Document 2qpo5B2z90RGxyQGxmM35owvR

Dana Corporation Page 135 of 176 Table of Contents we were a member of the CCR, we believe that our litigation strategy has reduced and will continue to reduce our indemnity costs. We have agreements with our insurance carriers providing for the payment of a significant majority of the defense and indemnity costs for the pending claims, as well as claims which may be filed against us in the future. We cannot estimate possible losses in excess of those for which we have accrued because we cannot predict how many additional claims may be brought against us in the future, the allegations in such claims or their probable outcomes. At December 31, 2003 and 2002, we had amounts receivable from our insurers and others of $33 and $38, respectively, representing reimbursements for settled claims and related defense costs. These receivables include billings in progress and amounts subject to alternate dispute resolution proceedings with certain of our insurers. Substantial progress has been made in those proceedings and we expect the outcome to be favorable. However, the amount receivable may increase until the proceedings are ultimately concluded. During 2003, we received $4 from the CCR as a refund of previous settlement advances and $21 from our insurers as reimbursement for defense and indemnity costs. Additional amounts were billed to our insurers for amounts we paid in 2003 in defense and indemnity costs. At December 31,2003, we had accrued $12 for contingent non-asbestos product liability costs, compared to $10 at December 31, 2002, with no recovery expected from third parties at either date. The difference between our minimum and maximum estimates for these liabilities was $12 at both dates. If there is a range of equally probable outcomes, we accrue the lower end of the range. We estimate contingent environmental liabilities based on the most probable method of remediation, current laws and regulations and existing technology. Estimates are made on an undiscounted basis and exclude the effects of inflation. If there is a range of equally probable remediation methods or outcomes, we accrue the lower end of the range. Dana is a potentially responsible party at the Hamilton Avenue Industrial Park Superfund site in New Jersey ("the site"). The site has three "Operable Units." Dana has estimated its potential financial exposure for Operable Units 1 and 2 at the site as ranging between $1 and $5 based on Dana's view as to the most likely remediation method and allocation of costs between Dana and other potentially responsible parties. However, the EPA has identified an array of remedial alternatives for Operable Unit 2 that includes a range from lower to substantially higher than the Dana estimate. Dana has not included any estimate for Operable Unit 3 in its cost projections as the site investigation for this aspect of the site has not yet been conducted. Currently, it is impossible to predict which remedial alternative for Operable Unit 2 will be selected by the EPA, or whether there will be a need for remedial action related to Operable Unit 3. At December 31, 2003, we had accrued $77 for contingent environmental liabilities, compared to $78 at December 31, 2002, with no recovery expected from other parties at either date. The difference between our minimum and maximum estimates for these liabilities was $10 at December 31, 2003, compared to $3 at December 31, 2002. Some former CCR members have defaulted on the payment of their shares of some of the CCRnegotiated settlements and some of the settling claimants are now seeking payment of the unpaid shares from Dana and the other companies that were members of the CCR at the time of the settlements. We have been working with the CCR, other former CCR member companies, our insurers and the claimants to resolve these issues. At December 31,2003, we had estimated our total exposure to these matters to be approximately $48 compared to our estimate of $57 at December 31, 2002. At December 31, 2003 we have recorded an estimated recoverable of $30 compared to $47 at December 31, 2002. The change in both amounts during 2003 reflects the favorable renegotiation of a portion of unpaid amounts with plaintiffs. In addition, we have increased our reserve against the recoverable by $8 to take into account the current status of negotiations with our insurers including the status of alternate dispute resolution proceedings and consultations with outside counsel. http://www.sec.gOv/Archives/edgar/data/26780/000095015204001384/105571ael0vk.htm 8/1/2004