636 michelle.hards@dana.com DANA CORPORATION REPORTS THIRD-QUARTER EARNINGS TOLEDO, Ohio, October 20, 2004 - Dana Corporation (NYSE: DCN) today announced third-quarter sales of $2.1 billion, compared to $1.9 billion during the same period last year. Net income for the quarter totaled $40 million, or 27 cents per share, compared to $61 million, or 41 cents per share, for the period in 2003. Net unusual charges for the quarter totaled $20 million. This amount includes net gains resulting from the sale of Dana's interest in certain assets and technology to a joint venture with the Knorr-Bremse Group and the company's continued program of divesting assets of its Dana Credit Corporation (DCC) operation. These gains were more than offset by charges primarily associated with the sale of Dana's automotive aftermarket businesses, including the reversal of an anticipated tax benefit of $20 million which was recognized in the second quarter of 2004. Based on our current expectations of the effect of the transaction, which is now anticipated to close in November, recognition of this tax benefit is no longer warranted. Excluding unusual items, third-quarter 2004 net income was $60 million, or 40 cents per share, compared to $43 million, or 29 cents per share for the period last year. Third-quarter 2004 results, however, included the impact from several positive tax developments, including the adjustment of the company's effective tax rate for the year to 31 percent. The reduction in the effective rate reflects, among other items, credits for research and development costs. In addition, a tax benefit of $24 million was recorded to recognize the utilization of capital loss carryforwards related to the settlement of certain issues with tax authorities, as well as adjustments associated with the finalization of the prior-year's tax returns. "Setting aside taxes, it was an otherwise disappointing quarter, largely because of the increasing cost of raw materials," said Dana Chairman and CEO Mike Burns. "The increase in steel costs alone totaled $22 million after tax, net of recoveries from our customers. "We had expected that the bottom-line impact of the commodity price increases would be offset by the stronger performance in our heavy-vehicle business and continuing cost-reduction efforts," he added. "But, the magnitude of the raw material increases, coupled with a decrease in light-vehicle production volumes, hit us harder than expected." (more)
Nine-Month Results - ------------------ Dana's nine-month consolidated sales were $6.8 billion, up from $5.9 billion during the same period last year. Net income during the first three quarters of 2004 was $215 million, or $1.43 per share, including $15 million in unusual net gains. This compares to net income of $154 million, or $1.04 per share, including $33 million in unusual net gains during the initial nine months of 2003. "Looking at the year-to-date results, we were reasonably satisfied with the performance from our Heavy Vehicle Technologies and Systems Group, which benefited from a solid commercial vehicle market in North America, and strong global off-highway vehicle production," Mr. Burns said. "It was a different story in our Automotive Systems Group. Although their sales were up, about 30 percent of the sales increase resulted from currency translation and new programs in our structures group, which are only beginning to contribute to the bottom line. Additionally, the automotive group bore the brunt of the increased steel costs." Looking Ahead - ------------- On Oct. 12, Dana revised its expectation for 2004 earnings per share, excluding unusual items, from $1.90 per share to a range of $1.60 to $1.65 per share. The full-year effect of unusual items, such as the sale of DCC assets and the divestiture of the company's automotive aftermarket businesses, cannot reasonably be quantified at this time and was excluded from this guidance. "We believe that raw material costs will continue to adversely affect us, at least in the near term," Mr. Burns said. "As we move into 2005, however, we can expect more of an offsetting benefit from our cost reduction programs. These include the consolidation of our purchasing function, the accelerated deployment of lean manufacturing techniques, and the standardization of administrative processes throughout the company. "At the same time, we are not solely focused on cutting costs," he said. "We are equally committed to growing our top line faster - we've added significantly to our book of new business over the last three months, the heavy-truck and off-highway markets continue to grow, and we are focused on expanding our global footprint." Quarterly Conference Call Scheduled Today at 10 a.m. - ---------------------------------------------------- Dana will discuss its third-quarter results in a conference call at 10 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. 2
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; increases in commodity costs, including steel, that cannot be recouped in product pricing; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and 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 September 30 ------------------------- Percent 2004 2003 Change -------- -------- -------- Sales $ 2,114 $ 1,880 12% ======== ======== Income from continuing operations $ 51 $ 37 38% Income (loss) from discontinued operations (11) 24 -146% -------- -------- Net income $ 40 $ 61 -34% ======== ======== Income from continuing operations $ 51 $ 37 38% Gain associated with the sale of assets to a newly formed joint venture (13) Net gains associated with DCC asset sales (2) (9) -78% Gain on repurchase of notes (9) Restructuring charges 5 -------- -------- Income from continuing operations, excluding unusual items $ 41 $ 19 116% ======== ======== Income (loss) from discontinued automotive aftermarket business $ (11) $ 24 -146% Adjustment of deferred tax allowance related to aftermarket sale 20 Costs relating to sale of aftermarket businesses 10 -------- -------- Income from discontinued operations, excluding unusual items $ 19 $ 24 -21% ======== ======== Diluted earnings per share: Income from continuing operations $ 0.34 $ 0.25 36% Income (loss) from discontinued operations (0.07) 0.16 -144% -------- -------- Net income $ 0.27 $ 0.41 -34% ======== ======== Income from continuing operations, excluding unusual items $ 0.27 $ 0.13 108% Income from discontinued operations, excluding unusual items 0.13 0.16 -19% -------- -------- Net income, excluding unusual items 0.40 0.29 38% Unusual items (0.13) 0.12 -208% -------- -------- Net income $ 0.27 $ 0.41 -34% ======== ======== Page 1
Dana Corporation Financial Summary (Unaudited) (in millions, except per share amounts) Nine Months Ended September 30 ------------------------- Percent 2004 2003 Change -------- -------- ------- Sales $ 6,756 $ 5,868 15% ======== ======== Income from continuing operations $ 178 $ 119 50% Income from discontinued operations 37 35 6% -------- -------- Net income $ 215 $ 154 40% ======== ======== Income from continuing operations $ 178 $ 119 50% Gain associated with the sale of assets to a newly formed joint venture (13) Net gains associated with DCC asset sales (20) (26) -23% Gain on repurchase of notes (9) Restructuring charges 5 -------- -------- Income from continuing operations, excluding unusual items $ 150 $ 84 79% ======== ======== Income from discontinued automotive aftermarket business $ 37 $ 43 -14% Loss from engine management business (8) -------- -------- Income from discontinued operations 37 35 6% Loss on engine management sale 2 Costs relating to sale of aftermarket businesses 13 -------- -------- Income from discontinued operations, excluding unusual items $ 50 $ 37 35% ======== ======== Diluted earnings per share: Income from continuing operations $ 1.18 $ 0.80 48% Income from discontinued operations 0.25 0.24 4% -------- -------- Net income $ 1.43 $ 1.04 38% ======== ======== Income from continuing operations, excluding unusual items $ 0.99 $ 0.56 77% Income from discontinued operations, excluding unusual items 0.33 0.25 32% -------- -------- Net income, excluding unusual items 1.32 0.81 63% Unusual items 0.11 0.23 -52% -------- -------- Net income $ 1.43 $ 1.04 38% ======== ======== The results of operations for the six months ended June 30, 2004 have been restated to reflect the adoption of FSP FAS 106-2. Page 2
Dana Corporation Condensed Statement of Income (Unaudited) (in millions, except per share amounts) Three Months Ended September 30 -------------------------- 2004 2003 -------- -------- Net sales $ 2,114 $ 1,880 Revenue from lease financing and other income (expense) (7) 41 -------- -------- 2,107 1,921 -------- -------- Costs and expenses Cost of sales 1,955 1,731 Selling, general and administrative expenses 123 115 Interest expense 62 55 -------- -------- 2,140 1,901 -------- -------- Income (loss) before income taxes (33) 20 Income tax benefit 81 13 Minority interest (3) (1) Equity in earnings of affiliates 6 5 -------- -------- Income from continuing operations 51 37 Income (loss) from discontinued operations (11) 24 -------- -------- Net income $ 40 $ 61 ======== ======== Basic earnings per share Income from continuing operations $ 0.34 $ 0.25 Income (loss) from discontinued operations (0.07) 0.16 -------- -------- Net income $ 0.27 $ 0.41 ======== ======== Diluted earnings per share Income from continuing operations $ 0.34 $ 0.25 Income (loss) from discontinued operations (0.07) 0.16 -------- -------- Net income $ 0.27 $ 0.41 ======== ======== 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) Nine Months Ended September 30 ------------------------- 2004 2003 -------- -------- Net sales $ 6,756 $ 5,868 Revenue from lease financing and other income 32 113 -------- -------- 6,788 5,981 -------- -------- Costs and expenses Cost of sales 6,161 5,370 Selling, general and administrative expenses 381 392 Interest expense 164 169 -------- -------- 6,706 5,931 -------- -------- Income before income taxes 82 50 Income tax benefit 78 34 Minority interest (9) (4) Equity in earnings of affiliates 27 39 -------- -------- Income from continuing operations 178 119 Income from discontinued operations 37 35 -------- -------- Net income $ 215 $ 154 ======== ======== Basic earnings per share Income from continuing operations $ 1.20 $ 0.80 Income from discontinued operations 0.25 0.24 -------- -------- Net income $ 1.45 $ 1.04 ======== ======== Diluted earnings per share Income from continuing operations $ 1.18 $ 0.80 Income from discontinued operations 0.25 0.24 -------- -------- Net income $ 1.43 $ 1.04 ======== ======== Average shares outstanding - For Basic EPS 149 148 For Diluted EPS 151 149 Page 4
Dana Corporation Condensed Balance Sheet (Unaudited) (in millions) September 30 December 31 Assets 2004 2003 ------------ ----------- Current assets Cash and cash equivalents $ 512 $ 731 Accounts receivable Trade 1,351 1,048 Other 287 326 Inventories 846 743 Assets of discontinued operations 1,332 1,254 Other current assets 555 431 -------- -------- Total current assets 4,883 4,533 Investment in leases 419 622 Investments and other assets 2,473 2,252 Property, plant and equipment, net 1,933 2,210 -------- -------- Total assets $ 9,708 $ 9,617 ======== ======== Liabilities and Shareholders' Equity Current liabilities Notes payable $ 313 $ 493 Accounts payable 1,266 1,076 Liabilities of discontinued operations 336 307 Other current liabilities 1,073 1,089 -------- -------- Total current liabilities 2,988 2,965 Long-term debt 2,542 2,605 Deferred employee benefits and other noncurrent liabilities 1,832 1,901 Minority interest 107 96 Shareholders' equity 2,239 2,050 -------- -------- Total liabilities and shareholders' equity $ 9,708 $ 9,617 ======== ======== Page 5
Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Three Months Ended September 30 ------------------------- 2004 2003 -------- -------- Net Income $ 40 $ 61 Depreciation and amortization 90 92 Asset impairment 22 9 Gain on divestitures, asset sales and note repurchases (40) (7) Working capital increase (249) (33) Deferred taxes (23) (15) Other 41 10 -------- -------- Net cash flows - operating activities (119) 117 -------- -------- Purchases of property, plant and equipment (66) (73) Payments received on leases 2 5 Net loan repayments from customers 1 Asset sales 169 27 Other 19 24 -------- -------- Net cash flows - investing activities 124 (16) -------- -------- Net change in short-term debt 28 88 Payments on and repurchases of long-term debt (101) (182) Dividends paid (17) (2) Other (1) -------- -------- Net cash flows - financing activities (90) (97) -------- -------- Net change in cash and cash equivalents (85) 4 Net change in cash - discontinued operations Cash and cash equivalents - beginning of period 597 632 -------- -------- Cash and cash equivalents - end of period $ 512 $ 636 ======== ======== Page 6
Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Nine Months Ended September 30 ------------------------- 2004 2003 -------- -------- Net Income $ 215 $ 154 Depreciation and amortization 273 294 Asset impairment 24 18 Gain on divestitures, asset sales and note repurchases (65) (29) Working capital increase (413) (317) Deferred taxes (64) (28) Other (34) (7) -------- -------- Net cash flows - operating activities (64) 85 -------- -------- Purchases of property, plant and equipment (208) (215) Payments received on leases 8 21 Net loan repayments from customers 2 12 Divestitures 145 Asset sales 324 206 Other (21) 33 -------- -------- Net cash flows - investing activities 105 202 -------- -------- Net change in short-term debt 181 (9) Proceeds from long-term debt 5 Payments on and repurchases of long-term debt (405) (225) Dividends paid (53) (5) Other 10 16 -------- -------- Net cash flows - financing activities (262) (223) -------- -------- Net change in cash and cash equivalents (221) 64 Net change in cash - discontinued operations 2 1 Cash and cash equivalents - beginning of period 731 571 -------- -------- Cash and cash equivalents - end of period $ 512 $ 636 ======== ======== Page 7
Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Three Months Ended September 30 ------------------------- 2004 2003 -------- -------- Net sales $ 2,114 $ 1,880 Other income 23 32 -------- -------- 2,137 1,912 -------- -------- Costs and expenses Cost of sales 1,961 1,741 Selling, general and administrative expenses 114 101 Interest expense 51 40 -------- -------- 2,126 1,882 -------- -------- Income before income taxes 11 30 Income tax benefit (expense) 30 (9) Minority interest (3) (1) Equity in earnings of affiliates 13 17 -------- -------- Income from continuing operations 51 37 Income (loss) from discontinued operations (11) 24 -------- -------- Net income $ 40 $ 61 ======== ======== Page 8
Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Nine Months Ended September 30 ------------------------- 2004 2003 -------- -------- Net sales $ 6,756 $ 5,868 Other income 43 72 -------- -------- 6,799 5,940 -------- -------- Costs and expenses Cost of sales 6,183 5,404 Selling, general and administrative expenses 357 341 Interest expense 128 122 -------- -------- 6,668 5,867 -------- -------- Income before income taxes 131 73 Income tax expense (8) (21) Minority interest (9) (4) Equity in earnings of affiliates 64 71 -------- -------- Income from continuing operations 178 119 Income from discontinued operations 37 35 -------- -------- Net income $ 215 $ 154 ======== ======== Page 9
Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Balance Sheet (Unaudited) (in millions) September 30 December 31 Assets 2004 2003 ------------ ------------ Current assets Cash and cash equivalents $ 487 $ 664 Accounts receivable Trade 1,351 1,048 Other 270 300 Inventories 846 743 Assets of discontinued operations 1,332 1,254 Other current assets 533 399 ------------ ------------ Total current assets 4,819 4,408 Investments and other assets 2,661 2,580 Property, plant and equipment, net 1,916 2,014 ------------ ------------ Total assets $ 9,396 $ 9,002 ============ ============ Liabilities and Shareholders' Equity Current liabilities Notes payable $ 382 $ 260 Accounts payable 1,266 1,076 Liabilities of discontinued operations 336 307 Other current liabilities 1,160 1,235 ------------ ------------ Total current liabilities 3,144 2,878 Long-term debt 2,084 2,087 Deferred employee benefits and other noncurrent liabilities 1,824 1,893 Minority interest 105 94 Shareholders' equity 2,239 2,050 ------------ ------------ Total liabilities and shareholders' equity $ 9,396 $ 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 September 30 ------------------------- 2004 2003 -------- -------- Sources Net income $ 40 $ 61 Depreciation 85 78 Asset sales 7 1 Working capital decrease (increase) (236) 3 -------- -------- (104) 143 -------- -------- Uses Capital spend (65) (76) Dividends (17) (2) Restructuring cash payments (16) (28) Deferred taxes 21 5 Investment in and undistributed earnings of equity affiliates (16) (18) Net changes in other accounts 18 24 -------- -------- (75) (95) -------- -------- Cash change in net debt $ (179) $ 48 ======== ======== Page 11
Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt (Unaudited) (in millions) Nine Months Ended September 30 ------------------------- 2004 2003 -------- -------- Sources Net income $ 215 $ 154 Depreciation 250 249 Asset sales 40 44 Divestitures -- 145 Working capital increase (351) (219) -------- -------- 154 373 -------- -------- Uses Capital spend (204) (209) Dividends (53) (5) Restructuring cash payments (65) (92) Deferred taxes (29) (1) Investment in and undistributed earnings of equity affiliates (80) (77) Net changes in other accounts (17) 59 -------- -------- (448) (325) -------- -------- Cash change in net debt $ (294) $ 48 ======== ======== Page 12
Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended September 30, 2004 ---------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Net sales $ 2,114 $ $ $ 2,114 Other income (expense) 23 (20) (10) (7) ------------ ------------ ------------ ------------ 2,137 (20) (10) 2,107 ------------ ------------ ------------ ------------ Costs and expenses Cost of sales 1,961 (6) 1,955 Selling, general and administrative expenses 114 12 (3) 123 Interest expense 51 12 (1) 62 ------------ ------------ ------------ ------------ 2,126 24 (10) 2,140 ------------ ------------ ------------ ------------ Income (loss) before income taxes 11 (44) -- (33) Income tax benefit 30 51 81 Minority interest (3) (3) Equity in earnings of affiliates 13 (7) 6 ------------ ------------ ------------ ------------ Income from continuing operations 51 7 (7) 51 Income from discontinued operations (11) (11) ------------ ------------ ------------ ------------ Net income $ 40 $ 7 $ (7) $ 40 ============ ============ ============ ============ 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) Nine Months Ended September 30, 2004 --------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Net sales $ 6,756 $ $ $ 6,756 Other income 43 26 (37) 32 ------------ ------------ ------------ ------------ 6,799 26 (37) 6,788 ------------ ------------ ------------ ------------ Costs and expenses Cost of sales 6,183 (22) 6,161 Selling, general and administrative expenses 357 38 (14) 381 Interest expense 128 37 (1) 164 ------------ ------------ ------------ ------------ 6,668 75 (37) 6,706 ------------ ------------ ------------ ------------ Income (loss) before income taxes 131 (49) -- 82 Income tax benefit (expense) (8) 86 78 Minority interest (9) (9) Equity in earnings of affiliates 64 4 (41) 27 ------------ ------------ ------------ ------------ Income from continuing operations 178 41 (41) 178 Income from discontinued operations 37 37 ------------ ------------ ------------ ------------ Net income $ 215 $ 41 $ (41) $ 215 ============ ============ ============ ============ 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. The results of operations for the six months ended June 30, 2004 have been restated to reflect the adoption of FSP FAS 106-2. Page 14
Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended September 30, 2003 --------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Net sales $ 1,880 $ $ $ 1,880 Other income 32 27 (18) 41 ------------ ------------ ------------ ------------ 1,912 27 (18) 1,921 ------------ ------------ ------------ ------------ Costs and expenses Cost of sales 1,741 (10) 1,731 Selling, general and administrative expenses 101 22 (8) 115 Interest expense 40 15 55 ------------ ------------ ------------ ------------ 1,882 37 (18) 1,901 ------------ ------------ ------------ ------------ Income (loss) before income taxes 30 (10) -- 20 Income tax benefit (expense) (9) 22 13 Minority interest (1) (1) Equity in earnings of affiliates 17 5 (17) 5 ------------ ------------ ------------ ------------ Income from continuing operations 37 17 (17) 37 Income from discontinued operations 24 24 ------------ ------------ ------------ ------------ Net income $ 61 $ 17 $ (17) $ 61 ============ ============ ============ ============ 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) Nine Months Ended September 30, 2003 ---------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Net sales $ 5,868 $ $ $ 5,868 Other income 72 101 (60) 113 ------------ ------------ ------------ ------------ 5,940 101 (60) 5,981 ------------ ------------ ------------ ------------ Costs and expenses Cost of sales 5,404 (34) 5,370 Selling, general and administrative expenses 341 77 (26) 392 Interest expense 122 47 169 ------------ ------------ ------------ ------------ 5,867 124 (60) 5,931 ------------ ------------ ------------ ------------ Income (loss) before income taxes 73 (23) -- 50 Income tax benefit (expense) (21) 55 34 Minority interest (4) (4) Equity in earnings of affiliates 71 16 (48) 39 ------------ ------------ ------------ ------------ Income from continuing operations 119 48 (48) 119 Income from discontinued operations 35 35 ------------ ------------ ------------ ------------ Net income $ 154 $ 48 $ (48) $ 154 ============ ============ ============ ============ 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) September 30, 2004 ------------------------------------------------------------- Dana with DCC on Elimination Dana ASSETS Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Current assets Cash and cash equivalents $ 487 $ 25 $ $ 512 Accounts receivable Trade 1,351 1,351 Other 270 169 (152) 287 Inventories 846 846 Assets of discontinued operations 1,332 1,332 Other current assets 533 156 (134) 555 ------------ ------------ ------------ ------------ Total current assets 4,819 350 (286) 4,883 ------------ ------------ ------------ ------------ Investment in leases 419 419 Investments and other assets 2,661 467 (655) 2,473 Property, plant and equipment, net 1,916 17 -- 1,933 ------------ ------------ ------------ ------------ Total assets $ 9,396 $ 1,253 $ (941) $ 9,708 ============ ============ ============ ============ Liabilities and Shareholders' Equity Current liabilities Notes payable $ 382 $ 76 $ (145) $ 313 Accounts payable 1,266 1,266 Liabilities of discontinued operations 336 336 Other current liabilities 1,160 55 (142) 1,073 ------------ ------------ ------------ ------------ Total current liabilities 3,144 131 (287) 2,988 ------------ ------------ ------------ ------------ Long-term debt 2,084 458 2,542 Deferred employee benefits and other noncurrent liabilities 1,824 330 (322) 1,832 Minority interest 105 2 107 Shareholders' equity 2,239 332 (332) 2,239 ------------ ------------ ------------ ------------ Total liabilities and shareholders' equity $ 9,396 $ 1,253 $ (941) $ 9,708 ============ ============ ============ ============ 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 ASSETS Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ 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 September 30, 2004 ---------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Sources Net income $ 40 $ 7 $ (7) $ 40 Depreciation 85 5 90 Asset sales 7 162 169 Working capital decrease (increase) (236) 1 2 (233) ------------ ------------ ------------ ------------ (104) 175 (5) 66 ------------ ------------ ------------ ------------ Uses Capital spend (65) (1) (66) Dividends (17) (17) Restructuring cash payments (16) (16) Deferred taxes 21 (44) (23) Investment in and undistributed earnings of equity affiliates (16) (34) 7 (43) Net changes in other accounts 18 (74) 143 87 ------------ ------------ ------------ ------------ (75) (153) 150 (78) ------------ ------------ ------------ ------------ Cash change in net debt $ (179) $ 22 $ 145 $ (12) ============ ============ ============ ============ Analysis of components of decrease in net debt: Net change in short-term debt $ 173 $ $ (145) $ 28 Net payments on long-term debt (5) (96) (101) Change in cash - continuing operations 11 74 85 ------------ ------------ ------------ ------------ Cash change in net debt 179 (22) (145) 12 Non-cash changes in net debt 35 1 36 ------------ ------------ ------------ ------------ Total change in net debt $ 214 $ (21) $ (145) $ 48 ============ ============ ============ ============ 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) Nine Months Ended September 30, 2004 ---------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Sources Net income $ 215 $ 41 $ (41) $ 215 Depreciation 250 23 273 Asset sales 40 287 (3) 324 Working capital increase (351) 3 (348) ------------ ------------ ------------ ------------ 154 351 (41) 464 ------------ ------------ ------------ ------------ Uses Capital spend (204) (7) 3 (208) Dividends (53) (53) Restructuring cash payments (65) (65) Deferred taxes (29) (35) (64) Investment in and undistributed earnings of equity affiliates (80) (4) 41 (43) Net changes in other accounts (17) (156) 142 (31) ------------ ------------ ------------ ------------ (448) (202) 186 (464) ------------ ------------ ------------ ------------ Cash change in net debt $ (294) $ 149 $ 145 $ -- ============ ============ ============ ============ Analysis of components of increase (decrease) in net debt: Net change in short-term debt $ 356 $ (30) $ (145) $ 181 Net payments on long-term debt (239) (161) (400) Change in cash - continuing operations 177 42 219 ------------ ------------ ------------ ------------ Cash change in net debt 294 (149) (145) -- Non-cash changes in net debt 2 (26) (24) ------------ ------------ ------------ ------------ Total change in net debt $ 296 $ (175) $ (145) $ (24) ============ ============ ============ ============ 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 September 30, 2003 ----------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Sources Net Income $ 61 $ 17 $ (17) $ 61 Depreciation 78 14 92 Asset sales 1 30 (4) 27 Working capital decrease (increase) 3 (4) (4) (5) ------------ ------------ ------------ ------------ 143 57 (25) 175 ------------ ------------ ------------ ------------ Uses Capital spend (76) (1) 4 (73) Dividends (2) (2) Restructuring cash payments (28) (28) Deferred taxes 5 (20) (15) Investment in and undistributed earnings of equity affiliates (18) (5) 17 (6) Net changes in other accounts 24 21 4 49 ------------ ------------ ------------ ------------ (95) (5) 25 (75) ------------ ------------ ------------ ------------ Cash change in net debt $ 48 $ 52 $ -- $ 100 ============ ============ ============ ============ Analysis of components of decrease in net debt: Net change in short-term debt $ 92 $ $ $ 92 Repurchases of long-term debt (140) (140) Proceeds from swap settlement 18 18 Net payments on long-term debt (15) (52) (67) Change in cash - continuing operations (3) (3) ------------ ------------ ------------ ------------ Cash change in net debt (48) (52) -- (100) Non-cash changes in net debt (53) (1) (54) ------------ ------------ ------------ ------------ Total change in net debt $ (101) $ (53) $ -- $ (154) ============ ============ ============ ============ 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) Nine Months Ended September 30, 2003 --------------------------------------------------------------- Dana with DCC on Elimination Dana Equity Basis DCC Entries Consolidated ------------ ------------ ------------ ------------ Sources Net income $ 154 $ 48 $ (48) $ 154 Depreciation 249 45 294 Asset sales 44 167 (5) 206 Divestitures 145 145 Working capital increase (219) (8) 2 (225) ------------ ------------ ------------ ------------ 373 252 (51) 574 ------------ ------------ ------------ ------------ Uses Capital spend (209) (9) 3 (215) Dividends (5) (5) Restructuring cash payments (92) (92) Deferred taxes (1) (27) (28) Investment in and undistributed earnings of equity affiliates (77) (16) 48 (45) Net changes in other accounts 59 32 91 ------------ ------------ ------------ ------------ (325) (20) 51 (294) ------------ ------------ ------------ ------------ Cash change in net debt $ 48 $ 232 $ -- $ 280 ============ ============ ============ ============ Analysis of components of increase (decrease) in net debt: Net change in short-term debt $ 87 $ (96) $ $ (9) Repurchases of long-term debt (140) (140) Proceeds from swap settlement 18 18 Net payments on long-term debt (15) (70) (85) Change in cash - continuing operations 2 (66) (64) ------------ ------------ ------------ ------------ Cash change in net debt (48) (232) -- (280) Non-cash changes in net debt (17) (33) (50) ------------ ------------ ------------ ------------ Total change in net debt $ (65) $ (265) $ -- $ (330) ============ ============ ============ ============ 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
[DANA LOGO] Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended September 30, 2004 (in millions) Inter- External Sales Segment Sales EBIT Operating PAT ------------------ ------------------ ------------------ ------------------ 04 03 04 03 04 03 04 03 -------- -------- -------- -------- -------- -------- -------- -------- Automotive Systems Group $ 1,535 $ 1,392 $ 48 $ 40 $ 67 $ 82 $ 46 $ 52 Heavy Vehicle Technologies and Systems Group 562 471 8 17 42 38 26 23 Dana Commercial Credit 4 6 Other 17 17 3 2 (59) (65) (35) (62) -------- -------- -------- -------- -------- -------- -------- -------- Continuing Operations 2,114 1,880 59 59 50 55 41 19 Discontinued Operations 29 40 19 24 Unusual Items Excluded from Performance Measurement (6) 12 (20) 18 -------- -------- -------- -------- -------- -------- -------- -------- Consolidated $ 2,114 $ 1,880 $ 59 $ 59 $ 73 $ 107 $ 40 $ 61 ======== ======== ======== ======== ======== ======== ======== ======== North America $ 1,383 $ 1,289 $ 29 $ 19 $ 17 $ 54 $ 10 $ 32 Europe 408 336 29 19 33 28 24 16 South America 171 122 55 42 29 21 17 13 Asia Pacific 152 133 8 1 7 13 5 9 Dana Commercial Credit 4 6 Other (36) (61) (19) (57) -------- -------- -------- -------- -------- -------- -------- -------- Continuing Operations 2,114 1,880 121 81 50 55 41 19 Discontinued Operations 29 40 19 24 Unusual Items Excluded from Performance Measurement (6) 12 (20) 18 -------- -------- -------- -------- -------- -------- -------- -------- Consolidated $ 2,114 $ 1,880 $ 121 $ 81 $ 73 $ 107 $ 40 $ 61 ======== ======== ======== ======== ======== ======== ======== ======== Information for Discontinued Operations 540 530 5 3 ======== ======== ======== ======== Net Profit Net Assets ------------------ ----------------- 04 03 04 03 -------- -------- -------- -------- Automotive Systems Group $ 10 $ 17 $ 3,092 $ 3,006 Heavy Vehicle Technologies and Systems Group 10 9 682 635 Dana Commercial Credit 4 6 332 323 Other 17 (13) 110 20 -------- -------- -------- -------- Continuing Operations 41 19 4,216 3,984 Discontinued Operations 19 24 Unusual Items Excluded from Performance Measurement (20) 18 -------- -------- -------- -------- Consolidated $ 40 $ 61 $ 4,216 $ 3,984 ======== ======== ======== ======== North America $ (14) $ 1 $ 2,294 $ 2,245 Europe 16 7 1,141 1,078 South America 15 10 350 279 Asia Pacific 1 4 159 179 Dana Commercial Credit 4 6 332 323 Other 19 (9) (60) (120) -------- -------- -------- -------- Continuing Operations 41 19 4,216 3,984 Discontinued Operations 19 24 Unusual Items Excluded from Performance Measurement (20) 18 -------- -------- -------- -------- Consolidated $ 40 $ 61 $ 4,216 $ 3,984 ======== ======== ======== ======== Information for Discontinued Operations 986 929 ======== ======== The performance and net assets of Clevite are now included in ASG. 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 Page 23
Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Nine Months Ended September 30, 2004 (in millions) Inter- External Sales Segment Sales EBIT Operating PAT ------------------- ------------------- ------------------- ------------------- 04 03 04 03 04 03 04 03 -------- -------- -------- -------- -------- -------- -------- -------- Automotive Systems Group $ 4,966 $ 4,396 $ 141 $ 111 $ 279 $ 246 $ 189 $ 175 Heavy Vehicle Technologies and Systems Group 1,732 1,425 26 58 132 93 81 57 Dana Commercial Credit 16 18 Other 58 47 6 5 (164) (164) (136) (166) -------- -------- -------- -------- -------- -------- -------- -------- Continuing Operations 6,756 5,868 173 174 247 175 150 84 Discontinued Operations 84 71 50 37 Unusual Items Excluded from Performance Measurement (15) 5 15 33 -------- -------- -------- -------- -------- -------- -------- -------- Consolidated $ 6,756 $ 5,868 $ 173 $ 174 $ 316 $ 251 $ 215 $ 154 ======== ======== ======== ======== ======== ======== ======== ======== North America $ 4,554 $ 4,085 $ 81 $ 66 $ 181 $ 167 $ 112 $ 104 Europe 1,288 1,074 90 59 101 84 72 64 South America 454 315 149 122 74 47 45 29 Asia Pacific 460 394 22 2 25 37 17 24 Dana Commercial Credit 16 18 Other (134) (160) (112) (155) -------- -------- -------- -------- -------- -------- -------- -------- Continuing Operations 6,756 5,868 342 249 247 175 150 84 Discontinued Operations 84 71 50 37 Unusual Items Excluded from Performance Measurement (15) 5 15 33 -------- -------- -------- -------- -------- -------- -------- -------- Consolidated $ 6,756 $ 5,868 $ 342 $ 249 $ 316 $ 251 $ 215 $ 154 ======== ======== ======== ======== ======== ======== ======== ======== Information for Discontinued Operations 1,607 1,680 14 11 ======== ======== ======== ======== Net Profit Net Assets ------------------ ------------------ 04 03 04 03 -------- -------- -------- -------- Automotive Systems Group $ 93 $ 79 $ 3,092 $ 3,006 Heavy Vehicle Technologies and Systems Group 39 18 682 635 Dana Commercial Credit 16 18 332 323 Other 2 (31) 110 20 -------- -------- -------- -------- Continuing Operations 150 84 4,216 3,984 Discontinued Operations 50 37 Unusual Items Excluded from Performance Measurement 15 33 -------- -------- -------- -------- Consolidated $ 215 $ 154 $ 4,216 $ 3,984 ======== ======== ======== ======== North America $ 34 $ 17 $ 2,294 $ 2,245 Europe 48 40 1,141 1,078 South America 38 22 350 279 Asia Pacific 7 13 159 179 Dana Commercial Credit 16 18 332 323 Other 7 (26) (60) (120) -------- -------- -------- -------- Continuing Operations 150 84 4,216 3,984 Discontinued Operations 50 37 Unusual Items Excluded from Performance Measurement 15 33 -------- -------- -------- -------- Consolidated $ 215 $ 154 $ 4,216 $ 3,984 ======== ======== ======== ======== Information for Discontinued Operations 986 929 ======== ======== The performance and net assets of Clevite are now included in ASG. 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 Page 24
[DANA LOGO] Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Three Months Ended June 30, 2004 (in millions) External Sales Inter-Segment Sales EBIT Operating PAT -------------------- ------------------- ------------------- ------------------ 04 03 04 03 04 03 04 03 ------- ------- ------ ------ ------- ------ ------ ------ Automotive Systems Group $ 1,719 $ 1,497 $ 48 $ 35 $ 109 $ 88 $ 72 $ 66 Heavy Vehicle Technologies and Systems Group 592 499 9 20 51 30 31 19 Dana Commercial Credit 5 6 Other 20 16 1 2 (46) (53) (49) (52) ------- ------- ------ ------ ------- ------ ------ ------ Continuing Operations 2,331 2,012 58 57 114 65 59 39 Discontinued Operations 30 19 18 8 Unusual Items Excluded from Performance Measurement (8) (8) 33 5 ------- ------- ------ ------ ------- ------ ------ ------ Consolidated $ 2,331 $ 2,012 $ 58 $ 57 $ 136 $ 76 $ 110 $ 52 ======= ======= ====== ====== ======= ====== ====== ====== North America $ 1,577 $ 1,387 $ 25 $ 23 $ 80 $ 59 $ $48 $ 40 Europe 442 377 31 21 37 27 26 23 South America 153 107 50 42 27 18 17 11 Asia Pacific 159 141 13 10 13 7 8 Dana Commercial Credit 5 6 Other (40) (52) (44) (49) ------- ------- ------ ------ ------- ------ ------ ------ Continuing Operations 2,331 2,012 119 86 114 65 59 39 Discontinued Operations 30 19 18 8 Unusual Items Excluded from Performance Measurement (8) (8) 33 5 ------- ------- ------ ------ ------- ------ ------ ------ Consolidated $ 2,331 $ 2,012 $ 119 $ 86 $ 136 $ 76 $ 110 $ 52 ======= ======= ====== ====== ======= ====== ====== ====== Information for Discontinued Operations 557 603 5 4 ======= ======= ====== ====== Net Profit Net Assets ---------------------- ------------------------ 04 03 04 03 -------- ------- -------- -------- Automotive Systems Group $ 44 $ 35 $ 2,986 $ 2,980 Heavy Vehicle Technologies and Systems Group 18 5 621 643 Dana Commercial Credit 5 6 325 306 Other (8) (7) (50) -------- ------- -------- -------- Continuing Operations 59 39 3,882 3,929 Discontinued Operations 18 8 Unusual Items Excluded from Performance Measurement 33 5 -------- ------- -------- -------- Consolidated $ 110 $ 52 $ 3,882 $ 3,929 ======== ======= ======== ======== North America $ 24 $ 11 $ 2,162 $ 2,242 Europe 19 15 1,096 1,051 South America 14 9 327 293 Asia Pacific 3 5 159 167 Dana Commercial Credit 5 6 325 306 Other (6) (7) (187) (130) -------- ------- -------- -------- Continuing Operations 59 39 3,882 3,929 Discontinued Operations 18 8 Unusual Items Excluded from Performance Measurement 33 5 -------- ------- -------- -------- Consolidated $ 110 $ 52 $ 3,882 $ 3,929 ======== ======= ======== ======== Information for Discontinued Operations 970 962 ======== ======== The performance and net assets of Clevite are now included in ASG. 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 Page 25
Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended March 31, 2004 (in millions) External Sales Inter-Segment Sales EBIT ---------------------- -------------------- --------------------- 04 03 04 03 04 03 ------- ------- ------- ------- ------ ------ Automotive Systems Group $ 1,712 $ 1,507 $ 45 $ 36 $ 103 $ 76 Heavy Vehicle Technologies and Systems Group 578 455 9 21 39 25 Dana Commercial Credit Other 21 14 2 1 (59) (45) ------- ------- ------- ------- ------ ------ Continuing Operations 2,311 1,976 56 58 83 56 Discontinued Operations 25 12 Unusual Items Excluded from Performance Measurement (1) ------- ------- ------- ------- ------ ------ Consolidated $ 2,311 $ 1,976 $ 56 $ 58 $ 107 $ 68 ======= ======= ======= ======= ====== ====== North America $ 1,594 $ 1,409 $ 27 $ 24 $ 83 $ 54 Europe 438 361 30 19 30 29 South America 130 86 44 38 18 8 Asia Pacific 149 120 1 1 8 11 Dana Commercial Credit Other (56) (46) ------- ------- ------- ------- ------ ------ Continuing Operations 2,311 1,976 102 82 83 56 Discontinued Operations 25 12 Unusual Items Excluded from Performance Measurement (1) ------- ------- ------- ------- ------ ------ Consolidated $ 2,311 $ 1,976 $ 102 $ 82 $ 107 $ 68 ======= ======= ======= ======= ====== ====== Information for Discontinued Operations 510 547 4 4 ======= ======= ======= ======= Operating PAT Net Profit Net Assets --------------------- --------------------- ----------------------- 04 03 04 03 04 03 ------ ------ ------- ------- ------- ------- Automotive Systems Group $ 71 $ 57 $ 40 $ 27 $ 3,031 $ 2,888 Heavy Vehicle Technologies and Systems Group 24 15 10 4 637 631 Dana Commercial Credit 7 6 7 6 301 287 Other (52) (52) (7) (11) (29) 18 ------ ------ ------- ------- ------- ------- Continuing Operations 50 26 50 26 3,940 3,824 Discontinued Operations 13 5 13 5 Unusual Items Excluded from Performance Measurement 2 10 2 10 ------ ------ ------- ------- ------- ------- Consolidated $ 65 $ 41 $ 65 $ 41 $ 3,940 $ 3,824 ====== ====== ======= ======= ======= ======= North America $ 54 $ 32 $ 25 $ 5 $ 2,165 $ 2,209 Europe 22 25 14 18 1,136 993 South America 11 5 9 3 312 269 Asia Pacific 5 7 2 4 183 164 Dana Commercial Credit 7 6 7 6 301 287 Other (49) (49) (7) (10) (157) (98) ------ ------ ------- ------- ------- ------- Continuing Operations 50 26 50 26 3,940 3,824 Discontinued Operations 13 5 13 5 Unusual Items Excluded from Performance Measurement 2 10 2 10 ------ ------ ------- ------- ------- ------- Consolidated $ 65 $ 41 $ 65 $ 41 $ 3,940 $ 3,824 ====== ====== ======= ======= ======= ======= Information for Discontinued Operations 945 1,056 ======= ======= The performance and net assets of Clevite are now included in ASG. 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 Page 26
Exhibit 99.2
| Dana Corporation Third-Quarter Conference Call October 20, 2004 (c) Dana Corporation, 2004 |
| 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; increases in commodity costs, including steel, that cannot be recouped in product pricing; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and 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 our automotive aftermarket businesses; 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 presentation. 3 (c) Dana Corporation. Dated October 20, 2004. |
| Key Topics Financial Review Operational Review Steel New Business Growth Market Update Future Outlook 5 (c) Dana Corporation. Dated October 20, 2004. |
| Financial Overview Q3 - 2004 Q3 - 2003 Sales $2.1 billion $1.9 billion Net Income Earnings per Share $40 million $0.27 $61 million $0.41 Net Income, excluding unusual items* $60 million $43 million Earnings Per Share, excluding unusual items* $0.40 $0.29 7 (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors |
| 2003 2002 9 Excluding Unusual Items DCC As Reported Q3 Income Statement With DCC on an Equity Basis* Unusual Items Tax AAG Other (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors |
| 11 Year to Date Income Statement With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors Excluding Unusual Items DCC As Reported Tax AAG Other Unusual Items |
| 13 2004 2003 Third Quarter 2004** 2003 Year-to-Date Income Statement With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * Comparable GAAP measures available at www.dana.com/investors ** First six months re-stated to reflect adoption of FSP FAS 106-2 |
| Cash Flow Statement With DCC on an Equity Basis * (Millions) 15 2004 2003 Third Quarter 2004** 2003 Year-to-Date (c) Dana Corporation. Dated October 20, 2004. * Comparable GAAP measures available at www.dana.com/investors ** First six months re-stated to reflect adoption of FSP FAS 106-2 |
| 17 Capital Structure With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors |
| September 30, 2004 Debt Portfolio 19 Maturities do not reflect swap valuation adjustments 200 180 (c) Dana Corporation. Dated October 20, 2004. 2004 2005 2006 2007 2008 2009 2010 2011 2028 2029 A/R Sec'n 180 Sr Notes 150 350 250 824 165.05 268.25 Other 200.4 |
| $400 0 175 $575 (145) $430 487 $917 $ - 180 25 $205 145 $350 5-year bank facility $400 Accts receivable program* 180 Bridge facility* 200 Committed facilities $780 DCC loan Total short-term facilities Plus: Cash Total 21 September 30, 2004 Liquidity Excluding DCC Lines Drawn Available (Millions) * Maximum size of Bridge facility is $200. In combination, draws against facilities cannot exceed $400. (c) Dana Corporation. Dated October 20, 2004. |
| 12/01 Total Portfolio Assets - $2,200 Dana Credit Corporation (DCC) Portfolio Analysis ($ Millions) VASG 85 50 45 RESG 170 425 475 CMG 675 Value-Added Services Retained Real Estate Capital Markets 9/04 Total Portfolio Assets - $865 VASG 120 10 50 RESG 170 900 0 CMG 410 23 (c) Dana Corporation. Dated October 20, 2004. |
| Financial Summary 25 Q3 - 2004 YTD - 2004 Net Income, excluding unusual items $60 $200 DCC 2 20 Aftermarket (30) (13) Knorr-Bremse/Others 8 8 Net Income, including unusual items $40 $215 Tax Benefit $24 $ 24 Steel Cost $22 $ 38 (Millions) (c) Dana Corporation. Dated October 20, 2004. |
| Steel 27 Increased steel costs have had a profoundly negative impact on auto industry this year Lack of global capacity has driven steep price increases Like it or not, these are the conditions of the market - and we must act aggressively Negotiating leveraged purchases Participating in OEM re-sale programs Pursuing additional solutions to reduce costs (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| $375 $412 $250 (end of Q2) Scrap Open Market Pricing (#1 Bundled) Source: Tri-Cities Index 29 (c) Dana Corporation. Dated October 20, 2004. |
| Heavy Vehicle Performance Sales OPAT 2004 2004 2003 2003 Chg. Chg. 31 Steel Q1 $587 $476 23% $24 $15 60% $1 Q2 601 519 16 31 19 63 3 Q3 570 488 17 26 23 13 3 Results $1,758 $1,483 19% $81 $57 42% $7 (Millions) 2004 (c) Dana Corporation. Dated October 20, 2004. |
| Automotive Systems Performance Sales OPAT 2004 2004 2003 2003 Chg. Chg. 33 Steel Q1 $1,757 $1,543 14% $71 $57 25% $1 Q2 1,767 1,532 15 72 66 9 7 Q3 1,583 1,432 11 46 52 (12) 13 Results $5,107 $4,507 13% $189 $175 8% $21 (Millions) 2004 (c) Dana Corporation. Dated October 20, 2004. |
| 3rd Quarter Segment Comparison 35 Sales OPAT 2004 2004 2003 2003 Chg. Chg. (Millions) Automotive 1,583 1,432 11 46 52 (12) Heavy Vehicle 570 488 17 26 23 13 DCC 4 6 (33) Other (39) (40) 3 (35) (62) 44 Results from Cont. Operations 2,114 1,880 12 41 19 116 Discontinued Ops.* 19 24 Unusual Items (20) 18 Consolidated 2,114 1,880 12 40 61 (34) % % % % % $ $ $ $ $ $ $ $ $ $ $ $ * Q3 Sales from Discontinued Operations were $540 in 2004 vs. $530 in 2003 % (c) Dana Corporation. Dated October 20, 2004. |
| Cost Cutting 37 Consolidation of global purchasing efforts Accelerated deployment of lean manufacturing techniques Standardization of administrative processes Pursuing value engineering to offset cost increases and meet customer pricing expectations Working Aggressively to Reduce Cost Structure (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| Business Growth 39 Added significantly to book of new business in Q3 Heavy-truck and off-highway markets experiencing healthy growth Focused on expanding global footprint Committed to Growing Top-Line Faster (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| Estimates based on Dana's review of the projected production schedules of our customers 41 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 $380M vs. 2004 Net $115M vs. 2005 (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 Net New Business ($ Millions) |
| 43 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 (c) Dana Corporation. Dated October 20, 2004. |
| N.A. Light-Vehicle Overview Production, U.S. Sales & Inventory (Units by Month) 2004 2002 Production/Sales 2003 45 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 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 Production 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 1337312 1559553 1312046 1010511 1397108 1344221 1363255 1356007 1412721 1371368 928292 1274961 1322997 1527000 1233235 1150379 1224080 1346490 1576554 1403556 1352941 1419456 826054 1401600 1391916 Inventory 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 3013588 3345454 3641547 3457653 3713848 3874969 3938113 3934786 3888575 3888194 3437104 3227971 3362715 3640779 3797787 3737410 3883828 4021507 4176968 4270856 4096943 4159006 3628032 3594650 3609663 Sales 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 1223914 1301012 1203337 1441965 1088162 1218968 1453996 1408423 1576342 1473866 1509013 1628365 1300052 1302735 1258320 1424315 1122845 1274701 1504160 1419390 1625290 1443615 1551611 1424528 1431081 Inventory (c) Dana Corporation. Dated October 20, 2004. ? ? ? Production Sales Inventory |
| Aftermarket Business Divestiture Transaction expected to close in November 47 (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| 2004 Revised Guidance ($ Millions, except per share data) Sales > $8,700 EPS* $1.60 - $1.65 49 * Excludes unusual items, non-GAAP measure (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| 2004 Free Cash Flow Projection Excluding DCC * Excludes proceeds from aftermarket divestiture 51 (Millions) (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2 |
| Summary 3rd Quarter Disappointing Commodities Focus On.... Cost Structure Top-line Growth 53 (c) Dana Corporation. Dated October 20, 2004. |
| 55 Questions (c) Dana Corporation, 2004 |
| 57 Capital Structure Reconciliation as of December 31, 2003 (c) Dana Corporation. Dated October 20, 2004. |
| 59 Capital Structure Reconciliation as of September 30, 2004 (c) Dana Corporation. Dated October 20, 2004. |
| $ 0 115 $115 ASG $360 $250 HVTSG 60 130 TOTAL $420 $380 61 Net New Business Detail 2004 2005 2006 (Millions) (c) Dana Corporation. Dated October 20, 2004. $(80) 120 $ 40 ASG $360 $200 HVTSG 60 100 TOTAL $420 $300 Q3-2004 Q2-2004 |