EX-99.1 2 l26170aexv99w1.htm EX-99.1 EX-99.1
 

Exhibit 99.1
JONES DAY
222 East 41st Street
New York, New York 10017
Telephone: (212) 326-3939
Facsimile: (212) 755-7306
Corinne Ball (CB 8203)
Richard H. Engman (RE 7861)
JONES DAY
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Telephone: (216) 586-3939
Facsimile: (216) 579-0212
Heather Lennox (HL 3046)
Carl E. Black (CB 4803)
Ryan T. Routh (RR 1994)
JONES DAY
1420 Peachtree Street, N.E.
Suite 800
Atlanta, Georgia 30309-3053
Telephone: (404) 521-3939
Facsimile: (404) 581-8330
Jeffrey B. Ellman (JE 5638)
Attorneys for Debtors
     and Debtors in Possession
UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK
         
     
 
        
 
      :
In re
      : Chapter 11
 
      :
 
      : Case No. 06-10354 (BRL)
 
      :
Dana Corporation, et al.,
      : (Jointly Administered)
 
  Debtors.   :
 
      :
 
        
     
MONTHLY OPERATING REPORT FOR DANA CORPORATION AND ITS AFFILIATED DEBTORS FOR THE MONTH OF MARCH 2007

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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
JUDGE:           Burton R. Lifland
CASE NO: 06-10354 (BRL)
CHAPTER 11
DANA CORPORATION, ET AL. (1)
MONTHLY OPERATING REPORT
PERIOD COVERED: March 1, 2007 — March 31, 2007
             
DEBTORS’ ADDRESS:       MONTHLY DISBURSEMENTS:
 
  4500 Dorr Street       $          480 million
             
 
  Toledo, OH 43615        
             
 
            
DEBTORS’ ATTORNEY:       MONTHLY NET LOSS:
 
  Jones Day       $          (37) million
             
 
  222 East 41st Street        
             
 
  New York, NY 10017        
             
 
            
REPORT PREPARER:        
 
            
/s/ Kenneth A. Hiltz       CHIEF FINANCIAL OFFICER
         
SIGNATURE OF REPORT PREPARER       TITLE
 
            
KENNETH A. HILTZ       May 11, 2007
         
PRINTED NAME OF REPORT PREPARER       DATE
The report preparer, having reviewed the attached report and being familiar with the Debtors’ financial affairs, verified under the penalty of perjury that the information contained therein is complete, accurate and truthful to the best of his knowledge. (2)
 
(1)   See next page for a listing of Debtors by case number.
 
(2)   All amounts herein are unaudited and subject to revision.

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In re Dana Corporation, et al.
Case No. 06-10354 (BRL) (Jointly Administered)
Reporting Period: March 1, 2007 — March 31, 2007
         
Debtors:   Case Number:
Dana Corporation
     06-10354  
Dakota New York Corp
     06-10351  
Brake Systems, Inc.
     06-10355  
BWDAC, Inc.
     06-10357  
Coupled Products, Inc.
     06-10359  
Dana Atlantic, LLC
     06-10360  
Dana Automotive Aftermarket, Inc.
     06-10362  
Dana Brazil Holdings I, LLC
     06-10363  
Dana Brazil Holdings, LLC
     06-10364  
Dana Information Technology, LLC
     06-10365  
Dana International Finance, Inc.
     06-10366  
Dana International Holdings, Inc.
     06-10367  
Dana Risk Management Services, Inc.
     06-10368  
Dana Technology, Inc.
     06-10369  
Dana World Trade Corporation
     06-10370  
Dandorr L.L.C.
     06-10371  
Dorr Leasing Corporation
     06-10372  
DTF Trucking, Inc.
     06-10373  
Echlin-Ponce, Inc.
     06-10374  
EFMG, LLC
     06-10375  
EPE, Inc.
     06-10376  
ERS, LLC
     06-10377  
Flight Operations, Inc.
     06-10378  
Friction, Inc.
     06-10379  
Friction Materials, Inc.
     06-10380  
Glacier Vandervell, Inc.
     06-10381  
Hose & Tubing Products, Inc.
     06-10382  
Lipe Corporation
     06-10383  
Long Automotive, LLC
     06-10384  
Long Cooling, LLC
     06-10385  
Long USA, LLC
     06-10386  
Midland Brake, Inc.
     06-10387  
Prattville Mfg, Inc.
     06-10388  
Reinz Wisconsin Gasket, LLC
     06-10390  
Spicer Heavy Axle & Brake, Inc.
     06-10391  
Spicer Heavy Axle Holdings, Inc.
     06-10392  
Spicer Outdoor Power Equipment Components
     06-10393  
Torque-Traction Integration Technologies, LLC
     06-10394  
Torque-Traction Manufacturing Technologies, LLC
     06-10395  
Torque-Traction Technologies, LLC
     06-10396  
United Brake Systems, Inc.
     06-10397  

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DANA CORPORATION, ET AL.
MONTHLY OPERATING REPORT
March 2007
Index
         
    Page
Financial Statements
        
Condensed Statement of Income (Loss) with Dana Credit Corporation (DCC) on an Equity Basis (Unaudited) - Month of March 2007 and for the Three Months ended March 31, 2007
     4  
Condensed Balance Sheet with DCC on an Equity Basis (Unaudited) — March 31, 2007
     5  
Condensed Statement of Cash Flows with DCC on an Equity Basis (Unaudited) — Month of March 2007 and for the Three Months ended March 31, 2007
     6  
 
        
Notes to Monthly Operating Report
        
 
        
Note 1. Basis of Presentation
     7  
Note 2. Reorganization Proceedings
     9  
Note 3. Financing
     10  
Note 4. Liabilities Subject to Compromise
     12  
Note 5. Reorganization Items
     13  
Note 6. Post-petition Accounts Payable
     13  
 
        
Schedules
        
 
        
Schedule 1. Cash Disbursements by Debtors
     14  
Schedule 2. Payroll Taxes Paid
     15  
Schedule 3. Post-petition Sales, Use and Property Taxes Paid
     16  
Other Information
While Dana Corporation (Dana) continues its reorganization under Chapter 11 of the United States Bankruptcy Code (the Bankruptcy Code), investments in Dana securities are highly speculative. Although shares of Dana common stock continue to trade on the OTC Bulletin Board under the symbol “DCNAQ,” the trading prices of the shares may have little or no relationship to the actual recovery, if any, by the holders under any eventual court-approved reorganization plan. The opportunity for any recovery by holders of Dana’s common stock under such reorganization plan is uncertain, and Dana’s shares may be cancelled without any compensation pursuant to such plan.
Case Number: 06-10354 (BRL) (Jointly Administered)

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DANA CORPORATION
DEBTOR IN POSSESSION
CONDENSED STATEMENT OF INCOME (LOSS)
WITH DCC ON AN EQUITY BASIS (UNAUDITED)
                 
    Month Ended     Year to Date  
    March 31, 2007     March 31, 2007  
    (in millions)  
Net sales
   $ 786     $ 2,145  
Costs and expenses
                
Cost of sales
     718       2,043  
Selling, general and administrative expenses
     39       96  
Realignment charges
     11       19  
Other income, net
     14       42  
 
            
Income from operations
     32       29  
Interest expense (contractual interest of $16 in March and $45 year to date)
     7       18  
Reorganization items, net
     10       37  
 
            
Income (loss) before income taxes
     15       (26 )
Income tax expense (benefit)
     (3 )     15  
Minority interest
     1       3  
Equity in earnings of affiliates
     2       8  
 
            
Income (loss) from continuing operations
     19       (36 )
Loss from discontinued operations
     (56 )     (56 )
 
            
Net loss
   $ (37 )   $ (92 )
 
            
The accompanying notes are an integral part of the financial statements.
Case Number: 06-10354 (BRL) (Jointly Administered)

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DANA CORPORATION
DEBTOR IN POSSESSION
CONDENSED BALANCE SHEET
WITH DCC ON AN EQUITY BASIS (UNAUDITED)
         
    March 31, 2007  
    (in millions)  
Assets
        
Current assets
        
Cash and cash equivalents
   $ 1,197  
Accounts receivable
        
Trade
     1,334  
Other
     265  
Inventories
     729  
Assets of discontinued operations
     206  
Other current assets
     141  
 
      
Total current assets
     3,872  
Investments and other assets
     998  
Investments in equity affiliates
     408  
Property, plant and equipment, net
     1,731  
 
      
Total assets
   $ 7,009  
 
      
 
        
Liabilities and Shareholders’ Deficit
        
Current liabilities
        
Notes payable, including current portion of long-term debt
   $ 993  
Accounts payable
     1,051  
Liabilities of discontinued operations
     144  
Other accrued liabilities
     741  
 
      
Total current liabilities
     2,929  
 
        
Liabilities subject to compromise
     4,340  
 
Deferred employee benefits and other noncurrent liabilities
     510  
Long-term debt
     14  
Minority interest in consolidated subsidiaries
     77  
 
        
Shareholders’ deficit
     (861 )
 
      
Total liabilities and shareholders’ deficit
   $ 7,009  
 
      
The accompanying notes are an integral part of the financial statements.
Case Number: 06-10354 (BRL) (Jointly Administered)

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DANA CORPORATION
DEBTOR IN POSSESSION
CONDENSED STATEMENT OF CASH FLOWS
WITH DCC ON AN EQUITY BASIS (UNAUDITED)
                 
    Month Ended     Year to Date  
    March 31, 2007     March 31, 2007  
    (in millions)     (in millions)  
Operating activities
                
Net loss
   $ (37 )   $ (92 )
Depreciation and amortization
     23       69  
Loss on sale of businesses
     27       14  
Increase in working capital
     (24 )     (55 )
Unremitted equity in earnings of affiliates
     (2 )     (8 )
Other
     8       33  
 
            
Net cash flows used for operating activities
     (5 )     (39 )
 
            
 
                
Investing activities
                
Purchases of property, plant and equipment
     (15 )     (39 )
Proceeds from sale of assets
     277       303  
 
            
Net cash flows provided by investing activities
     262       264  
 
            
 
                
Financing activities
                
Net change in short-term debt
     (5 )     67  
Proceeds from DIP Credit Agreement
             200  
 
            
Net cash flows provided by (used for) financing activities
     (5 )     267  
 
            
 
                
Net increase in cash and cash equivalents
     252       492  
Cash and cash equivalents — beginning of period
     945       705  
 
            
Cash and cash equivalents — end of period
   $ 1,197     $ 1,197  
 
            
The accompanying notes are an integral part of the financial statements.
Case Number: 06-10354 (BRL) (Jointly Administered)

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DANA CORPORATION, ET AL.
DEBTOR IN POSSESSION
NOTES TO MONTHLY OPERATING REPORT
(Dollars in millions)
Note 1. Basis of Presentation
General
     Dana and its consolidated subsidiaries are a leading supplier of axle, driveshaft, engine, structural, sealing and thermal products. Dana designs and manufactures products for every major vehicle producer in the world and is focused on being an essential partner to its automotive, commercial truck and off-highway vehicle customers.
     On March 3, 2006 (the Filing Date), Dana and forty of its wholly-owned domestic subsidiaries (collectively, the Debtors) filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). These Chapter 11 cases are being administered jointly under Case Number 06-10354 (BRL) and are collectively referred to as the “Bankruptcy Cases.” A listing of the Debtors and their respective case numbers is set forth at the beginning of this Monthly Operating Report. Neither DCC and its subsidiaries nor any of Dana’s non-U.S. subsidiaries are Debtors. See Note 2 for more information about the reorganization proceedings.
     This Monthly Operating Report has been prepared solely for the purpose of complying with the monthly reporting requirements applicable in the Bankruptcy Cases and is in a format acceptable to the Office of the United States Trustee for the Southern District of New York (the U.S. Trustee) and to the lenders under the DIP Credit Agreement which is discussed in Note 3. The financial information contained herein is limited in scope and covers a limited time period. Moreover, such information is unaudited and, as discussed below, is not prepared in accordance with accounting principles generally accepted in the United States (GAAP). Accordingly, this Monthly Operating Report should not be used for investment purposes.
Case Number: 06-10354 (BRL) (Jointly Administered)

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Accounting Requirements
     The condensed financial statements herein have been prepared in accordance with the guidance in American Institute of Certified Public Accountants Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code” (SOP 90-7), which is applicable to companies operating under Chapter 11. SOP 90-7 generally does not change the manner in which financial statements are prepared. However, it does require that the financial statements for periods subsequent to the filing of the Chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business.
Financial Statements Presented
     The unaudited condensed financial statements and supplemental information contained herein present the condensed financial information of Dana and its Debtor and non-Debtor subsidiaries with DCC accounted for on an equity basis. Accordingly, inter-company transactions with DCC have not been eliminated in these financial statements and are presented as intercompany loans and payables. This presentation of condensed Dana financial statements with DCC on an equity basis, while consistent in format with the financial information required to be provided to the lenders under the DIP Credit Agreement and acceptable to the U.S. Trustee, does not conform to GAAP, which requires that DCC and its subsidiaries be consolidated along with Dana’s other majority-owned subsidiaries.
     For consolidated financial statements for Dana and its consolidated subsidiaries prepared in conformity with GAAP and the notes thereto, see Dana’s Annual Report on Form 10-K for the year ended December 31, 2006 (the 2006 Form 10-K) and Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, which have been filed with the U.S. Securities and Exchange Commission.
     The condensed statements of income (loss) and cash flows presented herein are for the month and the three months ended March 31, 2007. “Schedule 1. Cash Disbursements by Debtors” contains further information regarding cash disbursements made by each of the Debtors during the post-petition period of March 1, 2007 to March 31, 2007.
     The condensed financial statements presented herein with DCC accounted for on an equity basis have been derived from Dana’s internal books and records. They include normal recurring adjustments and adjustments that are consistent with those made for financial statements prepared in accordance with GAAP. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.
     Although the financial information used in the preparation of this report was subjected to the procedures customarily applied in the preparation of Dana’s quarterly financial information prepared in accordance with GAAP, such procedures were not directed at the specific periods presented in this report. Accordingly, the financial information herein is subject to change and any such change could be material. The results of operations in this report are not necessarily indicative of results which may be expected for any other period or the full year and may not be representative of Dana’s consolidated results of operations, financial position and cash flows in the future.
Case Number: 06-10354 (BRL) (Jointly Administered)

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Note 2. Reorganization Proceedings
     The Debtors are managing their businesses in the ordinary course as debtors in possession, subject to the supervision of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.
     Official committees of the Debtors’ unsecured creditors and retirees not represented by unions have been appointed in the Bankruptcy Cases and, in accordance with the provisions of the Bankruptcy Code, have the right to be heard on all matters that come before the Bankruptcy Court. The Debtors are required to bear certain of the committees’ costs and expenses, including those of their counsel and other professional advisors. An official committee of Dana’s equity security holders was appointed and subsequently disbanded.
     The Debtors have received approval from the Bankruptcy Court to pay or otherwise honor certain of their pre-petition obligations, subject to certain restrictions, including employee wages, salaries, certain benefits and other employee obligations; claims of foreign vendors and certain suppliers that are critical to the Debtors’ continued operation; and certain customer program and warranty claims.
     Under the Bankruptcy Code, the Debtors have the right to assume or reject executory contracts (i.e., contracts that are to be performed by both contract parties after the Filing Date) and unexpired leases, subject to Bankruptcy Court approval and other limitations. In this context, “assuming” executory contracts or unexpired leases generally means that the Debtors will agree to perform their obligations and cure certain existing defaults under the contracts or leases and “rejecting” them means that the Debtors will be relieved of their obligations to perform further under the contracts or leases, which may give rise to an unsecured pre-petition claim for damages for the breach thereof. Since the Filing Date, the Bankruptcy Court has authorized the Debtors to assume or reject certain unexpired leases and executory contracts.
     The Debtors filed their initial schedules of assets and liabilities existing on the Filing Date with the Bankruptcy Court in June 2006 and amendments to certain of these schedules in July and November 2006. The Bankruptcy Court set September 21, 2006 as the general bar date (the date by which most entities that wished to assert a pre-petition claim against a Debtor had to file a proof of claim in writing). Asbestos-related personal injury and wrongful death claimants were not required to file proofs of claim by the bar date, and such claims will be addressed as part of the Chapter 11 proceedings. The Debtors are now in the process of evaluating, investigating and reconciling the claims that were submitted. The Debtors have objected to multiple claims and expect to file additional claim objections with the Bankruptcy Court. Pre-petition claims are recorded as liabilities subject to compromise. Amounts and payment terms for these claims, if applicable, will be established in connection with the Bankruptcy Cases. See Note 4 for more information about liabilities subject to compromise.
Case Number: 06-10354 (BRL) (Jointly Administered)

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     In August 2006, the Bankruptcy Court entered an order establishing procedures for trading in claims and equity securities which is designed to protect the Debtors’ potentially valuable tax attributes (such as net operating loss carryforwards). Under the order, holders or acquirers of 4.75% or more of Dana stock are subject to certain notice and consent procedures prior to acquiring or disposing of Dana common shares. Holders of claims against the Debtors that would entitle them to more than 4.75% of the common shares of reorganized Dana under a confirmed plan of reorganization utilizing the tax benefits provided under Section 382(l)(5) of the Internal Revenue Code may be subject to a requirement to sell down the excess claims if necessary to implement such a plan of reorganization.
     The Debtors have the exclusive right to file a plan of reorganization in the Bankruptcy Cases (the exclusivity period) until September 3, 2007.
Taxes
     Income taxes are accounted for in accordance with SFAS No. 109, “Accounting for Income Taxes.” Current and deferred income tax assets and liabilities are recognized based on events which have occurred and are measured by the enacted tax laws. Based on a history of losses in the U.S. and near-term prospects for continued losses, Dana established a 100% valuation allowance against its U.S. federal deferred tax assets in 2005. Deferred tax assets resulting from subsequent U.S. losses have been offset by increases in the valuation allowances, effectively eliminating the benefit of those losses.
     The Debtors have received Bankruptcy Court approval to pay pre-petition sales, use and certain other taxes in the ordinary course of their businesses. The Debtors believe that they have paid all pre-petition and post-petition taxes when due from before and after the Filing Date. See “Schedule 2. Payroll Taxes Paid” and “Schedule 3. Post-petition Sales, Use and Property Taxes Paid” for information regarding taxes paid. The Debtors believe that all tax returns are being prepared and filed when due, or extended as necessary, and that they are paying all post-petition taxes as they become due or obtaining extensions for the payment thereof.
Contractual Interest Expense
     Contractual interest expense includes amounts relating to debt subject to compromise which is no longer recognized in the statement of income (loss) in accordance with SOP 90-7. The contractual interest that was not recognized was $9 for the month of March 2007 and $27 for the three months ended March 31, 2007.
Note 3. Financing
DIP Credit Agreement
     Dana, as borrower, and its Debtor U.S. subsidiaries, as guarantors, are parties to a Senior Secured Superpriority Debtor-in-Possession Credit Agreement (the DIP Credit Agreement) with Citicorp North America, Inc., as agent, initial lender and an issuing bank, and with Bank of America, N.A. and JPMorgan Chase Bank, N.A., as initial lenders and issuing banks. The DIP Credit Agreement, as amended, has been approved by the Bankruptcy Court. The aggregate amount of the facility is presently $1,550, including a $650 revolving credit facility (of which $400 is available for the issuance of letters of credit) and a $900 term loan facility.
Case Number: 06-10354 (BRL) (Jointly Administered)

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     For a discussion of the terms of the DIP Credit Agreement, see Note 10 to our consolidated financial statements in Item 8 of the 2006 Form 10-K.
     The DIP Credit Agreement requires Dana and its direct and indirect subsidiaries, on a consolidated basis, to maintain (i) a minimum amount of EBITDAR for each period beginning on March 1, 2006 and ending on the last day of each month from May 2006 through March 2008, and (ii) a rolling 12-month cumulative EBITDAR beginning on March 31, 2007 and ending on February 28, 2008, at levels set forth therein. Dana must also maintain minimum availability of $100 under the DIP Credit Agreement at all times.
     The EBITDAR requirement in the DIP Credit Agreement for the period from March 1, 2006 to March 31, 2007 was $175, and the actual EBITDAR for that period was $291. EBITDAR for the first three months of 2007 is calculated as follows:
EBITDAR Calculation
                 
    For the     For the  
    Month Ended     Three Months Ended  
    March 31, 2007     March 31, 2007  
    (in millions)     (in millions)  
Net loss
   $ (37 )   $ (92 )
Plus -
                
Interest expense
     7       18  
Income tax expense
     (3 )     15  
Depreciation and amortization expense
     23       69  
Realignment charges
     11       19  
Reorganization items, net
     10       37  
Loss from discontinued operations
     56       56  
Minority interest
     1       3  
 
                
Less -
                
Equity in income of affiliates
     2       8  
Non-recurring items
     4       17  
Interest income
     3       8  
 
                
 
            
EBITDAR
   $ 59     $ 92  
 
            
     In January 2007, Dana borrowed an additional $200 under the term loan facility. Based on its borrowing base collateral, Dana had availability under the DIP Credit Agreement at March 31, 2007 of $182 after deducting the $100 minimum availability requirement and $307 for outstanding letters of credit.
Case Number: 06-10354 (BRL) (Jointly Administered)

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Canadian Credit Agreement
     In June 2006, Dana Canada Corporation (Dana Canada), as borrower, and certain of its Canadian affiliates, as guarantors, entered into a Credit Agreement (the Canadian Credit Agreement) with Citibank Canada as agent, initial lender and an issuing bank, and with JPMorgan Chase Bank, N.A., Toronto Branch and Bank of America, N.A., Canada Branch, as initial lenders and issuing banks. The Canadian Credit Agreement provides for a $100 revolving credit facility, of which $5 is available for the issuance of letters of credit. At March 31, 2007, based on Dana Canada’s borrowing base collateral, it had availability of $59 after deducting the $20 minimum availability requirement and $2 for currently outstanding letters of credit. Dana Canada had no borrowings under this agreement at March 31, 2007.
European Receivables Loan Facility
     In March 2007, certain of Dana’s European subsidiaries received a commitment from GE Leveraged Loans Limited for the establishment of a five-year accounts receivable securitization program, providing up to the euro equivalent of $225 in available financing. Under the financing program, certain of Dana’s European subsidiaries will sell accounts receivable to Dana Europe Financing (Ireland) Limited, a limited liability company incorporated under the laws of Ireland. This entity, as borrower, will pledge those receivables as collateral for short-term loans from GE Leveraged Loans Limited, as administrative agent, and other participating lenders.
Note 4. Liabilities Subject to Compromise
     As a result of the Chapter 11 filings, the Debtors’ pre-petition indebtedness is subject to compromise or other treatment under a plan of reorganization. SOP 90-7 requires that pre-petition liabilities subject to compromise be reported at the amounts expected to be allowed as claims, even if they may be settled for lesser amounts. The amounts currently classified as liabilities subject to compromise represent Dana’s estimate of known or potential pre-petition claims to be addressed in connection with the Bankruptcy Cases and include the liabilities subject to compromise of the discontinued operations. Such claims remain subject to future adjustments resulting from, among other things, negotiations with creditors, rejection of executory contracts and unexpired leases and orders of the Bankruptcy Court. The terms under which any allowed pre-petition claims will be satisfied will be established by order of the Bankruptcy Court, including any order confirming a plan or plans of reorganization in the Bankruptcy Cases.
     The amount of liabilities subject to compromise reported herein was $4,340 at March 31, 2007. This amount includes an intercompany payable to DCC of $325 which is not eliminated under this basis of presentation. In addition, substantially all of the Debtors’ pre-petition debt is in default due to the bankruptcy filing, and Debtors’ pre-petition debt of $1,585 is also included within liabilities subject to compromise. In accordance with SOP 90-7, following the Filing Date Dana discontinued recording interest expense on debt classified as liabilities subject to compromise. Contractual interest on all debt, including the portion classified as liabilities subject to compromise, amounted to $16 and $45 for the one month and three months ended March 31, 2007.
Case Number: 06-10354 (BRL) (Jointly Administered )

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Note 5. Reorganization Items
     SOP 90-7 requires that reorganization items, such as professional fees directly related to the process of reorganizing under Chapter 11 and provisions and adjustments to reflect the carrying value of certain pre-petition liabilities at their estimated allowable claim amounts, be reported separately. The Debtors’ reorganization expense items for the month of March 2007 consisted of professional fees partially offset by interest income and gains from settlements with suppliers.
     Pursuant to orders of the Bankruptcy Court, professionals retained by the Debtors and by the official statutory committees appointed in the Bankruptcy Cases are entitled to receive payment for their fees and expenses on a monthly basis, subject to compliance with certain procedures established by the Bankruptcy Code and orders of the Bankruptcy Court. In some cases, the professionals retained by the Debtors in the Bankruptcy Cases are also providing services to the Debtors’ non-Debtor subsidiaries and are being paid for such services by the non-Debtor subsidiaries. With respect to the Debtors’ foreign non-Debtor subsidiaries, payments for services to these entities in U.S. dollars are being made by the Debtors and reimbursed by the foreign non-Debtor subsidiaries through the ordinary course netting process established under the Debtors’ consolidated cash management system. In addition, under the terms of the DIP Credit Agreement, the Debtors are obligated to reimburse the lenders for the fees and expenses of their professionals. The Debtors are making the required payments to such professionals, as described above, and believe they are current with regard to such payments.
Note 6. Post-petition Accounts Payable
     The Debtors believe that all undisputed post-petition accounts payable have been and are being paid under agreed payment terms and the Debtors intend to continue paying all undisputed post-petition obligations as they become due.
See “Schedule 1. Cash Disbursements by Debtors” for post-petition disbursements in March 2007.
Case Number: 06-10354 (BRL) (Jointly Administered)

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In re Dana Corporation, et al.    
Case No. 06-10354 (BRL) (Jointly Administered)   Schedule 1
Reporting Period: March 1, 2007 — March 31, 2007    
Cash Disbursements by Debtors    
(Dollars in 000s)    
             
        March, 2007  
Petitioning Entities:   Case Number:   Disbursements  
Dana Corporation
   06-10354   $ 478,550  
Dakota New York Corp
   06-10351        
Brake Systems, Inc.
   06-10355        
BWDAC, Inc.
   06-10357        
Coupled Products, Inc.
   06-10359        
Dana Atlantic, LLC
   06-10360     433  
Dana Automotive Aftermarket, Inc.
   06-10362        
Dana Brazil Holdings I, LLC
   06-10363        
Dana Brazil Holdings, LLC
   06-10364        
Dana Information Technology, LLC
   06-10365        
Dana International Finance, Inc.
   06-10366        
Dana International Holdings, Inc.
   06-10367        
Dana Risk Management Services, Inc.
   06-10368     183  
Dana Technology, Inc.
   06-10369        
Dana World Trade Corporation
   06-10370        
Dandorr L.L.C.
   06-10371        
Dorr Leasing Corporation
   06-10372        
DTF Trucking, Inc.
   06-10373        
Echlin-Ponce, Inc.
   06-10374        
EFMG, LLC
   06-10375        
EPE, Inc.
   06-10376        
ERS, LLC
   06-10377        
Flight Operations, Inc.
   06-10378        
Friction, Inc.
   06-10379        
Friction Materials, Inc.
   06-10380        
Glacier Vandervell, Inc.
   06-10381     342  
Hose & Tubing Products, Inc.
   06-10382        
Lipe Corporation
   06-10383        
Long Automotive, LLC
   06-10384        
Long Cooling, LLC
   06-10385        
Long USA, LLC
   06-10386        
Midland Brake, Inc.
   06-10387        
Prattville Mfg, Inc.
   06-10388        
Reinz Wisconsin Gasket, LLC
   06-10390     1  
Spicer Heavy Axle & Brake, Inc.
   06-10391        
Spicer Heavy Axle Holdings, Inc.
   06-10392        
Spicer Outdoor Power Equipment Components
   06-10393        
Torque-Traction Integration Technologies, LLC
   06-10394     1  
Torque-Traction Manufacturing Technologies, LLC
   06-10395     73  
Torque-Traction Technologies, LLC
   06-10396        
United Brake Systems, Inc.
   06-10397        
 
          
Total Cash Disbursements
       $ 479,583 (a)
 
          
 
(a)   Total disbursements may include certain payments made by the Debtors on behalf of non-Debtors pursuant to their cash management order. Disbursements are actual cash disbursements incurred for the month.

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In re Dana Corporation, et al.   Schedule 2
Case No. 06-10354 (BRL) (Jointly Administered)    
Reporting Period: March 1, 2007 — March 31, 2007    
Payroll Taxes Paid    
     
(Dollars in 000s)    
                                         
    FEDERAL                           TOTALS
            Liabilities incurred or withheld            
    FIT   FICA-ER   FICA-EE   FUTA        
 
   $ 7,413     $ 4,627     $ 4,627     $ 812     $ 17,479  
                                         
            Deposits released and pending            
    FIT   FICA-ER   FICA-EE   FUTA        
 
   $ (7,413 )   $ (4,627 )   $ (4,627 )   $ (812 )   $ (17,479 )
                                         
     
     
    STATE                           TOTALS
            Liabilities incurred or withheld            
    SIT   SUI-ER   SUI-EE   SDI-EE        
 
   $ 2,091     $ 6,436     $ 6     $ 7     $ 8,540  
                                         
            Deposits released and pending            
    SIT   SUI-ER   SUI-EE   SDI-EE        
 
   $ (2,091 )   $ (6,436 )   $ (6 )   $ (7 )   $ (8,540 )
                                         
     
     
    LOCAL                           TOTALS
            Liabilities incurred or withheld                
    CIT                                
 
   $ 488                             $ 488  
                                         
            Deposits released and pending                
    CIT                                
 
   $ (488 )                           $ (488 )

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In re Dana Corporation, et al.   Schedule 3
Reporting Period: March 1, 2007 — March 31, 2007    
Case No. 06-10354 (BRL) (Jointly Administered)    
Post-petition Sales, Use and Property Taxes Paid    
     
(Dollars in 000s)    
                 
Tax Authority   State   Type of Tax   Taxes Paid  
Alabama Dept of Revenue
   AL   Franchise     (A )
Arkansas Secretary of State
   AR   Sales/use     41  
California Board of Equalization
   CA   Franchise     8  
California Board of Equalization
   CA   Property     1  
City of Bell
   CA   Property     5  
Connecticut Dept of Revenue
   CT   Franchise     (A )
Florida Dept of Revenue
   FL   Sales/use     9  
Georgia Secetary of State
   GA   Annual Report     (A )
Illinois Dept of Revenue
   IL   Sales/use     5  
Indiana Dept of Revenue
   IN   Sales/use     16  
Indiana Secretary of State
   IN   Annual Report     (A )
Iowa Dept of Revenue
   IA   Sales/use     3  
Kentucky Dept of Revenue
   KY   Sales/use     62  
Massachusetts Commonwealth
   MA   Annual Report     (A )
Michigan Dept of Treasury
   MI   Sales/use     20  
Minnesota Dept of Revenue
   MN   Income     2  
Mississippi Office of Revenue
   MS   Franchise     10  
Missouri Dept of Revenue
   MO   Sales/use     15  
New York State Corporation Tax
   NY   Income     1  
Noble County Treasurer
   IN   Property     17  
North Carolina Dept of Revenue
   NC   Annual Report     (A )
North Carolina Dept of Revenue
   NC   Franchise     (A )
Ohio State Treasurer
   OH   Miscellaneous     1  
Ohio State Treasurer
   OH   Sales/use     92  
Oklahoma Tax Commission
   OK   Franchise     (A )
Pennsylvania Dept of Revenue
   PA   Franchise     7  
Pennsylvania Dept of Revenue
   PA   Sales/use     (A )
South Carolina Dept of Revenue
   SC   Income     47  
South Carolina Dept of Revenue
   SC   Sales/use     1  
State of Michigan
   MI   Single Business     (A )
State of Utah
   UT   Annual Report     (A )
Tennessee Secretary of State
   TN   Annual Report     (A )
Texas Comptroller
   TX   Sales/use     6  
Town of Gordonsville
   TN   Property     24  
Virginia Dept of Taxation
   VA   Property     5  
Virginia State Corp Commission
   VA   Annual Report     (A )
Washington State Dept of Revenue
   WA   Excise     7  
West Virginia State Tax Dept
   WV   Income     (A )
Wisconsin Dept of Revenue
   WI   Annual Report     (A )
 
              
Total
           $ 431  
 
              
 
(A)   Amount paid was less than one thousand dollars

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