Slide 1: Second-Quarter 2007 Results and Full-Year 2007 Financial Outlook
Exhibit 99.2 Second-Quarter 2007 Results and Full-Year 2007 Financial Outlook August 2, 2007
Slide 2: Agenda
Agenda Company Overview and Business Plan Bob Rossiter, Chairman and CEO Second-Quarter 2007 Results and 2007 Outlook Jim Vandenberghe, Vice Chairman and CFO Q and A Session 2
Slide 3: Company Overview and Business Plan
Company Overview and Business Plan 3
Slide 4: What Does the Shareholder Vote Against the AREP Merger Proposal Mean?
What Does the Shareholder Vote Against the AREP Merger Proposal Mean?* Lear’s shareholders have voted, and we respect their decision At the time of the Merger Proposal, we had a clear strategy and business plan for the future Nevertheless, the Board was obligated to evaluate the AREP offer and make
Slide 5: Following the Offer, Near-Term Factors Turned More Positive
Following the Offer, Near-Term Factors Turned More Positive* Auto sector valuations increased significantly Big Three production in the first half was relatively stable and somewhat stronger than we had forecast Distress in the supply chain has moderated somewhat There were no labor disruptions in t
Slide 6: Business Assessment
Business Assessment* Near-Term Business Conditions Relatively Stable Continuing priority focus on quality and business fundamentals Seating business performing well globally Electrical and Electronic business needs further improvement Further Industry Restructuring and Volatility Expected Substantia
Slide 7: New Asian Program Awards in Second Quarter
New Asian Program Awards in Second Quarter Vehicle Automaker Market Lear Content Program(s) SOP** China Seats B13 CV Jun-08 China Seats A4 Nov-08 China Seats FC2/3 Apr-08 China Wire Harness/Junction Box/TPMS FC2/3 Jun-08 North America Junction Box Sonata/Santa Fe Feb-08 Australia Tier II Seat Compon
Slide 8: Going Forward, What is Lear's Business Plan?
Going Forward, What is Lear’s Business Plan?* Continue to execute the customer-focused business plan we have in place: Product-Line Focus Focus on strengthening our core businesses: Leverage leadership position in Seating systems Strengthen capabilities in Electrical and Electronic segment Expand ca
Slide 9: Second-Quarter Results and 2007 Outlook
Second-Quarter Results and 2007 Outlook 9
Slide 10: Financial Summary
Financial Summary* Second-Quarter special items include: Costs related to restructuring actions Costs related to AREP merger transaction Costs related to divestiture of Interior business Second-Quarter core operating earnings were $229 million, up $65 million from a year ago, reflecting: Favorable c
Slide 11: Second Quarter 2007 Industry Environment
Second Quarter 2007 Industry Environment Second Quarter Second Quarter 2007 2007 vs. 2006 North American Production Industry 4.0 mil Down 2% Big Three 2.7 mil Down 7% Lear's Top 15 Platforms 1.3 mil Down 6% European Production Industry 5.2 mil Up 1% Lear's Top 5 Customers 2.6 mil Up 1% Key Commoditi
Slide 12: Second Quarter 2007 Reported Financial Results
Second Quarter 2007 Reported Financial Results Second Second 2Q '07 (in millions, except net income per share) Quarter 2007 Quarter 2006 B/(W) 2Q '06 Net Sales $4,155.3 $4,810.2 ($654.9) Income Before Interest, Other Expense and Income Taxes* $194.8 $113.2 $81.6 Pretax Income $143.9 $31.5 $112.4 Net
Slide 13: Second Quarter 2007 Restructuring Costs and Other Special Items
Second Quarter 2007 Restructuring Costs and Other Special Items* Second Quarter Income Before Interest, Other Expense and (in millions) Income Taxes Reported Results 2007 Total Company $ 194.8 2007 Residual Interior business (0.6) Memo: 2007 Seating/Electrical and Electronic businesses $ 195.4 Incom
Slide 14: Second Quarter 2007 Net Sales Changes and Margin Impact Versus Prior Year
Second Quarter 2007 Net Sales Changes and Margin Impact Versus Prior Year Net Sales Margin Performance Factor Change Impact Comments (in millions) Industry Production / $ (171) Negative Primarily lower production in Platform Mix / Net Pricing / North America All Other Global New Business 266 Positiv
Slide 15: Second Quarter 2007 Business Segment Results
Second Quarter 2007 Business Segment Results ($ in millions) Second Quarter 2007 2006 Seating Margin Margin Net Sales $ 3,264.5 $ 3,096.1 Reported Segment Earnings* $ 238.8 7.3% $ 171.5 5.5% Adjusted Earnings** $ 250.4 7.7% $ 175.4 5.7% Electrical and Electronic Net Sales $ 825.1 $ 787.7 Reported Se
Slide 16: Second Quarter 2007 Seating Segment Performance
Second Quarter 2007 Seating Segment Performance* Explanation of Adjusted Seating Margin Year-to-Year Change + Favorable cost performance from 7.7% restructuring and ongoing efficiency 5.7% actions + Margin improvement actions, including selective vertical integration + Benefit of new business, prima
Slide 17: Second Quarter 2007 Electrical and Electronic Segment Performance
Second Quarter 2007 Electrical and Electronic Segment Performance* Adjusted Explanation of Electrical and Electronic Margin Year-to-Year Change - Litigation costs and other 6.4% commercial items - Unfavorable net pricing 4.7% - Lower industry production in N. A. - Roll-off of two programs in N. A. -
Slide 18: Second Quarter 2007 Headquarters Performance
Second Quarter 2007 Headquarters Performance* Explanation of Adjusted Headquarters Expense** Year-to-Year Change (in millions) $61.5 $59.7 SG&A efficiencies Restructuring savings Q2 2006 Q2 2007 * Please see slides titled “Non-GAAP Financial Information” at the end of this presentation for further i
Slide 19: Second Quarter 2007 Free Cash Flow
Second Quarter 2007 Free Cash Flow* (in millions) Second Quarter 2007 Net Income $ 123.6 Depreciation / Amortization 75.7 Working Capital / Other 43.8 Cash from Operations $ 243.1 Capital Expenditures (39.1) Free Cash Flow $ 204.0 * Free Cash Flow represents net cash provided by operating activities
Slide 20: 2007 Outlook Full-Year Production Assumptions
2007 Outlook Full-Year Production Assumptions* Full-Year Change from 2007 Outlook Prior Year North American Production Total Industry ~ 15.1 mil down 1% Big Three ~ 9.8 mil down 4% Lear’s Top 15 Platforms ~ 4.6 mil down 7% European Production Total Industry ~ 19.7 mil up 3% Lear’s Top 5 Customers ~
Slide 21: 2007 Outlook Full-Year Financial Forecast
2007 Outlook Full-Year Financial Forecast* 2007 Full-Year Financial Forecast for Core Business (Seating and Electrical and Electronic businesses) Net Sales ~ ~ $15 billion Core Operating Earnings $600 to $640 million Income before interest, other expense, income taxes, restructuring costs and other
Slide 22: Summary and Outlook
Summary and Outlook* Lear is Financially Sound Successfully refinanced major debt maturities through 2010 Operating results improving; cash flow now solidly positive Making Progress on Strategic Priorities Completed divestiture of Interior business Expanding our presence in Asia and growing Asian sa
Slide 23: Advance Relentlessly
R ADVANCE RELENTLESSLY™ LEA Listed NYSE www.lear.com 23
Slide 24: Non-GAAP Financial Information
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 before interest, other expense and income taxes,”
Slide 25: Non-GAAP Financial Information: Cash from Operations and Free Cash Flow
Non-GAAP Financial Information Cash from Operations and Free Cash Flow Three Months (in millions) Q2 2007 Net cash provided by operating activities $ 289.3 Net change in sold accounts receivable (46.2) Net cash provided by operating activities before net change in sold accounts receivable (cash from
Slide 26: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings Three Months (in millions) Q2 2007 Q2 2006 Pretax income $ 143.9 $ 31.5 Goodwill impairment charge related to Interior business - 2.9 Divestiture of Interior business (0.7) - Interest expense 51.3 53.2 Other expense, net * 0.3 25.6 Income before
Slide 27: Non-GAAP Financial Information: Segment Earnings Reconciliation
Non-GAAP Financial Information Segment Earnings Reconciliation Three Months (in millions) Q2 2007 Q2 2006 Seating $ 238.8 $ 171.5 Electrical and electronic 23.5 38.0 Interior (0.6) (34.3) Segment earnings 261.7 175.2 Corporate and geographic headquarters and elimination of intercompany activity (66.
Slide 28: Non-GAAP Financial Information: Adjusted Segment Earnings
Non-GAAP Financial Information Adjusted Segment Earnings Three Months Q2 2007 Three Months Q2 2006 Electrical and HQ/ Core Electrical and HQ/ Core (in millions) Seating Electronic Other Business Seating Electronic Other Business Segment earnings $ 238.8 $ 23.5 $ (66.9) $ 195.4 $ 171.5 $ 38.0 $ (62.0
Slide 29: 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