Slide 1: Third Quarter Results and 2008 Financial Outlook
October 30, 2008 Third Quarter Results and 2008 Financial Outlook Exhibit 99.2
Slide 2: Agenda
Agenda Business Environment Bob Rossiter, Chairman, CEO and President Third Quarter Results and 2008 Financial Outlook Matt Simoncini, SVP and CFO Summary and Outlook Bob Rossiter, Chairman, CEO and President Q and A Session
Slide 3: Business Environment
Business Environment
Slide 4: State of the Business
State of the Business* Widening international credit crisis and unfavorable economic conditions are adversely impacting global automotive demand We are taking necessary actions to withstand the current industry downturn and maintain our focus on strategic priorities We expect to generate positive fr
Slide 5: Near-Term Operating Priorities
Near-Term Operating Priorities* Execute operating improvement plan and achieve savings as soon as possible Plan consists of incremental actions globally, ranging from significant near-term cost reductions, as well as the deferral of certain program and restructuring spending Implement restructuring
Slide 6: Long-Term Outlook
Long-Term Outlook* Long-Term Industry Outlook Global growth in automotive demand and further consolidation of supply base Critical success factors: global capabilities, a low-cost footprint and superior quality Leading technologies and innovation are key differentiating factors Lear well positioned
Slide 7: Global Electrical and Electronics Business Update and Operating Priorities
Global Electrical and Electronics Business Update and Operating Priorities* Established stand-alone global Electrical and Electronics strategy and organization: Improves strategic focus Provides greater accountability Best leverages global resources Increases awareness of our capabilities Four initi
Slide 8: Global Electrical and Electronics Progress on Operating Priorities
Global Electrical and Electronics Progress on Operating Priorities* Improved Cost Competitiveness - optimizing and leveraging global resources Consolidation of global work force Aggressive restructuring actions in North America and Europe Continued optimization of low-cost footprint Launched new ele
Slide 9: Global Electrical and Electronics Sales Growth and Diversification
Global Electrical and Electronics Sales Growth and Diversification* Established marketing strategy and brand identity -- Powering Ideas That DeliverTM Awarded global programs ^$400 million in net new business signed since January, including new battery charger programs and new high-power electrical
Slide 10: Third-Quarter Results and 2008 Financial Outlook
Third-Quarter Results and 2008 Financial Outlook
Slide 11: Third-Quarter 2008 Financial Summary
Third-Quarter 2008 Financial Summary* Major Factors Impacting Third-Quarter 2008 Results Sharply lower production in North America and Europe Continued benefits of restructuring actions and other cost reduction actions Third-Quarter 2008 Results Net sales of $3.1 billion Core operating earnings of $
Slide 12: Third-Quarter 2008 Industry Environment
Third-Quarter 2008 Industry Environment
Slide 13: Third-Quarter 2008 Reported Financials
Third-Quarter 2008 Reported Financials * Please see slides titled "Non-GAAP Financial Information" at the end of this presentation for further information.
Slide 14: Third-Quarter 2008 Restructuring Impact
Third-Quarter 2008 Restructuring Impact* * Please see slides titled "Non-GAAP Financial Information" at the end of this presentation for further information. Third Quarter Income Before Interest, Other Expense and Income Taxes
Slide 15: Third-Quarter 2008 Net Sales Changes and Margin Impact
Third-Quarter 2008 Net Sales Changes and Margin Impact
Slide 16: Third-Quarter 2008 Seating Performance
Third-Quarter 2008 Seating Performance* Explanation of Year-to-Year Change Q3 * Please see slide titled "Non-GAAP Financial Information" at the end of this presentation for further information. Third Quarter (in mils) Sales Earnings** Adj. Earnings** $2,881.4 $2,478.1 $ 181.2 $ 40.9 $ 200.7 $ 75.6 *
Slide 17: Third-Quarter 2008 Electrical and Electronic Performance
Explanation of Year-to-Year Change Q3 * Please see slide titled "Non-GAAP Financial Information" at the end of this presentation for further information. Third Quarter (in mils) Sales Earnings** Adj. Earnings** $ 693.2 $ 655.4 $ 4.0 $ 4.9 $ 13.8 $ 11.9 ** Reported segment earnings represents income
Slide 18: Third-Quarter 2008 Free Cash Flow
Third-Quarter 2008 Free Cash Flow* * Free cash flow represents net cash provided by operating activities ($40.9 million for the three months ended 9/27/08) before net change in sold accounts receivable (($19.3) million for the three months ended 9/27/08) (Cash from Operations), less capital expendit
Slide 19: 2008 Outlook Fourth-Quarter and Full-Year Production Assumptions
2008 Outlook Fourth-Quarter and Full-Year Production Assumptions* Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information.
Slide 20: 2008 Outlook Full-Year Financial Forecast
2008 Outlook Full-Year Financial Forecast* ** Subject to actual mix of earnings by country. * Please see slides titled "Non-GAAP Financial Information" and "Forward-Looking Statements" at the end of this presentation for further information.
Slide 21: Strong Liquidity Position
Strong Liquidity Position* We expect to generate positive free cash flow for the year We have no significant near-term debt maturities On October 15, we borrowed $400 million under our revolving credit facility No near-term funding needs; invested in safe, short-term investments Protection against p
Slide 22: Update on Operating Improvement Plan
Update on Operating Improvement Plan* Operating improvement plan comprised of incremental actions on global basis Target to improve operating results by $150 million over the next twelve months from present run rate Major areas of improvement are: Sales/commercial items Material cost reductions Plan
Slide 23: Commercial and Cost Structure Actions; Restructuring Actions
* Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information. Global census reductions Compensation and benefit reductions and deferrals Salaried compensation concessions Extended holiday shutdowns Discretionary benefit reductions and deferrals Reduc
Slide 24: Credit Facility Covenant Compliance
Credit Facility Covenant Compliance* * Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information. Lear's major credit facility covenants are leverage and interest coverage ratios, determined by our trailing twelve months' operating results (includin
Slide 25: Summary and Outlook
Summary and Outlook
Slide 26: Summary and Outlook
Summary and Outlook* Business conditions have become more challenging globally We are aggressively implementing actions to improve near-term operating results: $150 million operating improvement plan Global restructuring initiative At the same time, we are maintaining our focus on strategic prioriti
Slide 27: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 28: 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," "income before interest, other
Slide 29: Non-GAAP Financial Information Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings
Slide 30: Non-GAAP Financial Information Segment Earnings
Non-GAAP Financial Information Segment Earnings
Slide 31: Non-GAAP Financial Information Adjusted Segment Earnings
Non-GAAP Financial Information Adjusted Segment Earnings
Slide 32: Non-GAAP Financial Information Cash from Operations and Free Cash Flow
Non-GAAP Financial Information Cash from Operations and Free Cash Flow
Slide 33: 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