Dana Incorporated · NYSE:DAN
Dana — Investor Presentation (September 2004)
36 slides from Dana's investor presentation, Sep 1, 2004
Slide 1: Investor Relations Update
Investor Relations Update September, 2004
Slide 2: A Century of Excellence
A Century of Excellence =) BUSINESS =a WEEK Clarence Charles Spicer Dana > Founded in 1904 > Headquartered in Toledo, Ohio > One of just 71 companies os oe to remain on Fortune 500 ; list for 50 years ere” ae , Dana Corporation. September 1, 2004.
Slide 3: Dana Today
Dana Today 2003 Sales*............... $7.9 Billion PRO DIE ssiicsncenanaxscann 45,000 Major Facilities®..........cccceseen COUNTIICS..........0 ccc cseeeeeeeeeeees ea <u> * Restated fo Reflect impact of Discontinued Operations” Dana Corporation. September 1, 2004.
Slide 4: Business Units
Business Units Automotive Torque and traction technologies (axles, driveshafts, and drivelines), Systems structural and chassis technology solutions (structures and steering and suspension components), and systems integration technology (including advanced modularity concepts and systems) Sealing sy
Slide 5: Aftermarket Business Divestiture
Aftermarket Business Divestiture > Signed definitive agreement to sell aftermarket business to The Cypress Group for $1.1 billion in cash a aes TO SELL AUTOMOTIVE AFTERMARKET BUSINESS TO CYPRESS GROUP Transaction to Enhance Dana's Strategic & Financial Flexibility >» Transaction expected to close in
Slide 6: Business Structure
Business Structure Automotive Systems Total ASG Revenue: $6 Billion Thermal 5% Sealing 10% Engine Parts 10% Fluid 11% Torque-Traction 45% Structures 14% Heavy Vehicle Technologies & Systems Total HVTSG Revenue: $1.9 Billion Medium-Duty Off-Highway 24% 39% Heavy-Duty 37% ee Data for Year Ended Dee. 3
Slide 7: Core Products
Core Products Dana’s Continuing Operations “> Driveshafts Structures ~\ Bearing & Sealing Products eu. Fluid Systems Modules & Systems A aes <u> © Dana Corporation. September 1, 2004.
Slide 8: Major Markets
Major Markets >» Automotive - Passenger Cars ‘a > Engine - Passenger Cars - Pickup Trucks - Light, Medium & Heavy - Sport Utility Trucks Vehicles - Construction Vehicles - Minivans - Agricultural Tractors - Crossover Vehicles - Recreational Vehicles i > Commercial & Off-Highway Medium & Heavy Trucks
Slide 9: Market Dynamics: Automotive
Market Dynamics: Automotive Light Vehicle Production Light Vehicle Production North America South America Unitsin Miilons Units in Millions 4 Light Vehicle Production Light Vehicle Production urope (per Dana geography) Asia Pacifle Units in Millions Unitsin Mifions 20 184 19.0 ns he 15 10 5 0 2002 2
Slide 10: N.A. Light-Vehicle Overview
N.A. Light-Vehicle Overview Production, U.S. Sales & Inventory (Units by Month) Production/Sales Inventory 2,000,000 + + 4,400,000 1,800,000 + + 4,200,000 1,600,000 + 1,400,000 4 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 F>ortb F&F. »« scsaoese &} BP OW FOOH Fb F VV Gao es & SP ODO BS S2
Slide 11: Market Dynamics: Commercial Vehicle & Off-Highway
Market Dynamics Commercial Vehicle & Off-Highway Construction oa ~~ Forestry Agriculture Material Handling OPE Off-Highway Environment (2004 Vehicle Production) Europe oO wv wea E0ange nuasens ea <u> NAFTA Production Class 5-8 Units (000s) 700 ] 600 1993 2000 2001 2002 2003 2004P 2005 2006 "Class 6-
Slide 12: NAFTA Heavy-Truck Overview
NAFTA Heavy-Truck Overview mam Backlog ~~ Net Orders Build Sales Inventory 150 = *. z 125 g g H S 100 2 i Cy = nv > = =) o oS s a o 50 3 go wo £. 25 2 = =) A 0 2001 2002 2003 2004 a Dana projections based an analysis of multiple industry data sources Qo © Dana Corporation. September 1, 2004. 12
Slide 13: Dana Customer Base: Automotive
Dana Customer Base Automotive Gord elor Company, | TOYOTA Oo Y RENAULT DAIMLERCHRYSLER a y f E] General Motors = sae eae * SUZUKI. i oo ‘ en H)|zz|0|N|D|A PSA PEUGEOT citroen | (Bs) DA Ewoo = o an = Auel JFL T/ALT | ISUZU Riese HOLOEN 13 Dana Corporation. September 1, 2004.
Slide 14: Dana Customer Base: Commercial Vehicle & Off-Highway
Dana Customer Base . sve :- Commercial Vehicle & Off-Highway ¢ © xmst2a Dong Feng Motor Comp Cc: Hae y JOHN DEERE 2 Traiimobile a TEREX| Dana Corporation. September 1, 2004
Slide 15: Sales by Region
Sales by Region DCN Global Footprint Qo Data for Year Ended Dee. 31, 2003, includes Continuing Operations © Dana Corporation. September 1, 2004. 15
Slide 16: Net New Business
Net New Business ( mittions) Cumulative $2,000 5 $1,600 - [i Heavy Vehicle $1,200 - Technologies & : Systems Group $800 + [| Automotive Systems T $400 - Group Pluses Minuses Bssoo -$800 + -$1,200 2004 2005 2006 Net $420M B vs. 2003 Net $300M® vs. 2004 —_—Net $40M Bt vs. 2005 <Cans> Estimates based o
Slide 17: Exciting New Programs
Exciting New Programs Dana Corporation. September 1, 2004
Slide 18: Dana Supplies of Best Engines
Dana Supplies 8 of 10 “Best Engines” Dana supplies products for eight of the 10 engines that Ward’s AutoWorld magazine judged to be the best engines |= for 2004. e Audi 4.2L V-8 e General Motors e BMW 3.2L I-6 Vortec 4.2L |-6 e DaimlerChrysler 5.7L “Hemi” V-8 ¢ DaimlerChrysler 5.9L an ae High-Output
Slide 19: Focus on Technology
Focus on Technology Nlicrowave Plasma Technology Harnesses microwave energy and plasma formed at atmospheric pressure to Active-Trak Differential Electronic differential provides improved traction and vehicle heat-treat and coat metal parts. Can improve material properties while significantly reduci
Slide 20: Dana Report Card
Dana Report Card Where We’ve Been Where We’re Going Decentralized Integrated Company Company SBU Organization Market-Focused Organization Disconnected Functions Fully Leveraged Functions OE/Aftermarket Strategic Focus — Vehicular OEM Global Footprint wiNA Bias Truly Global Footprint w/Balance 2001 R
Slide 21: Global Purchasing Initiative
Global Purchasing Initiative > Goals: e Transform decentralized structure e Harmonize processes e Drive "commonization” e Achieve economies of scale e Deliver savings > Actions to Date: e Appointed Paul Miller Global V.P. of Purchasing e Established matrix organizational structure e Two Supplier Wee
Slide 22: New VP & Chief Information Officer
New VP & Chief Information Officer » Joined Dana Sept. 1 » Formerly VP & Division CIO for $8.5 Billlon PepsiCo Beverages and Foods Division » Experience also includes six years at Reynolds and Reynolds Bruce C. Carver » Named among top 100 |.T. executives by Computerworld Magazine <> Dana Corporatio
Slide 23: Financial Overview
Financial Overview Dana Corporation. September 1, 2004.
Slide 24: 2001 Restructuring
2001 Restructuring Restructuring Costs bi On target with original estimates of $445 million Facility > Original target > 30 Closures Status: 39 closed > Original target > 15% Status: 20% to date Workforce Outsource Non-Core >» Substantial non-core components outsourced Content > Approximately $1 bil
Slide 25: DCC Portfolio Analysis
DCC Portfolio Analysis ($ Millions) 12/01 Total Portfolio Assets - $2,200 Wi Value-Added Services ® Real Estate re a Dana Corporation. September 1, 2004. 6/04 Total Portfolio Assets - $1,210 Capital Markets Retained 25
Slide 26: 12-Cent Quarterly Dividend Rate
12-Cent Quarterly Dividend Rate Effective First Quarter 2004 Annual Payments Quarterly Payments Average Median Average Median Supplier Group Payout 32.5% 27.8% EPS of $1.90 $0.62 $0.53 Supplier Group Yield 1.8% 1.8% $22 stock $0.40 $0.40 <bana> a Dana Corporation. September 1, 2004. $0.15 $0.10 $0.1
Slide 27: Net Debt
Net Debt Net Debt $ millions Net Debt/Capital % $3,000 70% $2,500 } 60% $2,000 50% $1,500 40% $1,000 |} 30% $500 20% $0 10% oi <Pans> 27 © Dana Corporation. September 1, 2004.
Slide 28: Capital Structure
Capital Structure With DCC on an Equity Basis* (Millions) Dec-03 Operations Other Jun-04 Short-term debt $ 260 $ (51) $ 4 $ 213 Long-term debt 2,087 (37) 2,050 Borrowings 2,347 (51) (33) 2,263 Cash 664 (166) - 498 Net debt $ 1,683 $ 115 $ (33) $ 1,765 Equity $ 2,050 $ 136 $ (44) $ 2,142 NetDebt/ Cap
Slide 29: June 30, 2004 Debt Portfolio
June 30, 2004 Debt Portfolio ($ Millions) Maturity Schedule Average Life - 9.1 Years $1,000 - 819 180 150 | ene 165 $0 a T Z. T Li T ri T I lI T T [i T 2004 2005 2006 2008 2009 2010 2011 2028 2029 @ A/R Sec'n @ Sr Notes fi Other Pe Maturities do not reflect swap valuation adjustments DANA SS 29 Dana
Slide 30: June 30, 2004 Liquidity
June 30, 2004 Liquidity Excluding DCC (Millions) Committed Drawn Available 5-year bank facility $ 400 $ - §$ 400 Accts receivable program* 300 180 120 Bridge facility* 100 - 100 Total short-term committed facilities $ 800 $180 $ 620 Plus: Cash 498 Total $1,118 -— * Maximum size of bridge facility is
Slide 31: Income Statement
Income Statement With DCC on an Equity Basis* (Millions) Second Quarter Year-to-Date 2004 2003 2004 2003 Net sales $ = 2,331 $ 2,012 $ 4,642 $ 3,988 Other income 13 27 20 40 2,344 2,039 4,662 4,028 Cost of sales 2,108 1,849 4,222 3,663 SG&A expense 125 125 247 241 Interest expense 39 39 77 81 2,272
Slide 32: 2004 Guidance
2004 Guidance ($ Millions, except per share data) Sales 2 $8,500 Net Income* = 285 EPS* > 1.90 * Excludes unusual items <Pans> © Dana Corporation. Dated Septernber 1, 2004. May contain forward-looking information. Actual results may differ materially due to factors discussed on page 36. 32
Slide 33: 2004 Free Cash Flow Projection
2004 Free Cash Flow Projection Excluding DCC ($ Millions) Sources: Net income, excluding unusualitems $ 285 Depreciation 325 Working capital reduction 100 $ 710 Less: Capital spend (315) Restructuring payments (85) Dividends at current rate (70) $ (470) Free Cash Flow from operations* $ 240 <ana> *
Slide 34: Dana Consolidated ROIC
Dana Consolidated ROIC (Last 12 Months Total Income/5-Quarter Rolling Average Invested Capital) 9, 4 aaa 13.2% 12% 4 10% 4 is 9.1% 8.6% 7.9% 8% 4 74% 6.6% a 6% 4 A 2% 4 0% 4 Pe 1999 2000 Q101 Q201 Q301 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 0403 Q104 Q2 04 Future Qo Return excludes unusual items. I
Slide 35: Shareholder Value
Shareholder Value Trough Peak me ee ee Greater Than Restructuring ! I am | Transformation Achieve at Least the Cost of Capi So Dana Corporation. September 1, 2004. —~— 15% ROIC A/T Over the Cycle 15% ROIC A/T 35
Slide 36: Forward-Looking Statements
Forward-Looking Statements Statements herein about our forecasts, beliefs, and expectations constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our current information and assumptions. Forward-looking state