Slide 1: Dana Corporation 3rd Quarter Conference Call
October 24, 2003 Dana Corporation 3rd Quarter Conference Call Exhibit 99.1
Slide 2: 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 statements are inherently subjec
Slide 3: Agenda
Operational Review Third-Quarter Performance Increased Dividend Future Outlook Wrap-Up Q & A Session Agenda
Slide 4: Financial Summary
Sales $ 0.02 $ 2.4 billion $ 2.4 billion Net Income $ 61 million $ 4 million Earnings Per Share $ 0.41 Financial Summary Q3 -2003 Q3 -2002
Slide 5: Segment Comparison – 3rd Qtr
% % % N/M N/M N/M: Not Meaningful N/M $ $ $ $ $ $ $ $4 Automotive 928 859 8 35 28 25 Aftermarket 574 562 2 26 26 0 Engine & Fluid 482 498 (3) 18 18 0 Heavy Vehicle 488 494 (1) 23 20 15 DCC 6 7 (14) Other (62) (57) 9 (65) (61) 7 Discontinued Ops. 6 Unusual Items 18 (40) Total 2,410 2,356 2 61 Segment
Slide 6: Projected Net Incremental Business
195 20 85 195 545 30 125 190 720 35 170 175 685 35 215 240 635 35 235 250 Prior Qtr. 905 495 1,230 1,100 1,270 Estimates based on Dana’s review of the projected production schedules of our customers Projected Net Incremental Business ($ Millions) SBU 2004 2003 2006 2005 2007 ASG AAG EFMG HVTSG TOTAL
Slide 7: Income Statement
($ Millions) Net sales 2,410 $ 2,356 $ 7,393 $ 7,253 $ Other income 33 20 71 47 2,443 2,376 7,464 7,300 Cost of sales 2,176 2,118 6,658 6,457 SG&A expense 156 174 529 558 Restructuring 34 122 Interest expense 40 42 123 131 2,372 2,368 7,310 7,268 Income before taxes 71 8 154 32 Income taxes (25) (12
Slide 8: Cash Flow Statement
($ Millions) Sources Net income (loss) 154 (173) $ Accounting change effect 220 Depreciation 249 291 Asset sales 7 12 Divestitures 145 41 Working capital increase (219) (15) 336 376 Uses Capital spend (209) (186) Dividends (5) (5) Acquisitions (31) Net change in other accounts (19) 55 (233) (167) Re
Slide 9: Working Capital Comparison
($ Millions) Increase through Sept. 30 (219) (15) Q1 2002 tax refund - (152) Adjusted increase through Sept. 30 (219) (167) Working Capital Comparison With DCC on an Equity Basis 2003 2002 YTD
Slide 10: Capital Structure
($ Millions) Short-term debt 53 52 254 359 Long-term debt 2,462 (102) (270) 2,090 Borrowings 2,515 (50) (16) 2,449 Cash 551 (2) 1 550 Net debt 1,964 (48) (17) 1,899 Equity 1,482 150 218 1,850 Net debt/capital 57.0% 50.7% $ $ $ $ $ $ $ $ $ $ $ $ Capital Structure With DCC on an Equity Basis 12/31/02
Slide 11: September 30, 2003 Debt Portfolio
Maturities do not reflect swap valuation adjustments 23 262 100 September 30, 2003 Debt Portfolio With DCC on an Equity Basis
Slide 12: September 30, 2003 Liquidity
5-year bank facility $400 $ - $ 400 Accts receivable program 400 100 300 Total short-term committed facilities $800 $ 100 $ 700 Plus: Cash 550 Committed Drawn Available September 30, 2003 Liquidity With DCC on an Equity Basis Total $1,250
Slide 13: DCC Portfolio Analysis
Value-Added Services Retained Real Estate Capital Markets Net of certain non-recourse debt 12/01 Total Portfolio Assets - $2,200 DCC Portfolio Analysis ($ Millions) 9/03 Total Portfolio Assets - $1,420
Slide 14: 2003 Full-Year Guidance
January $ 180-200 February $ 185-205 April $ 195-215 $ 1.41-1.48 October $ 210-220 $ 1.21-1.34 $ 1.24-1.38 $ 1.31-1.44 2003 Full-Year Guidance Net Income In Millions ($ Millions, except per-share amounts) Date Provided EPS
Slide 15: 2003 Cash Projection
($ Millions) Sources: Net income 210 Depreciation 330 Working capital 150 Divestiture proceeds 145 835 Less: Capital spend (315) Dividends (15) 505 Cash payments for restructuring $ $ $ $ 100-130 2003 Cash Projection With DCC on an Equity Basis
Slide 16: Re-affirming 2004 Guidance
Net Income $300 Million EPS $2.00 Re-affirming 2004 Guidance
Slide 17: Return On Invested Capital (ROIC)
Return excludes unusual items. Invested capital reflects DCC on an equity basis. Dana Consolidated Return On Invested Capital (ROIC) (Last 12 Months Total Income/ 5-Quarter Rolling Average Invested Capital)
Slide 18: A Word on ArvinMeritor
Greater Shareholder Value Created Under Dana’s Strategic Plan Offer is inadequate Offer is opportunistic Macro environment improving every month Our business momentum is substantial and accelerating Reflected in earnings and dividend increase Offer is highly conditional No announced progress on fina
Slide 19: Market Reaction Since July 7, 2003
07/07/03 10/23/03 Market Reaction Since July 7, 2003 S&P Auto Parts Index ArvinMeritor ARM: -20% S&P Auto Parts: +14%
Slide 20: Performance Flywheel
Core Content Capital Efficiency Innovation ROIC Gross Margin Performance Flywheel Customer Shareholder Value Shareholder Value Shareholder Value Shareholder Value
Slide 21: Increased Dividend Declared
Dividend of 6 cents per share payable Dec. 15, 2003 announced on October 21 Confidence in company’s performance and direction Continued success in executing restructuring plan Approaching what could be considered “investment-grade” performance Expectation of continued improvement in earnings and cas
Slide 22: 2004 Outlook and Long-Term Objectives
Improved top-line performance Heavy duty volumes New business wins Bottom-line and cash flow improvements Restructuring complete Substantial operating leverage Leverage off of start-up costs incurred in 2003 Annual top-line growth 6% to 7% Continued margin improvement Balance sheet Return to investm
Slide 23: In Summary
Strong third-quarter results Earnings significantly improved over 2002 2003 full-year net income forecast raised to range of $210 to $220 million Net debt-to-capital ratio reduced to 50.7% Increased fourth-quarter dividend to 6 cents per share Reaffirming 2004 EPS guidance of $2.00 We are far from f
Slide 24: Questions?
Questions?
Slide 25: Final Thoughts
Third-quarter earnings significantly improved over 2002 2003 full-year net income forecast raised to range of $210 to $220 million Net debt-to-capital ratio reduced to 50.7% Increased fourth-quarter dividend to 6 cents per share Reaffirming 2004 EPS guidance of $2.00 Final Thoughts
Slide 26: Details of Restructuring Charges & Credits by SBU
Restructuring Restructuring Reversals of Disposition Provisions Accruals Gain (Loss) Automotive 3 - - Aftermarket 5 - - Engine & Fluid 1 1 - Heavy Vehicle 6 16 1 Other 3 - - 18 17 1 Restructuring Restructuring Reversals of Disposition Provisions Accruals Gain (Loss) Automotive 10 9 1 Aftermarket 6 -
Slide 27: Change in Working Capital - DCC on an Equity Basis
($Millions) Balance at beginning of period 1,101 1,091 830 1,116 Cash from operations: Incr (decr) in accts rec. (21) (98) 203 298 Incr (decr) in inventory 12 52 (10) 17 Incr (decr) in other assets (11) (3) 33 13 Decr (incr) in curr liabs 17 88 (7) (313) Net from operations (3) 39 219 15 Restructuri
Slide 28: Capital Structure - December 31, 2002
December 31, 2002 Debt 53 2,462 2,515 551 1,964 1,482 57.0 234 753 987 20 967 271 78.1 - - - - - 287 3,215 3,502 571 2,931 1,482 66.4 Short-term debt Long-term debt Borrowings Cash Net debt Equity Net debt/capital (271) This consolidating statement provides a reconciliation of the amounts presented
Slide 29: Capital Structure - September 30, 2003
September 30, 2003 Debt 359 2,090 2,449 550 1,899 1,850 50.7 225 563 788 86 702 323 68.5 - - - - - (323) 584 2,653 3,237 636 2,601 1,850 58.4 Short-term debt Long-term debt Borrowings Cash Net debt Equity Net debt/capital This consolidating statement provides a reconciliation of the amounts presente
Slide 30: Change in Working Capital - Three Months 2003
Three Months Ended September 30, 2003 1,101 (21) 12 (11) 17 (3) 190 3 - (8) 9 4 - 4 - - - 4 1,291 (14) 12 (19) 26 5 Balance at beginning of period Cash from operations: Increase (decrease) in receivables Increase (decrease) in inventory Net from operations This consolidating statement provides a rec
Slide 31: Change in Working Capital - Nine Months 2003
Nine Months Ended September 30, 2003 830 203 (10) 33 (7) 219 179 (104) - 106 6 8 1 - - - (2) (2) 1,010 99 (10) 139 (3) 225 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 Corp
Slide 32: Change in Working Capital - Three Months 2002
Three Months Ended September 30, 2002 1,091 (98) 52 (3) 88 39 106 1 - (4) 5 2 1 4 - - - 4 1,198 (93) 52 (7) 93 45 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 o
Slide 33: Change in Working Capital - Nine Months 2002
Nine Months Ended September 30, 2002 1,116 298 17 13 (313) 15 109 (18) - 22 10 14 4 (7) - - - (7) 1,229 273 17 35 (303) 22 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 Corp