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Dana Corporation Reports Third-Quarter Earnings TOLEDO, Ohio, Oct. 20 /PRNewswire-FirstCall/ -- Dana Corporation (NYSE:DCN) today announced third-quarter sales of $2.1 billion, compared to $1.9 billion during the same period last year. Net income for the quarter totaled $40 million, or 27 cents per share, compared to $61 million, or 41 cents per share, for the period in 2003. (Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA ) Net unusual charges for the quarter totaled $20 million. This amount includes net gains resulting from the sale of Dana's interest in certain assets and technology to a joint venture with the Knorr-Bremse Group and the company's continued program of divesting assets of its Dana Credit Corporation (DCC) operation. These gains were more than offset by charges primarily associated with the sale of Dana's automotive aftermarket businesses, including the reversal of an anticipated tax benefit of $20 million which was recognized in the second quarter of 2004. Based on our current expectations of the effect of the transaction, which is now anticipated to close in November, recognition of this tax benefit is no longer warranted. Excluding unusual items, third-quarter 2004 net income was $60 million, or 40 cents per share, compared to $43 million, or 29 cents per share for the period last year. Third-quarter 2004 results, however, included the impact from several positive tax developments, including the adjustment of the company's effective tax rate for the year to 31 percent. The reduction in the effective rate reflects, among other items, credits for research and development costs. In addition, a tax benefit of $24 million was recorded to recognize the utilization of capital loss carryforwards related to the settlement of certain issues with tax authorities, as well as adjustments associated with the finalization of the prior-year's tax returns. "Setting aside taxes, it was an otherwise disappointing quarter, largely because of the increasing cost of raw materials," said Dana Chairman and CEO Mike Burns. "The increase in steel costs alone totaled $22 million after tax, net of recoveries from our customers. "We had expected that the bottom-line impact of the commodity price increases would be offset by the stronger performance in our heavy-vehicle business and continuing cost-reduction efforts," he added. "But, the magnitude of the raw material increases, coupled with a decrease in light- vehicle production volumes, hit us harder than expected." Nine-Month Results Dana's nine-month consolidated sales were $6.8 billion, up from $5.9 billion during the same period last year. Net income during the first three quarters of 2004 was $215 million, or $1.43 per share, including $15 million in unusual net gains. This compares to net income of $154 million, or $1.04 per share, including $33 million in unusual net gains during the initial nine months of 2003. "Looking at the year-to-date results, we were reasonably satisfied with the performance from our Heavy Vehicle Technologies and Systems Group, which benefited from a solid commercial vehicle market in North America, and strong global off-highway vehicle production," Mr. Burns said. "It was a different story in our Automotive Systems Group. Although their sales were up, about 30 percent of the sales increase resulted from currency translation and new programs in our structures group, which are only beginning to contribute to the bottom line. Additionally, the automotive group bore the brunt of the increased steel costs." Looking Ahead On Oct. 12, Dana revised its expectation for 2004 earnings per share, excluding unusual items, from $1.90 per share to a range of $1.60 to $1.65 per share. The full-year effect of unusual items, such as the sale of DCC assets and the divestiture of the company's automotive aftermarket businesses, cannot reasonably be quantified at this time and was excluded from this guidance. "We believe that raw material costs will continue to adversely affect us, at least in the near term," Mr. Burns said. "As we move into 2005, however, we can expect more of an offsetting benefit from our cost reduction programs. These include the consolidation of our purchasing function, the accelerated deployment of lean manufacturing techniques, and the standardization of administrative processes throughout the company. "At the same time, we are not solely focused on cutting costs," he said. "We are equally committed to growing our top line faster - we've added significantly to our book of new business over the last three months, the heavy-truck and off-highway markets continue to grow, and we are focused on expanding our global footprint." Quarterly Conference Call Scheduled Today at 10 a.m. Dana will discuss its third-quarter results in a conference call at 10 a.m. (EDT) today. The call may be accessed via Dana's web site ( 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; increases in commodity costs, including steel, that cannot be recouped in product pricing; the ability of our customers and suppliers to achieve their projected sales and production levels; competitive pressures on our sales and pricing; the continued success of our cost reduction and cash management programs and of our long-term transformation strategy for the company; the success and timing of the divestiture of the automotive aftermarket business; and other factors set out in our public filings with the Securities and Exchange Commission. Dana does not undertake to update any forward-looking statements in this release. Dana Corporation Financial Summary (Unaudited) (in millions, except per share amounts) Three Months Ended September 30 Percent 2004 2003 Change Sales $2,114 $1,880 12% Income from continuing operations $51 $37 38% Income (loss) from discontinued operations (11) 24 -146% Net income $40 $61 -34% Income from continuing operations $51 $37 38% Gain associated with the sale of assets to a newly formed joint venture (13) Net gains associated with DCC asset sales (2) (9) -78% Gain on repurchase of notes (9) Restructuring charges 5 Income from continuing operations, excluding unusual items $41 $19 116% Income (loss) from discontinued automotive aftermarket business $(11) $24 -146% Adjustment of deferred tax allowance related to aftermarket sale 20 Costs relating to sale of aftermarket businesses 10 Income from discontinued operations, excluding unusual items $19 $24 -21% Diluted earnings per share: Income from continuing operations $0.34 $0.25 36% Income (loss) from discontinued operations (0.07) 0.16 -144% Net income $0.27 $0.41 -34% Income from continuing operations, excluding unusual items $0.27 $0.13 108% Income from discontinued operations, excluding unusual items 0.13 0.16 -19% Net income, excluding unusual items 0.40 0.29 38% Unusual items (0.13) 0.12 -208% Net income $0.27 $0.41 -34% Dana Corporation Financial Summary (Unaudited) (in millions, except per share amounts) Nine Months Ended September 30 Percent 2004 2003 Change Sales $6,756 $5,868 15% Income from continuing operations $178 $119 50% Income from discontinued operations 37 35 6% Net income $215 $154 40% Income from continuing operations $178 $119 50% Gain associated with the sale of assets to a newly formed joint venture (13) Net gains associated with DCC asset sales (20) (26) -23% Gain on repurchase of notes (9) Restructuring charges 5 Income from continuing operations, excluding unusual items $150 $84 79% Income from discontinued automotive aftermarket business $37 $43 -14% Loss from engine management business (8) Income from discontinued operations 37 35 6% Loss on engine management sale 2 Costs relating to sale of aftermarket businesses 13 Income from discontinued operations, excluding unusual items $50 $37 35% Diluted earnings per share: Income from continuing operations $1.18 $0.80 48% Income from discontinued operations 0.25 0.24 4% Net income $1.43 $1.04 38% Income from continuing operations, excluding unusual items $0.99 $0.56 77% Income from discontinued operations, excluding unusual items 0.33 0.25 32% Net income, excluding unusual items 1.32 0.81 63% Unusual items 0.11 0.23 -52% Net income $1.43 $1.04 38% Dana Corporation Condensed Statement of Income (Unaudited) (in millions, except per share amounts) Three Months Ended September 30 2004 2003 Net sales $2,114 $1,880 Revenue from lease financing and other income (expense) (7) 41 2,107 1,921 Costs and expenses Cost of sales 1,955 1,731 Selling, general and administrative expenses 123 115 Interest expense 62 55 2,140 1,901 Income (loss) before income taxes (33) 20 Income tax benefit 81 13 Minority interest (3) (1) Equity in earnings of affiliates 6 5 Income from continuing operations 51 37 Income (loss) from discontinued operations (11) 24 Net income $40 $61 Basic earnings per share Income from continuing operations $0.34 $0.25 Income (loss) from discontinued operations (0.07) 0.16 Net income $0.27 $0.41 Diluted earnings per share Income from continuing operations $0.34 $0.25 Income (loss) from discontinued operations (0.07) 0.16 Net income $0.27 $0.41 Average shares outstanding - For Basic EPS 149 148 For Diluted EPS 151 149 Dana Corporation Condensed Statement of Income (Unaudited) (in millions, except per share amounts) Nine Months Ended September 30 2004 2003 Net sales $6,756 $5,868 Revenue from lease financing and other income 32 113 6,788 5,981 Costs and expenses Cost of sales 6,161 5,370 Selling, general and administrative expenses 381 392 Interest expense 164 169 6,706 5,931 Income before income taxes 82 50 Income tax benefit 78 34 Minority interest (9) (4) Equity in earnings of affiliates 27 39 Income from continuing operations 178 119 Income from discontinued operations 37 35 Net income $215 $154 Basic earnings per share Income from continuing operations $1.20 $0.80 Income from discontinued operations 0.25 0.24 Net income $1.45 $1.04 Diluted earnings per share Income from continuing operations $1.18 $0.80 Income from discontinued operations 0.25 0.24 Net income $1.43 $1.04 Average shares outstanding - For Basic EPS 149 148 For Diluted EPS 151 149 Dana Corporation Condensed Balance Sheet (Unaudited) (in millions) September 30 December 31 Assets 2004 2003 Current assets Cash and cash equivalents $512 $731 Accounts receivable Trade 1,351 1,048 Other 287 326 Inventories 846 743 Assets of discontinued operations 1,332 1,254 Other current assets 555 431 Total current assets 4,883 4,533 Investment in leases 419 622 Investments and other assets 2,473 2,252 Property, plant and equipment, net 1,933 2,210 Total assets $9,708 $9,617 Liabilities and Shareholders' Equity Current liabilities Notes payable $313 $493 Accounts payable 1,266 1,076 Liabilities of discontinued operations 336 307 Other current liabilities 1,073 1,089 Total current liabilities 2,988 2,965 Long-term debt 2,542 2,605 Deferred employee benefits and other noncurrent liabilities 1,832 1,901 Minority interest 107 96 Shareholders' equity 2,239 2,050 Total liabilities and shareholders' equity $9,708 $9,617 Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Three Months Ended September 30 2004 2003 Net income $40 $61 Depreciation and amortization 90 92 Asset impairment 22 9 Gain on divestitures, asset sales and note repurchases (40) (7) Working capital increase (249) (33) Deferred taxes (23) (15) Other 41 10 Net cash flows - operating activities (119) 117 Purchases of property, plant and equipment (66) (73) Payments received on leases 2 5 Net loan repayments from customers 1 Asset sales 169 27 Other 19 24 Net cash flows - investing activities 124 (16) Net change in short-term debt 28 88 Payments on and repurchases of long-term debt (101) (182) Dividends paid (17) (2) Other (1) Net cash flows - financing activities (90) (97) Net change in cash and cash equivalents (85) 4 Net change in cash - discontinued operations Cash and cash equivalents - beginning of period 597 632 Cash and cash equivalents - end of period $512 $636 Dana Corporation Condensed Statement of Cash Flows (Unaudited) (in millions) Nine Months Ended September 30 2004 2003 Net income $215 $154 Depreciation and amortization 273 294 Asset impairment 24 18 Gain on divestitures, asset sales and note repurchases (65) (29) Working capital increase (413) (317) Deferred taxes (64) (28) Other (34) (7) Net cash flows - operating activities (64) 85 Purchases of property, plant and equipment (208) (215) Payments received on leases 8 21 Net loan repayments from customers 2 12 Divestitures 145 Asset sales 324 206 Other (21) 33 Net cash flows - investing activities 105 202 Net change in short-term debt 181 (9) Proceeds from long-term debt 5 Payments on and repurchases of long-term debt (405) (225) Dividends paid (53) (5) Other 10 16 Net cash flows - financing activities (262) (223) Net change in cash and cash equivalents (221) 64 Net change in cash - discontinued operations 2 1 Cash and cash equivalents - beginning of period 731 571 Cash and cash equivalents - end of period $512 $636 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Three Months Ended September 30 2004 2003 Net sales $2,114 $1,880 Other income 23 32 2,137 1,912 Costs and expenses Cost of sales 1,961 1,741 Selling, general and administrative expenses 114 101 Interest expense 51 40 2,126 1,882 Income before income taxes 11 30 Income tax benefit (expense) 30 (9) Minority interest (3) (1) Equity in earnings of affiliates 13 17 Income from continuing operations 51 37 Income (loss) from discontinued operations (11) 24 Net income $40 $61 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Statement of Income (Unaudited) (in millions) Nine Months Ended September 30 2004 2003 Net sales $6,756 $5,868 Other income 43 72 6,799 5,940 Costs and expenses Cost of sales 6,183 5,404 Selling, general and administrative expenses 357 341 Interest expense 128 122 6,668 5,867 Income before income taxes 131 73 Income tax expense (8) (21) Minority interest (9) (4) Equity in earnings of affiliates 64 71 Income from continuing operations 178 119 Income from discontinued operations 37 35 Net income $215 $154 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Condensed Balance Sheet (Unaudited) (in millions) September 30 December 31 Assets 2004 2003 Current assets Cash and cash equivalents $487 $664 Accounts receivable Trade 1,351 1,048 Other 270 300 Inventories 846 743 Assets of discontinued operations 1,332 1,254 Other current assets 533 399 Total current assets 4,819 4,408 Investments and other assets 2,661 2,580 Property, plant and equipment, net 1,916 2,014 Total assets $9,396 $9,002 Liabilities and Shareholders' Equity Current liabilities Notes payable $382 $260 Accounts payable 1,266 1,076 Liabilities of discontinued operations 336 307 Other current liabilities 1,160 1,235 Total current liabilities 3,144 2,878 Long-term debt 2,084 2,087 Deferred employee benefits and other noncurrent liabilities 1,824 1,893 Minority interest 105 94 Shareholders' equity 2,239 2,050 Total liabilities and shareholders' equity $9,396 $9,002 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt (Unaudited) (in millions) Three Months Ended September 30 2004 2003 Sources Net income $40 $61 Depreciation 85 78 Asset sales 7 1 Working capital decrease (increase) (236) 3 (104) 143 Uses Capital spend (65) (76) Dividends (17) (2) Restructuring cash payments (16) (28) Deferred taxes 21 5 Investment in and undistributed earnings of equity affiliates (16) (18) Net changes in other accounts 18 24 (75) (95) Cash change in net debt $(179) $48 Dana Corporation (Including Dana Credit Corporation on an Equity Basis) Cash Flow Impact on Net Debt (Unaudited) (in millions) Nine Months Ended September 30 2004 2003 Sources Net income $215 $154 Depreciation 250 249 Asset sales 40 44 Divestitures - 145 Working capital increase (351) (219) 154 373 Uses Capital spend (204) (209) Dividends (53) (5) Restructuring cash payments (65) (92) Deferred taxes (29) (1) Investment in and undistributed earnings of equity affiliates (80) (77) Net changes in other accounts (17) 59 (448) (325) Cash change in net debt $(294) $48 Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended September 30, 2004 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Net sales $2,114 $ $ $2,114 Other income (expense) 23 (20) (10) (7) 2,137 (20) (10) 2,107 Costs and expenses Cost of sales 1,961 (6) 1,955 Selling, general and administrative expenses 114 12 (3) 123 Interest expense 51 12 (1) 62 2,126 24 (10) 2,140 Income (loss) before income taxes 11 (44) - (33) Income tax benefit 30 51 81 Minority interest (3) (3) Equity in earnings of affiliates 13 (7) 6 Income from continuing operations 51 7 (7) 51 Income from discontinued operations (11) (11) Net income $40 $7 $(7) $40 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Nine Months Ended September 30, 2004 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Net sales $6,756 $ $ $6,756 Other income 43 26 (37) 32 6,799 26 (37) 6,788 Costs and expenses Cost of sales 6,183 (22) 6,161 Selling, general and administrative expenses 357 38 (14) 381 Interest expense 128 37 (1) 164 6,668 75 (37) 6,706 Income (loss) before income taxes 131 (49) - 82 Income tax benefit (expense) (8) 86 78 Minority interest (9) (9) Equity in earnings of affiliates 64 4 (41) 27 Income from continuing operations 178 41 (41) 178 Income from discontinued operations 37 37 Net income $215 $41 $(41) $215 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Three Months Ended September 30, 2003 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Net sales $1,880 $ $ $1,880 Other income 32 27 (18) 41 1,912 27 (18) 1,921 Costs and expenses Cost of sales 1,741 (10) 1,731 Selling, general and administrative expenses 101 22 (8) 115 Interest expense 40 15 55 1,882 37 (18) 1,901 Income (loss) before income taxes 30 (10) - 20 Income tax benefit (expense) (9) 22 13 Minority interest (1) (1) Equity in earnings of affiliates 17 5 (17) 5 Income from continuing operations 37 17 (17) 37 Income from discontinued operations 24 24 Net income $61 $17 $(17) $61 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Statement of Income (Unaudited) (in millions) Nine Months Ended September 30, 2003 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Net sales $5,868 $ $ $5,868 Other income 72 101 (60) 113 5,940 101 (60) 5,981 Costs and expenses Cost of sales 5,404 (34) 5,370 Selling, general and administrative expenses 341 77 (26) 392 Interest expense 122 47 169 5,867 124 (60) 5,931 Income (loss) before income taxes 73 (23) - 50 Income tax benefit (expense) (21) 55 34 Minority interest (4) (4) Equity in earnings of affiliates 71 16 (48) 39 Income from continuing operations 119 48 (48) 119 Income from discontinued operations 35 35 Net income $154 $48 $(48) $154 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Balance Sheet (Unaudited) (in millions) September 30, 2004 Dana with Elimi- Dana DCC on nation Consoli- Assets Equity Basis DCC Entries dated Current assets Cash and cash equivalents $487 $25 $ $512 Accounts receivable Trade 1,351 1,351 Other 270 169 (152) 287 Inventories 846 846 Assets of discontinued operations 1,332 1,332 Other current assets 533 156 (134) 555 Total current assets 4,819 350 (286) 4,883 Investment in leases 419 419 Investments and other assets 2,661 467 (655) 2,473 Property, plant and equipment, net 1,916 17 - 1,933 Total assets $9,396 $1,253 $(941) $9,708 Liabilities and Shareholders' Equity Current liabilities Notes payable $382 $76 $(145) $313 Accounts payable 1,266 1,266 Liabilities of discontinued operations 336 336 Other current liabilities 1,160 55 (142) 1,073 Total current liabilities 3,144 131 (287) 2,988 Long-term debt 2,084 458 2,542 Deferred employee benefits and other noncurrent liabilities 1,824 330 (322) 1,832 Minority interest 105 2 107 Shareholders' equity 2,239 332 (332) 2,239 Total liabilities and shareholders' equity $9,396 $1,253 $(941) $9,708 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Condensed Consolidating Balance Sheet (Unaudited) (in millions) December 31, 2003 Dana with Elimi- Dana DCC on nation Consoli- Assets Equity 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 September 30, 2004 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Sources Net income $40 $7 $(7) $40 Depreciation 85 5 90 Asset sales 7 162 169 Working capital decrease (increase) (236) 1 2 (233) (104) 175 (5) 66 Uses Capital spend (65) (1) (66) Dividends (17) (17) Restructuring cash payments (16) (16) Deferred taxes 21 (44) (23) Investment in and undistributed earnings of equity affiliates (16) (34) 7 (43) Net changes in other accounts 18 (74) 143 87 (75) (153) 150 (78) Cash change in net debt $(179) $22 $145 $(12) Analysis of components of decrease in net debt: Net change in short-term debt $173 $ $(145) $28 Net payments on long-term debt (5) (96) (101) Change in cash - continuing operations 11 74 85 Cash change in net debt 179 (22) (145) 12 Non-cash changes in net debt 35 1 36 Total change in net debt $214 $(21) $(145) $48 This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Nine Months Ended September 30, 2004 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Sources Net income $215 $41 $(41) $215 Depreciation 250 23 273 Asset sales 40 287 (3) 324 Working capital increase (351) 3 (348) 154 351 (41) 464 Uses Capital spend (204) (7) 3 (208) Dividends (53) (53) Restructuring cash payments (65) (65) Deferred taxes (29) (35) (64) Investment in and undistributed earnings of equity affiliates (80) (4) 41 (43) Net changes in other accounts (17) (156) 142 (31) (448) (202) 186 (464) Cash change in net debt $(294) $149 $145 $- Analysis of components of increase (decrease) in net debt: Net change in short-term debt $356 $(30) $(145) $181 Net payments on long-term debt (239) (161) (400) Change in cash - continuing operations 177 42 219 Cash change in net debt 294 (149) (145) - Non-cash changes in net debt 2 (26) (24) Total change in net debt $296 $(175) $(145) $(24) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Three Months Ended September 30, 2003 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Sources Net income $61 $17 $(17) $61 Depreciation 78 14 92 Asset sales 1 30 (4) 27 Divestitures - Working capital decrease (increase) 3 (4) (4) (5) 143 57 (25) 175 Uses Capital spend (76) (1) 4 (73) Dividends (2) (2) Restructuring cash payments (28) (28) Deferred taxes 5 (20) (15) Investment in and undistributed earnings of equity affiliates (18) (5) 17 (6) Net changes in other accounts 24 21 4 49 (95) (5) 25 (75) Cash change in net debt $48 $52 $- $100 Analysis of components of decrease in net debt: Net change in short-term debt $92 $ $ $92 Repurchases of long-term debt (140) (140) Proceeds from swap settlement 18 18 Net payments on long-term debt (15) (52) (67) Change in cash - continuing operations (3) (3) Cash change in net debt (48) (52) - (100) Non-cash changes in net debt (53) (1) (54) Total change in net debt $(101) $(53) $- $(154) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Dana Corporation Consolidating Cash Flow Impact on Net Debt (Unaudited) (in millions) Nine Months Ended September 30, 2003 Dana with Elimi- Dana DCC on nation Consoli- Equity Basis DCC Entries dated Sources Net income $154 $48 $(48) $154 Depreciation 249 45 294 Asset sales 44 167 (5) 206 Divestitures 145 145 Working capital increase (219) (8) 2 (225) 373 252 (51) 574 Uses Capital spend (209) (9) 3 (215) Dividends (5) (5) Restructuring cash payments (92) (92) Deferred taxes (1) (27) (28) Investment in and undistributed earnings of equity affiliates (77) (16) 48 (45) Net changes in other accounts 59 32 91 (325) (20) 51 (294) Cash change in net debt $48 $232 $- $280 Analysis of components of increase (decrease) in net debt: Net change in short-term debt $87 $(96) $ $(9) Repurchases of long-term debt (140) (140) Proceeds from swap settlement 18 18 Net payments on long-term debt (15) (70) (85) Change in cash - continuing operations 2 (66) (64) Cash change in net debt (48) (232) - (280) Non-cash changes in net debt (17) (33) (50) Total change in net debt $(65) $(265) $- $(330) This consolidating statement provides a reconciliation of the amounts presented for Dana with Dana Credit Corporation (DCC) on an equity basis to amounts reported for Dana Corporation on a fully consolidated basis. Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended September 30, 2004 (in millions) Inter-Segment External Sales Sales EBIT 04 03 04 03 04 03 Automotive Systems Group $1,535 $1,392 $48 $40 $67 $82 Heavy Vehicle Technologies and Systems Group 562 471 8 17 42 38 Dana Commercial Credit Other 17 17 3 2 (59) (65) Continuing Operations 2,114 1,880 59 59 50 55 Discontinued Operations 29 40 Unusual Items Excluded from Performance Measurement (6) 12 Consolidated $2,114 $1,880 $59 $59 $73 $107 North America $1,383 $1,289 $29 $19 $17 $54 Europe 408 336 29 19 33 28 South America 171 122 55 42 29 21 Asia Pacific 152 133 8 1 7 13 Dana Commercial Credit Other (36) (61) Continuing Operations 2,114 1,880 121 81 50 55 Discontinued Operations 29 40 Unusual Items Excluded from Performance Measurement (6) 12 Consolidated $2,114 $1,880 $121 $81 $73 $107 Information for Discontinued Operations 540 530 5 3 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 ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended September 30, 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $46 $52 $10 $17 $3,092 $3,006 Heavy Vehicle Technologies and Systems Group 26 23 10 9 682 635 Dana Commercial Credit 4 6 4 6 332 323 Other (35) (62) 17 (13) 110 20 Continuing Operations 41 19 41 19 4,216 3,984 Discontinued Operations 19 24 19 24 Unusual Items Excluded from Performance Measurement (20) 18 (20) 18 Consolidated $40 $61 $40 $61 $4,216 $3,984 North America $10 $32 $(14) $1 $2,294 $2,245 Europe 24 16 16 7 1,141 1,078 South America 17 13 15 10 350 279 Asia Pacific 5 9 1 4 159 179 Dana Commercial Credit 4 6 4 6 332 323 Other (19) (57) 19 (9) (60) (120) Continuing Operations 41 19 41 19 4,216 3,984 Discontinued Operations 19 24 19 24 Unusual Items Excluded from Performance Measurement (20) 18 (20) 18 Consolidated $40 $61 $40 $61 $4,216 $3,984 Information for Discontinued Operations 986 929 The performance and net assets of Clevite are now included in ASG. See Notes 20 and 21 in Dana's 2003 Annual Report for further information ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Nine Months Ended September 30, 2004 (in millions) Inter-Segment External Sales Sales EBIT 04 03 04 03 04 03 Automotive Systems Group $4,966 $4,396 $141 $111 $279 $246 Heavy Vehicle Technologies and Systems Group 1,732 1,425 26 58 132 93 Dana Commercial Credit Other 58 47 6 5 (164) (164) Continuing Operations 6,756 5,868 173 174 247 175 Discontinued Operations 84 71 Unusual Items Excluded from Performance Measurement (15) 5 Consolidated $6,756 $5,868 $173 $174 $316 $251 North America $4,554 $4,085 $81 $66 $181 $167 Europe 1,288 1,074 90 59 101 84 South America 454 315 149 122 74 47 Asia Pacific 460 394 22 2 25 37 Dana Commercial Credit Other (134) (160) Continuing Operations 6,756 5,868 342 249 247 175 Discontinued Operations 84 71 Unusual Items Excluded from Performance Measurement (15) 5 Consolidated $6,756 $5,868 $342 $249 $316 $251 Information for Discontinued Operations 1,607 1,680 14 11 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 ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Nine Months Ended September 30, 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $189 $175 $93 $79 $3,092 $3,006 Heavy Vehicle Technologies and Systems Group 81 57 39 18 682 635 Dana Commercial Credit 16 18 16 18 332 323 Other (136) (166) 2 (31) 110 20 Continuing Operations 150 84 150 84 4,216 3,984 Discontinued Operations 50 37 50 37 Unusual Items Excluded from Performance Measurement 15 33 15 33 Consolidated $215 $154 $215 $154 $4,216 $3,984 North America $112 $104 $34 $17 $2,294 $2,245 Europe 72 64 48 40 1,141 1,078 South America 45 29 38 22 350 279 Asia Pacific 17 24 7 13 159 179 Dana Commercial Credit 16 18 16 18 332 323 Other (112) (155) 7 (26) (60) (120) Continuing Operations 150 84 150 84 4,216 3,984 Discontinued Operations 50 37 50 37 Unusual Items Excluded from Performance Measurement 15 33 15 33 Consolidated $215 $154 $215 $154 $4,216 $3,984 Information for Discontinued Operations 986 929 The performance and net assets of Clevite are now included in ASG. See Notes 20 and 21 in Dana's 2003 Annual Report for further information ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Three Months Ended June 30, 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 (46) (53) Continuing Operations 2,331 2,012 58 57 114 65 Discontinued Operations 30 19 Unusual Items Excluded from Performance Measurement (8) (8) Consolidated $2,331 $2,012 $58 $57 $136 $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 (40) (52) Continuing Operations 2,331 2,012 119 86 114 65 Discontinued Operations 30 19 Unusual Items Excluded from Performance Measurement (8) (8) Consolidated $2,331 $2,012 $119 $86 $136 $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 ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Three Months Ended June 30, 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $72 $66 $44 $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 (49) (52) (8) (7) (50) Continuing Operations 59 39 59 39 3,882 3,929 Discontinued Operations 18 8 18 8 Unusual Items Excluded from Performance Measurement 33 5 33 5 Consolidated $110 $52 $110 $52 $3,882 $3,929 North America $48 $40 $24 $11 $2,162 $2,242 Europe 26 23 19 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 (44) (49) (6) (7) (187) (130) Continuing Operations 59 39 59 39 3,882 3,929 Discontinued Operations 18 8 18 8 Unusual Items Excluded from Performance Measurement 33 5 33 5 Consolidated $110 $52 $110 $52 $3,882 $3,929 Information for Discontinued Operations 970 962 The performance and net assets of Clevite are now included in ASG. See Notes 20 and 21 in Dana's 2003 Annual Report for further information ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended March 31, 2004 (in millions) Inter-Segment External Sales Sales EBIT 04 03 04 03 04 03 Automotive Systems Group $1,712 $1,507 $45 $36 $103 $76 Heavy Vehicle Technologies and Systems Group 578 455 9 21 39 25 Dana Commercial Credit Other 21 14 2 1 (59) (45) Continuing Operations 2,311 1,976 56 58 83 56 Discontinued Operations 25 12 Unusual Items Excluded from Performance Measurement (1) Consolidated $2,311 $1,976 $56 $58 $107 $68 North America $1,594 $1,409 $27 $24 $83 $54 Europe 438 361 30 19 30 29 South America 130 86 44 38 18 8 Asia Pacific 149 120 1 1 8 11 Dana Commercial Credit Other (56) (46) Continuing Operations 2,311 1,976 102 82 83 56 Discontinued Operations 25 12 Unusual Items Excluded from Performance Measurement (1) Consolidated $2,311 $1,976 $102 $82 $107 $68 Information for Discontinued Operations 510 547 4 4 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 ( http://www.dana.com/ ). Investor Relations Dana Corporation Quarterly Financial Information (Unaudited) For the Quarter Ended March 31, 2004 (in millions) Operating PAT Net Profit Net Assets 04 03 04 03 04 03 Automotive Systems Group $71 $57 $40 $27 $3,031 $2,888 Heavy Vehicle Technologies and Systems Group 24 15 10 4 637 631 Dana Commercial Credit 7 6 7 6 301 287 Other (52) (52) (7) (11) (29) 18 Continuing Operations 50 26 50 26 3,940 3,824 Discontinued Operations 13 5 13 5 Unusual Items Excluded from Performance Measurement 2 10 2 10 Consolidated $65 $41 $65 $41 $3,940 $3,824 North America $54 $32 $25 $5 $2,165 $2,209 Europe 22 25 14 18 1,136 993 South America 11 5 9 3 312 269 Asia Pacific 5 7 2 4 183 164 Dana Commercial Credit 7 6 7 6 301 287 Other (49) (49) (7) (10) (157) (98) Continuing Operations 50 26 50 26 3,940 3,824 Discontinued Operations 13 5 13 5 Unusual Items Excluded from Performance Measurement 2 10 2 10 Consolidated $65 $41 $65 $41 $3,940 $3,824 Information for Discontinued Operations 945 1,056 The performance and net assets of Clevite are now included in ASG. See Notes 20 and 21 in Dana's 2003 Annual Report for further information ( http://www.dana.com/ ). FOR MORE INFORMATION ( http://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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