Document 06mDGV5rqqXRZe7X3rNeDbVxd

Dana Corporation Page 35 of 176 Table of Contents Cash Flows (2002 versus 2001) Cash Flows from Operating Activities: Net income (loss) Effect of change in accounting Depreciation and amortization Deferred income taxes Unremitted earnings of affiliates Gains on divestitures and asset sales Asset impairment charges Decrease (increase) in operating working capital Other Cash flows from operating activities 2002 2001 Dollar Change $(182) 220 478 (135) (43) (53) 114 50 72 ...... $ 521 $(298) 548 (116) 4 (10) 206 407 (102) -- $ 639 $ 116 220 (70) (19) (47) (43) (92) (357) 174 -- $(118) Net income in 2002, after adding back the non-cash impact of our change in accounting for goodwill, contributed $336 more to operating cash flows than in 2001. Operating cash flow produced from depreciation declined in 2002 because of our reduced capital spending in 2001 and 2002, as spending was substantially below depreciation levels in both years. The non-cash impact of impairment charges on operating cash flows resulted from a higher level of restructuring announcements in 2001 compared to 2002, each of which related to the overall restructuring program announced during the fourth quarter of 2001. Operating working capital decreased significantly in 2001 as we addressed the high levels of working capital in our AAG SBU. Working capital, especially inventory, was abnormally high in 2000 in certain of the AAG units that were in the process of consolidating distribution centers and had built bridge inventories to meet customer demand during the consolidation. These inventories were reduced in 2001. The pace of improvement in working capital levels slowed in 2002 in large part due to cash payments associated with our restructuring plans. 2002 Dollar 2001 Change Cash Flows from Investing Activities: Purchases of property, plant and equipment Divestitures Proceeds from sales of leasing subsidiary assets Proceeds from sales of other assets Other Cash flows from investing activities $(375) 506 248 101 .45 $ 525 $(425) 236 60 132 ..76 $ 79 $ 50 270 188 (31) _(31) $446 Cash flows from investing activities in 2002 benefited from cash generated by divestitures of non core businesses during the year, including FTE, Boston Weatherhead Division and certain smaller business units. In addition, sales of DCC assets were significantly higher in 2002 as a result of sale transaction activity occurring subsequent to our announcement in the fourth quarter of 2001 of our intention to sell a substantial portion of DCC's assets. Investing cash flows also benefited from reduced http://www.sec.gOv/Archives/edgar/data/26780/000095015204001384/105571ael0vk.htm 8/1/2004