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Dana Corporation Reports Significantly Improved Operational Results Net Income Also Includes Net Gains Triggered by Transactions TOLEDO, Ohio, July 21 /PRNewswire-FirstCall/ -- Dana Corporation (NYSE:DCN) today announced that its 2004 second-quarter sales were $2.3 billion, compared to $2.0 billion during the same period last year. Net income for the quarter (including $33 million of unusual net gains) totaled $108 million, or 72 cents per share. This compares to net income (including $5 million of unusual net gains) of $52 million, or 35 cents per share, for the period in 2003. (Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA ) "We are pleased to have delivered another solid quarter of operational performance with net income, exclusive of unusual items, up 60 percent," said Dana Chairman and CEO Mike Burns. "At the same time, we're far from satisfied and continue to pursue greater focus, integration, and productivity in line with our commitment to meeting the needs of our global customers." Second-quarter sales were up 16 percent over the same period last year with the majority of the increase being driven by our new business programs and higher production volumes in the principal markets served by Dana, particularly the North American heavy-truck sector. "Our solid sales growth contributed to stronger bottom-line results," Mr. Burns said. "In addition, we continued to see growth in our gross margin - both year-over-year and sequentially by quarter - as we achieved further cost efficiencies and made progress in addressing the launch costs associated with our structures programs. It's important to note that these improvements were achieved in spite of the higher cost of steel and certain other raw materials that we experienced during the quarter. "We are also enthused by the positive strategic and financial flexibility that we will have when we complete the sale of our automotive aftermarket business," Mr. Burns said. On July 9, Dana announced that it had reached a definitive agreement to sell its automotive aftermarket business to The Cypress Group for approximately $1.1 billion in cash. Transactions Trigger Recognition of $33 Million of Unusual Net Gains The $33 million of unusual net gains included in the second quarter of 2004 included the recognition of $38 million in anticipated tax benefits triggered by the sale of the automotive aftermarket business and transactions that are part of the continuing program to divest assets of Dana Credit Corporation (DCC), which are expected to close during the third quarter. This was partially offset by $5 million of transaction-related expenses. Dana Vice President and Chief Financial Officer Bob Richter explained, "These transactions are expected to generate capital gains. We had capital loss carryforwards from prior periods that were fully reserved. Since we now expect to be able to use the carryforwards to offset the gains, accounting rules require us to recognize the anticipated tax benefit by releasing a portion of the reserve at this time. "While we're happy to benefit from the additional income, we're pleased that even without these unusual items, we still achieved second-quarter net profit of $75 million, or 50 cents per share, which is up substantially over the prior year." First-Half Results Significantly Improved Dana's six-month consolidated sales were $4.6 billion, up from $4.0 billion during the same period last year. Net income during the first half of 2004 was $171 million, or $1.14 per share, including $35 million in unusual net gains. This compares to net income of $93 million, or 63 cents per share, including $15 million in unusual net gains during the initial six months of 2003. "Excluding our unusual items and the results of businesses held for sale, our net income from continuing operations improved by more than 60 percent during the first half of 2004, compared to the same period last year," Mr. Burns said. "Again, this improvement was largely the result of new business and strong production volumes in our principal markets." Full-Year EPS Guidance "While we are optimistic about production levels in the North American heavy-truck sector, the second half of the year will not be without its challenges," Mr. Burns said. "We will continue to be impacted by many of the challenges that we experienced during the first six months of the year, particularly higher raw material costs. In addition, rising North American light-vehicle inventory levels also point to the potential for reductions in production schedules in that sector during the second half of the year. "So even though we will continue to consolidate the results of the automotive aftermarket business until the sale closes, we are not changing our earnings guidance of at least $1.90 per share, excluding unusual items, in 2004." Quarterly Conference Call Scheduled Today at 11 a.m. Dana will discuss its second-quarter results in a conference call at 11 a.m. (EDT) today. The call may be accessed via Dana's web site ( http://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: http://www.dana.com/ . Forward-Looking Statements Certain statements contained in this release constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent Dana's expectations based on our current information and assumptions. Forward-looking statements are inherently subject to risks and uncertainties. Dana's actual results could differ materially from those that are anticipated or projected due to a number of factors. These factors include national and international economic conditions; adverse effects from terrorism or hostilities; the strength of other currencies relative to the U.S. dollar; the cyclical nature of the global vehicular industry; changes in business relationships with our major customers and in the timing, size and continuation of their and our programs; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and pricing; increases in production or material costs that cannot be recouped in product pricing; the continued success of our cost reduction and cash management programs and of our long-term transformation strategy for the company; the success and timing of the divestiture of the automotive aftermarket business; and other factors set out in our public filings with the Securities and Exchange Commission. Dana does not undertake to update any forward-looking statements in this release. Dana Corporation Financial Summary (Unaudited) (in millions, except per share amounts) Three Months Ended June 30 Percent 2004 2003 Change Sales $2,331 $2,012 16% Income from continuing operations $73 $46 59% Income from discontinued operations 35 6 483% Net income $108 $52 108% Income from continuing operations $73 $46 59% Reduction in deferred tax allowance related to DCC asset sales (18) (9) Expenses relating to DCC sale activity 2 2 0% Income from continuing operations, excluding unusual items $57 $39 46% Income from automotive aftermarket business $35 $9 289% Loss from engine management business (3) Income from discontinued operations 35 6 483% Loss on engine management sale 2 Reduction in deferred tax allowance related to aftermarket sale (20) Expenses relating to sale of aftermarket 3 Income from discontinued operations, excluding unusual items $18 $8 125% Diluted earnings per share: Income from continuing operations $0.49 $0.30 63% Income from discontinued operations 0.23 0.05 360% Net income $0.72 $0.35 106% Income from continuing operations, excluding unusual items $0.38 $0.26 46% Income from discontinued operations, excluding unusual items 0.12 0.05 140% Net income, excluding unusual items 0.50 0.31 61% Unusual items 0.22 0.04 450% Net income $0.72 $0.35 106% Dana Corporation Financial Summary (Unaudited) (in millions, except per share amounts) Six Months Ended June 30 Percent 2004 2003 Change Sales $4,642 $3,988 16% Income from continuing operations $123 $82 50% Income from discontinued operations 48 11 336% Net income $171 $93 84% Income from continuing operations $123 $82 50% Gains associated with DCC asset sales (20) (19) 5% Expenses relating to DCC sale activity 2 2 Income from continuing operations, excluding unusual items $105 $65 62% Income from automotive aftermarket business $48 $19 153% Loss from engine management business (8) Income from discontinued operations 48 11 336% Loss on engine management sale 2 Reduction in deferred tax allowance related to aftermarket sale (20) Expenses relating to sale of aftermarket 3 Income from discontinued operations, excluding unusual items $31 $13 138% Diluted earnings per share: Income from continuing operations $0.82 $0.55 49% Income from discontinued operations 0.32 0.08 300% Net income $1.14 $0.63 81% Income from continuing operations, excluding unusual items $0.70 $0.44 59% Income from discontinued operations, excluding unusual items 0.21 0.09 133% Net income, excluding unusual items 0.91 0.53 72% Unusual items 0.23 0.10 130% Net income $1.14 $0.63 81% Dana Corporation Condensed Statement of Income (Unaudited) (in millions, except per share amounts) Three Months Ended June 30 2004 2003 Net sales $2,331 $2,012 Revenue from lease financing and other income 25 43 2,356 2,055 Costs and expenses Cost of sales 2,101 1,838 Selling, general and administrative expenses 126 141 Interest expense 51 55 2,278 2,034 Income before income taxes 78 21 Income tax benefit (expense) (6) 9 Minority interest (3) (1) Equity in earnings of affiliates 4 17 Income from continuing operations 73 46 Income from discontinued operations 35 6 Net income $108 $52 Basic earnings per share Income from continuing operations $0.49 $0.30 Income from discontinued operations 0.23 0.05 Net income $0.72 $0.35 Diluted earnings per share Income from continuing operations $0.49 $0.30 Income from discontinued operations 0.23 0.05 Net income $0.72 $0.35 Average shares outstanding - For Basic EPS 149 148 For Diluted EPS 151 149 Dana Corporation Condensed Statement of Income (Unaudited) (in millions, except per share amounts) Six Months Ended June 30 2004 2003 Net sales $4,642 $3,988 Revenue from lease financing and other income 39 72 4,681 4,060 Costs and expenses Cost of sales 4,206 3,639 Selling, general and administrative expenses 262 277 Interest expense 102 114 4,570 4,030 Income before income taxes 111 30 Income tax benefit (expense) (3) 21 Minority interest (6) (3) Equity in earnings of affiliates 21 34 Income from continuing operations 123 82 Income from discontinued operations 48 11 Net income $171 $93 Basic earnings per share Income from continuing operations $0.83 $0.55 Income from discontinued operations 0.32 0.08 Net income $1.15 $0.63 Diluted earnings per share Income from continuing operations $0.82 $0.55 Income from discontinued operations 0.32 0.08 Net income $1.14 $0.63 Average shares outstanding - For Basic EPS 148 148 For Diluted EPS 150 149 Dana Corporation Condensed Balance Sheet (Unaudited) (in millions) June 30 December 31 Assets 2004 2003 Current assets Cash and cash equivalents $597 $731 Accounts receivable Trade 1,310 1,048 Other 317 326 Inventories 747 743 Assets of discontinued operations 1,324 1,254 Other current assets 459 431 Total current assets 4,754 4,533 Investment in leases 540 622 Investments and other assets 2,286 2,252 Property, plant and equipment, net 2,086 2,210 Total assets $9,666 $9,617 Liabilities and Shareholders' Equity Current liabilities Notes payable $384 $493 Accounts payable 1,241 1,076 Liabilities of discontinued operations 348 307 Other current liabilities 1,135 1,089 Total current liabilities 3,108 2,965 Long-term debt 2,508 2,605 Deferred employee benefits and other noncurrent liabilities 1,807 1,901 Minority interest 101 96 Shareholders' equity 2,142 2,050 Total liabilities and shareholders' equity $9,666 $9,617 Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Three Months Ended June 30 2004 2003 Net income $108 $52 Depreciation and amortization 90 99 Asset impairment 1 3 Gain on divestitures and asset sales (21) (11) Working capital decrease (increase) 58 (47) Deferred taxes (46) (6) Other (73) (11) Net cash flows - operating activities 117 79 Purchases of property, plant and equipment (63) (66) Payments received on leases 3 7 Net loan repayments from customers 1 9 Divestitures 145 Asset sales 52 75 Other (41) 3 Net cash flows - investing activities (48) 173 Net change in short-term debt 38 (184) Payments on long-term debt (45) (37) Dividends paid (18) (2) Other 5 18 Net cash flows - financing activities (20) (205) Net change in cash and cash equivalents 49 47 Net change in cash - discontinued operations 2 1 Cash and cash equivalents - beginning of period 546 584 Cash and cash equivalents - end of period $597 $632 Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Six Months Ended June 30 2004 2003 Net income $171 $93 Depreciation and amortization 183 202 Asset impairment 2 9 Gain on divestitures and asset sales (25) (22) Working capital increase (164) (284) Deferred taxes (41) (13) Other (71) (17) Net cash flows - operating activities 55 (32) Purchases of property, plant and equipment (142) (142) Payments received on leases 6 16 Net loan repayments from customers 2 11 Divestitures 145 Asset sales 155 179 Other (40) 9 Net cash flows - investing activities (19) 218 Net change in short-term debt 153 (97) Proceeds from long-term debt 5 Payments on long-term debt (304) (43) Dividends paid (36) (3) Other 10 17 Net cash flows - financing activities (172) (126) Net change in cash and cash equivalents (136) 60 Net change in cash - discontinued operations 2 1 Cash and cash equivalents - beginning of period 731 571 Cash and cash equivalents - end of period $597 $632 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Three Months Ended June 30 2004 2003 Net sales $2,331 $2,012 Other income 13 27 2,344 2,039 Costs and expenses Cost of sales 2,108 1,849 Selling, general and administrative expenses 125 125 Interest expense 39 39 2,272 2,013 Income before income taxes 72 26 Income tax expense (27) (6) Minority interest (3) (1) Equity in earnings of affiliates 31 27 Income from continuing operations 73 46 Income from discontinued operations 35 6 Net income $108 $52 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Six Months Ended June 30 2004 2003 Net sales $4,642 $3,988 Other income 20 40 4,662 4,028 Costs and expenses Cost of sales 4,222 3,663 Selling, general and administrative expenses 247 241 Interest expense 77 81 4,546 3,985 Income before income taxes 116 43 Income tax expense (38) (12) Minority interest (6) (3) Equity in earnings of affiliates 51 54 Income from continuing operations 123 82 Income from discontinued operations 48 11 Net income $171 $93 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Balance Sheet (Unaudited) (in millions) June 30 December 31 Assets 2004 2003 Current assets Cash and cash equivalents $498 $664 Accounts receivable Trade 1,310 1,048 Other 300 300 Inventories 747 743 Assets of discontinued operations 1,324 1,254 Other current assets 430 399 Total current assets 4,609 4,408 Investments and other assets 2,657 2,580 Property, plant and equipment, net 1,927 2,014 Total assets $9,193 $9,002 Liabilities and Shareholders' Equity Current liabilities Notes payable $213 $260 Accounts payable 1,241 1,076 Liabilities of discontinued operations 348 307 Other current liabilities 1,302 1,235 Total current liabilities 3,104 2,878 Long-term debt 2,050 2,087 Deferred employee benefits and other noncurrent liabilities 1,798 1,893 Minority interest 99 94 Shareholders' equity 2,142 2,050 Total liabilities and shareholders' equity $9,193 $9,002 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt (Unaudited) (in millions) Three Months Ended June 30 2004 2003 Sources Net income $108 $52 Depreciation 82 85 Asset sales 19 19 Divestitures 145 Working capital decrease (increase) 65 (30) 274 271 Uses Capital spend (63) (61) Dividends (18) (2) Restructuring cash payments (26) (20) Deferred taxes (54) (2) Investment in and undistributed earnings of equity affiliates (43) (32) Net changes in other accounts (64) 12 (268) (105) Cash change in net debt $6 $166 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt (Unaudited) (in millions) Six Months Ended June 30 2004 2003 Sources Net income $171 $93 Depreciation 165 171 Asset sales 33 43 Divestitures 145 Working capital increase (115) (222) 254 230 Uses Capital spend (139) (133) Dividends (36) (3) Restructuring cash payments (49) (64) Deferred taxes (50) (6) Investment in and undistributed earnings of equity affiliates (64) (59) Net changes in other accounts (31) 35 (369) (230) Cash change in net debt $(115) $ - Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended June 30, 2004 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Net sales $2,331 $ $ $2,331 Other income 13 24 (12) 25 2,344 24 (12) 2,356 Costs and expenses Cost of sales 2,108 (7) 2,101 Selling, general and administrative expenses 125 6 (5) 126 Interest expense 39 12 51 2,272 18 (12) 2,278 Income before income taxes 72 6 - 78 Income tax benefit (expense) (27) 21 (6) Minority interest (3) (3) Equity in earnings of affiliates 31 (2) (25) 4 Income from continuing operations 73 25 (25) 73 Income from discontinued operations 35 35 Net income $108 $25 $(25) $108 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Six Months Ended June 30, 2004 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Net sales $4,642 $ $ $4,642 Other income 20 46 (27) 39 4,662 46 (27) 4,681 Costs and expenses Cost of sales 4,222 (16) 4,206 Selling, general and administrative expenses 247 26 (11) 262 Interest expense 77 25 102 4,546 51 (27) 4,570 Income (loss) before income taxes 116 (5) - 111 Income tax benefit (expense) (38) 35 (3) Minority interest (6) (6) Equity in earnings of affiliates 51 4 (34) 21 Income from continuing operations 123 34 (34) 123 Income from discontinued operations 48 48 Net income $171 $34 $(34) $171 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended June 30, 2003 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Net sales $2,012 $ $ $2,012 Other income 27 36 (20) 43 2,039 36 (20) 2,055 Costs and expenses Cost of sales 1,849 (11) 1,838 Selling, general and administrative expenses 125 25 (9) 141 Interest expense 39 16 55 2,013 41 (20) 2,034 Income (loss) before income taxes 26 (5) - 21 Income tax benefit (expense) (6) 15 9 Minority interest (1) (1) Equity in earnings of affiliates 27 5 (15) 17 Income from continuing operations 46 15 (15) 46 Income from discontinued operations 6 6 Net income $52 $15 $(15) $52 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Six Months Ended June 30, 2003 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Net sales $3,988 $ $ $3,988 Other income 40 74 (42) 72 4,028 74 (42) 4,060 Costs and expenses Cost of sales 3,663 (24) 3,639 Selling, general and administrative expenses 241 54 (18) 277 Interest expense 81 33 114 3,985 87 (42) 4,030 Income (loss) before income taxes 43 (13) - 30 Income tax benefit (expense) (12) 33 21 Minority interest (3) (3) Equity in earnings of affiliates 54 11 (31) 34 Income from continuing operations 82 31 (31) 82 Income from discontinued operations 11 11 Net income $93 $31 $(31) $93 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Balance Sheet (Unaudited) (in millions) June 30, 2004 Dana with DCC on Elimi- Dana Equity nation Consoli- Assets Basis DCC Entries dated Current assets Cash and cash equivalents $498 $99 $ $597 Accounts receivable Trade 1,310 1,310 Other 300 26 (9) 317 Inventories 747 747 Assets of discontinued operations 1,324 1,324 Other current assets 430 238 (209) 459 Total current assets 4,609 363 (218) 4,754 Investment in leases 682 (142) 540 Investments and other assets 2,657 536 (907) 2,286 Property, plant and equipment, net 1,927 16 143 2,086 Total assets $9,193 $1,597 $(1,124) $9,666 Liabilities and Shareholders' Equity Current liabilities Notes payable $213 $171 $ $384 Accounts payable 1,241 1,241 Liabilities of discontinued operations 348 348 Other current liabilities 1,302 50 (217) 1,135 Total current liabilities 3,104 221 (217) 3,108 Long-term debt 2,050 458 2,508 Deferred employee benefits and other noncurrent liabilities 1,798 591 (582) 1,807 Minority interest 99 2 101 Shareholders' equity 2,142 325 (325) 2,142 Total liabilities and shareholders' equity $9,193 $1,597 $(1,124) $9,666 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Balance Sheet (Unaudited) (in millions) December 31, 2003 Dana with DCC on Elimi- Dana Equity nation Consoli- Assets Basis DCC Entries dated 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. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Three Months Ended June 30, 2004 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Sources Net income $108 $25 $(25) $108 Depreciation 82 8 90 Asset sales 19 36 (3) 52 Working capital decrease 65 7 12 84 274 76 (16) 334 Uses Capital spend (63) (3) 3 (63) Dividends (18) (18) Restructuring cash payments (26) (26) Deferred taxes (54) 8 (46) Investment in and undistributed earnings of equity affiliates (43) 27 25 9 Net changes in other accounts (64) (56) (12) (132) (268) (24) 16 (276) Cash change in net debt $6 $52 $ - $58 Analysis of components of decrease in net debt: Net change in short-term debt $38 $ - $ $38 Net payments on long-term debt 3 (48) (45) Change in cash - continuing operations (47) (4) (51) Cash change in net debt (6) (52) - (58) Non-cash changes in net debt (49) - (49) Total change in net debt $(55) $(52) $ - $(107) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Six Months Ended June 30, 2004 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Sources Net income $171 $34 $(34) $171 Depreciation 165 18 183 Asset sales 33 125 (3) 155 Working capital increase (115) (1) 1 (115) 254 176 (36) 394 Uses Capital spend (139) (6) 3 (142) Dividends (36) (36) Restructuring cash payments (49) (49) Deferred taxes (50) 9 (41) Investment in and undistributed earnings of equity affiliates (64) 30 34 - Net changes in other accounts (31) (82) (1) (114) (369) (49) 36 (382) Cash change in net debt $(115) $127 $ - $12 Analysis of components of increase (decrease) in net debt: Net change in short-term debt $183 $(30) $ $153 Net payments on long-term debt (234) (65) (299) Change in cash - continuing operations 166 (32) 134 Cash change in net debt 115 (127) - (12) Non-cash changes in net debt (33) (27) (60) Total change in net debt $82 $(154) $ - $(72) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Three Months Ended June 30, 2003 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Sources Net income $52 $15 $(15) $52 Depreciation 85 14 99 Asset sales 19 57 (1) 75 Divestitures 145 145 Working capital decrease (increase) (30) 4 (1) (27) 271 90 (17) 344 Uses Capital spend (61) (3) (2) (66) Dividends (2) (2) Restructuring cash payments (20) (20) Deferred taxes (2) (4) (6) Investment in and undistributed earnings of equity affiliates (32) 11 16 (5) Net changes in other accounts 12 20 3 35 (105) 24 17 (64) Cash change in net debt $166 $114 $ - $280 Analysis of components of decrease in net debt: Net change in short-term debt $(162) $(26) $ $(188) Proceeds from long-term debt 18 18 Debt assumed by buyer (32) (32) Payments on long term debt (18) (12) (30) Change in cash - continuing operations (4) (44) (48) Cash change in net debt (166) (114) - (280) Non-cash changes in net debt 28 28 Total change in net debt $(138) $(114) $ - $(252) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Six Months Ended June 30, 2003 Dana with DCC on Elimi- Dana Equity nation Consoli- Basis DCC Entries dated Sources Net income $93 $31 $(31) $93 Depreciation 171 31 202 Asset sales 43 137 (1) 179 Divestitures 145 145 Working capital increase (222) (4) 6 (220) 230 195 (26) 399 Uses Capital spend (133) (8) (1) (142) Dividends (3) (3) Restructuring cash payments (64) (64) Deferred taxes (6) (7) (13) Investment in and undistributed earnings of equity affiliates (59) 21 32 (6) Net changes in other accounts 35 11 (5) 41 (230) 17 26 (187) Cash change in net debt $ - $212 $ - $212 Analysis of components of increase (decrease) in net debt: Net change in short-term debt $(5) $(96) $ $(101) Proceeds from long-term debt 18 18 Debt assumed by buyer (32) (32) Payments on long term debt (18) (18) (36) Change in cash - continuing operations 5 (66) (61) Cash change in net debt - (212) - (212) Non-cash changes in net debt 36 36 Total change in net debt $36 $(212) $ - $(176) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts presented for Dana Corporation on a fully consolidated basis. Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) Q2 - 2004 (in millions) Inter- Segment External Sales Sales EBIT 04 03 04 03 04 03 Automotive Systems Group $1,719 $1,497 $48 $35 $109 $88 Heavy Vehicle Technologies and Systems Group 592 499 9 20 51 30 Dana Commercial Credit Other 20 16 1 2 (48) (53) Continuing Operations 2,331 2,012 58 57 112 65 Discontinued Operations 30 19 Unusual Items Excluded from Performance Measurement (8) (8) Consolidated $2,331 $2,012 $58 $57 $134 $76 North America $1,577 $1,387 $25 $23 $80 $59 Europe 442 377 31 21 37 27 South America 153 107 50 42 27 18 Asia Pacific 159 141 13 - 10 13 Dana Commercial Credit Other (42) (52) Continuing Operations 2,331 2,012 119 86 112 65 Discontinued Operations 30 19 Unusual Items Excluded from Performance Measurement (8) (8) Consolidated $2,331 $2,012 $119 $86 $134 $76 Information for Discontinued Operations 557 603 5 4 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 ) Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) Q2 - 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $72 $66 $43 $35 $2,986 $2,980 Heavy Vehicle Technologies and Systems Group 31 19 18 5 621 643 Dana Commercial Credit 5 6 5 6 325 306 Other (51) (52) (9) (7) (50) - Continuing Operations 57 39 57 39 3,882 3,929 Discontinued Operations 18 8 18 8 Unusual Items Excluded from Performance Measurement 33 5 33 5 Consolidated $108 $52 $108 $52 $3,882 $3,929 North America $48 $40 $23 $11 $2,162 $2,242 Europe 26 23 18 15 1,096 1,051 South America 17 11 14 9 327 293 Asia Pacific 7 8 3 5 159 167 Dana Commercial Credit 5 6 5 6 325 306 Other (46) (49) (6) (7) (187) (130) Continuing Operations 57 39 57 39 3,882 3,929 Discontinued Operations 18 8 18 8 Unusual Items Excluded from Performance Measurement 33 5 33 5 Consolidated $108 $52 $108 $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 ) Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Six Months Ended June 30, 2004 (in millions) Inter- Segment External Sales Sales EBIT 04 03 04 03 04 03 Automotive Systems Group $3,431 $3,004 $93 $71 $212 $164 Heavy Vehicle Technologies and Systems Group 1,170 954 18 41 90 55 Dana Commercial Credit Other 41 30 3 3 (109) (98) Continuing Operations 4,642 3,988 114 115 193 121 Discontinued Operations 55 31 Unusual Items Excluded from Performance Measurement (9) (8) Consolidated $4,642 $3,988 $114 $115 $239 $144 North America $3,171 $2,796 $52 $47 $163 $113 Europe 880 738 61 40 67 56 South America 283 193 94 80 45 26 Asia Pacific 308 261 14 1 18 24 Dana Commercial Credit Other (100) (98) Continuing Operations 4,642 3,988 221 168 193 121 Discontinued Operations 55 31 Unusual Items Excluded from Performance Measurement (9) (8) Consolidated $4,642 $3,988 $221 $168 $239 $144 Information for Discontinued Operations 1,067 1,150 9 8 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) Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Six Months Ended June 30, 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $143 $123 $82 $62 $2,986 $2,980 Heavy Vehicle Technologies and Systems Group 55 34 28 9 621 643 Dana Commercial Credit 12 12 12 12 325 306 Other (105) (104) (17) (18) (50) - Continuing Operations 105 65 105 65 3,882 3,929 Discontinued Operations 31 13 31 13 Unusual Items Excluded from Performance Measurement 35 15 35 15 Consolidated $171 $93 $171 $93 $3,882 $3,929 North America $102 $72 $47 $16 $2,162 $2,242 Europe 48 48 32 33 1,096 1,051 South America 28 16 23 12 327 293 Asia Pacific 12 15 5 9 159 167 Dana Commercial Credit 12 12 12 12 325 306 Other (97) (98) (14) (17) (187) (130) Continuing Operations 105 65 105 65 3,882 3,929 Discontinued Operations 31 13 31 13 Unusual Items Excluded from Performance Measurement 35 15 35 15 Consolidated $171 $93 $171 $93 $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 or Dana Investor Relations 419-535-4635 http://www.newscom.com/cgi-bin/prnh/19990903/DANA http://photoarchive.ap.org/ DATASOURCE: Dana Corporation CONTACT: Michelle L. Hards of Dana Corporation, +1-419-535-4636, or Web site: http://www.dana.com/ Company News On-Call: http://www.prnewswire.com/comp/226839.html

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