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Dana Holding Corporation  Corresp

Dana Holding Corporation

4500 Dorr Street

Toledo, Ohio 43615

July 21, 2008

Via facsimile and EDGAR submission

Mr. Joseph A. Foti

Senior Assistant Chief Accountant

United States Securities and Exchange Commission

Division of Corporation Finance

100 F Street, N.E.

Washington, D.C. 20549

    Re:

    Dana Holding Corporation

    Form 10-K for the year ended December 31, 2007

    Filed March 14, 2008

    File No. 001-01063

Dear Mr. Foti:

On behalf of Dana Holding Corporation (“Dana”), I submit our response to the comments in your
letter dated July 1, 2008 related to Dana’s Form 10-K for the year ended December 31, 2007 and Form
10-Q for the quarter ended March 31, 2008 filed with the Securities and Exchange Commission on
March 14, 2008 and May 12, 2008, respectively. Our responses to the comments are set forth below.
For ease of reference, the comments are also set forth below in their entirety.

The
revisions we have proposed in response to your comments predominantly:

    (1)

    provide further details on the composition of amounts which were previously
presented on a “net” basis, with expanded disclosure of the
“grossed-up” amounts, or

    (2)

    provide information describing the valuation process and assumptions used to
determine reorganization value and the fair values of assets and liabilities.

We are proposing to include these expanded disclosures in our Form 10-Q for the quarter ended June
30, 2008 which we expect to file by August 11, 2008. An amended
10-Q for the quarter ended March 31, 2008 would not likely be
available before that date. As such, based on the nature of the
revisions and the projected schedule for filing of our Form 10-Q for
the quarter ended June 30, 2008, and subject to your concurrence, we
propose incorporating these revised disclosures in our Form 10-Q for
the quarter ended June 30, 2008, with not amendment of the Form 10-Q
for the quarter ended March 31, 2008.

Page 1 of 23

RESPONSES ($ in millions):

Form 10-K for the year ended December 31, 2007

Management’s Discussion and Analysis of Financial Condition and Results of Operations —
Results of Operations — Summary, Page 29

Item 1.

We note your use of the non-GAAP financial measure Gross Margin less SG&A and your disclosure that
you believe the measure is useful for an understanding of your ongoing operations because it
excludes other income and expense items which are generally not expected to be part of your ongoing
business. However, we note that the amount excludes items such as foreign exchange gain/losses,
interest income, and asset impairments which will presumably be part of your ongoing operations.
Also, in the Form 10-Q for the quarter ended March 31, 2008, the measure excludes intangible
amortization which will occur for several future periods. Please provide us with, and revise
future filings to include, a substantive reason unique to you as to why investors will find this
non-GAAP financial measure useful.

Response:

Our use of Gross Margin less SG&A as a financial measure resulted from our decision to discuss the
combined effects of cost of sales and SG&A on our operations by operating segment and in the
aggregate. Factors such as foreign exchange gain or loss, interest income and asset impairment
were discussed in connection with the results of operations comments directed at the respective
income statement captions which included these effects (e.g., “other income,” “impairment,”
“realignment” and “intangible amortization”).

In future filings, we will discontinue the use of Gross Margin less SG&A, thereby eliminating this
non-GAAP reference and associated disclosure. We will discuss the significant factors
impacting cost of sales and
separately comment on those factors impacting SG&A by operating segment.

Margin Analysis, page 32

Item 2.

We note your discussion of results of operations includes a discussion of gross margin by segment.
In future filings please discuss and analyze net sales and cost of sales (rather than margins)
separately for each segment. Because margins are impacted by both net sales and cost of sales, we
believe a separate discussion of cost of sales results is appropriate.

Page 2 of 23

Response:

The comment here calls for a separate discussion of net sales and cost of sales by operating
segment. Our past filings already provided a separate analysis of the factors impacting net sales.
As indicated in the response to Item 1, we’ve disclosed the significant factors impacting cost of
sales, but our disclosure of these factors had been in reference to the impact on Gross Margin less
SG&A. In future filings, we will comment specifically on the factors affecting cost of sales for
the applicable periods.

Form 10-Q for the quarter ended March 31, 2008

Statement of Stockholders’ Equity, page 6

Item 3.

We note that the issuance of new equity in connection with emergence from Chapter 11 resulted in
additional paid-in capital of $2,267. Please tell us, and revise your notes to the financial
statements to disclose, how you determined or calculated the $2,267 amount. The footnotes to the
reorganized consolidated balance sheet should also be revised to explain how this amount was
calculated.

Response:

In our Form 10-Q for the quarter ended March 31, we reported our disclosures regarding emergence
from Chapter 11 in Note 1 to the consolidated financial statements. For our Form 10-Q for the
quarter ended June 30, 2008, we have moved this disclosure to Note 2. We will revise Note 2
(reported as Note 1 in the first quarter 10-Q), Emergence from Chapter 11, as it will appear in our
Form 10-Q for the quarter ended June 30, 2008 to include explanatory note (5) below which
reconciles the enterprise value of $3,563 to the new common stock of $1 and paid-in capital of
$2,267. These two line items are referenced on the face of the reorganized consolidated balance
sheet as of January 31, 2008 and in explanatory note (5). The attached Exhibit 1 includes all
revisions to Note 2, which will be included in our financial statements beginning with our Form
10-Q for the quarter ended June 30, 2008.

Page 3 of 23

    (5)

    Reconciliation of enterprise value to the reorganization value of Dana
assets, determination of goodwill and allocation of compromise enterprise value to
common stockholders:

    Compromise total enterprise value

    $
    3,563

    Plus: cash and cash equivalents

    2,147

    Less: emergence related cash payments after January 31, 2008

    (1,129
    )

    Plus: liabilities (excluding debt and liability for emergence bonuses)

    3,694

    Reorganization value of Dana assets

    8,275

    Fair value
of Dana assets (excluding goodwill)

    7,973

    Reorganization value of Dana assets in excess of fair value (goodwill)

    $
    302

    Reorganization value of Dana assets

    $
    8,275

    Less: liabilities (excluding debt and the liability for emergence bonuses)

    (3,694
    )

    Less: debt

    (1,383
    )

    Less: minority interest

    (112
    )

    Less: preferred stock (net of issuance costs)

    (771
    )

    Less: liability for emergence bonus shares not issued at January 31, 2008

    (47
    )

    New common stock ($1) and paid-in capital ($2,267)

    $
    2,268

    Shares outstanding at January 31, 2008

    97,971,791

    Per share value

    $
    23.15

The per share value of $23.15 was utilized to record the shares issued for allowed claims
and for the unliquidated and disputed claims reserve and to record the liability at January
31, 2008 for shares to be issued to employees as emergence bonuses.

Emergence
related cash payments represents reductions to cash on hand for amounts expected
to be paid for bankruptcy claims and fees after emergence. The fair value of reorganized
Dana assets excluding goodwill is derived from the sum of all assets on the reorganized
consolidated balance sheet, excluding goodwill.

Note 1. Emergence from Chapter 11, Page 8

Emergence from Reorganization Proceedings and Related Subsequent Events

Item 4.

We note from the disclosure on Page 11 that Dana’s compromise total enterprise value is $3,563 and
that this value represents the amount of resources available for the satisfaction of post-petition
liabilities and allowed claims as negotiated between the Debtors and their creditors. We also note
that Dana developed its view of what the value should be based upon expected future cash flows of
the business after emergence from Chapter 11, discounted at rates reflecting the perceived business
and financial risks and this valuation and a valuation using market value multiples for peer
companies were blended to arrive at the compromise valuation.

Page 4 of 23

With regard to Dana’s determination of reorganization value, please tell us and revise the
notes to your financial statements to include disclosure of the following matters:

    •

    Please revise to disclose the significant assumptions used in your discounted cash
flow analysis including expected changes in cash flows from those indicated by your
current operations, number of years for which cash flows were projected, discount
rates and other significant assumptions used in your analysis, including how any
terminal value was calculated or determined. Refer to the disclosure requirements
outlined in paragraph 39 of SOP 90-7.

    •

    Disclose the results of the valuation based on multiples of peer group companies
and explain how the results of this analysis were combined or blended with the results
of the discounted cash flow analysis to arrive at the total enterprise value of
$3,563.

    •

    Please revise to explain the nature and amounts of the adjustments that were made
to the enterprise value of $3,563 to determine the value of $2,267 attributed to the
interests of the common shareholders.

We may have further comment upon receipt of your response and our review of your revised
disclosures.

Response:

We will revise Note 2, Emergence from Chapter 11, beginning with our Form 10-Q for the quarter
ended June 30, 2008 to include the following additional disclosure explaining the significant
assumptions and methodologies and the combined valuation:

The basis for the discounted cash flows (DCF) was the projections published in the
Plan. These five-year estimates included projected changes associated with our
reorganization initiatives, anticipated changes in general market conditions, including
variations in market regions and known new business gains and losses, as well as other
factors considered by Dana management. We completed the DCF analysis by operating segment
in late 2007 using discount rates ranging from 10.5% to 11.5% based on a capital asset
pricing model which utilized weighted average cost of capital relative to certain ASG and
HVSG reference peer group companies.

For
our DCF valuation, we utilized the average of two DCF methodologies to derive the enterprise value of Dana:

    •

    EBITDA Multiple Method — The sum of the present values of the unlevered free cash
flows was added to the present value of the terminal value of the reorganized Dana,
computed using EBITDA exit multiples by segment based in part on the range of multiples
calculated by using a comparable public company methodology, to arrive at an implied
enterprise value for Dana’s operating assets (excluding cash).

Page 5 of 23

    •

    Perpetuity Growth Method — The sum of the present values of the unlevered free
cash flows was added to the present value of the terminal value of Dana, which was
computed using the perpetuity growth method based in part on industry growth prospects
and our business plans, to arrive at an implied enterprise value for Dana’s operating
assets (excluding cash).

     We also utilized a comparable companies methodology which identified a group of
publicly traded companies whose businesses and operating characteristics were similar to
those of Dana as a whole, or similar to significant portions of Dana’s operations, and
evaluated various operating metrics, growth characteristics and valuation multiples for
each of the companies in the group. We then developed a range of valuation multiples to apply to our projections to derive a range of implied
enterprise values for Dana. The multiples ranged from 3.8 to 9.0
depending on the comparable companies.

     The final valuation range was an average of the DCF valuation ranges and the
comparable company multiples range. This amount was also adjusted for the fair value of
unconsolidated subsidiaries, the residual value of DCC’s assets, the fair value of our net
operating losses and a note receivable obtained in connection with a divestiture in 2004.

The revision to explanatory note (5) in Note 2, Emergence from Chapter 11, as discussed in our
response to Item 3 above responds to the question of the
adjustments made to the enterprise value of $3,563 to determine the $2,268 (which consists of new common stock of $1 and paid-in
capital of $2,267 referred to in your comments). See revised Note 2, attached as Exhibit 1, which
will be included in our financial statements beginning with our Form 10-Q for the quarter ended
June 30, 2008.

Item 5.

We note your disclosure that you issued and distributed 71 million shares of Dana common stock to
holders of allowed unsecured claims totaling approximately $2,050. Please explain to us and revise
your disclosure to indicate how you valued the shares of stock issued. Also, explain how you
valued and accounted for the issuance of 27 million additional shares issued and set aside for
distribution to holders of allowed unsecured nonpriority claims in
Class 5B under the plan.
Further, please explain how you valued the two million shares to pay bonuses to union employees and
non-union hourly and salaried non-management employees for which a $47 million charge to
reorganization items was recorded as of the effective date. As part of your revised disclosure,
please explain how total enterprise value of the “reorganized” Dana was allocated to various
categories of equity issued.

Response:

As indicated in our response to Item 3 above, we will revise Note 2, Emergence from Chapter 11,
beginning with our Form 10-Q for the quarter ended June 30, 2008 to include explanatory note (5)
which discloses that the common stock shares were valued at $23.15 per share and includes the
following additional disclosure:

Page 6 of 23

The per share value of $23.15 was utilized to record the shares issued for allowed claims
and for the unliquidated and disputed claims reserve and to record the liability at January
31, 2008 for shares to be issued to employees as emergence bonuses.

In addition, we intend to disclose the original valuation of the shares distributed to the allowed
claimholders and held for disputed claims in Note 2 (revisions to the previous disclosure are
indicated by bold type and the amounts will change when additional distributions are made from the
disputed claims reserve):

     Claims resolution — On December 26, 2007, the Bankruptcy Court entered an order (the
Confirmation Order) confirming the Third Amended Joint Plan of Reorganization of Debtors
and Debtors in Possession (as modified, the Plan) and, on the Effective Date, the Plan was
consummated and we emerged from bankruptcy. As provided in the Plan and the Confirmation
Order, we issued and distributed approximately 71 million shares of Dana common stock
(valued in reorganization at $1,637) on the effective date to holders of allowed unsecured
claims totaling approximately $2,050. Pursuant to the Plan, we also issued and set aside
approximately 27 million additional shares of Dana common stock (valued in reorganization
at $631) for future distribution to holders of allowed unsecured nonpriority claims in
Class 5B under the Plan. These shares are distributed as the disputed and unliquidated
claims are resolve