Dana Incorporated · NYSE:DAN
Dana — Q2 2008 Earnings Presentation
36 slides from Dana's earnings presentation, Aug 7, 2008
Slide 1: Second-Quarter 2008 Conference Call
August 7, 2008 Dana Holding Corporation Second-Quarter 2008 Conference Call
Slide 2: To Print This Presentation
To Print This Presentation ... Please visit: www.dana.com/investors
Slide 3: Safe Harbor Statement
Safe Harbor Statement Certain statements and projections contained in this presentation are, by their nature, forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on our current expectations, estimates and projections
Slide 4: Agenda
Agenda Introduction Steve Superits Vice President - Investment Management & Investor Relations Update on Key Issues John Devine Executive Chairman Quarterly Financial Review Jim Yost Chief Financial Officer Operational Excellence Update Gary Convis Chief Executive Officer Strategic Direction and Joh
Slide 5: Update on Key Issues
Update on Key Issues Progress on 2008 priorities despite significant headwinds Operational Continue to strengthen our management team Progress on fixing North American operations Strategic plan in place and progressing Financial: strong cash and balance sheet Profits hit by steel cost increases and
Slide 6: Steel Price Increases Continue
Steel Price Increases Continue Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2007 Actual 260 295 370 345 279 295 291 302 322 315 295 325 2008 YTD Actual 410 402 420 597 703 773 850 Prior 2008 Projection 312 312 312 312 312 312 312 312 312 312 312 312 Current 2H08 Projection 850 850 850 850 850 850
Slide 7: Management Team
Management Team Continue to attract talent to the organization Johnson Controls COO Keith Wandell joined Dana's Board of Directors Industry veteran Jim Yost (34 years at Ford and Hayes Lemmerz) joined as CFO Seven new senior operations leaders Experts at Toyota Production System and continuous-impro
Slide 8: Quarterly Financial Review
Quarterly Financial Review 8 @ Dana Limited
Slide 9: 2Q08 Highlights
2Q08 Highlights Financial Results EBITDA at $128 million - down $15 million from 2007 Net loss at $140 million, including $82 million impairment Free cash flow at $38 million Cost savings of $64 million vs. 2007 $1.2 billion cash; $1.6 billion liquidity Operational Improvement Actions Working capita
Slide 10: 2Q08 Summary
2Q08 Summary ($ in Millions) 2008 2007 Change Sales $ 2,333 $ 2,289 $ 44 EBITDA 128 143 (15) Net loss (140) (133) (7) Capital spend 47 55 (8) Free cash flow 38 (190) 228 See supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliation of EBITDA to income (los
Slide 11: Change in Sales (2Q 2008 vs. 2007)
Change in Sales (2Q 2008 vs. 2007, $ in millions) 2007 2008 Volume/Mix/Pricing Currency 2289 2333 -97 141 ($97)
Slide 12: Change in EBITDA (2Q 2008 vs. 2007)
Change in EBITDA (2Q 2008 vs. 2007, $ in Millions) 2007 2008 Currency Transaction Income Steel Cost* Volume/Mix Pricing* Cost Saving/ Ops. Improv. 143 128 -26 -25 -22 -6 64 ($22) ($6) ($25) ($26) See supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliatio
Slide 13: Segment Sales & Profit 2Q 2008
Segment Sales & Profit 2Q 2008 2008 2007 2008 2007 Light Axle $ 632 $ 716 $ 32 $ 35 Driveshaft 350 307 45 32 Structures 255 279 29 35 Sealing 201 190 26 22 Thermal 77 79 4 7 Commercial Vehicle 325 307 12 13 Off Highway 492 403 50 46 Other 1 8 (2) (12) Segment operations 2,333 2,289 196 178 Shared se
Slide 14: Net Debt
Net Debt ($ in Millions) Cash - U.S. $ 548 International 643 Total cash 1,191 Term loan facility 1,423 Less OID (107) All other debt 64 Total debt 1,380 Net Debt $ 189 June 30, 2008
Slide 15: Global Liquidity
Global Liquidity ($ in Millions) Cash $ 1,191 Less: Deposits supporting obligations (97) Cash in less than wholly-owned subsidiaries (63) Available cash 1,031 Additional cash availability from: Lines of credit (U.S. and Europe) 575 Additional lines of credit supported by letters of credit from the R
Slide 16: Operational Excellence Update
Operational Excellence Update
Slide 17: Dana Operating System
Patterned after the Toyota Production System Provide customers with highest quality parts and services at competitive prices Key elements Drive cost reductions Better enables our people to contribute to our success Achieve consistent quality, efficiency, and safety Continuous improvement, teamwork,
Slide 18: Operational Excellence Key Performance Indicators
Raw material Work-in- process Finished goods Premium freight Plant conversion cost / standard earned hours Utilities OSHA incidents Lost-time accidents Operational Excellence Key Performance Indicators (KPIs) Leading indicators of safety, quality, and cost performance Standard visual control and man
Slide 19: Operational Excellence Dana Operating System Results
Operational Excellence Dana Operating System Notable results from first half 2008 vs. 2007: OSHA recordable incidents and lost-time accidents down 48% and 68%, respectively - great for team members and insurance costs Customer delivered quality has improved 18% - beating our internal target - 25 pro
Slide 20: Footprint and Workforce Changes
Operational Excellence Footprint and Workforce Changes Completing footprint changes begun in Chapter 11 Barrie, Ont., plant closure pulled up to October St. Marys, Ont., plant closure on schedule Equipment from plants being closed will support new business in South America and India Relocated heavy
Slide 21: Strategic Direction and Summary
Strategic Direction and Summary
Slide 22: Strategic Direction
Strategic Direction Present Dana includes seven business lines Driveline, structural, and engine components Global businesses serve three markets - automotive, commercial truck, and off-highway Historically, businesses have been run independently with multiple processes Future Dana Focus on drivelin
Slide 23: Strategic Direction
Strategic Direction Fix North American automotive business Either consolidate to reduce costs and generate cash Or downsize further to generate cash on lower volumes Leverage growth opportunities Automotive, primarily in Asia and South America Commercial truck, primarily in North America and Asia Of
Slide 24: Dana Revenues (1H08)
Dana Revenues (1H08) North America 0.49 Europe 0.31 South America 0.12 Asia-Pacific 0.08 North America Europe South America Asia-Pacific Business Line Light Axle 0.27 Driveshaft 0.15 structures 0.11 sealing 0.09 thermal 0.03 cvs 0.14 oh 0.21 Sealing Thermal Structures Driveshaft Light Axle Commercia
Slide 25: Dana Revenues by Customer (1H08)
Dana Revenues by Customer (1H08) Ford 0.1948 GM 0.0584 Toyota 0.0538 Paccar 0.0438 Nissan 0.0353 Navistar 0.0323 Volvo 0.0323 Chrysler LLC 0.0308 Fiat 0.03 Daimler 0.0285 All Other 0.46 Ford GM Toyota Paccar Nissan Navistar Volvo Chrysler Fiat Daimler All Other
Slide 26: Summary
Summary High steel costs and depressed North American volumes expected to continue; for 2008, revenue outlook now $8.6-8.8 billion Near-term focus - offset steel costs and lower North American production volumes Steel recovery target is full recovery Rightsize North America automotive Resolve "upsid
Slide 27: Q&A Session
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Slide 28: DAN NYSE
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Slide 29: Supplemental Slides Non-GAAP Financial Information
Supplemental Slides Non-GAAP Financial Information In connection with Dana's emergence from bankruptcy on January 31, 2008 and the application of fresh start accounting in accordance with the provisions of the American Institute of Certified Public Accountants' Statement of Position 90-7, the post-e
Slide 30: Consolidated Statement of Operations, Three Months
DANA HOLDING CORPORATION (Consolidated Statement of Operations (Unaudited) For the Three Months Ended June 30. 2008 ari 2007 30 @ Dana Limited Net sates Costs and expenses Cost of ales Selling, generat and ‘adminetrative expene «= Amottziation of intangibles Reakgnment charges, net Impairment of goo
Slide 31: Consolidated Statement of Operations, Six Months
DANA HOLDING CORPORATION ‘Consolidated Statement of Operations (Unaudited) For the Six Months Ended June 30, 2008 and 2007 ‘Net income (oss) from continuing operations: s 0m san so Dantes Ss 0m S47 3 (50) Basie Ss oy soy sos) Dantes So $ — (oOy 3 Os) Net income (oss) avaliable Bose s 07%) san sas in
Slide 32: Consolidated Balance Sheet
‘DANA HOLDING CORPORATION = Fisting Consolidated Balance Sheet (Unaudit sete oe ‘bor At June 30, 2008 and December 31, 2007 —— s 491 * 4am ew “1 x WWorcpocess an tna coo eo = ‘acto ncontud opens ‘Taco aniain aie a ‘rere andor eats = 28 ropa, prt rd onsen. a 2008 178 titi and Hocker equity ett) aos p
Slide 33: Consolidated Statement of Cash Flows, Three Months
DANA HOLDING CORPORATION Consolidated Statement of Cash Flows (Unaudited) For the Three Months Ended June 30, 2008 and 2007 cash ft ey 6) o o a | _@ 03), |), | ao a2 | 1250 sat |S 33 © Dana Limited
Slide 34: Consolidated Statement of Cash Flows, Six Months
DANA HOLDING CORPORATION ‘Consolidated Statement of Cash Flows (Unaudited) For the Six Months Ended June 30, 2008 and 2007 08 ‘08 208 Neen) sqm fs om 5 aes am oo = : Irma gpa tang @ e ‘ory drs 7 ° crac tos o wt ” a ‘aon stlomert tbs set compromien en @ ayer otc eo e etna otf ath mers cc) ~ 4 7 ahr (
Slide 35: Segment EBITDA Reconciliation, Three Months
DANAHOLDING CORPORATION SEGMENT EBITDARE CONCILIATION (Unaudited) Reconcilation of Segment EBITOA to incame (tss) from Continuing Operations Before income Taxes 35 @ Dana Limited ASG Light Axle Driveshat Sealing Thermal Structures Eliminations and other Total ASG HvsG Commercial Vehicle Off Highway
Slide 36: Segment EBITDA Reconciliation, Six Months
DANAHOLDING CORPORATION Six Months Ended June30,2008 SEGMENT EBITDARE CONCILIATION (Unaudited) Dans ‘Prior Dana Prior Dans Reconcilatin of Segment EBITDA to income (ss) Fie Months One Morth Six Morthe from Continuing Operations Before Income Taxes Ended Ended Ended lune 30, January 31, June 30, 2008