Dana Holding Corporation Reports Positive Net Income for 2010 and Raises Guidance for 2011

- Reported adjusted EBITDA of $553 million and net income of $10 million on sales of $6.1 billion

- Generated positive free cash flow for the seventh consecutive quarter

- Secured $846 million in net new business across Dana’s four business segments

- Initiated strategic actions to support 50-percent revenue growth by 2015

- Raised guidance for sales and adjusted EBITDA in 2011

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Feb 23, 2011, 07:00 ET

MAUMEE, Ohio, Feb. 23, 2011 /PRNewswire/ -- Dana Holding Corporation (NYSE: DAN) today announced its full-year and fourth-quarter 2010 results. All full-year financial targets were achieved or exceeded.

(Logo: http://photos.prnewswire.com/prnh/19990903/DANA )

Dana Incorporated logo. (PRNewsFoto/Dana Incorporated) (PRNewsFoto/)

Strong sales of $6.1 billion – up 17 percent over 2009 – and continued operating improvements enabled the company to post net income of $10 million for 2010, compared to a $431 million loss the prior year. Adjusted EBITDA for 2010 was $553 million, compared to $326 million the prior year.

Continued restructuring and cost-reduction actions contributed to a $124 million reduction in conversion costs in 2010 and a significant improvement in margins. Adjusted EBITDA margin reached the full-year target of 9 percent, compared to 6 percent in 2009.

The company generated full-year 2010 free cash flow of $242 million, compared to $109 million for the prior year. At December 31, 2010, Dana’s global liquidity stood at approximately $1.4 billion, and its net cash position of $187 million was significantly improved from a net debt position of $56 million at the end of 2009.

“Dana met or exceeded its 2010 targets including operational improvements, profitable growth and improved margins – with a continued focus on our strong balance sheet,” said Dana Executive Chairman and Interim Chief Executive Officer John Devine. “The entire Dana team worked together to deliver on our commitments. More remains to be done, but we have a strong foundation to keep improving top- and bottom-line results in 2011 and beyond.”

Dana secured $846 million in net new business in 2010, at margins above its cost of capital, against its goal of $650 million to $700 million. Business wins were achieved – and are expected to continue – in all markets (automotive, commercial vehicle, and off-highway) and geographic regions.

Fourth-Quarter Results

Fourth-quarter 2010 sales were $1.6 billion, up $100 million from the same period in 2009. A net loss of $14 million in the fourth quarter is improved from a net loss of $236 million a year ago. Adjusted EBITDA in the fourth quarter was $143 million.

Dana also generated $12 million of free cash flow in the fourth quarter – its seventh consecutive quarter of positive free cash flow.

Greater Financial Flexibility, Strategic Investments Provide Strong Start to 2011

Dana strengthened its capital structure last month by extending the maturities and reducing the amount of its long-term debt. Dana further strengthened its flexibility in pursuing its growth strategies by eliminating certain loan covenants.

Earlier this month, Dana signed an agreement to increase ownership of its joint venture, Dongfeng Dana Axle Co., Ltd. (DDAC), to 50 percent, pending Chinese government approval. DDAC is the sole supplier of medium- and heavy-duty axles to China’s second largest commercial vehicle manufacturer and exports to several other markets. Dana also recently completed a strategic agreement with SIFCO S.A., which positions Dana as the leading full-line supplier of commercial vehicle drivelines in South America and is expected to add approximately $350 million in annual sales. Collectively, cash outlays for these investments in China and Brazil are expected to total approximately $270 million.

In addition, Dana has put in place a robust plan to grow its global aftermarket business. The company expects to expand its aftermarket business from 15 percent of sales in 2010 to a target of 20 percent with new products and by leveraging its brands to enter new market segments.

Increased Sales and Earnings Guidance for 2011

Dana updated its assumptions and earnings guidance for 2011:

2011 revenues are now forecast to increase at least 17 percent over 2010 versus the previous forecast of more than 10 percent growth;
Adjusted EBITDA is now projected to be $740 million to $760 million versus the previous guidance of $675 million to $700 million; adjusted EBITDA as a percent of sales is still forecast to be more than 10 percent;
Diluted adjusted earnings per share are expected to total $1.50 to $1.60 per share compared to earlier guidance of $1.30 to $1.40 per diluted adjusted share; and
Free cash flow for the year is projected at more than $150 million versus the previous guidance of greater than $100 million.

Dana to Host Fourth-Quarter Conference Call at 10:30 a.m. Today

Dana will discuss its full-year and fourth-quarter results in a conference call at 10:30 a.m. EST today. Participants may listen to the audio portion of the conference call either through audio streaming online or by telephone. United States and Canadian locations should dial 1-888-311-4590 and international locations should call 1-706-758-0054, and enter conference I.D. number 41269649. Please ask for the "Dana Holding Corporation Financial Webcast and Conference Call." Phone registration will be available starting at 10 a.m. EST. Slide viewing is available online via a link on Dana’s investor website – www.dana.com/investors.

Non-GAAP Measures

This release refers to adjusted EBITDA, which we’ve defined to be earnings before interest, taxes, depreciation, amortization, non-cash equity grant expense, restructuring expense, and other nonrecurring items (gain/loss on debt extinguishment or divestitures, impairment, etc). Adjusted EBITDA is a non-GAAP financial measure, and the measure currently being used by Dana as the primary measure of its operating segment performance. The most significant impact to Dana’s ongoing results of operations as a result of applying fresh start accounting is higher depreciation and amortization.

By using adjusted EBITDA, which is a performance measure that excludes depreciation and amortization, the comparability of results is enhanced. Management also believes that adjusted EBITDA is an important measure since the financial covenants of our primary debt agreements are based, in part, on adjusted EBITDA. Because it is a non-GAAP measure, adjusted EBITDA should not be considered a substitute for net income or other reported results prepared in accordance with GAAP. The financial information accompanying this release provides a reconciliation of adjusted EBITDA for the periods presented to the reported income (loss) from continuing operations before income taxes, which is a GAAP measure.

Diluted Adjusted EPS, another non-GAAP financial measure referenced in the slides, is derived from net income adjusted to exclude restructuring expense, amortization expense and nonrecurring items (as used in Adjusted EBITDA), net of any associated tax effects. Adjusted net income is divided by fully diluted shares, as determined in accordance with GAAP based on the adjusted earnings. This measure is considered useful for purposes of providing investors, analysts and other interested parties with an indicator of ongoing financial performance that provides enhanced comparability to EPS reported by other companies.

Free cash flow is also a non-GAAP financial measure which we have defined as cash provided by operations (a GAAP measure) exclusive of any bankruptcy claim-related payments included therein, less capital spending. This measure is useful in evaluating the operational cash flow of the company inclusive of the spending required to maintain the operations.

Forward-Looking Statements

Certain statements and projections contained in this news release 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, management’s 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.

Dana’s 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 news release speak only as of this date. Dana does not undertake any obligation to revise or update publicly any forward-looking statement for any reason.

About Dana Holding Corporation

Dana is a world leader in the supply of driveline products (axles, driveshafts, and transmissions), power technologies (sealing and thermal-management products), and genuine service parts for light- and heavy-duty vehicle manufacturers. The company's customer base includes nearly every major vehicle manufacturer in the global automotive, commercial vehicle, and off-highway markets. Based in Maumee, Ohio, the company employs approximately 22,500 people in 26 countries and reported 2010 sales of $6.1 billion. For more information, please visit: www.dana.com.

DANA HOLDING CORPORATION
Consolidated Statement of Operations (Unaudited)
For the Three Months Ended December 31, 2010 and 2009

	Three Months Ended
(In millions except per share amounts)	December 31,
	2010	2009
Net sales	$ 1,559	$ 1,493
Costs and expenses
Cost of sales	1,387	1,387
Selling, general and administrative expenses	110	96
Amortization of intangibles	15	18
Restructuring charges, net	13	25
Impairment of long-lived assets		150
Other expense, net	(8)	(2)
Income (loss) before interest and income taxes	26	(185)
Interest expense	21	31
Income (loss) before income taxes	5	(216)
Income tax expense	(21)	(12)
Equity in earnings of affiliates	3	(7)
Net loss	(13)	(235)
Less: Noncontrolling interests net income	1	1
Net loss attributable to the parent company	(14)	(236)
Preferred stock dividend requirements	8	8
Net loss available to common stockholders	$ (22)	$ (244)

Net loss per share available to
parent company stockholders:
Basic	$ (0.16)	$ (2.02)
Diluted	$ (0.16)	$ (2.02)
Average common shares outstanding
Basic	143	139
Diluted	143	139

DANA HOLDING CORPORATION
Consolidated Statement of Operations
For the Year Ended December 31, 2010 and 2009

	Year Ended
(In millions except per share amounts)	December 31,
	2010	2009
Net sales	$ 6,109	$ 5,228
Costs and expenses
Cost of sales	5,450	4,985
Selling, general and administrative expenses	402	313
Amortization of intangibles	61	71
Restructuring charges, net	73	118
Impairment of long-lived assets		156
Other income, net	1	98
Income (loss) before interest, reorganization
items and income taxes	124	(317)
Interest expense	89	139
Reorganization items		(2)
Income (loss) before income taxes	35	(454)
Income tax benefit (expense)	(31)	27
Equity in earnings of affiliates	10	(9)
Net income (loss)	14	(436)
Less: Noncontrolling interests net income (loss)	4	(5)
Net income (loss) attributable to the parent company	10	(431)
Preferred stock dividend requirements	32	32
Net loss available to common stockholders	$ (22)	$ (463)

Net loss per share available to
parent company stockholders:
Basic	$ (0.16)	$ (4.19)
Diluted	$ (0.16)	$ (4.19)
Average common shares outstanding
Basic	141	110
Diluted	141	110

DANA HOLDING CORPORATION
Consolidated Balance Sheet
As of December 31, 2010 and 2009

(In millions except per share amounts)
			December 31,
Assets			2010	2009
Current assets
Cash and cash equivalents			$ 1,134	$ 947
Accounts receivable
	Trade, less allowance for doubtful accounts
	of $11 in 2010 and $18 in 2009		816	728
	Other		184	172
Inventories			708	608
Other current assets			91	89
Current assets held for sale				99
		Total current assets	2,933	2,643
Goodwill			104	111
Intangibles			352	438
Investments and other assets			238	262
Investments in affiliates			121	112
Property, plant and equipment, net			1,351	1,484
Noncurrent assets held for sale				104
		Total assets	$ 5,099	$ 5,154

Liabilities and equity
Current liabilities
Notes payable, including current portion of long-term debt			$ 167	$ 34
Accounts payable			779	601
Accrued payroll and employee benefits			144	103
Accrued restructuring costs			28	29
Taxes on income			38	101
Other accrued liabilities			251	270
Current liabilities held for sale				79
		Total current liabilities	1,407	1,217
Long-term debt			780	969
Deferred employee benefits and other noncurrent liabilities			1,128	1,189
		Total liabilities	3,315	3,375
Commitments and contingencies
Parent company stockholders' equity
	Preferred stock, 50,000,000 shares authorized
		Series A, $0.01 par value, 2,500,000 shares outstanding	242	242
		Series B, $0.01 par value, 5,311,298 and 5,400,000
		shares outstanding	520	529
	Common stock, $.01 par value, 450,000,000 shares authorized,
		144,126,032 and 139,414,149 outstanding	1	1
	Additional paid-in capital		2,613	2,580
	Accumulated deficit		(1,191)	(1,169)
	Treasury stock, at cost		(4)
	Accumulated other comprehensive loss		(496)	(504)
		Total parent company stockholders' equity	1,685	1,679
Noncontrolling equity			99	100
		Total equity	1,784	1,779
		Total liabilities and equity	$ 5,099	$ 5,154

DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows (Unaudited)
For the Three Months Ended December 31, 2010 and 2009

	Three Months Ended
(In millions)	December 31,
	2010	2009
Cash flows − operating activities
Net loss	$ (13)	$ (235)
Depreciation	58	80
Amortization of intangibles	19	22
Amortization of deferred financing charges and original issue discount	5	7
Impairment of intangibles and other assets		156
Loss (gain) on sale of business	(2)	9
Deferred income taxes		11
Pension contributions in excess of expense	(43)
Change in working capital	43	45
Other, net	3	25
Net cash flows provided by operating activities (1)	70	120

Cash flows − investing activities
Purchases of property, plant and equipment (1)	(58)	(25)
Proceeds from sale of businesses	5
Other	1	(2)
Net cash flows used in investing activities	(52)	(27)

Cash flows − financing activities
Net change in short-term debt	(7)
Proceeds from long-term debt		22
Repayment of long-term debt	(2)	(17)
Proceeds from issuance of common stock		35
Dividends paid to preferred stockholders	(34)
Other	5	(1)
Net cash flows provided by (used in) financing activities	(38)	39

Net increase (decrease) in cash and cash equivalents	(20)	132
Cash and cash equivalents − beginning of period	1,137	814
Effect of exchange rate changes on cash balances	17	1
Cash and cash equivalents − end of period	$ 1,134	$ 947

(1) Free cash flow of $12 in 2010 and $95 in 2009 is the sum of net cash provided by operating activities

reduced by the purchases of property, plant and equipment.

DANA HOLDING CORPORATION
Consolidated Statement of Cash Flows
For the Year Ended December 31, 2010 and 2009

	Year Ended
(In millions)	December 31,
	2010	2009
Cash flows − operating activities
Net income (loss)	$ 14	$ (436)
Depreciation	238	311
Amortization of intangibles	76	86
Amortization of deferred financing charges and original issue discount	25	34
Impairment of intangibles and other assets		156
Loss on sale of business	3	9
Loss (gain) on extinguishment of debt	7	(35)
Reorganization-related tax claim payment (1)	(75)
Deferred income taxes	(10)	(20)
Pension contributions in excess of expense	(30)	(5)
Change in working capital	33	94
Other, net	6	14
Net cash flows provided by operating activities (1)	287	208

Cash flows − investing activities
Purchases of property, plant and equipment (1)	(120)	(99)
Proceeds from sale of businesses	118
Other	4	1
Net cash flows provided by (used in) investing activities	2	(98)

Cash flows − financing activities
Net change in short-term debt	6	(36)
Proceeds from long-term debt	52	27
Repayment of long-term debt	(137)	(214)
Proceeds from issuance of common stock		264
Underwriting fee payment		(14)
Dividends paid to preferred stockholders	(66)
Dividends paid to noncontrolling interests	(7)	(5)
Other	8	10
Net cash flows provided by (used in) financing activities	(144)	32

Net increase in cash and cash equivalents	145	142
Cash and cash equivalents − beginning of period	947	777
Effect of exchange rate changes on cash balances	42	28
Cash and cash equivalents − end of period	$ 1,134	$ 947

(1) Free cash flow of $242 in 2010 and $109 in 2009 is the sum of net cash provided by operating activities

(exclusive of reorganization-related claims payments) reduced by the purchases of property, plant and equipment.

DANA HOLDING CORPORATION
Segment Sales & Adjusted EBITDA (Unaudited)
For the Three Months Ended December 31, 2010 and 2009

(In millions)	Three Months Ended
	December 31,
SALES	2010	2009
Light Vehicle Driveline	$ 655	$ 580
Power Technologies	230	211
Commercial Vehicle	345	303
Off-Highway	316	210
Structures	13	189
Total Sales	$ 1,559	$ 1,493

Adjusted EBITDA
Light Vehicle Driveline	$ 58	$ 52
Power Technologies	30	15
Commercial Vehicle	35	28
Off-Highway	29	11
Structures	(2)	15
Segment EBITDA	150	121
Shared services and administrative	(9)	(7)
Other income, net	5	3
Foreign exchange not in segments	(3)	(2)
Adjusted EBITDA	$ 143	$ 115

DANA HOLDING CORPORATION
Segment Sales and Adjusted EBITDA
For the Year Ended December 31, 2010 and 2009

(In millions)	Year Ended
	December 31,
SALES	2010	2009
Light Vehicle Driveline	$ 2,516	$ 1,973
Power Technologies	927	714
Commercial Vehicle	1,344	1,099
Off-Highway	1,131	850
Structures	188	592
Other	3
Total Sales	$ 6,109	$ 5,228

Adjusted EBITDA
Light Vehicle Driveline	$ 235	$ 128
Power Technologies	125	29
Commercial Vehicle	131	84
Off-Highway	98	38
Structures	6	35
Segment EBITDA	595	314
Shared services and administrative	(22)	(22)
Other income (expense), net	(10)	33
Foreign exchange not in segments	(10)	1
Adjusted EBITDA	$ 553	$ 326

DANA HOLDING CORPORATION
Reconciliation of Segment and Adjusted EBITDA to
Income (Loss) Before Income Taxes (Unaudited)
For the Three Months Ended December 31, 2010 and 2009

(In millions)	Three Months Ended
	December 31,
	2010	2009
Segment EBITDA	$150	$121
Shared services and administrative	(9)	(7)
Other income, net	5	3
Foreign exchange not in segments	(3)	(2)
Adjusted EBITDA	143	115
Depreciation	(58)	(80)
Amortization	(19)	(22)
Restructuring	(13)	(25)
Impairment		(150)
Warranty settlement	(25)
Strategic transaction and other expenses	(5)	(12)
Gain (loss) on sale of assets, net	2	(6)
Stock compensation expense	(5)	(6)
Foreign exchange on intercompany loans
and market value adjustments on forwards	(3)	(5)
Interest expense	(21)	(31)
Interest income	9	6
Income (loss) before income taxes	$ 5	$(216)

DANA HOLDING CORPORATION
Reconciliation of Segment and Adjusted EBITDA to
Income (Loss) Before Income Taxes
For the Year Ended December 31, 2010 and 2009

(In millions)	Year Ended
	December 31,
	2010	2009
Segment EBITDA	$ 595	$ 314
Shared services and administrative	(22)	(22)
Other income (expense), net	(10)	33
Foreign exchange not in segments	(10)	1
Adjusted EBITDA	553	326
Depreciation	(238)	(311)
Amortization	(76)	(86)
Restructuring	(73)	(118)
Impairment		(156)
Reorganization items, net		2
Gain (loss) on extinguishment of debt	(7)	35
Warranty settlement	(25)
Strategic transaction and other expenses	(5)	(16)
Loss on sale of assets, net	(5)	(8)
Stock compensation expense	(14)	(13)
Foreign exchange on intercompany loans, Venezuelan currency
devaluation and market value adjustments on forwards	(16)	6
Interest expense	(89)	(139)
Interest income	30	24
Income (loss) before income taxes	$ 35	$ (454)