Slide 1: First Quarter 2005 Results and Second Quarter and Full Year 2005 Guidance
fast forward R First Quarter 2005 Results and Second Quarter and Full Year 2005 Guidance April 22, 2005 Exhibit 99.2
Slide 2: Agenda
Agenda Operating Review Jim Vandenberghe, Vice Chairman Financial Review and Updated 2005 Guidance Dave Wajsgras, SVP and CFO Strategic Direction and Outlook Bob Rossiter, Chairman and CEO Q & A
Slide 3: Operating Review
Operating Review
Slide 4: First Quarter Summary
First Quarter Summary Business conditions very challenging Industry production down 4% in N.A. and 3% in Europe Lear's top fifteen platforms down 11% in N.A. Raw material prices continue at high levels Net sales were $4.3 billion, down 5% Net income was $0.23 per share, including a one-time tax bene
Slide 5: First Quarter Production Environment
First Quarter Production Environment Overall Industry Big Three Big Three Trucks Lear's Top 15Platforms -0.04 -0.09 -0.11 -0.11 North America Overall Industry Big Three Big Three Trucks Lear's Top 15 Platforms Overall Industry Lear's Top 10 Platforms -0.03 0.02 Overall Industry Lear's Top 15 Platfor
Slide 6: Impact Of Commodity Movements
Impact Of Commodity Movements Key Commodities Steel Resins Chemicals Energy Continuing To Work With Customers And Supply Base Action Plan Factor into customer productivity requirements Lear's Cost Technology Optimization process Supply base compression Re-sourcing - develop new sources of supply In-
Slide 7: Lear's Game Plan
Lear's Game Plan Aggressively implement cost improvement initiatives Improve quality and ensure flawless launches Continue to profitably grow our sales backlog: Focusing on customer diversification Continuing to expand presence in Asia Evaluate repositioning actions to eliminate excess capacity and
Slide 8: 2005 And 2006 Sales Backlog
2005 And 2006 Sales Backlog* $1.55 billion of new business coming online in 2005 $3.8 billion of new business coming online over the next three years 2005 is a transition year for Lear's platform mix: More than half of Lear's major North American platforms are turning over during 2005. . . Represent
Slide 9: Major North American Launches
Major North American Launches Dodge Ram Truck Seats, Doors, Instrument Panel, Overhead Systems SOP: 3Q 2005 Cadillac DTS Total Interior Integrator, Electrical Distribution SOP: 3Q 2005 Ford Explorer / Mountaineer Seats, Doors, Electrical Distribution SOP: 3Q 2005 Buick Lucerne Total Interior Integra
Slide 10: Major North American Launches (continued)
Major North American Launches (continued) Hyundai Sonata Seats, Wire Harness SOP: 1Q 2005 Chevy HHR Cockpit, Flooring & Acoustics SOP: 2Q 2005 Chevy Impala / Chevy Monte Carlo Seats SOP: 2Q / 3Q 2005 Ford Fusion / Milan / Zephyr Seats SOP: 3Q 2005
Slide 11: Major European / Asian Launches
Major European / Asian Launches BMW 3 Series Seats, Electronics SOP: 1Q 2005 Peugeot 407 Coupe Seats SOP: 2Q 2005 Nissan Serena Electrical Distribution SOP: 2Q 2005 Audi A6 - China Seats SOP: 1Q 2005
Slide 12: Continuing To Diversify Our Customer Mix
Continuing To Diversify Our Customer Mix 1994 2004 East 19 46 West North Non-Traditional Big Three* * Excludes affiliates of GM (other than Opel), Ford and DaimlerChrysler. Hyundai Sonata: seats & wire harness award in NA Several electronics awards (TPMS) in NA Tucson: seats in Korea Tucson/Sonata:
Slide 13: Present Business Assessment
Present Business Assessment* Three key factors impacting near-term results -- adverse platform mix, lower industry volume and high raw material and energy prices Financial outlook improving the balance of this year and into 2006 Currently evaluating our global business to best position Lear for long
Slide 14: Financial Review and Updated 2005 Guidance
Financial Review and Updated 2005 Guidance
Slide 15: Financial Highlights - First Quarter 2005
First Quarter 2005 First Quarter 2004 1Q '05 B/(W) 1Q '04 (in millions, except net income per share) Financial Highlights - First Quarter 2005 * Income (loss) before income taxes for the first quarter 2005 and 2004 was ($2.9) and $126.0, respectively. Please see slides titled "Use of Non-GAAP Financ
Slide 16: North America Adverse First Quarter Mix Impact
North America Adverse First Quarter Mix Impact Driven By Sharp Declines In High Content Platforms Avg. CPV Avg. CPV - Top Fifteen 4th Qtr 553 1350 East 13.9 13.7 20.4 West 30.6 38.6 31.6 North 45.9 46.9 43.9 ^ 4.7 4.8 Lear's Key N.A. Platforms > $1,000 ^$550 B/(W) 1Q 2004 Source: Ward's Automotive
Slide 17: 1Q05 vs 1Q04 - Change In Net Sales
1Q05 vs 1Q04 - Change In Net Sales Total Change Platform Mix Industry Production Acquisitions FX Global New Business & Other Net Sales -206 -490 -219 92 115 297 ($206) 2004 $4,492 (in millions) 2005 $4,286
Slide 18: 1Q05 vs 1Q04 - Change In Core Operating Earnings
1Q05 vs 1Q04 - Change In Core Operating Earnings** Total Change Industry Production & Platform Mix Net Commodity Price Impact New Business Net Operating Performance & Other* Net Sales -130 -184 -33 26 62 (in millions) 2004 $179 2005 $49 * Includes the impact of currency exchange. ** Please see slide
Slide 19: First Quarter Free Cash Flow
Net Income $ 15.6 Depreciation / Amortization 95.6 Working Capital / Other 7.3 Cash from Operations $ 118.5 Capital Expenditures (129.4) Free Cash Flow $ (10.9 ) Three Months First Quarter Free Cash Flow* (in millions) * Free Cash Flow represents net cash provided by operating activities ($118.5M fo
Slide 20: 2005 Outlook Vehicle Production Assumptions
North America (in millions) 2005 Outlook Vehicle Production Assumptions* 2004 Actual 2005 Forecast 3rd Qtr 4th Qtr 4.1 4.2 4.2 4.2 East 7.4 7.1 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 2004 Actual 2005 Forecast 3rd Qtr 4th Qtr 4.8 4.8 5.1 4.9 East 9 8.6 90 20.4 West 30.6 38.6 34.6 31
Slide 21: 2005 Outlook Net Sales
2005 Outlook Net Sales* 2005 Net Sales Increase Reflects Strong Backlog (in billions) Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information. 2003 2004 2005 Guidance East 3.9 4.5 4.3 ddd 4.1 4.3 4.5 West 7.8 8.2 8.6 North 3 $17.0 $15.7 First Quar
Slide 22: 2005 Outlook Net Income Per Share
2005 Outlook Net Income Per Share** 2004 Reported 2005 Guidance East 2.1 1.4 0.75 2.05 0.75 West 6.5 4.17 2.4 North 0.5 $5.77 First Quarter Full Year $2.75 - $3.25* $0.23* $1.24 * Includes first-quarter tax benefit resulting from a tax law change in Poland. ** Please see slide titled "Forward-Lookin
Slide 23: 2005 Outlook Full Year - Change In Net Income Per Share
2005 Outlook Full Year - Change In Net Income Per Share* Total Change Industry Production & Platform Mix Net Commodity Price Impact Industry Production FX Net Operating Performance & Other New Business Net Sales -2.77 -3.88 -1.47 -0.4 0.25 0.84 1.49 2004 $5.77 2005 Guidance Midpoint - $3.00 Please s
Slide 24: 2005 Full Year Financial Guidance
Free Cash Flow** ($50) million - breakeven Interest Expense ^$180 million Tax Rate* ^25% Depreciation ^$425 million Capital Expenditures ^$550 million Euro $1.25 - $1.35 / Euro 2005 Outlook Other 2005 Full Year Financial Guidance** * Excludes one-time tax benefit resulting from a tax law change in P
Slide 25: 2005 Capital Spending And Free Cash Flow
Capital Spending 2005 Outlook 2005 Capital Spending And Free Cash Flow* ^ 3.9 4.1 Includes negative impact of change in customer payment terms Free Cash Flow * Please see slides titled "Use of Non-GAAP Financial Information" and "Forward-Looking Statements" at the end of this presentation for furthe
Slide 26: 2005 Outlook Volume And Cost Factors Improve In Second Half
2005 Outlook Volume And Cost Factors Improve In Second Half* North America Production Down 3% Up 2% Big Three Production Down 7% About Flat Net Commodity Cost Impact 2/3 of Full Year 1/3 of Full Year Please see slide titled "Forward-Looking Statements" at the end of this presentation for further inf
Slide 27: Strategic Direction and Outlook
Strategic Direction and Outlook
Slide 28: Strategic Direction
Strategic Direction Streamline organizational structure and reposition business for improved long-term profitability Accelerate growth in low-cost manufacturing and engineering locations Evaluate present product portfolio to maximize long- term returns Deemphasize lower-margin, non-core businesses A
Slide 29: Long-Term Outlook Remains Positive for Lear
Long-Term Outlook Remains Positive for Lear* Near-term financial results severely depressed reflecting transitional volume and cost factors; expected to improve in second half of 2005 and going forward Lear has a very strong three-year sales backlog of $3.8 billion Lear's platform mix to improve in
Slide 30: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 31: Use of 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" (core operating earnings) and "
Slide 32: Use of Non-GAAP Financial Information - Core Operating Earnings
Q1 2005 Q1 2004 Income before interest, other expense and income taxes Income (loss) before income taxes $ ( 2.9 ) $ 126.0 Interest expense 44.8 39.1 Other expense, net 6.9 14.1 Income before interest, other expense and income taxes $ 48.8 $ 179.2 (core operating earnings) Three Months (in millions)
Slide 33: Use of Non-GAAP Financial Information - Free Cash Flow
Q1 2005 Free cash flow Net cash provided by operating activities $ 118.5 Net change in sold accounts receivable - Net cash provided by operating activities before net change in sold accounts receivable 118.5 Capital expenditures ( 129.4 ) Free cash flow $ ( 10.9) Three Months (in millions) Use of No
Slide 34: 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. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties