Slide 1: Fourth-Quarter and Full-Year 2008 Results and Sales Backlog Update
January 29, 2009 Fourth-Quarter and Full-Year 2008 Results and Sales Backlog Update Exhibit 99.2
Slide 2: Agenda
Agenda Business Environment Bob Rossiter, Chairman, CEO and President Fourth-Quarter and Full-Year 2008 Results and Sales Backlog Update Matt Simoncini, SVP and CFO Summary and Outlook Bob Rossiter, Chairman, CEO and President Q and A Session
Slide 3: Business Environment
Qtear.. Business Environment
Slide 4: Business in Perspective
Business in Perspective* In 2007, Lear reported improved financial results in its core business for the second consecutive year, following the divestiture of the Interior business, successful global restructuring efforts and cost improvements In 2008, the U.S. economy experienced the worst economic
Slide 5: Strategy to Manage Through the Downturn
Strategy to Manage Through the Downturn* Focusing on a lean operating structure to minimize cash burn Negotiating an amendment to our credit facility to maintain financial flexibility Aggressively implementing cost reductions and operating improvements to align business with lower volumes Putting a
Slide 6: Summary of Operating Improvements
Closed or consolidated more than 25 facilities worldwide and reduced salaried census by 33% in North America since 2005 Reduced compensation and fringe benefits Thrifted non-program related spending Reduced new market infrastructure spending Slowed capacity expansion in emerging markets Consolidated
Slide 7: Making Progress on Sales Diversification
Making Progress on Sales Diversification By Region By Customer All Other GM Ford BMW Asian OEMs VW/Audi Fiat PSA Group Saab/Volvo Mercedes Benz Renault/Nissan Chrysler Jaguar/Land Rover 6.7 21.5 15.8 11.5 6.7 6.7 6.7 5.2 4.9 4.5 4.4 3 2.4 GM North America ROW Europe East 0.36 0.15 0.48 North America
Slide 8: Positioned for Industry Recovery
Positioned for Industry Recovery* Strong global capabilities in critical automotive systems -- Seating and Power Distribution Improved annual cost structure by more than $250 million through aggressive restructuring actions since mid-2005 Significant low-cost footprint in place, with operations in 2
Slide 9: Fourth-Quarter and Full-Year 2008 Results and Sales Backlog Update
Fourth-Quarter and Full-Year 2008 Results and Sales Backlog Update
Slide 10: Global Production Environment
Global Production Environment
Slide 11: 2008 Financial Summary
2008 Financial Summary* Fourth-Quarter 2008 Results Net sales of $2.6 billion Core operating earnings of $22 million** Free cash flow was negative $38 million** Full-Year 2008 Results Net sales of $13.6 billion Core operating earnings of $418 million** Free cash flow was negative $71 million** Sales
Slide 12: Fourth-Quarter 2008 Reported Financials
Fourth-Quarter 2008 Reported Financials* * Please see slides titled "Non-GAAP Financial Information" at the end of this presentation for further information.
Slide 13: Fourth-Quarter 2008 Restructuring / Special Items Impact
Fourth-Quarter 2008 Restructuring / Special Items Impact* * Please see slides titled "Non-GAAP Financial Information" at the end of this presentation for further information. Fourth-Quarter (1) Excludes $5.7 million of restructuring charges recorded in other expense.
Slide 14: Fourth-Quarter 2008 Net Sales Changes and Margin Impact
Fourth-Quarter 2008 Net Sales Changes and Margin Impact
Slide 15: Full-Year 2008 Seating Performance
Full-Year 2008 Seating Performance* Explanation of Year-to-Year Change * Please see slide titled "Non-GAAP Financial Information" at the end of this presentation for further information. (in mils) Sales Earnings** Adj. Earnings** ** Reported segment earnings represents income before goodwill impairm
Slide 16: Full-Year 2008 Electrical and Electronic Performance
Explanation of Year-to-Year Change * Please see slide titled "Non-GAAP Financial Information" at the end of this presentation for further information. (in mils) Sales Earnings** Adj. Earnings** ** Reported segment earnings represents income before goodwill impairment charges, interest, other expense
Slide 17: Fourth-Quarter and Full-Year 2008 Free Cash Flow
Fourth-Quarter and Full-Year 2008 Free Cash Flow* (in millions) * Free cash flow represents net cash provided by (used in) operating activities (($90.9) million for the three months and $144.2 million for the twelve months ended 12/31/08) before net change in sold accounts receivable ($86.5 million
Slide 18: Sufficient Cash Position
Sufficient Cash Position* To protect against disruptions in the capital markets and uncertainty in the industry, Lear fully borrowed amounts available under its primary credit facility (~$1.2 billion) during the fourth quarter Combined with cash on hand, Lear had $1.6 billion of cash and cash equiva
Slide 19: Sales Backlog Update
Sales Backlog Update* 2009-2011 2009 2010 2011 Consolidated 1100 0 700 400 By Product: Seating -- 60% Electrical and Electronic -- 40% By Region: North America -- $0 Europe -- $300M Asia -- $800M 2009 - 2011 Sales Backlog** ($ in millions) Composition of Sales Backlog** * For a definition of sales b
Slide 20: Lear to Supply Key Electrical and Electronic Products for Chevy Volt and Other New Hybrids
High and low-voltage wire harnesses Custom terminals and connectors, including the industry's first terminal with 250-amp capability External charging cable with Lear's Smart Connector(tm) Other proprietary electronics BMW (new generation) hybrid vehicles - -- high-voltage wiring system Fisker Karma
Slide 21: 2009 Outlook
2009 Outlook* Global automotive production has declined rapidly Economic conditions remain very volatile and uncertain: Negatives: Low consumer confidence Very tight credit conditions Weak overall economic activity Poor housing and employment conditions Positives: Low interest rates Government stimu
Slide 22: Summary and Outlook
Qtear.. Summary and Outlook
Slide 23: Summary and Outlook
Summary and Outlook* Business conditions have become more challenging globally We are following a lean operating structure to minimize cash burn We are accelerating and expanding restructuring and cost reduction actions to improve near-term operating results At the same time, we are maintaining our
Slide 24: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 25: Non-GAAP Financial Information
In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this presentation, the Company has provided information regarding "income (loss) before interest, other expense and income taxes," "income before interest
Slide 26: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings
Slide 27: Non-GAAP Financial Information: Segment Earnings
Non-GAAP Financial Information Segment Earnings
Slide 28: Non-GAAP Financial Information: Adjusted Segment Earnings
Non-GAAP Financial Information Adjusted Segment Earnings
Slide 29: Non-GAAP Financial Information: Cash from Operations and Free Cash Flow
Non-GAAP Financial Information Cash from Operations and Free Cash Flow
Slide 30: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results and liquidity. Actual results may differ materially from anticipated results as a