Slide 1: Third Quarter 2003 Earnings Review
Third Quarter 2003 Earnings Review October 17, 2003 fast forward advance relentlessly world's leading automotive interior supplier Exhibit 99.2
Slide 2: Third Quarter 2003 Operating Highlights: Customer-Focused Strategy Driving Success
In a Challenging Environment, with Industry Production Down and Intense Competitive Pressures in Both our Major Markets, the Lear Team is Focused on: Third Quarter 2003 Operating Highlights Customer-Focused Strategy Driving Success Delivering high value-add to our customers Continuing to improve qua
Slide 3: Quality Continues to Improve
Management priority Global focus Part of Lear culture Six Sigma discipline Sharing best practices Teamwork Nine Months 2002 Nine Months 2003 3rd Qtr 4th Qtr East 118 86 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 27% Improvement Driven to Provide High Level Quality Products and Services
Slide 4: Major Launches - Second Half 2003
Third Quarter 2003 Operating Highlights Major Launches - Second Half 2003 North America Ford F-150 Dodge Durango Nissan Titan/Armada Lexus RX 330 Mitsubishi Galant Cadillac SRX Chevrolet Monza Chrysler Concorde/Magnum Ford Escape Europe Opel Vectra Wagon BMW X3 Fiat Lancia Y Maserati Quattroporte Go
Slide 5: Production Environment - Third Quarter 2003
Financial Review Production Environment - Third Quarter 2003 Production Environment Remains Difficult; OEMs Continue to Focus on Cost, Productivity and Quality North America Industry production down 5%; Big Three down 10% Content Per Vehicle of $582, about even with a year ago Western Europe Industr
Slide 6: Financial Highlights - Third Quarter 2003
Net Sales $ 3,491.5 $ 3,337.4 $ 154.1 Income before Interest, Other Expense & Income Taxes* $ 163.1 $ 158.9 $ 4.2 Margin 4.7 % 4.8 % ( 10 )bps Net Income $ 76.1 $ 61.6 $ 14.5 Net Income Per Share $ 1.10 $ 0.91 $ 0.19 SG&A % of Net Sales 4.0 % 3.8 % ( 20 )bps Interest Expense $ 44.5 $ 53.0 $ 8.5 Othe
Slide 7: 3Q03 vs 3Q02 - Change in Net Sales
Financial Review 3Q03 vs 3Q02 - Change in Net Sales Industry Vehicle Production N.A. (5)% W.E. (5)% S.A. (5)% Total Change Industry Production & Platform Mix FX Global New Business Net Performance Net Sales 154 -223 184 193 0 Directional Impact on Core Operating Earnings Please see slides titled "Us
Slide 8: 3Q03 Free Cash Flow
Net Income $ 76 $ 248 Depreciation 83 235 Working Capital / Other ( 5 ) 67 Cash from Operations* $ 154 $ 550 Capital Expenditures ( 77 ) ( 214 ) Free Cash Flow $ 77 $ 336 3Q03 * Cash from Operations represents net cash provided by operating activities ($102 for third quarter and $360 for nine months
Slide 9: Further Debt Reduction & Increased Financial Flexibility
1998 1999 2000 2001 2002 Sept '03 2003 Estimate Target EPS 1533 3385 2981 2660 2271 2005.9 2000 1800 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Net Debt to Cap 70% 65% 63% 58% 50% (in millions) * Net debt represents total debt plus utilization of our ABS facility, less cash. Please see slides
Slide 10: Rating Agency Update
Rating Outlook Standard and Poor's BBB- Stable Upgraded 7/28/03 Moody's Ba1 Positive Outlook raised 10/14/03 Fitch Ratings BBB- Stable Initiated coverage 9/22/03 Financial Review Rating Agency Update Solid Financial Performance Has Led to Positive Action From the Rating Agencies
Slide 11: 2003 Vehicle Production Outlook
North America (in millions) Western Europe (in millions) 2003 Production Down in North America and Western Europe Q4* 4.0 Up 2% FY 2002 Actual FY 2003 Outlook East 16.4 15.9 West 4 FY 2002 Actual FY 2003 Outlook East 16.4 15.9 Q4 3.8 Down 7% Financial Review 2003 Vehicle Production Outlook * Big Thr
Slide 12: Fourth Quarter and Full Year 2003 Guidance
Fourth Quarter Net Income Per Share Full Year Net Income Per Share Net Sales of $4.0 Billion 2001 2002 2003 4th Qtr East 0.74 1.76 1.75 20.4 West 0.1 31.6 North 45.9 46.9 45 43.9 Capital Expenditures $ 100 M $ 315 M Free Cash Flow $ 75 M $ 400 M 2001 2002 2003 4th Qtr East 3.73 4.65 5.4 20.4 West 0.
Slide 13: Summary and Outlook: Future Cash Flow Opportunities Enhance Value
Summary and Outlook Future Cash Flow Opportunities Enhance Value All Investment Opportunities will be Evaluated to Maximize Shareholder Value Support strategic growth opportunities Asia Pacific region and electronics globally Internally generated or acquired Maintain financial flexibility Continue t
Slide 14: Global Strategy Remains Unchanged
Global Strategy Remains Unchanged; Leveraging our Total Interior Capabilities to Deliver Value to our Customers Summary and Outlook Customer-Focused Strategy Driving our Success Quality and customer service remain our top priorities Top line growing as customers recognize Lear's value-add Credit rat
Slide 15: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 16: Use Information: Non-GAAP Financial Measures
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 certain non-GAAP financial measures. These measures include "income before interest, oth
Slide 17: Core Operating Earnings
Q3 2003 Q3 2002 Q3 2003 Q3 2002 Income before interest, other expense and income taxes Income before income taxes $ 105.7 $ 92.7 $ 351.4 $ 291.0 Interest expense 44.5 53.0 146.7 163.4 Other expense, net 12.9 13.2 38.6 41.9 Income before interest, other expense and income taxes $ 163.1 $ 158.9 $ 536.
Slide 18: Free Cash Flow
Q3 2003 Q3 2002 Q3 2003 Q3 2002 Free cash flow Net cash provided by operating activities $ 102.3 $ 69.8 $ 359.6 $ 370.1 Net change in sold accounts receivable 51.3 21.6 190.9 27.4 Net cash provided by operating activities before net change in sold accounts receivable 153.6 91.4 550.5 397.5 Capital e
Slide 19: Net Debt
(in millions) Net debt Short-term borrowings $ 11.3 $ 37.3 $ 63.2 $ 72.4 $ 103.6 Current portion of long-term debt 4.4 3.9 129.5 155.6 63.6 Long-term debt 2,042.2 2,132.8 2,293.9 2,852.1 3,324.8 Total debt 2,057.9 2,174.0 2,486.6 3,080.1 3,492.0 Cash ( 102.5 ) ( 91.7 ) ( 87.6 ) ( 98.8 ) (106.9 ) Ass
Slide 20: 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