dana holdings 3Q08Earnings

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<ul><li>1.Dana Holding Corporation Third-Quarter 2008 Earnings Conference CallNovember 6, 2008 2008 Dana Limited. This presentation contains copyrighted and confidential information of Dana Holding Corporation and/or its subsidiaries. Those having access to this workmay not copy it, use it, or disclose the information contained within it without written authorization of Dana Holding Corporation. Unauthorized use may result in prosecution. </li></ul><p>2. To Print ThisPresentation Please visit: www.dana.com/investors 2008 Dana Limited. This presentation contains copyrighted and confidential information of Dana Holding Corporation and/or its subsidiaries. Those having access to this workmay not copy it, use it, or disclose the information contained within it without written authorization of Dana Holding Corporation. Unauthorized use may result in prosecution. 3. 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 about our industry and business, managements beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as anticipates, expects, intends, plans, predicts, believes, seeks, estimates, may, will, should, would, could, potential, continue, ongoing, similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward- looking statement. Danas Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss important risk factors that could affect our business, results of operations and financial condition. The forward-looking statements in this presentation speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason.3 Dana Limited 4. AgendaIntroduction Steve SuperitsVice President Investment Management&amp; Investor RelationsUpdate on Key Issues John Devine and InitiativesExecutive ChairmanQuarterly Financial Review Jim YostChief Financial OfficerQ&amp;A SessionAll 4 Dana Limited 5. Update on Key IssuesDifficult third quarter because of peaking steel prices and depressedNorth American production volumes.Additional restructuring planned: Now planning up to 10 plant closures in 2009-2010 Hourly and salaried workforce reductions will increase from 3,000 to 5,000 in 2008Good progress on pricing actions impact primarily in 2009.Significant reductions in commodity prices, including steel. Impactprimarily in 2009 because of lower 2008 volumes.Good progress on evaluating strategic options for sealing, thermal,and structural products. Decisions expected by early 2009.Good progress on key priorities of rolling out Operational Excellenceinitiative and continuing to build strong management team.5 Dana Limited 6. Management TeamContinue to attract talent to the organizationMark WallacePresident,Operational Excellence Former President &amp; CEO, Webasto Products, North America Ken CaoPresident,Asia Pacific Former President, Asia Pacific Operations, GKN Sinter Metals Jacqui DedoVice President,Strategy &amp; Business Development Former V.P., Innovation &amp; Growth, The Timken Company6 Dana Limited 7. Operational Excellence Recent Progress &amp; Developments Footprint &amp; Workforce Changes Dana Operating System Roll Out Reduce global footprint by up to 10 Continued good progress on roll out facilities, primarily in U.S. and Canadaand resultsMost moves in 2009 with remainderBy the end of 2008, more than 70in 2010percent of North American manufacturing plants will haveAnticipate consolidations and closureswill result in one-time costs of initiated a formal roll out of the DOS$100 to $150M Initiated South American DOS roll outActions anticipated to generate annual in Q3operating savings of about $40M Initiating European DOS roll out in Announced closure of Magog, Quebec, December driveshaft facility on Oct. 15Expect to exit facility in 2009One-time closure costs of $9 to $10Mand anticipated EBITDA improvementof $2.5 to $3M annually Additional actions to be announced later 7 Dana Limited 8. Steel Price Volatility 2008 Profit Impact ($ in millions) H1Q3Q4 TotalSteel Increase $ (42) $(65) $ (70)$ (177)Recovery1545 55115Net(27)(20) (15) (62)Recovery36% 69%79%65%U.S. Scrap Steel ($ per ton) 10002008 YTD Actual 800600Current Q4 08 Projection: 400 $300/Ton200Jan Feb Mar Apr May JunJul Aug Sep Oct Nov Dec8 Dana Limited 9. North American Production (2008 vs. 2007) Change in ProductionYTD Q3Light truck (32%)(21%)Light vehicle (16%)(13%)Full-size light truck (50%)(35%)Medium truck (5-7)(23%)(19%)Heavy truck (Class 8) 13% (4%) Source: Global Insight, Wards Automotive, and ACT 9 Dana Limited 10. Key Priorities: 2008Priorities Update/Recent Actions Operational Excellence President Rebuild Asia Pacific President the Strategy &amp; Business Development V.P.Team Manufacturing talentOperational Excellence Focus on cost, quality, and productivityJump-Start Three Priorities: Common metrics, Dana Operating System,Operations footprint optimization Rolling out globallyEvaluating both strategic options and growth opportunities Address Decision on strategic options by year end or early 2009 Strategic Focus on fixing North American automotive businessIssuesMaintain strong liquidity and balance sheet FinancialPerformance2009 Plan: Focus on pricing and cost actions to improve profits&amp; Planssubstantially despite depressed volumes 10 Dana Limited 11. Quarterly FinancialReview 11 Dana Limited 12. 3Q08 Summary ($ in Millions) 20082007 Change Sales$ 1,929$ 2,130 $ (201) EBITDA15126(111) Net loss(271)*(69) (202) Capital spend(72) (54)(18) Free cash flow(151)(143) (8) * Includes impairment charges of $123 million, of which $15 million is includedin equity in earnings of affiliates See supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliation of EBITDA to income (loss) from continuing operations before income taxes and free cash flow to cash from (used by) operations.12 Dana Limited 13. Change in Sales (3Q 2008 vs. 2007, $ in Millions)$2,130$1,929 $72 $45($318)2007 2008Volume/Mix Pricing Currency 13 Dana Limited 14. Change in EBITDA (3Q 2008 vs. 2007, $ in Millions) $126 Net Recovery: ($20) $45 $12 $15($75) ($65)($28)($28) 20072008Volume/Mix Steel CostPricingCost Saving/Other Ops. Improv.(Primarily Exchange)See supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliation of EBITDA to income (loss) from continuing operations before income taxes. 14 Dana Limited 15. Free Cash Flow (Nine Months, $ in Millions) 20082007EBITDA $ 290$ 373Working capital(172)(183)Capital spend(164)(148)Interest, net (67) (49)Income taxes (102) (75)Restructuring (65)(107)Discontinued Ops EBITDA ---(26)Reorganization &amp; Other(51)(147)Free Cash Flow $ (331)$ (362) See supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliation of EBITDA to income (loss) from continuing operations before income taxes and free cash flow to cash from (used by) operations.15 Dana Limited 16. Net Debt ($ in Millions)September 30, 2008Cash U.S. $ 519International488Total cash 1,007Term loan facility1,419Less OID (102) All other debt 70Total debt 1,387Net Debt$38016 Dana Limited 17. Global Liquidity ($ in Millions)September 30, 2008 Cash $ 1,007 Less:Deposits supporting obligations (87)Cash in less than wholly-owned subsidiaries (64)Available cash856Additional cash availability from:Lines of credit (U.S. and Europe) 455Additional lines of credit supported by lettersof credit from the Revolving Facility32Total global liquidity $ 1,343 17 Dana Limited 18. Debt Covenants Term Loan In compliance through 09/30/08 Need covenant changes for 12/31/08 compliance test Will launch amendment next week Expect completion in the next few weeks 18 Dana Limited 19. Financial OutlookCalendar 2008 Outlook $8.2 billionSales $300 millionEBITDA $250 millionCapital SpendFree Cash Flow Negative $300 to $350 million 2009 TargetsSales$7.2 to $7.3 billion $150 million improvement over 2008EBITDA Customer pricing ($200 to $250 million) Cost savings ($100 to $200 million) Partially offset by expected market decline $250 millionCapital Spend BreakevenFree Cash FlowSee supplemental slides for comments regarding the presentation of non-GAAP measures and a reconciliation of EBITDA 19 Dana Limited to income (loss) from continuing operations before income taxes and free cash flow to cash from (used by) operations. 20. Q&amp;A Session 2008 Dana Limited. This presentation contains copyrighted and confidential information of Dana Holding Corporation and/or its subsidiaries. Those having access to this workmay not copy it, use it, or disclose the information contained within it without written authorization of Dana Holding Corporation. Unauthorized use may result in prosecution. 21. Supplemental Slides Non-GAAP Financial Information In connection with Danas 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-emergence results of the successor company for the eight months ended September 30, 2008 and the pre-emergence results of the predecessor company for the one month ended January 31, 2008 are presented separately as successor and predecessor results in the financial statements presented in our Form 10-Q. This presentation is required by generally accepted accounting principles (GAAP) as the successor company is considered to be a new entity, and the results of the new entity reflect the application of fresh start accounting. For your convenience in viewing the accompanying slides, we have combined the separate successor and predecessor periods to derive combined results for the nine months ended September 30, 2008. The following slides provide the separate successor and predecessor GAAP results for the applicable periods, along with the combined results described above for the first nine months of 2008.A number of slides refer to EBITDA, which weve defined to be earnings before interest, taxes, depreciation, amortization and restructuring. EBITDA is a non-GAAP financial measure, and the measure currently being used by Dana as the primary measure of its reportable operating segment performance. EBITDA was selected as the primary measure for operating segment performance as well as a relevant measure of Danas overall performance given the enhanced comparability and usefulness after application of fresh start accounting. The most significant impact to Danas ongoing results of operations as a result of applying fresh start accounting is higher depreciation and amortization. By using EBITDA, which is a performance measure that excludes depreciation and amortization, the comparability of results is enhanced. Management also believes that EBITDA is an important measure since the financial covenants of our primary debt agreements are EBITDA-based, and our management incentive performance programs are based, in part, on EBITDA. Because it is a non-GAAP measure, EBITDA should not be considered a substitute for net income or other reported results prepared in accordance with GAAP. Slides 27-29 provide a reconciliation of EBITDA for the periods presented to the reported income (loss) from continuing operations before income taxes, which is a GAAP measure. 22 Dana Limited 22. Three Months Ended DANA HOLDING CORPORATIONSeptember 30, Consolidated Statement of Operations (Unaudited) Dana Prior Dana For the Three Months Ended September 30, 2008 and 2007 20082007 $1,929 $ 2,130 Net sales($ in Millions) Costs and expenses1,896 2,017Cost of salesSelling, general and 8779administrative expenses 18Amortization of intangibles 16 6Realignment charges, net105Impairment of goodwill3Impairment of assets230Other income, net Income (loss) from continuing operations before interest, (194) 58 reorganization items and income taxesInterest expense (contractual interest of $54 for the 3727 three months ended September 30, 2007)198 Reorganization items, net (232)(67) Loss from continuing operations before income taxes(24)3 Income tax benefit (expense) (1) (4) Minority interests(13)4 Equity in earnings of affiliates (270)(64) Loss from continuing operations (1) (5) Loss from discontinued operations (271)(69) Net loss8 Preferred stock dividend requirements $ (279)$ (69) Net loss available to common stockholdersNet loss from continuing operations: $(2.78)$(0.42)Basic $(2.78)$(0.42)Diluted Net loss from discontinued operations $(0.01)$(0.04)Basic $(0.01)$(0.04)Diluted Net loss available to common stockholders $(2.79)$(0.46)Basic $(2.79)$(0.46)Diluted Average common shares outstanding:100150Basic100150Diluted 23 Dana Limited 23. DANA HOLDING CORPORATIONDana Prior DanaCombined Prior Dana Consolidated Statement of Operations (Unaudited)Eight Months One MonthNine MonthsNine MonthsEnded Ended EndedEnded For the Nine Months Ended September 30, 2008 and 2007 September 30,January 31, September 30, September 30, 200820082008 (1) 2007 ($ in Millions) $5,823 $ 751 $ 6,574$6,564 Net sales Costs and expenses5,579 702 6,281 6,201Cost of salesSelling, general and23634 270263administrative expenses 4949Amortization of intangibles 611273159Realignment charges, net180 180Impairment of goodwill 1010Impairment of assets 54 862108Other income, net Income (loss) from continuing operations before (238) 11 (227) 49 interest, reorganization items and income taxes Interest expense (contractual interest of $17 for the one month ended January 31, 2008 and $159 99 8 107 78 for the nine months ended September 30, 2007) 2298 120173 Reorganization items, net1,009 1,009 Fresh start accounting adjustments Income (loss) from continuing (359)914555 (202) operations before income taxes(56) (199)(255) (15) Income tax expense (6) (2)(8) (10) Minority interests(10)2 (8)22 Equity in earnings of affiliates Income (loss) from (431)715 284(205) continuing operations (4) (6)(10)(89) Loss from discontinued operations (435)709 274(294) Net income (loss) Preferred stock dividend 2121 requirements Net income (loss) available to $ (456)$ 709 $ 253$ (294) common stockholdersNet income (loss) from continuing operations: $ (4.52) $4.77$(1.36)Basic $ (4.52) $4.75$(1.36)Diluted Net loss from discontinued operations $ (0.04) $ (0.04) $(0.60)Basic $ (0.04) $ (0.04) $(0.60)Diluted Net income (loss) availableto common stockho...</p>