Slide 1: Third-Quarter 2007 Results and Financial Outlook
Exhibit 99.2 Third-Quarter 2007 Results and Financial Outlook November 6, 2007
Slide 2: Agenda
Agenda Company Overview Bob Rossiter, Chairman, CEO and President Business Conditions Jim Vandenberghe, Vice Chairman Third-Quarter 2007 Results and Outlook Matt Simoncini, Chief Financial Officer Q and A Session 2
Slide 3: Company Overview
Company Overview 3
Slide 4: Company Overview: significant actions to improve shareholder value
Company Overview Lear has implemented a number of significant actions to improve shareholder value Despite challenging business conditions, we are continuing to improve our financial results Seating business performing well; electrical and electronic business needs further improvement Aggressively g
Slide 5: Actions to Improve Shareholder Value
Actions to Improve Shareholder Value* Implementing global restructuring initiative Refinanced 2007-2009 debt maturities Divested Interior business; retained minority interest in IAC joint ventures Revitalized strategic focus on “growth” Strategic Actions To Improve Shareholder Value Have Improved Fi
Slide 6: Strategic Assessment: Seating Systems
Strategic Assessment Seating Systems* Market Environment Lear has a strong competitive position globally Business performing well today Core Strategies Leverage global leadership in systems integration Achieve lowest cost global footprint Expand capabilities in value-added components Further sales g
Slide 7: Strategic Assessment: Electrical and Electronic Segment
Strategic Assessment Electrical and Electronic Segment* Market Environment Fierce global competition is depressing margins Increasing consumer demand for electrical content in vehicles (i.e., safety-related features, infotainment and power equipment ) Core Strategies Further develop system integrati
Slide 8: Update on IAC Joint Ventures
Update on IAC Joint Ventures IAC provides opportunity for future success of Interior business Industry consolidation, restructuring and business integration in this segment is on-track Lear positioned to participate in improving business fundamentals IAC–Europe Annual sales of over $1 billion Lear h
Slide 9: New Asian Program Awards in Third Quarter
New Asian Program Awards in Third Quarter** Future Vehicle Automaker Market Lear Content Program(s) SOP DPCA China Seats W2/X7 2009/2011 Ford/AAT Thai/S.Afr. Wire Harnesses T6 Ranger 2010/2011 *GM China/India Seats M300/T300 2009/2010 DCX China Seats W204/C Class January 2008 Australia Seat Trim/Map
Slide 10: Major Customer Awards and Industry Recognition
Major Customer Awards and Industry Recognition Customer Awards “Supplier of the Year” for global Seating Systems 3 World Excellence Awards-- "Gold Award” at Genk, Belgium seating plant "Silver Award” and "Recognition of Achievement for consumer-driven Six-Sigma” at St. Thomas, Ontario Canada seating
Slide 11: Business Conditions
Business Conditions 11
Slide 12: Present Business Environment
Present Business Environment Macro Economic Factors Positives: U.S. interest rates and key commodity prices moderating Risks: consumer credit, weak housing sector and high oil prices Volatile capital markets Industry Production Relatively stable in North America and Europe Full-size pick-up trucks a
Slide 13: Lower Production Of Full-Size Pick-Ups And Large SUVs Since 2004 Peak
Lower Production Of Full-Size Pick-Ups And Large SUVs In North America Since 2004 Peak* Production of Full-Size Pick-Ups and Large SUVs in North America (in millions of units) * Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information. ** 2007 Fore
Slide 14: Aggressively Growing Total Asian Sales
Aggressively Growing Total Asian Sales*** 2007 Highlights Total Asian Sales -- Core Businesses ** Significant market position ($ in millions) in China: Total sales > $700 million* ~$2,850 Supply 20+ OEMs on $2,200 > 100 vehicle programs $1,850 19 manufacturing facilities with approximately 6,000 $1,
Slide 15: Restructuring Plan Update
Restructuring Plan Update Objectives: eliminate excess capacity, improve operating efficiency in response to structural changes within the industry and accelerate our move move to low-cost countries. Present Status: closure of 17 manufacturing facilities, numerous consolidations of administrative ce
Slide 16: New Pattern UAW Labor Agreement
New Pattern UAW Labor Agreement New pattern UAW contract reached without a major production disruption Major contract provisions significantly improve automaker competitiveness and preserve union benefits Agreements include an innovative VEBA trust for retiree health care liability, a second-tier wa
Slide 17: Third-Quarter 2007 Results and Outlook
Third-Quarter 2007 Results and Outlook 17
Slide 18: Financial Summary
Financial Summary* Third-Quarter special items include: Costs related to restructuring actions Costs related to AREP merger transaction Settlement of transaction-related items from divestiture of Interior business Third-Quarter core operating earnings were $170 million, up $70 million from a year ag
Slide 19: Third Quarter 2007 Industry Environment
Third Quarter 2007 Industry Environment Third Quarter Third Quarter 2007 2007 vs. 2006 North American Production Industry 3.5 mil Up 4% Big Three 2.2 mil Up 1% Lear's Top 15 Platforms 1.1 mil Down 1% European Production Industry 4.3 mil Up 2% Lear's Top 5 Customers 2.2 mil Up 2% Key Commodities (Qua
Slide 20: Third Quarter 2007 Reported Financial Results
Third Quarter 2007 Reported Financial Results Third Third 3Q '07 (in millions, except net income per share) Quarter 2007 Quarter 2006 B/(W) 3Q '06 Net Sales $3,574.6 $4,069.7 ($495.1) Income Before Interest, Other Expense and Income Taxes* $108.0 $28.8 $79.2 Pretax Income (Loss) $60.1 ($65.9) $126.0
Slide 21: Third Quarter 2007 Restructuring Costs and Other Special Items
Third Quarter 2007 Restructuring Costs and Other Special Items* Third Quarter Income Before Interest, Other Expense and (in millions) Income Taxes Reported Results 2007 Total Company $ 108.0 Income Statement Category Reported Results Include the Following Items: COGS SG&A Costs related to restructur
Slide 22: Third Quarter 2007 Net Sales Changes and Margin Impact Versus Prior Year
Third Quarter 2007 Net Sales Changes and Margin Impact Versus Prior Year Net Sales Margin Performance Factor Change Impact Comments (in millions) Industry Production / $ (64) Negative Primarily industry pricing and unfavorable Platform Mix / Net Pricing platform mix in North America offset in part b
Slide 23: Third Quarter 2007 Business Segment Results
Third Quarter 2007 Business Segment Results*** ($ in millions) Third Quarter 2007 2006 Seating Margin Margin Net Sales $ 2,881.4 $ 2,633.0 Reported Segment Earnings* $ 181.2 6.3% $ 125.6 4.8% Adjusted Earnings** $ 200.7 7.0% $ 133.4 5.1% Electrical and Electronic Net Sales $ 693.2 $ 682.6 Reported S
Slide 24: Third Quarter 2007 Seating Segment Performance
Third Quarter 2007 Seating Segment Performance* Explanation of Adjusted Seating Margin Year-to-Year Change Favorable cost performance from restructuring On-going efficiency actions Margin improvement actions, including selective vertical integration Benefit of new business, primarily outside of Nort
Slide 25: Third Quarter 2007 Electrical and Electronic Segment Performance
Third Quarter 2007 Electrical and Electronic Segment Performance* Adjusted Explanation of Electrical and Electronic Margin Year-to-Year Change 3.4% Unfavorable net pricing 2.0% Roll-off of several large programs in North America + Slightly lower copper prices and favorable prior period recovery Q3 2
Slide 26: Third Quarter 2007 Free Cash Flow
Third Quarter 2007 Free Cash Flow* (in millions) Third Nine Months Quarter 2007 2007 Net Income $ 41.0 $ 214.5 Depreciation / Amortization 70.7 220.9 Working Capital / Other 24.9 (58.6) Cash from Operations $ 136.6 $ 376.8 Capital Expenditures (45.8) (114.1) Free Cash Flow $ 90.8 $ 262.7 * Free Cash
Slide 27: 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 ~ 15.0 mil down 2% Big Three ~ 9.4 mil down 6% Lear's Top 15 Platforms ~ 4.5 mil down 8% European Production Total Industry ~ 19.7 mil up 3% Lear's Top 5 Customers ~1
Slide 28: 2007 Outlook: Full-Year Financial Forecast
2007 Outlook Full-Year Financial Forecast* 2007 Full-Year Financial Forecast for Core Businesses Net Sales ~ ~ $15 billion Core Operating Earnings ~ ~ $680 million Income before interest, other expense, income taxes, restructuring costs and other special items Interest Expense ~ $200 million ~ Preta
Slide 29: Preliminary 2008 Outlook
Preliminary 2008 Outlook* Industry Production Preliminary 2008 Assessment North America - Generally in-line with 2007 outlook Europe - Up slightly from 2007 outlook Lear Factors Sales Backlog - About $300 million N.A. Platform Mix - Negative, reflecting lower production of full-size pick-up trucks a
Slide 30: Summary and Outlook
Summary and Outlook* Lear is financially sound Nine months financial results show solid improvement Full-year 2007 earnings and cash flow forecast increased Making progress on strategic priorities Completed divestiture of Interior business Expanding in Asia and growing Asian sales globally Implement
Slide 31: Advance Relentlessly
R ADVANCE RELENTLESSLY™ LEA Listed NYSE www.lear.com 31
Slide 32: 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 33: Non-GAAP Financial Information: Core Operating Earnings
Non-GAAP Financial Information Core Operating Earnings Three Months (in millions) Q3 2007 Q3 2006 Pretax income (loss) $ 60.1 $ (65.9) Divestiture of Interior business (17.1) 28.7 Interest expense 47.5 56.6 Other expense, net * 17.5 9.4 Income before interest, other expense and income taxes $ 108.0
Slide 34: Non-GAAP Financial Information: Segment Earnings Reconciliation
Non-GAAP Financial Information Segment Earnings Reconciliation Three Months (in millions) Q3 2007 Q3 2006 Seating $ 181.2 $ 125.6 Electrical and electronic 4.0 16.4 Interior - (55.8) Segment earnings 185.2 86.2 Corporate and geographic headquarters and elimination of intercompany activity (77.2) (57
Slide 35: Non-GAAP Financial Information: Adjusted Segment Earnings
Non-GAAP Financial Information Adjusted Segment Earnings Three Months Q3 2007 Electrical and HQ/ Core Total (in millions) Seating Electronic Other Businesses Interior Company Segment earnings $ 181.2 $ 4.0 $ (77.2) $ 108.0 $ - $ 108.0 Costs related to restructuring actions 19.5 9.8 8.0 37.3 - 37.3 C
Slide 36: Non-GAAP Financial Information: Cash from Operations and Free Cash Flow
Non-GAAP Financial Information Cash from Operations and Free Cash Flow Three Months Nine Months (in millions) Q3 2007 Q3 2007 Net cash provided by operating activities $ 62.0 $ 309.5 Net change in sold accounts receivable 74.6 67.3 Net cash provided by operating activities before net change in sold
Slide 37: 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