UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2003
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____ to _____
Commission file number 1-4651
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
Dana Corporation Employee Incentive and Savings Investment Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
Dana Corporation
4500 Dorr Street
Toledo, Ohio 43615
INDEX
Page
I. REQUIRED INFORMATION
Report of Independent Registered Public Accounting Firm 3
Financial Statements
Statement of Assets Available for Benefits
as of December 31, 2003 and 2002 4
Statement of Changes In Assets Available for Benefits,
for the Years Ended December 31, 2003 and 2002 5
Notes to Financial Statements 6
Additional Information*
Schedule H, line 4i
Schedule of Assets (Held at End of Year), December 31, 2003 10
II. SIGNATURE 12
III. EXHIBITS
Exhibit 23 - Consent of Independent Registered Public Accounting Firm 13
* Other schedules required by Section 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under ERISA have been omitted
because they are not applicable.
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REQUIRED INFORMATION
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of the
Dana Corporation Employee Incentive and Savings Investment Plan
In our opinion, the accompanying statement of assets available for benefits and
the related statements of changes in net assets available for benefits present
fairly, in all material respects, the net assets available for benefits of the
Dana Corporation Employee Incentive and Savings Investment Plan (the "Plan") at
December 31, 2003 and December 31, 2002, and the changes in net assets available
for benefits for the years then ended in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets held
at end of year is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plan's management. This
supplemental schedule has been subjected to the auditing procedures applied in
the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Toledo, Ohio
June 28, 2004
3
DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,
(AMOUNTS IN THOUSANDS) 2003 2002
Assets:
Investments, at fair value $ 86,306 $ 75,686
Investments, at contract value 36,955 43,067
--------- ---------
Total investments 123,261 118,753
Employee contributions receivable 435 665
Employer contributions receivable 77 112
--------- ---------
Assets available for benefits $ 123,773 $ 119,530
========= =========
The accompanying notes are an integral part of the financial statements.
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DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED
DECEMBER 31,
(AMOUNTS IN THOUSANDS) 2003 2002
Investment income (loss):
Interest and dividend income $ 2,640 $ 2,914
Net appreciation (depreciation) of investments 20,096 (20,286)
Interest on employee loans 241 382
--------- ---------
22,977 (16,990)
Contributions:
Employee contributions 7,290 9,149
Employer contributions 1,197 1,502
--------- ---------
Total additions 8,487 10,651
--------- ---------
Deductions:
Benefit payments (26,783) (11,196)
Administrative expenses (8) (5)
--------- ---------
Total deductions (26,791) (11,201)
--------- ---------
Net transfers out (430) (77)
--------- ---------
Net increase (decrease) 4,243 (17,617)
Net assets available for benefits at beginning of year 119,530 137,147
--------- ---------
Net assets available for benefits at end of year $ 123,773 $ 119,530
========= =========
The accompanying notes are an integral part of the financial statements.
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NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
GENERAL
The Dana Corporation Employee Incentive and Savings Investment Plan (the
"Plan") is a contributory defined contribution employee benefit plan that
was established by Echlin Inc. ("Echlin") effective as of January 1, 1984,
to provide benefits for all eligible employees of various participating
divisions and subsidiaries of Echlin that subsequently became divisions
and subsidiaries of Dana Corporation ("Dana"), as identified in the Plan.
The Plan is now sponsored by Dana. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The
following is a brief description of the Plan. Participants should refer to
the Plan for more complete information.
ADMINISTRATION
The Administrator of the Plan is the Dana Corporation Investment
Committee, which has delegated responsibility for day to day
administration of the Plan to Dana Benefits and Payroll Services. Dana has
entered into a trust agreement with The Vanguard Fiduciary Trust Co. (the
"Trustee").
PARTICIPATION
Each employee at a facility within a participating Dana division or
subsidiary, as stipulated in the Plan, who was hired prior to January 1,
2003, is eligible to participate in the Plan unless he or she is employed
as a member of a collective bargaining unit or as an hourly employee at a
facility that provides the Plan only to salaried employees.
EMPLOYEE CONTRIBUTIONS
An eligible employee may elect to have up to 50% of his or her eligible
compensation, as defined in the Plan, up to the maximum elective deferral
amount as determined under Section 402(g) of the Internal Revenue Code
(the "Code"), contributed to his or her account. Contributions for some
participants may be further limited as a result of other Code
requirements.
EMPLOYER CONTRIBUTIONS
Dana contributes to the Plan 30% on the first 3% of the compensation
contributed to the Plan by the employee and 10% on the next 3% of
compensation contributed by the employee.
INVESTMENTS
Participants may elect to have their contributions and the related
employer contributions allocated to one or more of the alternative
investment vehicles maintained by the Trustee, including equity and fixed
income mutual funds and a participant loan fund. Until January 1, 2000,
participants could also elect to invest in the Dana Stock Fund. As of that
date, this fund was closed to new investments.
VESTING
Participants are fully vested at all times in both the employee and
employer contributions and earnings thereon, in their individual accounts.
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NORMAL RETIREMENT, DISABILITY, TERMINATION OR DEATH
In accordance with the Plan provisions, a participating employee who
retires upon attaining age 65 or becomes totally and permanently disabled
is eligible to receive the full value of his or her account in a lump sum.
Upon termination of employment, the participant's account will be paid
automatically in a lump sum shortly after termination if the account
balance is less than $5,000. Otherwise, the participant's account may
remain in the Plan until the participant attains the age of 70-1/2.
Upon a participant's death, the participant's account balance will be paid
to his or her beneficiary in a lump sum.
LOANS
The Trustee may extend loans to participants with the approval of the Plan
administrator. Participant loans may not be made for less than $1,000 or
exceed the lesser of 50% of the participant's account balance or $50,000
minus the highest amount of outstanding balance of loans to the
participant for the previous 12-month period. The loan term may not be
longer than 60 months unless the loan is used to acquire a principal
residence. Interest is charged on the loan at a rate equal to 1% above the
"Prime Rate" quoted by The Wall Street Journal under the Money Rates
section. At December 31, 2003, such loans had interest rates ranging from
5% to 10%.
As participant loans are repaid, the amounts are allocated to the
investment fund according to the participant's most recent election with
respect to current contributions.
PLAN TERMINATION
Although it has not expressed any intention to do so, Dana has the right
under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to ERISA. In the event of Plan termination, the
value of the participant accounts will be distributed as soon as
practicable in accordance with the uniform, nondiscriminatory rules
established by the Administrator.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan have been prepared on the accrual
basis of accounting in accordance with accounting principles generally
accepted in the United States of America ("GAAP").
EXPENSES OF THE PLAN
Generally, the expenses associated with the administration of the Plan are
paid by Dana. Loan origination and maintenance fees are paid by the loan
fund participants. These fees amounted to $7,700 and $4,650 for the years
ended December 31, 2003 and 2002, respectively.
VALUATION OF INVESTMENTS
The Plan's investments in the equity mutual funds are stated at quoted
market value. Investments in guaranteed investment contracts in the fixed
income mutual funds are stated at contract value, which approximates
market value. Participant loans receivable are stated at estimated fair
values, consisting of outstanding principal and any related
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accrued interest. Investments in the Dana Stock Fund are expressed in
units, each representing undivided fractional interests in the Dana common
stock and money market assets held in the fund, which are recorded at fair
market value.
Net appreciation or depreciation includes realized gains and losses and
net unrealized appreciation and depreciation. Realized gains and losses on
investment transactions are recorded as the difference between proceeds
received and the fair market value at the beginning of the year of the
respective investments sold, or cost if acquired during the year. Net
unrealized appreciation or depreciation in the fair market value of
investments is recorded as the change between the fair market value of
investments at the end of the year and the beginning of the year, or cost
if acquired during the year.
USE OF ESTIMATES
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported
amounts of assets available for benefits at the date of the financial
statements and reported changes in assets available for benefits during
the reporting period. Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
equity and fixed income mutual funds and other investment securities, at
the participant's election. Investment securities are exposed to various
risks, such as interest rate, market and credit risk. Due to the level of
risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities, it
is at least reasonably possible that changes in risks in the near term
would materially affect participants' account balances and the amounts
reported in the Statement of Assets Available for Benefits and the
Statement of Changes in Assets Available for Benefits.
3. INCOME TAX STATUS
The Internal Revenue Service has determined and informed Dana by a letter
dated April 3, 2002, that the Plan and related trust are tax-qualified in
accordance with applicable sections of the Code. Therefore, no provision
for income taxes has been included in the Plan's financial statements.
4. PARTIES-IN-INTEREST
Investments in the Dana Stock Fund consisted primarily of 618,306 and
755,983 shares of Dana common stock at December 31, 2003 and 2002,
respectively. Shares for this fund were purchased prior to January 1,
2000, in the open market at fair market value or converted from shares of
Echlin common stock held by the predecessor Echlin Inc. Incentive and
Savings Plan at the time Dana acquired Echlin in July 1998. Consequently,
such share acquisitions were permitted under the provisions of the Plan
and were exempt from prohibition of party-in-interest transactions under
the Code and ERISA.
Certain Plan investments are shares of mutual funds or collective
investment funds managed by The Vanguard Group, a company related to the
Trustee.
8
5. INVESTMENTS
The following table presents investments that represent 5% or more of the
Plan's net assets.
DECEMBER 31,
(AMOUNTS IN THOUSANDS EXCEPT SHARE/UNIT INFORMATION) 2003 2002
Dana Corporation Fixed Principal Fund (GIC), $ 36,955 $ 43,067
36,955,020 and 43,067,496 shares, respectively
Dana Stock Fund,
2,794,559 and 3,419,371 units, respectively 11,346 8,890
Putnam Voyager,
0 and 1,286,268 shares, respectively 16,348
Putnam New Opportunities,
0 and 372,638 shares, respectively 10,594
Vanguard Primecap Fund,
741,450 and 203,075 shares, respectively 39,327 7,851
Vanguard Wellington Inv,
312,600 and 333,913 shares, respectively 9,006 8,201
Vanguard 500 Index Inv,
124,686 and 136,164 shares, respectively 12,802 11,050
Other investments 13,825 12,752
--------- ---------
Total $ 123,261 $ 118,753
========= =========
During 2003 and 2002, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated (depreciated) in value by $20,096 and ($20,286), respectively,
as follows:
(AMOUNTS IN THOUSANDS) 2003 2002
Mutual funds $ 15,675 $ (18,876)
Dana Stock Fund 4,421 (1,410)
-------- ---------
$ 20,096 $ (20,286)
======== =========
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SCHEDULE H, LINE 4i
DANA CORPORATION
EMPLOYEE INCENTIVE AND SAVINGS INVESTMENT PLAN
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
(AMOUNTS IN THOUSANDS)
----------------------
(a) (b) (c) (d) (e)
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
* The Vanguard Group Vanguard 500 Index Inv *** $ 12,802
* The Vanguard Group Vanguard IT Treasury Fund *** 1,243
* The Vanguard Group Vanguard Int'l Growth Fund *** 3,211
* The Vanguard Group Vanguard LifeSt Conserv Growth *** 591
* The Vanguard Group Vanguard LifeSt Growth Fund *** 855
* The Vanguard Group Vanguard LifeSt Income Fund *** 617
* The Vanguard Group Vanguard LifeSt Moderate Growth Fund *** 624
* The Vanguard Group Vanguard LT Treasury Inv *** 781
* The Vanguard Group Vanguard Primecap Fund *** 39,327
* The Vanguard Group Vanguard Wellington Inv *** 9,006
* The Vanguard Group Vanguard Windsor Fund *** 2,765
** AIG Financial Guaranteed Investment Contract *** 3,156
4.85%; 12/31/2007
** AIG Financial Guaranteed Investment Contract *** 3,290
4.12%
** CDC FA Guaranteed Investment Contract *** 6,990
3.83%
** CDC FA Guaranteed Investment Contract *** 277
5.65%; 2/28/2004
** CDC FA Guaranteed Investment Contract *** 920
3.99%; 9/28/2005
** JP Morgan Guaranteed Investment Contract *** 3,597
4.67%; 6/30/2006
10
(a) (b) (c) (d) (e)
IDENTITY OF ISSUE DESCRIPTION OF INVESTMENT COST CURRENT VALUE
** New York Life Guaranteed Investment Contract *** $ 1,538
5.69%; 6/30/2005
** New York Life Guaranteed Investment Contract *** 2,173
5.93%; 7/15/2005
** Rabobank Guaranteed Investment Contract *** 8,216
4.07%; 12/31/2007
** Rabobank Guaranteed Investment Contract *** 1,338
4.29%
** State Street Bank Guaranteed Investment Contract *** 4,511
4.20%; 3/31/2008
* The Vanguard Group VGI Prime Money Market *** 949
0.77%
* Dana Corporation Dana Stock Fund *** 11,346
* Participants Participants notes receivable, interest ranging *** 3,138
from 5% to 10%
-------------
$ 123,261
=============
* Parties-in-interest to the Plan
** Represents the Plan's proportionate share of the investments held within the
Dana Corporation Fixed Principal Fund (GIC)
*** Cost is not required for participant-directed investments
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Dana
Corporation Investment Committee, which is the administrator of the Dana
Corporation Employee Incentive and Savings Investment Plan, has duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
Dana Corporation Investment Committee
Date: June 28, 2004 By: /s/ Robert C. Richter
----------------------------------------
Robert C. Richter
Title: Chairman
Dana Corporation Investment Committee
12