EX-99.2 4 dex992.htm PRESS RELEASE OF DANA CORPORATION Press Release of Dana Corporation

Exhibit 99.2

 

  Contact: Michelle Hards
     (419) 535-4636
     michelle.hards@dana.com

 

DANA CORPORATION REPORTS

STRONGER THIRD-QUARTER EARNINGS

 

  • Third-quarter earnings significantly improved over 2002

 

  • Full-year net income forecast raised to range of $210 to $220 million

 

  • Net debt-to-capital ratio reduced to below 51 percent

 

  • Fourth-quarter dividend increased to 6 cents per share

 

TOLEDO, Ohio, October 24, 2003 — Dana Corporation (NYSE: DCN) today announced third-quarter net income totaling $61 million, or 41 cents per share, on sales of $2.4 billion. These results are a significant improvement over net income of $4 million, or 2 cents per share, on sales of $2.4 billion during the same period last year.

 

Third-quarter 2003 net income of $61 million included $9 million in after-tax gains from the continued reduction of Dana Credit Corporation (DCC) assets, and $9 million in after-tax gains from early retirement of debt. Excluding these items, quarterly net income totaled $43 million, or 29 cents per share. Third-quarter 2002 reported net income of $4 million included $40 million in after-tax charges associated with the company’s restructuring plan and $6 million of after-tax income from divested businesses classified as “discontinued operations.” Excluding these items, third-quarter 2002 net income totaled $38 million, or 26 cents per share.

 

“The plan we initiated two years ago is now yielding results, achieving or surpassing every goal associated with it,” said Bill Carroll, Dana’s Acting President and Chief Operating Officer. “Our performance, evident in today’s reported results, continues to validate our strategic course. We’re doing what we said we’d do. We are delivering world-class support to our customers, our margins are improving, we are paying down debt, and we are increasing the dividend payout to our shareholders.”

 

Looking ahead to 2004, Mr. Carroll noted that, “We expect that the costs associated with our seven concurrent product launches will be largely behind us, and that we will begin to deliver full returns on these programs. Coupled with a steadily improving heavy-truck market and stability in the light-truck market, we believe Dana is positioned for further improved performance next year.”

 

(more)

Nine-Month Results Improved

 

In the first nine months of 2003, Dana’s net income totaled $154 million, or $1.04 per share, on sales of $7.4 billion. This compares favorably to a loss of $173 million, or $1.16 per share, on sales of $7.3 billion during the first nine months of 2002. Nine-month net income in 2003 included net gains from divestitures and the repurchase of debt, and losses from discontinued operations. Net income in the period in 2002 reflected a charge of $220 million, or $1.48 per share, associated with the required adoption of FAS 142 related to accounting for goodwill, as well as restructuring charges, divestiture gains, and income from discontinued operations.

 

Net Debt-to-Capital Reduced; Asset Reduction Continues at DCC

 

“During the third quarter, we used a portion of the divestiture proceeds we received earlier this year to repurchase some of our long-term bonds at attractive prices,” said Dana Chief Financial Officer Bob Richter. “We bought back bonds with a face value of $158 million, generating an after-tax gain of $9 million. This helped bring our ratio of net debt-to-capital at Sept. 30, exclusive of DCC, down to 50.7 percent from 57.0 percent at the beginning of the year.

 

“We also reduced DCC assets by another $70 million during the quarter,” he said. “This brings the total asset reduction since we began the program in October 2001, to $780 million through September 30th, with a cumulative net after-tax gain of $58 million.”

 

2003 Net Income Forecast Raised; 2004 Guidance Reaffirmed

 

“We look forward to building on the momentum of all that we have accomplished over the last two years,” Mr. Richter added. “On the strength of the third-quarter results, we are again raising our guidance for 2003 full-year net income to a range of $210 to $220 million and reaffirming our belief that earnings in 2004 will be at least $300 million, which would be just over $2 per share.”

 

Dividend Increased to 6 Cents per Share for the Fourth Quarter

 

On Oct. 21, Dana announced that it would raise its dividend to 6 cents per share for the fourth quarter. “We are pleased that our continuing success in executing our restructuring plan has enabled us to provide our shareholders with this dividend increase,” said Glen Hiner, Dana’s Acting Chairman. “We committed to our shareholders that we would revisit our dividend policy as our results approached what could be considered ‘investment grade’ performance. Our confidence that our net debt-to-capital will be below 50 percent by year-end moves us toward that goal. Increasing the dividend at this time is also consistent with our expectation of continued improvement in earnings and cash flow.”

 

He added, “This action reflects the strong belief of Dana that dividends are an important component of the total return that Dana provides to our shareholders.”

 

(more)

 

2

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 1 p.m. today. To access this recording, please dial (800) 537-8823. A webcast replay of the call will be available after 3 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 vehicle manufacturers and their related aftermarkets. The company employs approximately 60,000 people worldwide. Founded in 1904 and based in Toledo, Ohio, Dana operates hundreds of technology, manufacturing, and customer service facilities in 30 countries. The company reported 2002 sales of $9.5 billion.

 

Certain statements contained in this release constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent Dana’s expectations based on our current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Dana’s actual results could differ materially from those that are anticipated or projected due to a number of factors. These factors include national and international economic conditions; adverse effects from terrorism or hostilities; the strength of other currencies relative to the U.S. dollar; the cyclical nature of the global vehicular industry; the performance of the global aftermarket sector; changes in business relationships with our major customers and in the timing, size and continuation of their and our programs; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and pricing; increases in production or material costs that cannot be recouped in product pricing; the impact of our collective bargaining negotiations and those of our customers in the North American light vehicle sector; the continued success of our cost reduction and cash management programs and of our long-term transformation strategy for the company; costs associated with the tender offer for our common stock that was commenced on July 9, 2003, by ArvinMeritor, Inc.; 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 contained in this release.

 

Dana’s shareholders, and its customers, suppliers and employees, are strongly advised to read carefully Dana’s solicitation/recommendation statement regarding ArvinMeritor’s tender offer, because it contains important information. Free copies of the solicitation/recommendation statement and the related amendments, which have been filed by Dana with the Securities and Exchange Commission, are available at the SEC’s web site at www.sec.gov, or at the Dana web site at www.dana.com, and also by directing requests to Dana’s Investor Relations Department or Dana’s information agent, D.F. King & Co., Inc., at 1-800-901-0068.

 

# # #

 

3

Dana Corporation

Reconciliation to GAAP Presentation

(in millions, except per share amounts)

 

     Three Months Ended September 30
  
     Dollar amounts
     Diluted per share
amounts
  
     2003
    2002
     2003
    2002
  

Operating profit after tax (a)

    $ 43    $ 38     $ 0.29    $ 0.26  

Add items excluded from segment performance measures:

                               

After-tax gains from DCC asset sales

      9      —         0.06      —    

After-tax gains from early retirement of debt

      9      —         0.06         

Restructuring charges after-tax

      —          (40 )     —        (0.27 )

Income from discontinued operations

      —        6       —        0.03  
    
  
 
  

Net income—GAAP basis

    $   61    $ 4     $ 0.41    $ 0.02  
    
  
 
  

 

(a) Operating profit after tax is presented in our Business Segment table as the key internal measure of performance used by management as a measure of segment profitability.

 

Page 1

Dana Corporation

Condensed Statement of Income (Unaudited)

(in millions, except per share amounts)

 

    

Three Months Ended

September 30

  
     2003
     2002
  

Net sales

    $ 2,410     $ 2,356  

Revenue from lease financing and other income

      42       44  
    
 
       2,452       2,400  
    
 

Costs and expenses

                 

Cost of sales

      2,165       2,103  

Selling, general and administrative expenses

      171       199  

Restructuring charges

              34  

Interest expense

      55       63  
    
 
       2,391       2,399  
    
 

Income before income taxes

      61       1  

Income tax expense

      (3 )     (5 )

Minority interest

      (2 )     (4 )

Equity in earnings of affiliates

      5       7  
    
 

Income (loss) from continuing operations

      61       (1 )

Income from discontinued operations

      —         5  
    
 

Net income

    $ 61     $ 4  
    
 

Basic earnings (loss) per share

                 

Income (loss) from continuing operations

    $ 0.41     $ (0.01 )

Income from discontinued operations

              0.03  
    
 

Net income

    $ 0.41     $ 0.02  
    
 

Diluted earnings (loss) per share

                 

Income (loss) from continuing operations

    $ 0.41     $ (0.01 )

Income from discontinued operations

              0.03  
    
 

Net income

    $ 0.41     $ 0.02  
    
 

Average shares outstanding—  

                 

For Basic EPS

      148       148  

For Diluted EPS

      149       149  

 

 

Page 2

Dana Corporation

Condensed Statement of Income (Unaudited)

(in millions, except per share amounts)

 

    

Nine Months Ended

September 30

  
     2003
     2002
  

Net sales

    $ 7,393     $ 7,253  

Revenue from lease financing and other income

      112       172  
    
 
       7,505       7,425  
    
 

Costs and expenses

                 

Cost of sales

      6,624       6,412  

Selling, general and administrative expenses

      580       639  

Restructuring charges

              122  

Interest expense

      170       195  
    
 
       7,374       7,368  
    
 

Income before income taxes

      131       57  

Income tax expense

      (3 )     (40 )

Minority interest

      (6 )     (13 )

Equity in earnings of affiliates

      40       40  
    
 

Income from continuing operations before effect of change in accounting

      162       44  

Income (loss) from discontinued operations

      (8 )     3  
    
 

Income before effect of change in accounting

      154       47  

Effect of change in accounting

              (220 )
    
 

Net income (loss)

    $ 154     $ (173 )
    
 

Basic earnings (loss) per share

                 

Income from continuing operations before effect of change in accounting

    $ 1.10     $ 0.30  

Income (loss) from discontinued operations

      (0.06 )     0.02  

Effect of change in accounting

              (1.49 )
    
 

Net income (loss)

    $ 1.04     $ (1.17 )
    
 

Diluted earnings (loss) per share

                 

Income from continuing operations before effect of change in accounting

    $ 1.09     $ 0.30  

Income (loss) from discontinued operations

      (0.05 )     0.02  

Effect of change in accounting

              (1.48 )
    
 

Net income (loss)

    $ 1.04     $ (1.16 )
    
 

Average shares outstanding—

                 

For Basic EPS

      148       148  

For Diluted EPS

      149       149  

 

Page 3

Dana Corporation

Condensed Balance Sheet (Unaudited)

(in millions)

 

    

September 30

2003

   

December 31

2002

Assets

              

Current assets

              

Cash and cash equivalents

    $ 636    $ 571

Accounts receivable

              

Trade

      1,496      1,348

Other

      313      320

Inventories

      1,167      1,116

Other current assets

      622      763
    
  

Total current assets

      4,234      4,118
    
  

Property, plant and equipment, net

      2,475      2,556

Investment in leases

      658      827

Investments and other assets

      2,117      2,052
    
  

Total assets

    $ 9,484    $ 9,553
    
  

Liabilities and Shareholders’ Equity

              

Current liabilities

              

Notes payable

    $ 584    $ 287

Accounts payable

      1,187      1,004

Other current liabilities

      1,142      1,533
    
  

Total current liabilities

      2,913      2,824
    
  

Long-term debt

      2,653      3,215

Deferred employee benefits and other noncurrent liabilities

      1,968      1,925

Minority interest

      100      107

Shareholders’ equity

      1,850      1,482
    
  

Total liabilities and shareholders’ equity

    $ 9,484    $ 9,553
    
  

 

Page 4

Dana Corporation

Condensed Statement of Cash Flows (Unaudited)

(in millions)

 

    

Three Months Ended

September 30

  
     2003
     2002
  

Net income

    $ 61     $ 4  

Depreciation and amortization

      92       118  

Asset impairment

      9       15  

Gain on divestitures, asset sales and note repurchases

      (7 )     (1 )

Working capital increase

      (33 )     (35 )

Other

      (5 )     (16 )
    
 

Net cash flows—operating activities

      117       85  
    
 

Purchases of property, plant and equipment

      (73 )     (85 )

Payments received on leases

      5       21  

Net loan repayments from customers

      1       4  

Acquisitions

      —         (31 )

Divestitures

      —         163  

Asset sales

      27       8  

Other

      24       (7 )
    
 

Net cash flows—investing activities

      (16 )     73  
    
 

Net change in short-term debt

      88       (71 )

Payments on and repurchases of long-term debt

      (182 )     (28 )

Dividends paid

      (2 )     (2 )

Other

      (1 )     72  
    
 

Net cash flows—financing activities

      (97 )     (29 )
    
 

Net change in cash and cash equivalents

      4       129  

Cash and cash equivalents—beginning of period

      632       318  
    
 

Cash and cash equivalents—end of period

    $ 636     $ 447  
    
 

 

Page 5

Dana Corporation

Condensed Statement of Cash Flows (Unaudited)

(in millions)

 

     Nine Months
Ended
September 30
  
     2003
     2002
  

Net income (loss)

    $ 154     $ (173 )

Depreciation and amortization

      294       360  

Asset impairment

      18       45  

Change in accounting for goodwill

      —         220  

Gain on divestitures, asset sales and note repurchases

      (29 )     (35 )

Working capital increase

      (317 )     (11 )

Other

      (35 )     (46 )
    
 

Net cash flows—operating activities

      85       360  
    
 

Purchases of property, plant and equipment

      (215 )     (250 )

Payments received on leases

      21       46  

Net loan repayments from customers

      12       18  

Acquisitions

      —         (31 )

Divestitures

      145       235  

Asset sales

      206       67  

Other

      33       (18 )
    
 

Net cash flows—investing activities

      202       67  
    
 

Net change in short-term debt

      (9 )     (282 )

Proceeds from long-term debt

      —         285  

Payments on and repurchases of long-term debt

      (225 )     (252 )

Dividends paid

      (5 )     (5 )

Other

      16       75  
    
 

Net cash flows—financing activities

      (223 )     (179 )
    
 

Net change in cash and cash equivalents

      64       248  

Net change in cash—discontinued operations

      1          

Cash and cash equivalents—beginning of period

      571       199  
    
 

Cash and cash equivalents—end of period

    $ 636     $ 447  
    
 

 

Page 6

Dana Corporation

(Including Dana Credit Corporation on an Equity Basis)

Condensed Statement of Income (Unaudited)

(in millions)

 

 

     Three Months
Ended September 30
  
     2003
     2002
  

Net sales

    $ 2,410     $ 2,356  

Other income

      33       20  
    
 
       2,443       2,376  
    
 

Costs and expenses

                 

Cost of sales

      2,176       2,118  

Selling, general and administrative expenses

      156       174  

Restructuring charges

              34  

Interest expense

      40       42  
    
 
       2,372       2,368  
    
 

Income before income taxes

      71       8  

Income tax expense

      (25 )     (12 )

Minority interest

      (2 )     (4 )

Equity in earnings of affiliates

      17       7  
    
 

Income (loss) from continuing operations

      61       (1 )

Income from discontinued operations

              5  
    
 

Net income

    $ 61     $ 4  
    
 

 

Page 7

Dana Corporation

(Including Dana Credit Corporation on an Equity Basis)

Condensed Statement of Income (Unaudited)

(in millions)

 

 

    

Nine Months

Ended September 30

  
     2003
     2002
  

Net sales

    $ 7,393     $ 7,253  

Other income

      71       47  
    
 
       7,464       7,300  
    
 

Costs and expenses

                 

Cost of sales

      6,658       6,457  

Selling, general and administrative expenses

      529       558  

Restructuring charges

              122  

Interest expense

      123       131  
    
 
       7,310       7,268  
    
 

Income before income taxes

      154       32  

Income tax expense

      (58 )     (46 )

Minority interest

      (6 )     (13 )

Equity in earnings of affiliates

      72       71  
    
 

Income from continuing operations before effect of change in accounting

      162       44  

Income (loss) from discontinued operations

      (8 )     3  
    
 

Income before effect of change in accounting

      154       47  

Effect of change in accounting

              (220 )
    
 

Net income (loss)

    $ 154     $ (173 )
    
 

 

Page 8

Dana Corporation

(Including Dana Credit Corporation on an Equity Basis)

Condensed Balance Sheet (Unaudited)

(in millions)

 

 

     September 30              December 31
     2003
              2002

Assets

                        

Current assets

                        

Cash and cash equivalents

    $ 550              $ 551

Accounts receivable

                        

Trade

      1,496                1,348

Other

      306                209

Inventories

      1,167                1,116

Other current assets

      582                716
    
            

Total current assets

      4,101                3,940
    
            

Property, plant and equipment, net

      2,235                2,253

Investments and other assets

      2,516                2,375
    
            

Total assets

    $ 8,852              $ 8,568
    
            

Liabilities and Shareholders’ Equity

                        

Current liabilities

                        

Notes payable

    $ 359              $ 53

Accounts payable

      1,187                1,004

Other current liabilities

      1,287                1,555
    
            

Total current liabilities

      2,833                2,612
    
            

Long-term debt

      2,090                2,462

Deferred employee benefits and other noncurrent liabilities

      1,980                1,906

Minority interest

      99                106

Shareholders’ equity

      1,850                1,482
    
            

Total liabilities and shareholders’ equity

    $ 8,852              $ 8,568
    
            

 

Page 9

Dana Corporation

(Including Dana Credit Corporation on an Equity Basis)

Cash Flow Impact on Net Debt

(in millions)

 

 

    

Three Months

Ended

September 30

  
     2003
               2002
  

Sources

                           

Net income

    $ 61               $ 4  

Depreciation

      78                 96  

Asset sales (non-restructuring)

      1                 1  

Divestitures

                        31  

Working capital decrease (increase)

      3                 (39 )
    
           
       143                 93  
    
           

Uses

                           

Capital spend

      (76 )               (52 )

Dividends

      (2 )               (2 )

Acquisitions

                        (31 )

Net changes in other accounts

      11                 81  
    
           
       (67 )               (4 )
    
           

October 2001 restructuring cash impact

                           

After-tax charges

                        40  

Cash payments

      (28 )               (30 )

Proceeds from asset sales

                        4  
    
           
       (28 )               14  
    
           

Cash change in net debt

    $ 48               $ 103  
    
           

 

Page 10

Dana Corporation

(Including Dana Credit Corporation on an Equity Basis)

Cash Flow Impact on Net Debt

(in millions)

 

 

    

Nine Months

Ended

September 30

  
     2003
               2002
  

Sources

                           

Net income (loss)

    $ 154               $ (173 )

Change in accounting for goodwill

                        220  
    
           

Net income before goodwill change

      154                 47  

Depreciation

      249                 291  

Asset sales (non-restructuring)

      7                 12  

Divestitures

      145                 41  

Working capital decrease (increase)

      (219 )               (15 )
    
           
       336                 376  
    
           

Uses

                           

Capital spend

      (209 )               (186 )

Dividends

      (5 )               (5 )

Acquisitions

                        (31 )

Net changes in other accounts

      (19 )               55  
    
           
       (233 )               (167 )
    
           

October 2001 restructuring cash impact

                           

After-tax charges

                        119  

Cash payments

      (92 )               (108 )

Proceeds from asset sales

      37                 23  
    
           
       (55 )               34  
    
           

Cash change in net debt

    $ 48               $ 243  
    
           

 

Page 11

Dana Corporation

Condensed Consolidating Statement of Income (Unaudited)

(in millions)

 

     Three Months Ended September 30, 2003
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Net sales

    $ 2,410     $       $       $ 2,410  

Other income

      33       27       (18 )     42  
    
 
 
 
       2,443       27       (18 )     2,452  
    
 
 
 

Costs and expenses

                                 

Cost of sales

      2,176               (11 )     2,165  

Selling, general and administrative expenses

      156       22       (7 )     171  

Interest expense

      40       15               55  
    
 
 
 
       2,372       37       (18 )     2,391  
    
 
 
 

Income (loss) before income taxes

      71       (10 )     —         61  

Income tax benefit (expense)

      (25 )     22               (3 )

Minority interest

      (2 )                     (2 )

Equity in earnings of affiliates

      17       5       (17 )     5  
    
 
 
 

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 12

Dana Corporation

Condensed Consolidating Statement of Income (Unaudited)

(in millions)

 

     Nine Months Ended September 30, 2003
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Net sales

    $ 7,393     $       $       $ 7,393  

Other income

      71       101       (60 )     112  
    
 
 
 
       7,464       101       (60 )     7,505  
    
 
 
 

Costs and expenses

                                 

Cost of sales

      6,658               (34 )     6,624  

Selling, general and administrative expenses

      529       77       (26 )     580  

Interest expense

      123       47               170  
    
 
 
 
       7,310       124       (60 )     7,374  
    
 
 
 

Income (loss) before income taxes

      154       (23 )     —         131  

Income tax benefit (expense)

      (58 )     55               (3 )

Minority interest

      (6 )                     (6 )

Equity in earnings of affiliates

      72       16       (48 )     40  
    
 
 
 

Income from continuing operations

      162       48       (48 )     162  

Loss from discontinued operations

      (8 )                     (8 )
    
 
 
 

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 13

Dana Corporation

Condensed Consolidating Statement of Income (Unaudited)

(in millions)

 

     Three Months Ended September 30, 2002
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Net sales

    $ 2,356     $       $       $ 2,356  

Other income

      20       55       (31 )     44  
    
 
 
 
       2,376       55       (31 )     2,400  
    
 
 
 

Costs and expenses

                                 

Cost of sales

      2,118               (15 )     2,103  

Selling, general and administrative expenses

      174       37       (12 )     199  

Restructuring charges

      34                       34  

Interest expense

      42       21               63  
    
 
 
 
       2,368       58       (27 )     2,399  
    
 
 
 

Income (loss) before income taxes

      8       (3 )     (4 )     1  

Income tax benefit (expense)

      (12 )     6       1       (5 )

Minority interest

      (4 )                     (4 )

Equity in earnings of affiliates

      7       6       (6 )     7  
    
 
 
 

Income (loss) from continuing operations

      (1 )     9       (9 )     (1 )

Income from discontinued operations

      5                       5  
    
 
 
 

Net income

    $ 4     $ 9     $ (9 )   $ 4  
    
 
 
 

 

This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis.

 

Page 14

Dana Corporation

Condensed Consolidating Statement of Income (Unaudited)

(in millions)

 

     Nine Months Ended September 30, 2002
  
     Dana
with DCC on
Equity Basis
     DCC
    Elimination
Entries
     Dana
Consolidated
  

Net sales

    $ 7,253     $      $       $ 7,253  

Other income

      47       220      (95 )     172  
    
 
  
 
       7,300       220      (95 )     7,425  
    
 
  
 

Costs and expenses

                                

Cost of sales

      6,457              (45 )     6,412  

Selling, general and administrative expenses

      558       120      (39 )     639  

Restructuring charges

      122                      122  

Interest expense

      131       64              195  
    
 
  
 
       7,268       184      (84 )     7,368  
    
 
  
 

Income before income taxes

      32       36      (11 )     57  

Income tax benefit (expense)

      (46 )     3      3       (40 )

Minority interest

      (13 )                    (13 )

Equity in earnings of affiliates

      71       18      (49 )     40  
    
 
  
 

Income from continuing operations

      44       57      (57 )     44  

Income from discontinued operations

      3                      3  
    
 
  
 

Income before effect of change in accounting

      47       57      (57 )     47  

Effect of change in accounting

      (220 )                    (220 )
    
 
  
 

Net income (loss)

    $ (173 )   $ 57    $ (57 )   $ (173 )
    
 
  
 

 

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 Balance Sheet (Unaudited)

(in millions)

 

     September 30, 2003
     Dana
with DCC on
Equity Basis
    DCC
    Elimination
Entries
     Dana
Consolidated

Assets

                             

Current assets

                             

Cash and cash equivalents

    $ 550    $ 86    $       $ 636

Accounts receivable

                             

Trade

      1,496                     1,496

Other

      306      7              313

Inventories

      1,167                     1,167

Other current assets

      582      211      (171 )     622
    
  
  
 

Total current assets

      4,101      304      (171 )     4,234
    
  
  
 

Property, plant and equipment, net

      2,235      16      224       2,475

Investment in leases

             882      (224 )     658

Investments and other assets

      2,516      520      (919 )     2,117
    
  
  
 

Total assets

    $ 8,852    $ 1,722    $ (1,090 )   $ 9,484
    
  
  
 

Liabilities and Shareholders’ Equity

                             

Current liabilities

                             

Notes payable

    $ 359    $ 225    $       $ 584

Accounts payable

      1,187                     1,187

Other current liabilities

      1,287      26      (171 )     1,142
    
  
  
 

Total current liabilities

      2,833      251      (171 )     2,913
    
  
  
 

Long-term debt

      2,090      563              2,653

Deferred employee benefits and other noncurrent liabilities

      1,980      584      (596 )     1,968

Minority interest

      99      1              100

Shareholders’ equity

      1,850      323      (323 )     1,850
    
  
  
 

Total liabilities and shareholders’ equity

    $ 8,852    $ 1,722    $ (1,090 )   $ 9,484
    
  
  
 

 

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)

 

     December 31, 2002
     Dana
with DCC on
Equity Basis
    DCC
    Elimination
Entries
     Dana
Consolidated

Assets

                             

Current assets

                             

Cash and cash equivalents

    $ 551    $ 20    $       $ 571

Accounts receivable

                             

Trade

      1,348                     1,348

Other

      209      111              320

Inventories

      1,116                     1,116

Other current assets

      716      105      (58 )     763
    
  
  
 

Total current assets

      3,940      236      (58 )     4,118
    
  
  
 

Property, plant and equipment, net

      2,253      39      264       2,556

Investment in leases

             1,091      (264 )     827

Investments and other assets

      2,375      569      (892 )     2,052
    
  
  
 

Total assets

    $ 8,568    $ 1,935    $ (950 )   $ 9,553
    
  
  
 

Liabilities and Shareholders’ Equity

                             

Current liabilities

                             

Notes payable

    $ 53    $ 234    $       $ 287

Accounts payable

      1,004                     1,004

Other current liabilities

      1,555      37      (59 )     1,533
    
  
  
 

Total current liabilities

      2,612      271      (59 )     2,824
    
  
  
 

Long-term debt

      2,462      753              3,215

Deferred employee benefits and other noncurrent liabilities

      1,906      639      (620 )     1,925

Minority interest

      106      1              107

Shareholders’ equity

      1,482      271      (271 )     1,482
    
  
  
 

Total liabilities and shareholders’ equity

    $ 8,568    $ 1,935    $ (950 )   $ 9,553
    
  
  
 

 

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

Consolidating Cash Flow Impact on Net Debt

(in millions)

 

     Three Months Ended September 30, 2003
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Sources

                                 

Net income

    $ 61     $ 17     $ (17 )   $ 61  

Depreciation

      78       14               92  

Asset sales (non-restructuring)

      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 )

Net changes in other accounts

      11       (4 )     21       28  
    
 
 
 
       (67 )     (5 )     25       (47 )
    
 
 
 

October 2001 restructuring cash impact

                                 

Cash payments

      (28 )                     (28 )

Proceeds from asset sales

                              —    
    
 
 
 
       (28 )     —         —         (28 )
    
 
 
 

Cash change in net debt

    $ 48     $ 52     $ —       $ 100  
    
 
 
 

Analysis of components of increase (decrease) in net debt:

                                 

Net change in short-term debt

    $ 92     $       $       $ 92  

Repurchases of long-term debt

      (140 )                     (140 )

Payments on long-term debt

      3       (52 )             (49 )

Change in cash

      (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 18

Dana Corporation

Consolidating Cash Flow Impact on Net Debt

(in millions)

 

     Nine Months Ended September 30, 2003
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Sources

                                 

Net income

    $ 154     $ 48     $ (48 )   $ 154  

Depreciation

      249       45               294  

Asset sales (non-restructuring)

      7       167       (5 )     169  

Divestitures

      145                       145  

Working capital decrease (increase)

      (219 )     (8 )     2       (225 )
    
 
 
 
       336       252       (51 )     537  
    
 
 
 

Uses

                                 

Capital spend

      (209 )     (9 )     3       (215 )

Dividends

      (5 )                     (5 )

Net changes in other accounts

      (19 )     (11 )     48       18  
    
 
 
 
       (233 )     (20 )     51       (202 )
    
 
 
 

October 2001 restructuring cash impact

                                 

Cash payments

      (92 )                     (92 )

Proceeds from asset sales

      37                       37  
    
 
 
 
       (55 )     —         —         (55 )
    
 
 
 

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

      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 19

Dana Corporation

Consolidating Cash Flow Impact on Net Debt

(in millions)

 

     Three Months Ended September 30, 2002
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Sources

                                 

Net income

    $ 4     $ 8     $ (8 )   $ 4  

Depreciation

      96       22               118  

Asset sales

      1       32       (29 )     4  

Divestitures

      31       132               163  

Working capital increase

      (39 )     (2 )     (4 )     (45 )
    
 
 
 
       93       192       (41 )     244  
    
 
 
 

Uses

                                 

Capital spend

      (52 )     (53 )     20       (85 )

Dividends

      (2 )                     (2 )

Acquisitions

      (31 )                     (31 )

Net changes in other accounts

      81       (83 )     21       19  
    
 
 
 
       (4 )     (136 )     41       (99 )
    
 
 
 

October 2001 restructuring cash impact

                                 

After-tax charges

      40                       40  

Cash payments

      (30 )                     (30 )

Proceeds from asset sales

      4                       4  
    
 
 
 
       14       —         —         14  
    
 
 
 

Cash change in net debt

    $ 103     $ 56     $ —       $ 159  
    
 
 
 

Analysis of components of increase (decrease) in net debt:

                        

Net change in short-term debt

    $ (82 )   $ 23     $       $ (59 )

Proceeds from long-term debt

      —         —                 —    

Proceeds from swap termination

      72                       72  

Payments on long term debt

      (21 )     (22 )             (43 )

Change in cash

      (72 )     (57 )             (129 )
    
 
 
 

Cash change in net debt

      (103 )     (56 )     —         (159 )

Non-cash changes in net debt

      (11 )     (16 )             (27 )
    
 
 
 

Total change in net debt

    $ (114 )   $ (72 )   $ —       $ (186 )
    
 
 
 

 

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

(in millions)

 

     Nine Months Ended September 30, 2002
  
     Dana
with DCC on
Equity Basis
     DCC
     Elimination
Entries
     Dana
Consolidated
  

Sources

                                 

Net income (loss)

    $ (173 )   $ 56     $ (56 )   $ (173 )

Change in accounting for goodwill

      220                       220  
    
 
 
 

Net income before goodwill change

      47       56       (56 )     47  

Depreciation

      291       69               360  

Asset sales

      12       32               44  

Divestitures

      41       194               235  

Working capital increase

      (15 )     (14 )     7       (22 )
    
 
 
 
       376       337       (49 )     664  
    
 
 
 

Uses

                                 

Capital spend

      (186 )     (55 )     (9 )     (250 )

Dividends

      (5 )                     (5 )

Acquisitions

      (31 )                     (31 )

Net changes in other accounts

      55       (97 )     58       16  
    
 
 
 
       (167 )     (152 )     49       (270 )
    
 
 
 

October 2001 restructuring cash impact

                                 

After-tax charges

      119                       119  

Cash payments

      (108 )                     (108 )

Proceeds from asset sales

      23                       23  
    
 
 
 
       34       —         —         34  
    
 
 
 

Cash change in net debt

    $ 243     $ 185     $ —       $ 428  
    
 
 
 

Analysis of components of increase (decrease) in net debt:

                        

Net change in short-term debt

    $ (207 )   $ (63 )   $       $ (270 )

Proceeds from long-term debt

      250       35               285  

Proceeds from swap termination

      72                       72  

Payments on long term debt

      (167 )     (100 )             (267 )

Change in cash

      (191 )     (57 )             (248 )
    
 
 
 

Cash change in net debt

      (243 )     (185 )     —         (428 )

Non-cash changes in net debt

      40       (11 )             29  
    
 
 
 

Total change in net debt

    $ (203 )   $ (196 )   $ —       $ (399 )
    
 
 
 

 

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

LOGO

 

Investor Relations

Dana Corporation

Quarterly Financial Information (Unaudited)

For Nine Months Ended September 30, 2003

(in millions)

 

     External Sales
    Inter-Segment
Sales
    EBIT
     Operating PAT
      Net Profit
      Net Assets
  
     03
    02
    03
    02
    03
     02
     03
      02
      03
      02
      03
      02
  

Automotive Systems Group

    $ 2,773    $ 2,655    $ 95    $ 70    $ 155     $ 153     $ 116      $ 116      $ 52      $ 52      $ 1,912      $ 1,796  

Automotive Aftermarket Group

      1,656      1,678      10      12      94       134       59        82        14        36        1,005        1,001  

Engine and Fluid Management Group

      1,494      1,496      71      75      98       95       64        62        31        28        1,030        948  

Heavy Vehicle Technologies and Systems Group

      1,425      1,378      58      74      93       86       57        53        17        15        635        674  

Dana Commercial Credit

                                                  18        24        18        24        324        258  

Other

      45      46      5      10      (185 )     (164 )     (187 )      (197 )      (5 )      (15 )      13        21  
    
  
  
  
  
 
 
  
  
  
  
  

Continuing Operations

      7,393      7,253      239      241      255       304       127        140        127        140        4,919        4,698  

Discontinued Operations

                                  (9 )     (3 )     (6 )      (1 )      (6 )      (1 )                  

Unusual Items Excluded from Performance Measurement

                                  5       (158 )     33        (92 )      33        (92 )                  

Effect of change in Accounting

                                                           (220 )               (220 )                  
    
  
  
  
  
 
 
  
  
  
  
  

Consolidated

    $ 7,393    $ 7,253    $ 239    $ 241    $ 251     $ 143     $ 154      $ (173 )    $ 154      $ (173 )    $ 4,919      $ 4,698  
    
  
  
  
  
 
 
  
  
  
  
  

North America

    $ 5,300    $ 5,500    $ 61    $ 28    $ 261     $ 351     $ 154      $ 217      $ 41      $ 91      $ 3,003      $ 2,980  

Europe

      1,292      1,111      62      53      79       48       61        42        32        15        1,197        1,095  

South America

      406      367      139      137      58       54       36        33        27        25        338        296  

Asia Pacific

      395      275      2      1      37       12       24        8        13                 179        178  

Dana Commercial Credit

                                                  18        24        18        24        324        258  

Other

                                  (180 )     (161 )     (166 )      (184 )      (4 )      (15 )      (122 )      (109 )
    
  
  
  
  
 
 
  
  
  
  
  

Continuing Operations

      7,393      7,253      264      219      255       304       127        140        127        140        4,919        4,698  

Discontinued Operations

                                  (9 )     (3 )     (6 )      (1 )      (6 )      (1 )                  

Unusual Items Excluded from Performance Measurement

                                  5       (158 )     33        (92 )      33        (92 )                  

Effect of change in Accounting

                                                           (220 )               (220 )                  
    
  
  
  
  
 
 
  
  
  
  
  

Consolidated

    $ 7,393    $ 7,253    $ 264    $ 219    $ 251     $ 143     $ 154      $ (173 )    $ 154      $ (173 )    $ 4,919      $ 4,698  
    
  
  
  
  
 
 
  
  
  
  
  

Information for Discontinued Operations

      155      623      6      50                                                                      
    
  
  
  
                                                                     

 

The differences between the Net Profit (Loss) amounts reported for discontinued operations above and the income (loss) from discontinued operations reported on the condensed statement of income result from the separate reporting of unusual items excluded from performance measurement, which include amounts recorded by our discontinued operations.

 

See Notes 20 and 21 in Dana’s 2002 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

LOGO

 

Investor Relations

Dana Corporation

Quarterly Financial Information (Unaudited)

Q3 – 2003

(in millions)

 

     External Sales
    Inter-
Segment
Sales
    EBIT
     Operating
PAT
      Net Profit
      Net Assets
  
     03
    02
    03
    02
    03
     02
     03
      02
      03
    02
      03
      02
  

Automotive Systems Group

    $ 895    $ 836    $ 33    $ 23    $ 57     $ 42     $ 35      $ 28      $ 12    $ 9      $ 1,912      $ 1,796  

Automotive Aftermarket Group

      571      558      3      5      42       43       26        26        9      12        1,005        1,001  

Engine and Fluid Management Group

      458      473      24      25      28       28       18        18        7      8        1,030        948  

Heavy Vehicle Technologies and Systems Group

      471      474      17      20      38       32       23        20        9      7        635        674  

Dana Commercial Credit

                                                  6        7        6      7        324        258  

Other

      15      15      2      2      (70 )     (48 )     (65 )      (61 )             (5 )      13        21  
    
  
  
  
  
 
 
  
  
  
  
  

Continuing Operations

      2,410      2,356      79      75      95       97       43        38        43      38        4,919        4,698  

Discontinued Operations

                                          7                6               6                    

Unusual Items Excluded from Performance Measurement

                                  12       (50 )     18        (40 )      18      (40 )                  
    
  
  
  
  
 
 
  
  
  
  
  

Consolidated

    $ 2,410    $ 2,356    $ 79    $ 75    $ 107     $ 54     $ 61      $ 4      $ 61    $ 4      $ 4,919      $ 4,698  
    
  
  
  
  
 
 
  
  
  
  
  

North America

    $ 1,709    $ 1,773    $ 19    $ 10    $ 94     $ 96     $ 54      $ 58      $ 15    $ 19      $ 3,003      $ 2,980  

Europe

      410      361      20      16      28       20       15        13        5      4        1,197        1,095  

South America

      157      116      48      48      25       23       16        14        12      11        338        296  

Asia Pacific

      134      106      1      1      13       6       8        4        4      1        179        178  

Dana Commercial Credit

                                                  6        7        6      7        324        258  

Other

                                  (65 )     (48 )     (56 )      (58 )      1      (4 )      (122 )      (109 )
    
  
  
  
  
 
 
  
  
  
  
  

Continuing Operations

      2,410      2,356      88      75      95       97       43        38        43      38        4,919        4,698  

Discontinued Operations

                                          7                6               6                    

Unusual Items Excluded from

                                                                                                

Performance Measurement

                                  12       (50 )     18        (40 )      18      (40 )                  
    
  
  
  
  
 
 
  
  
  
  
  

Consolidated

    $ 2,410    $ 2,356    $ 88    $ 75    $ 107     $ 54     $ 61      $ 4      $ 61    $ 4      $ 4,919      $ 4,698  
    
  
  
  
  
 
 
  
  
  
  
  

Information for Discontinued Operations

             210             17                                                                    
           
         
                                                                   

 

The differences between the Net Profit (Loss) amounts reported for discontinued operations above and the income (loss) from discontinued operations reported on the condensed statement of income result from the separate reporting of unusual items excluded from performance measurement, which include amounts recorded by our discontinued operations.

 

See Notes 20 and 21 in Dana’s 2002 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