• $22 Million of economic value added.
• Earnings per share from operations up 102% to $1.21, excluding integration costs.
• Second quarter sales reach new record of $1,687 million, up 39%.
• Cash flow from operations, net of capital expenditures, totals $202 million.
• $70 million additional net new business announced.
• Acquisition of Alcan Nural completed.
• Automotive cylinder liner joint venture with Teikoku established.
• Divestiture of Italian auto parts distributor announced.

In line with its growth strategy, Federal-Mogul completed its announced acquisition of Alcan Nural, a German piston company. Federal-Mogul also established a joint venture with Teikoku Piston Rings for the manufacture of automotive cylinder liners at Federal-Mogul's current Lake City, Minnesota, manufacturing facility. Federal-Mogul's second quarter revenues increased to $1,687 million compared to $1,214 million in 1998. For the second quarter, the company earned $96 million or $1.21 per share from operations, compared to $31 million or $.60 per share from operations in 1998. Earnings per share from operations exclude integration costs in 1999, and integration costs as well as extraordinary items in 1998. Including these items, the company reported second quarter earnings of $87 million or $1.11 per share in 1999, and a loss of $3 million or ($.07) per share in 1998.

The company generated $202 million of cash from operations. Cash from operations is net of capital expenditures and excludes integration and restructuring payments. EVA increased from $2 million in the second quarter of 1998 to $22 million the second quarter of 1999. Federal-Mogul's second quarter sales were 63% in North America, 32% in Europe and 5% in the rest of the world. The original equipment market represented 53% of the company's global sales.

Federal-Mogul's six-month consolidated sales reached $3,329 million, up 78% compared to the same period last year. Earnings from operations for the first two quarters of 1999 were $170 million, an increase of 181% over the first six months of 1998. Sales and earnings results were records for any six-month period in the company's 100-year history.

Powertrain Systems

Powertrain Systems reported second quarter sales of $755 million compared to $639 million in 1998.

Sealing Systems

Sealing Systems reported second quarter sales of $319 million compared to $303 million in 1998.

General Products

General Products reported second quarter sales of $613 million compared to $272 million in 1998.

* Sales up nearly 50 percent to $3.2 billion -- Highest quarterly sales ever
* Earnings up nearly 15 percent to $1.10 per share -- Highest quarterly earnings ever
* Completed UT Automotive transaction -- New platform for growth
* Financing package completed -- Bank facility and senior notes
* Motors business divested to Johnson Electric -- Raised $310 million
* Integrated new electronics capabilities -- Ahead of schedule

Net income for the quarter ended July 3, 1999 was a record $74.8 million, or $1.10 per share, compared with $65.7 million, or $.96 per share, in the second quarter of 1998. Operating income for the 1999 second quarter advanced 37 percent to $190.8 million, versus $139.6 million for 1998's second quarter. For the most recent quarter, the Company had approximately five hundred thousand fewer shares outstanding on a weighted average basis.

Net sales for the second quarter of 1999 rose to an all-time record of over $3.2 billion, as compared to approximately $2.2 billion in the second quarter of 1998. More than 20 percent of the second quarter sales increase was due to internally generated new business.

Geographically, almost one-third of the second quarter's record sales increase was attributable to Lear's operations outside of the U.S. and Canada. For the first time ever, European sales reached the billion-dollar mark, rising 55 percent from $662 million in the year-ago period. Also for the first time ever, sales in the U.S. and Canada reached the two-billion-dollar mark, a 55 percent increase from $1.3 billion in the year ago period. Due primarily to continued softness in the South American market, second quarter sales in other world regions declined from $217 million to $197 million.

Net income for the six months ended July 3, 1999 increased 11 percent to a record $125.1 million, or $1.85 per share, compared with earnings of $113.0 million, or $1.65 per share, in the comparable 1998 period. Operating income for the first six months of 1999 advanced 24 percent to $311.2 million, from $250.3 million in last year's comparable period. For the first six months of 1999, the Company had approximately seven hundred thousand fewer shares outstanding on a weighted average basis.

Net sales for the six months ended July 3, 1999 rose 41 percent to a record $5.9 billion from $4.2 billion. More than 30 percent of the six-month sales increase was due to internally generated new business.

Geographically, almost one-third of the sales increase for the first six months of 1999 was attributable to Lear's operations outside of the U.S. and Canada. For the first six months of 1999, European sales increased 46 percent to $1.9 billion, while sales in other world regions declined 9 percent to $365 million. U.S. and Canada sales for the first six months of 1999 increased 46 percent to $3.7 billion.

Reported net income for the period rose 19 percent to a record $190 million, and earnings per share for the quarter rose 18 percent to $1.14. These figures include non-recurring, after-tax charges of $5 million (3 cents per share) for the second quarter of 1999 and $7.5 million (4 cents per share) in 1998.

Dana's six-month consolidated sales were $6.8 billion, up 5 percent over the same period last year. Net income for the first two quarters was $352 million, an increase of 17 percent over the first six months of 1998. Earnings per share on a diluted basis also rose 17 percent for the first half of the year to $2.10. Return on sales for the second quarter increased to 5.7 percent, compared with 5.2 percent a year ago. For the quarter, all strategic business units except the Off-Highway Systems and Industrial groups showed increases in operating margin. Operating margins improved to 9.9 percent, 90 basis points higher than the second quarter of 1998, mainly due to restructuring and rationalization efforts, as well as ongoing cost-control initiatives.