Dana Incorporated · NYSE:DAN
Dana — Q2 2004 Earnings Presentation
26 slides from Dana's earnings presentation, Jul 21, 2004
Slide 1: Dana Corporation Second-Quarter Conference Call
Dana Corporation Second-Quarter Conference Call July 21, 2004 © Dana Corporation, 2004
Slide 2: 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
Slide 3: Key Topics
Key Topics Solid Second-Quarter Performance Aftermarket Sale & Potential Use of Anticipated Proceeds New Business Growth New Global Purchasing Initiative Financial Review 3 © Dana Corporation. Dated July 21, 2004. Slide may contain forward-looking information. Actual results may differ materially du
Slide 4: Financial Summary
Financial Summary Q2 - 2004 Q2 - 2003 Sales $2.3 billion $2.0 billion Net Income $108 million $52 million Earnings per Share $0.72 $0.35 Net Income, excluding unusual items $75 million $47 million Earnings Per Share, excluding unusual items $0.50 $0.31 4 © Dana Corporation. Dated July 21, 2004. Slid
Slide 5: 2nd Quarter Segment Comparison
2nd Quarter Segment Comparison (Millions) Sales OPAT 2004 2003 Chg. 2004 2003 Chg. Automotive $ 1,767 $ 1,532 15 % $ 72 $ 66 9% Heavy Vehicle 601 519 16 31 19 63 DCC 5 6 (16) Other (37) (39) 5 (51) (52) 2 Results from Cont. Operations $ 2,331 $ 2,012 16 % $ 57 $ 39 46 % Discontinued Ops.* 18 8 Unusu
Slide 6: 2004 Consecutive Quarter Segment Comparison
2004 Consecutive Quarter Segment Comparison (Millions) Sales OPAT 2nd Qtr 1st Qtr Chg. 2nd Qtr 1st Qtr Chg. Automotive $ 1,767 $ 1,757 1% $ 72 $ 71 1% Heavy Vehicle 601 587 2 31 24 29 DCC 5 7 (29) Other (37) (33) (12) (51) (54) 6 Results from Cont. Operations $ 2,331 $ 2,311 1% $ 57 $ 48 19 % Discon
Slide 7: Aftermarket Business Divestiture
Aftermarket Business Divestiture Signed definitive agreement to sell aftermarket business to The Cypress Group for $1.1 billion in cash Transaction expected to close in third quarter Will provide strategic and financial flexibility Potential uses of proceeds: – Contribute to pension plans – Reduce l
Slide 8: Dana Corporation
Dana Corporation Where We’ve Been Where We’re Going What We’ve Done Decentralized Integrated Combined ASG/EFMG; Company Company Integrating Operations SBU Organization Market-Focused Renewed Focus on Key Organization Customers & Markets Disconnected Fully Leveraged Established Global Functions Funct
Slide 9: Net New Business ($ Millions)
Net New Business ($ Millions) Cumulative $2,000 $1,600 Heavy Vehicle $1,200 Technologies & Systems Group $800 Automotive Systems Group $400 Pluses Minuses -$400 -$800 -$1,200 2004 2005 2006 Net $420M vs. 2003 Net $300M vs. 2004 Net $40M vs. 2005 9 Estimates based on Dana’s review of the projected pr
Slide 10: Exciting New Programs
Exciting New Programs Navistar Colorado Blue Diamond ~ | a 4 > \ aS Dana Corporation. Dated July 21,2004. Slide may contain forward-looking information. Actual results may differ materially due to factors discussed on slide 2
Slide 11: NAFTA Heavy-Truck Overview
NAFTA Heavy-Truck Overview Backlog Net Orders Build Sales Inventory Net Orders, Sales, Inventory & Build (000) 150 50 125 40 Backlog (000) 100 30 75 20 50 10 25 0 0 2001 2002 2003 2004 11 © Dana Corporation. Dated July 21, 2004. Slide may contain forward-looking information. Actual results may diffe
Slide 12: N.A. Light-Vehicle Overview
N.A. Light-Vehicle Overview Production, U.S. Sales & U.S. Inventory (Units by Month) Production/Sales 2,000,000 Inventory 4,400,000 1,800,000 4,200,000 1,600,000 4,000,000 1,400,000 3,800,000 1,200,000 3,600,000 1,000,000 3,400,000 800,000 600,000 3,200,000 400,000 3,000,000 200,000 2,800,000 0 2,60
Slide 13: Global Purchasing Initiative
Global Purchasing Initiative Goals: • Transform decentralized structure • Harmonize processes • Drive "commonization” • Achieve economies of scale • Deliver savings Actions to Date: • Appointed Paul Miller Global V.P. of Purchasing • Established matrix organizational structure • Two Supplier Week ev
Slide 14: Q2 Income Statement
Q2 Income Statement With DCC on an Equity Basis* Unusual Items (Millions) Excluding Tax Adjustment Transaction Unusual Items Aftermarket DCC Costs As Reported Net sales $ 2,331 $ 2,331 Other income 17 - - (4) 13 2,348 - - (4) 2,344 Cost of sales 2,108 2,108 SG&A expense 125 125 Interest expense 39 -
Slide 15: 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 2,
Slide 16: Cash Flow Statement
Cash Flow Statement With DCC on an Equity Basis * (Millions) Second Quarter Year-to-Date 2004 2003 2004 2003 Sources Net income $ 108 $ 52 $ 171 $ 93 Depreciation 82 85 165 171 Asset Sales & Divestitures 19 164 33 188 Working capital decrease (increase) 65 (30) (115) (222) 274 271 254 230 Uses Capit
Slide 17: 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 Net Debt /
Slide 18: June 30, 2004 Debt Portfolio
June 30, 2004 Debt Portfolio ($ Millions) Maturity Schedule Average Life - 9.1 Years $1,000 819 $500 350 250 268 180 150 165 32 16 $0 2004 2005 2006 2008 2009 2010 2011 2028 2029 A/R Sec'n Sr Notes Other Maturities do not reflect swap valuation adjustments 18 © Dana Corporation. Dated July 21, 2004.
Slide 19: 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 $2
Slide 20: DCC Portfolio Analysis
DCC Portfolio Analysis ($ Millions) 12/01 Total Portfolio Assets - $2,200 6/04 Total Portfolio Assets - $1,210 Value-Added Services Capital Markets Real Estate Retained 20 © Dana Corporation. Dated July 21, 2004. Slide may contain forward-looking information. Actual results may differ materially due
Slide 21: 2004 Guidance
2004 Guidance ($ Millions, except per share data) Sales > $8,500 Net Income* > 285 EPS* > 1.90 21 * Excludes unusual items © Dana Corporation. Dated July 21, 2004. Slide may contain forward-looking information. Actual results may differ materially due to factors discussed on slide 2
Slide 22: 2004 Free Cash Flow Projection
2004 Free Cash Flow Projection Excluding DCC (Millions) Sources: Net income, excluding unusual items $ 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 * Exclude
Slide 23: Summary
Summary Q2 performance: 16% Sales, 60% Profit* Pleased, but not satisfied We are taking action … – ASG Consolidation • Better focus on markets we serve – Improvement in Structures – Purchasing Initiatives • Help offset raw material costs – Close AAG transaction • Redeployment of proceeds – Enhanced
Slide 24: Questions
Questions 24 © Dana Corporation, 2004
Slide 25: Capital Structure Reconciliation as of December 31, 2003
Capital Structure Reconciliation as of December 31, 2003 Dana Dana with DCC with DCC (Millions) On Equity DCC Consolidated Short-term debt $ 260 $ 233 $ 493 Long-term debt 2,087 518 2,605 Borrowings 2,347 751 3,098 Cash 664 67 731 Net debt $ 1,683 $ 684 $ 2,367 Equity $ 2,050 $ 2,050 Net Debt / Capi
Slide 26: Capital Structure Reconciliation as of June 30, 2004
Capital Structure Reconciliation as of June 30, 2004 Dana Dana with DCC with DCC (Millions) On Equity DCC Consolidated Short-term debt $ 213 $ 171 $ 384 Long-term debt 2,050 458 2,508 Borrowings 2,263 629 2,892 Cash 498 99 597 Net debt $ 1,765 $ 530 $ 2,295 Equity $ 2,142 $ 2,142 Net Debt / Capital