Federal-Mogul ReportsSecond Quarter 2004 Results

Federal-Mogul Corporation (USA) reported financial results for second quarter 2004. Federal-Mogul has been operating under Chapter 11 bankruptcy protection since third quarter 2001, and recently had its final reorganization plan approved. article: Federal-Mogul reorganization plan approved Sales in second quarter 2004 were up 10% over 2003, to $1.58 billion from $1.43 billion. Sales benefited from $44 million in foreign currency effects, along with improved sales to both original equipment and aftermarket customers. Partially offsetting the organic sales improvements were customer price reductions driven by increasingly competitive market situations, and higher costs of some raw materials. Income was helped by productivity improvements and cost reductions traceable to continued cost reduction and restructuring activities. Also, SG&A expenses declined as a percentage of sales from 16.0% to 14.9%. Income from continuing operations, before income taxes, was $11 million in the quarter, from $19 million in 2003. A European Powertrain operation recorded assets impairment of $20 million to adjust the carrying value of certain tangible assets, principally machinery and equipment. During the quarter, Federal-Mogul received $20 million as an insurance settlement for the fire which destroyed its Smithville, Tennessee distribution center the night of March 5, 2004.