Slide 1: Third-Quarter 2006 Results, Fourth-Quarter 2006 Guidance and a Preliminary Outlook for 2007
R Exhibit 99.2 Third-Quarter 2006 Results, Fourth-Quarter 2006 Guidance and a Preliminary Outlook for 2007 October 26, 2006 fast forward advance relentlessly 1
Slide 2: Agenda
Agenda Recent Events Bob Rossiter, Chairman and CEO Financial Review Jim Vandenberghe, Vice Chairman and CFO Strategy Update and Key Operating Targets Doug DelGrosso, President and COO Summary and Outlook Bob Rossiter, Chairman and CEO Q and A Session 2
Slide 3: Recent Events
Recent Events* Strategic Developments Closed transaction whereby Lear contributed substantially all of its European Interior business to joint venture in return for a one- third equity stake Continued to make progress on new strategy for North American Interior business Agreed to $200 million equity
Slide 4: Financial Review
Financial Review 4
Slide 5: Recent Events: Update on Interior Business
Recent Events Update on Interior Business Contributed substantially all of Lear’s European Interior business to International Automotive Components Group, LLC in return for a one-third equity stake: Creates a large [20 manufacturing facilities in 9 countries, with $1.2 billion in annual sales] and w
Slide 6: Recent Events: Equity Offering
Recent Events Equity Offering* Lear agreed to issue $200 million of common stock to affiliates of Carl Icahn in a private placement Proceeds to be used for strategic investments in the Company’s core businesses and to increase financial and operating flexibility Lear looks forward to working with Ic
Slide 7: Third Quarter 2006 Industry Environment
Third Quarter 2006 Industry Environment Third Quarter Third Quarter 2006 2006 vs. 2005 North American Production Industry 3.4 mil Down 9% Big Three 2.2 mil Down 13% Lear's Top 15 Platforms 1.1 mil Down 14% European Production Industry 4.2 mil Down 2% Lear's Top 5 Customers 2.0 mil Down 3% Key Commod
Slide 8: Third Quarter 2006 Financial Summary
Third Quarter 2006 Financial Summary** Third Third 3Q '06 (in millions, except net loss per share) Quarter 2006 Quarter 2005 B/(W) 3Q '05 Net Sales $4,069.7 $3,986.6 $83.1 Income (Loss) Before Interest, Other Expense and Income Taxes* $28.8 ($726.3) $755.1 Margin 0.7 % NM NM Pretax Loss ($65.9) ($78
Slide 9: Third Quarter 2006 Restructuring and Special Items
Third Quarter 2006 Restructuring and Special Items* Third Quarter Memo: Income Before Interest, Other Expense and (in millions) Income Taxes Pretax Loss Income Statement Category Other COGS SG&A Expense 2006 Reported Results $ 28.8 $ (65.9) Reported results include the following items: Costs related
Slide 10: Net Sales Changes and Margin Impact Versus Prior Year
Third Quarter 2006 Net Sales Changes and Margin Impact Versus Prior Year Net Sales Margin Performance Factor Change Impact Comments (in millions) Industry Production / $ (366) Negative Primarily lower industry production in Platform Mix / Net Pricing / North America (down 9%) and Other unfavorable p
Slide 11: Third Quarter and Nine Months 2006 Business Segment Results
Third Quarter and Nine Months 2006 Business Segment Results*** ($ in millions) Third Quarter Nine Months 2006 2005 2006 2005 Seating Net Sales $ 2,633.0 $ 2,564.3 $ 8,721.6 $ 8,192.9 Segment Earnings* $ 125.6 $ 71.2 $ 423.0 $ 169.9 % of Sales 4.8 % 2.8 % 4.9 % 2.1 % Adjusted % of Sales** 5.1 % 3.0 %
Slide 12: Third Quarter and Nine Months 2006 Free Cash Flow
Third Quarter and Nine Months 2006 Free Cash Flow* (in millions) Third Nine Quarter Months 2006 2006 Net Loss $ (74.0) $ (62.5) Depreciation / Amortization 98.1 299.4 Working Capital / Other 11.5 (107.1) Cash from Operations $ 35.6 $ 129.8 Capital Expenditures (83.8) (268.5) Free Cash Flow $ (48.2)
Slide 13: Fourth Quarter 2006 Guidance Key Assumptions
Fourth Quarter 2006 Guidance Key Assumptions* Fourth Quarter Change from 2006 Guidance Prior Year North American Production Total Industry 3.7 mil down 5% Big Three 2.4 mil down 12% Lear's Top 15 Platforms 1.0 mil down 24% European Production Total Industry 4.7 mil down 1% Lear's Top 5 Customers 2.4
Slide 14: 2006 Guidance Key Financial Projections
2006 Guidance Key Financial Projections*** (Reflects Lear's investment in European Fourth Quarter 2006 Full Year 2006 Interiors joint venture on an equity basis) Net Sales $ 4.1 billion $ 17.7 billion Core Operating Earnings $80 to $110 million $345 to 375 million Income before interest, other expen
Slide 15: 2007 Outlook Preliminary Assessment of Key Financials
2007 Outlook Preliminary Assessment of Key Financials* Assuming an industry production environment that is roughly in line with 2006. . . we see the following preliminary outlook for 2007: Within our core Seating, Electronic and Electrical businesses: Global new business of about $800 million, Seati
Slide 16: Strategy Update and Key Operating Targets
Strategy Update and Key Operating Targets 16
Slide 17: Where Lear Needs To Be and Our Strategy To Get There
Where Lear Needs To Be . . . And Our Strategy To Get There* High-Performance Strategic Direction Company Consistently Delivering “Profitable Growth” Market Leadership Expand Market Boundaries Maintain Efficient / Competitive Operations * Please see slide titled “Forward-Looking Statements” at the en
Slide 18: Key Operating Targets
Key Operating Targets** Achieve global sales growth (about 5% annually) and further diversify sales (target is to grow total Asian sales* about 25% annually) Continuous improvement in quality and customer satisfaction Core Dimension Strategy – product focus; emphasis on technology Put in place a new
Slide 19: Global Strategy For Sales Growth and Diversification
Global Strategy For Sales Growth and Diversification* North America Fully participate in fast-growing Crossover segment Expand emerging relationships with Hyundai, Nissan and Toyota Grow content per vehicle with new products and technology: Safety-Related – IntelliTireTM , Pro-TecTM PLuS and Adaptiv
Slide 20: Examples of Emerging Asian Relationships
Examples of Emerging Asian Relationships* Customer Product Lear Relationship Supply 100% of North American seating Provide value-add technologies (e.g., TPMS) Provide wiring harnesses through JV with a Korean partner Leverage Lear’s quality reputation and global footprint to support Hyundai’s qualit
Slide 21: Lear China Business Profile
Lear China Business Profile* Lear China = 13 JV Plants (For 12 JVs) + 3 WOFE’s (Including Regional Headquarters) Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information. 21
Slide 22: Lear China Projected Sales Growth
Lear China Projected Sales Growth* Lear China’s Sales Are Projected To Grow About 30% Annually Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information. 22
Slide 23: New Asian Business Awards During Third Quarter 2006
New Asian Business Awards During Third Quarter 2006* Automaker Market Lear Content Vehicle Program Nissan Europe Seating, Wire Future Crossover Harnesses, Smart Junction Box Chery China Seating Transit Van Changan China Seating, Door Trim New MPV Honda North America ProTec Plus TM Pilot DFM China Wi
Slide 24: Targeting Total Asian Sales Growth of About 25% Annually
Targeting Total Asian Sales Growth of About 25% Annually** Revenue in Asia and with Lear’s Targeted Asian Manufacturers* Asian Sales by Major Market (in millions) $3,000 $2,500 $2,200 $1,800 $1,200 Consolidated Non-consolidated Rapid Growth In Asian Sales Led By Expanding Relationships With Hyundai,
Slide 25: North America Major Second Half 2006 And 2007 Launches
North America Major Second Half 2006 And 2007 Launches Chevrolet Silverado Jeep Patriot Seating, Door Panels and Instrument Panel, Overhead System, Car2UTM Home Automation System Flooring & Acoustics, and Interior Trim Acura MDX Nissan Altima Wire Harnesses Seating, Headliner, Door Panels, Flooring
Slide 26: Europe and Rest of World Major Launches
Europe and Rest of World Major Second Half 2006 And 2007 Launches Europe Rest of World Mercedes C-Class Hyundai Veracruz Seating Seating and IntelliTireTM (Korea) BMW 3-Series Convertible Cadillac STS (China) Seating, Electronics Seating, Door Panels, Flooring & Acoustics Fiat Bravo Chang'an (China)
Slide 27: Summary and Outlook
Summary and Outlook 27
Slide 28: Improving our Global Competitiveness
Summary and Outlook Improving our Global Competitiveness* Continuously improving quality and customer satisfaction levels Successfully implementing global restructuring initiatives Increasing emphasis on new product technology and innovation Leveraging global scale, expertise and common architecture
Slide 29: Making Progress on Strategic Priorities
Summary and Outlook Making Progress on Strategic Priorities* Global Seating margins improving Aggressive restructuring actions to improve Electronic and Electrical margins in future Completed agreement to contribute European Interior business to International Automotive Components Group, LLC Priorit
Slide 30: Advance Relentlessly
R ADVANCE RELENTLESSLY™ LEA Listed NYSE www.lear.com 30
Slide 31: 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 certain non-GAAP financial measures. These measures inclu
Slide 32: Non-GAAP Financial Information
Non-GAAP Financial Information (in millions) Q3 2006 Q3 2005 Loss before income taxes $ (65.9) $ (787.8) Interest expense 56.6 45.1 Other expense, net 38.1 16.4 Income (loss) before interest, other expense and income taxes $ 28.8 $ (726.3) Goodwill and fixed asset impairment charges - 743.8 Costs re
Slide 33: Non-GAAP Financial Information
Non-GAAP Financial Information (in millions) Q3 2006 Q3 2005 Loss before income taxes $ (65.9) $ (787.8) Goodwill and fixed asset impairment charges - 743.8 Costs related to restructuring actions 17.4 33.1 Litigation charges - 0.8 Loss on divestiture 28.7 - Pretax loss before impairments, restructur
Slide 34: Non-GAAP Financial Information
Non-GAAP Financial Information Three Months Nine Months (in millions) Q3 2006 Q3 2006 Net cash provided by (used in) operating activities $ (8.1) $ 106.1 Net change in sold accounts receivable 43.7 23.7 Net cash provided by operating activities before net change in sold accounts receivable (cash fro
Slide 35: Non-GAAP Financial Information
Non-GAAP Financial Information Three Months Nine Months (in millions) Q3 2006 Q3 2005 Q3 2006 Q3 2005 Seating $ 125.6 $ 71.2 $ 423.0 $ 169.9 Electronic and Electrical 16.4 35.3 107.6 145.9 Interior (55.8) (112.6) (149.6) (138.8) Segment earnings $ 86.2 $ (6.1) $ 381.0 $ 177.0 Corporate and geographi
Slide 36: Non-GAAP Financial Information
Non-GAAP Financial Information Three Months Q3 2006 Three Months Q3 2005 Electronic and Electronic and (in millions) Seating Electrical Interior Seating Electrical Interior Segment earnings $ 125.6 $ 16.4 $ (55.8) $ 71.2 $ 35.3 $ (112.6) Fixed asset impairment charges - - - - - 73.8 Costs related to
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