Document zz8JbrBmzV2Yk3GrJ8Rq3O4Nn

D A N A C O R P O R A T IO N / Annual Report 2001 With the exception of DCC, operating profit after taxes (PAT) represents earnings before interest and taxes (EBIT), tax effected at 39% (our estimated long-term effective rate), plus equity in earnings of affiliates. The Other category includes operations not assigned to the SBUs, discontinued businesses, trailing liabilities for certain closed plants, interest expense net of interest income, corporate expenses and adjustments to reflect the actual effective tax rate. SBU and regional expenses are included in the respective SBU or region; otherwise they are included in Other. In arriving at net profit from operating PAT, allocations are based on sales. Equity earnings included in the operating PAT and net profit reported in 1999, 2000 and 2001 were $15, $29 and $27 for ASG and $7, $11 and $3 for EFMG. Equity earnings included for the other SBUs were not material. Net assets at the SBU and regional level is intended to correlate with invested capital. It includes accounts receivable, inventories (on a first-in, first-out basis), net property, plant and equipment, investments in affiliates, goodwill, trade accounts payable and 2% of annualized sales as an assumption for cash and prepaid expense. DCC is evaluated based upon numerous criteria of which net profit and net assets (equity investment) shown above are the major items. Restructuring and nonrecurring items consist of the gains on sales of business discussed in Note 19, restructuring and integration charges discussed in Note 20 and other nonrecurring charges. Sales by region are based upon location of the entity recording the sale. Sales from the U.S. amounted to $9,413 in 1999, $8,552 in 2000 and $6,863 in 2001. No other country's sales exceeded 10% of total sales. U.S. long-lived assets were $1,835 in 1999, $1,865 in 2000 and $1,631 in 2001. No other country's long-lived assets exceeded 10% of total long-lived assets. Net operating assets differ from consolidated assets as follows: Net operating assets Accounts payable DCC's assets in excess of equity Non-trade receivables and other current assets Other long-term assets Consolidated assets 1999 $ 7,240 1,129 1,902 2000 $ 6,980 1,014 2,279 2001 $ 6,134 1,042 2,012 655 197 $11,123 755 208 $11,236 775 244 $10,207 The difference between operating capital spend and depreciation shown above and purchases of property, plant and equipment and depreciation shown on the cash flow statement represents the method of measuring DCC for operating purposes. DCC's capital spend and depreciation are not included above. In addition, DCC purchases equipment and leases the equipment to the other SBUs. These operating leases are included in the consolidated statements as purchases of assets and depreciated over their useful life. Export sales from the U.S. to customers outside the U.S. amounted to $939 in 1999, $832 in 2000 and $649 in 2001. Total export sales (including sales to our non-U.S. subsidiaries which are eliminated for financial statement presentation) were $1,229 in 1999, $1,115 in 2000 and $874 in 2001. Worldwide sales to Ford Motor Company and subsidiaries amounted to $2,130 in 1999, $2,396 in 2000 and $1,888 in 2001, which represented 16%, 19% and 18% of our consolidated sales. Sales to DaimlerChrysler AG and subsidiaries were $1,777 in 1999, $1,669 in 2000 and $1,169 in 2001 representing 14%, 14% and 11% of our consolidated sales. Sales to Ford were primarily from our ASG and EFMG segments, while sales to DaimlerChrysler were primarily from the ASG and CVS segments. No other customer accounted for more than 10% of our consolidated sales. Note 14. Estimated Income Taxes Income tax expense (benefit) consists of the following components: Current U.S.federal U.S. state and local Non-U.S. Deferred U.S. federal and state Non-U.S. Total expense (benefit) Year Ended December 31 1999 2000 2001 $ 23 15 139 177 $ 22 18 74 114, $ (94) (5) 54 (45) 120 (46) 74 $251 48 9 57 $ 171 (111) (5) (116) $(161) Deferred tax benefits (liabilities) consist of the following: Postretirement benefits other than pensions Expense accruals Net operating loss carryforwards Inventory reserves Foreign tax credits recoverable Other tax credits recoverable Pension accruals Postemployment benefits Other employee benefits Other Valuation allowances Deferred tax benefits December 31 1999 2000 $387 150 117 35 $328 210 128 58 23 7 38 24 63 814 (83) 731 32 23 58 867 (102) 765 2001 $339 252 234 77 79 27 33 32 20 85 1,178 (128) 1,050 Leasing activities Depreciation - non-leasing Pension accruals Other Deferred tax liabilities Net deferred tax benefits (liabilities) (441) (215) (15) (17) (688) $ 43 (557) (239) (12) (17) (825) $ (60) (678) (233) (24) (935) $ 115 29