Slide 1: Dana Corporation Third-Quarter Conference Call
Dana Corporation Third-Quarter Conference Call October 20, 2004 (c) Dana Corporation, 2004
Slide 2: Forward-Looking Statements
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
Slide 3: Key Topics
Key Topics Financial Review Operational Review Steel New Business Growth Market Update Future Outlook 5 (c) Dana Corporation. Dated October 20, 2004.
Slide 4: Financial Overview
Financial Overview Q3 - 2004 Q3 - 2003 Sales $2.1 billion $1.9 billion Net Income Earnings per Share $40 million $0.27 $61 million $0.41 Net Income, excluding unusual items* $60 million $43 million Earnings Per Share, excluding unusual items* $0.40 $0.29 7 (c) Dana Corporation. Dated October 20, 200
Slide 5: Q3 Income Statement With DCC on an Equity Basis
2003 2002 9 Excluding Unusual Items DCC As Reported Q3 Income Statement With DCC on an Equity Basis* Unusual Items Tax AAG Other (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors
Slide 6: Year to Date Income Statement With DCC on an Equity Basis
11 Year to Date Income Statement With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors Excluding Unusual Items DCC As Reported Tax AAG Other Unusual Items
Slide 7: Income Statement With DCC on an Equity Basis
13 2004 2003 Third Quarter 2004** 2003 Year-to-Date Income Statement With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * Comparable GAAP measures available at www.dana.com/investors ** First six months re-stated to reflect adoption of FSP FAS 106-2
Slide 8: Cash Flow Statement With DCC on an Equity Basis
Cash Flow Statement With DCC on an Equity Basis * (Millions) 15 2004 2003 Third Quarter 2004** 2003 Year-to-Date (c) Dana Corporation. Dated October 20, 2004. * Comparable GAAP measures available at www.dana.com/investors ** First six months re-stated to reflect adoption of FSP FAS 106-2
Slide 9: Capital Structure With DCC on an Equity Basis
17 Capital Structure With DCC on an Equity Basis* (c) Dana Corporation. Dated October 20, 2004. * NOTE: Comparable GAAP measures available at www.dana.com/investors
Slide 10: September 30, 2004 Debt Portfolio
September 30, 2004 Debt Portfolio 19 Maturities do not reflect swap valuation adjustments 200 180 (c) Dana Corporation. Dated October 20, 2004. 2004 2005 2006 2007 2008 2009 2010 2011 2028 2029 A/R Sec'n 180 Sr Notes 150 350 250 824 165.05 268.25 Other 200.4
Slide 11: September 30, 2004 Liquidity Excluding DCC
$400 0 175 $575 (145) $430 487 $917 $ - 180 25 $205 145 $350 5-year bank facility $400 Accts receivable program* 180 Bridge facility* 200 Committed facilities $780 DCC loan Total short-term facilities Plus: Cash Total 21 September 30, 2004 Liquidity Excluding DCC Lines Drawn Available (Millions) * M
Slide 12: Dana Credit Corporation Portfolio Analysis
12/01 Total Portfolio Assets - $2,200 Dana Credit Corporation (DCC) Portfolio Analysis ($ Millions) VASG 85 50 45 RESG 170 425 475 CMG 675 Value-Added Services Retained Real Estate Capital Markets 9/04 Total Portfolio Assets - $865 VASG 120 10 50 RESG 170 900 0 CMG 410 23 (c) Dana Corporation. Dated
Slide 13: Financial Summary
Financial Summary 25 Q3 - 2004 YTD - 2004 Net Income, excluding unusual items $60 $200 DCC 2 20 Aftermarket (30) (13) Knorr-Bremse/Others 8 8 Net Income, including unusual items $40 $215 Tax Benefit $24 $ 24 Steel Cost $22 $ 38 (Millions) (c) Dana Corporation. Dated October 20, 2004.
Slide 14: Steel
Steel 27 Increased steel costs have had a profoundly negative impact on auto industry this year Lack of global capacity has driven steep price increases Like it or not, these are the conditions of the market - and we must act aggressively Negotiating leveraged purchases Participating in OEM re-sale
Slide 15: Steel Scrap and Open Market Pricing
$375 $412 $250 (end of Q2) Scrap Open Market Pricing (#1 Bundled) Source: Tri-Cities Index 29 (c) Dana Corporation. Dated October 20, 2004.
Slide 16: Heavy Vehicle Performance
Heavy Vehicle Performance Sales OPAT 2004 2004 2003 2003 Chg. Chg. 31 Steel Q1 $587 $476 23% $24 $15 60% $1 Q2 601 519 16 31 19 63 3 Q3 570 488 17 26 23 13 3 Results $1,758 $1,483 19% $81 $57 42% $7 (Millions) 2004 (c) Dana Corporation. Dated October 20, 2004.
Slide 17: Automotive Systems Performance
Automotive Systems Performance Sales OPAT 2004 2004 2003 2003 Chg. Chg. 33 Steel Q1 $1,757 $1,543 14% $71 $57 25% $1 Q2 1,767 1,532 15 72 66 9 7 Q3 1,583 1,432 11 46 52 (12) 13 Results $5,107 $4,507 13% $189 $175 8% $21 (Millions) 2004 (c) Dana Corporation. Dated October 20, 2004.
Slide 18: 3rd Quarter Segment Comparison
3rd Quarter Segment Comparison 35 Sales OPAT 2004 2004 2003 2003 Chg. Chg. (Millions) Automotive 1,583 1,432 11 46 52 (12) Heavy Vehicle 570 488 17 26 23 13 DCC 4 6 (33) Other (39) (40) 3 (35) (62) 44 Results from Cont. Operations 2,114 1,880 12 41 19 116 Discontinued Ops.* 19 24 Unusual Items (20)
Slide 19: Working Aggressively to Reduce Cost Structure
Cost Cutting 37 Consolidation of global purchasing efforts Accelerated deployment of lean manufacturing techniques Standardization of administrative processes Pursuing value engineering to offset cost increases and meet customer pricing expectations Working Aggressively to Reduce Cost Structure (c)
Slide 20: Committed to Growing Top-Line Faster
Business Growth 39 Added significantly to book of new business in Q3 Heavy-truck and off-highway markets experiencing healthy growth Focused on expanding global footprint Committed to Growing Top-Line Faster (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Ac
Slide 21: Net New Business
Estimates based on Dana's review of the projected production schedules of our customers 41 Automotive Systems Group Heavy Vehicle Technologies & Systems Group Net $420M vs. 2003 2004 2005 2006 Pluses Minuses $2,000 $1,600 $1,200 $800 - -$400 - -$800 $400 - -$1,200 Cumulative Net $380M vs. 2004 Net $
Slide 22: NAFTA Heavy-Truck Overview
43 NAFTA Heavy-Truck Overview Backlog (000) Net Orders, Sales, Inventory & Build (000) Backlog Net Orders Build Sales Inventory 2001 69963 14785 13119 13888 47703 70726 12300 12184 13042 47415 67233 11085 13633 15836 44381 65214 10947 12199 15688 40345 60894 9656 13629 16679 38557 58728 10710 12863
Slide 23: N.A. Light-Vehicle Overview
N.A. Light-Vehicle Overview Production, U.S. Sales & Inventory (Units by Month) 2004 2002 Production/Sales 2003 45 Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar A
Slide 24: Aftermarket Business Divestiture
Aftermarket Business Divestiture Transaction expected to close in November 47 (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2
Slide 25: 2004 Revised Guidance
2004 Revised Guidance ($ Millions, except per share data) Sales > $8,700 EPS* $1.60 - $1.65 49 * Excludes unusual items, non-GAAP measure (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2
Slide 26: 2004 Free Cash Flow Projection Excluding DCC
2004 Free Cash Flow Projection Excluding DCC * Excludes proceeds from aftermarket divestiture 51 (Millions) (c) Dana Corporation. Dated October 20, 2004. Slide contains forward-looking information. Actual results may differ materially due to factors discussed on slide 2
Slide 27: Summary
Summary 3rd Quarter Disappointing Commodities Focus On.... Cost Structure Top-line Growth 53 (c) Dana Corporation. Dated October 20, 2004.
Slide 28: Questions
55 Questions (c) Dana Corporation, 2004
Slide 29: Capital Structure Reconciliation as of December 31, 2003
57 Capital Structure Reconciliation as of December 31, 2003 (c) Dana Corporation. Dated October 20, 2004.
Slide 30: Capital Structure Reconciliation as of September 30, 2004
59 Capital Structure Reconciliation as of September 30, 2004 (c) Dana Corporation. Dated October 20, 2004.
Slide 31: Net New Business Detail
$ 0 115 $115 ASG $360 $250 HVTSG 60 130 TOTAL $420 $380 61 Net New Business Detail 2004 2005 2006 (Millions) (c) Dana Corporation. Dated October 20, 2004. $(80) 120 $ 40 ASG $360 $200 HVTSG 60 100 TOTAL $420 $300 Q3-2004 Q2-2004