2014

Dana Corporation to Restate Financial Statements for 2004 & 2005, Write Off U.S. Deferred Tax Assets Company Postpones Third-Quarter 2005 Earnings Release



    TOLEDO, Ohio, Oct. 10 /PRNewswire-FirstCall/ -- Dana Corporation
 (NYSE:   DCN) today announced that it will restate its 2004, first-quarter 2005,
 and second-quarter 2005 financial statements.  Also, the company has postponed
 its third-quarter 2005 earnings release and is withdrawing its earnings
 guidance for full-year 2005.
     (Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
 
     Restatement of Financial Statements
     Dana's management and the Audit Committee of the Board of Directors have
 determined, as a result of their ongoing internal investigations, that the
 company did not properly account for certain items during 2004 and the first
 and second quarters of 2005.  As a result, management and the Audit Committee
 have concluded that Dana's financial statements for these periods should no
 longer be relied upon and that restatements will be required for these
 periods.  The primary purpose for the restatements is to correct issues
 involving customer pricing and transactions with suppliers in Dana's
 Commercial Vehicle business.
     The company's conclusions were reached in consultation with its
 independent registered public accounting firm, PricewaterhouseCoopers LLP, and
 independent investigators retained by the Audit Committee.  The company will
 file amended reports on Forms 10-K/A and 10-Q/A for the periods being
 restated.
     In connection with the restatements, the company believes that there are
 material weaknesses in its internal control over financial reporting.
     The company has not completed its investigations.  It has not determined
 whether it will be necessary to revise the estimated impact on second-quarter
 income of $10-15 million after tax, which it reported on Sept. 15, based on
 information available at that time from its preliminary review.  It has also
 not determined what additional amounts will be required to adjust the
 statements for the other periods.
 
     Company to Write Off U.S. Deferred Tax Assets
     On Sept. 15, the company announced that it was evaluating its ability to
 maintain its U.S. deferred tax assets in light of the change in its earnings
 outlook.  At June 30, the company reported that its U.S. deferred tax assets
 totaled approximately $740 million.  The company now believes that it will be
 unable to maintain its U.S. deferred tax assets or to record similar tax
 benefits in the future.  The company is assessing the impact of this on its
 financial statements.  The write-off of the U.S. deferred tax assets and the
 inability to record similar tax benefits in the future has a direct negative
 impact on net income but does not impact the company's cash flow.
 
     Company Assessing Impact on Financial Agreements
     Following the announcement on Sept. 15 that it would likely restate its
 second-quarter financial statements, the company received certain necessary
 waivers under its five-year bank facility and its accounts receivable
 securitization agreement for the second quarter.  The company also received a
 waiver of the financial covenants under its bank facility for the third
 quarter.  The company is now assessing the impact of the additional
 restatements and the decision to write off the U.S. deferred tax assets on its
 obligations under those credit facilities and other agreements.
 
     Third-Quarter Earnings Release Postponed
     As a result of the restatements, Dana will not release its third-quarter
 2005 results on Oct. 19, as previously anticipated.  At this time, no date has
 been set for the third-quarter release.
 
     Operational and Strategic Actions Being Evaluated
     The company continues to evaluate a number of significant measures, both
 operational and strategic, to improve its financial performance, and will make
 further announcements regarding its plans as soon as appropriate.
 
     About Dana Corporation
     Dana people design and manufacture products for every major vehicle
 producer in the world.  Dana is focused on being an essential partner to
 automotive, commercial, and off-highway vehicle customers, which collectively
 produce more than 60 million vehicles annually.  A leading supplier of axle,
 driveshaft, engine, frame, chassis, and transmission technologies, Dana
 employs 46,000 people in 28 countries.  Based in Toledo, Ohio, the company
 reported sales of $9.1 billion in 2004.  Dana's Internet address is:
 www.dana.com.
 
     Forward-Looking Statements
     Statements in this release which are not entirely historical 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.  However, forward-looking
 statements are inherently subject to risks and uncertainties and Dana's actual
 results could differ materially from those that are anticipated or projected
 due to a number of factors.  These factors include, in addition to those
 discussed in this release, the effect of national and international economic
 conditions; adverse effects from terrorism or hostilities; the strength of
 other currencies relative to the U.S. dollar; increases in commodity costs,
 including steel, that cannot be recouped in product pricing; our ability and
 that of our customers to achieve projected sales and production levels; the
 continued availability of necessary goods and services from our suppliers;
 competitive pressures on our sales and pricing; our ability to implement our
 cost reduction, cash management and long-term transformation programs; and
 other factors set out in our public filings with the Securities and Exchange
 Commission.  Forward-looking statements in this release speak only as of the
 date of the release.  Dana does not undertake to update such forward-looking
 statements.
 
 

SOURCE Dana Corporation
RELATED LINKS
http://www.dana.com

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