Slide 1: Fourth Quarter and Full Year 2005 Results
Exhibit 99.2 fast forward advance relentlessly R Fourth Quarter and Full Year 2005 Results January 25, 2006
Slide 2: Agenda
Agenda 2005 Highlights Jim Vandenberghe, Vice Chairman Operating Priorities Doug DelGrosso, President and COO Financial Review Dave Wajsgras, EVP and CFO Closing Comments Bob Rossiter, Chairman and CEO
Slide 3: 2005 Highlights
Qtear., 2005 Highlights
Slide 4: Highlights - Full Year 2005
Highlights - Full Year 2005 Net sales of $17.1 billion Launched comprehensive restructuring plan Expanded infrastructure in Asia; grew sales with Asian automakers Increased low-cost country manufacturing and engineering capability Fifth consecutive year as J.D. Power's highest-quality major seat sup
Slide 5: Changing Business Conditions
Reversal of trend toward total interiors Composition of global market share Trend toward crossover SUV's in U.S. Escalation of energy and raw material prices Financial distress of major customers / increasing industry focus on cost reduction Strengthen leadership position in Seating Grow Electrical
Slide 6: 2005 Revenue Diversification
North America ROW Europe East 0.54 0.08 0.38 Trad Big 3 ROW Europe East 0.52 0.07 0.34 Traditional Big Three* 56% European OEMs 36% 2005 Revenue Diversification Rest of World 8% Europe 38% North America 54% Geographic Customer Asian OEMs 8% * Excludes Mercedes, Volvo, Land Rover, Jaguar and Saab
Slide 7: Largest Customers by Region
Largest Customers by Region North America Europe Rest of World GM Ford Chrysler BMW Subaru Nissan Toyota Hyundai Honda Volkswagen Mazda Volvo BMW PSA Fiat Ford GM / Opel Mercedes Audi Saab Jaguar Renault Ford Mazda Hyundai GM / Opel BMW Mercedes Audi Fiat PSA Volkswagen Nissan Based on Full Year 200
Slide 8: Operating Priorities
Quer. Operating Priorities
Slide 9: Operating Priorities
Operating Priorities Retain Core Values Quality First Customer Satisfaction Refocus Our Plan Align Lear with Customer Sourcing Strategy New Products / Technology Customer / Regional Diversification Operational Excellence Pricing / New Program Award Discipline Competitive Manufacturing Cost Structure
Slide 10: Retain Core Values: Quality First and Customer Satisfaction
Retain Core Values Quality First and Customer Satisfaction Internal Quality Measures Continuous improvement J.D. Power Seat Quality Survey 6% improvement in TGW over 2004 35% improvement since 1999 4 Best-in-Segment vehicles Full-size Car: Ford Five Hundred Pickup: Chevrolet Avalanche Sport Utility:
Slide 11: Refocus Our Plan: Seating - Featured Products
Refocus Our Plan Seating - Featured Products ProTec Plus Second generation self-aligning head restraint Significantly reduces forces and movements in the neck Improved comfort by exceeding regulatory requirements Potential for improved rear and lateral vision Lear Flexible Seat Architecture Modular
Slide 12: Refocus Our Plan: Electronics - Featured Products
Refocus Our Plan Electronics - Featured Products Car2UTM Two-Way Remote Keyless Entry System Wireless control system with an integrated transmitter/receiver that can control and display the status of the vehicle, such as engine, lock/unlock, trunk, A/C, cabin temperature and more: Ability to downloa
Slide 13: Customer / Regional Diversification
Geographic Mix (2008 - 2010) Customer / Regional Diversification Continuing to Focus on Improving Sales Mix*** *** Please see slide titled "Forward-Looking Statements" at the end of this presentation for further information. Customer Mix (2008 - 2010) Trad Big Three Asian OEM Europe East 0.475 0.15
Slide 14: Pricing / New Program Award Discipline
Operational Excellence Pricing / New Program Award Discipline* Emphasize the elimination of waste and reduction of cost Provide incentives to work cooperatively with our customers Support objective that each individual program is economically viable Create reasonable margin profile over time Please
Slide 15: Competitive Manufacturing Cost Structure
Operational Excellence Competitive Manufacturing Cost Structure* Eliminate excess capacity Accelerate move to lower- cost sources Streamline organization and improve operational efficiency Restructuring Objectives 2005 2006+ 104 150 Pretax Restructuring Costs $103 (in millions) Net savings impact ex
Slide 16: Supply Chain Management
Operational Excellence Supply Chain Management Global Operations/Purchasing Organization Alignment High-Risk Supplier Management Team Key-Supplier Quality Program Affordable Cost Standards Supplier Cost Technology Optimization Lear Sourcing Agreement
Slide 17: 2006 Key Product Launches
Operational Excellence 2006 Key Product Launches Americas GMT900 SUVs/Pickups Seats, doors Hyundai Santa Fe Seats, TPMS Nissan Versa Overhead systems, trim Nissan Sentra Overhead systems, trim DCX Caliber/Compass/Patriot Overhead systems, trim, doors, flooring, IP International VW Cabrio Seats Peuge
Slide 18: Pro-Active, Long-Term Labor Strategy
Operational Excellence Pro-Active, Long-Term Labor Strategy Long and productive history of working together Regular, open dialogue with all unions Candid assessment of business outlook Establish broad competitiveness framework Work together to address local issues
Slide 19: Financial Review
Qtear., Financial Review
Slide 20: Challenging Fourth Quarter Production Environment
2005 Results Challenging Fourth Quarter Production Environment North America Industry production up 3% Big Three down 2% Europe Industry production down 1% Top Five customers down 1% Euro 8% weaker than a year ago
Slide 21: Fourth Quarter Financial Summary
2005 Results Fourth Quarter Financial Summary
Slide 22: Fourth Quarter Reported Results
2005 Results Fourth Quarter Reported Results * Please see slides titled "Use of Non-GAAP Financial Information" at the end of this presentation for further information.
Slide 23: Fourth Quarter Sales Changes and Margin Impact Versus Prior Year
Fourth Quarter Sales Changes and Margin Impact Versus Prior Year
Slide 24: Full Year Reported Results
2005 Results Full Year Reported Results * Please see slides titled "Use of Non-GAAP Financial Information" at the end of this presentation for further information.
Slide 25: Fourth Quarter and Full Year Free Cash Flow
2005 Results Fourth Quarter and Full Year Free Cash Flow * * Cash from Operations represents net cash provided by operating activities ($332 for three months and $561 for twelve months ended 12/31/05) before net change in sold accounts receivable (($132) for three months and ($411) for twelve months
Slide 26: Restructuring Implementation Status
2005 Results Restructuring Implementation Status Initiated closure of seven manufacturing facilities Streamlined global organizational structure and restructured multiple administrative offices Accelerating manufacturing footprint actions to improve cost competitiveness 2005 Actions 2005 Cost and Ca
Slide 27: Interior Product Segment - Key Financials
2005 Results Interior Product Segment - Key Financials** Financial Returns Under Pressure * Excludes costs related to restructuring actions of $32.3 million and fixed asset impairment charges of $82.3 million. ** Please see slides titled "Use of Non-GAAP Financial Information" at the end of this pre
Slide 28: 2006 Outlook: Vehicle Production Assumptions
North America (in millions) 2006 Outlook Vehicle Production Assumptions* 2005 Actual 2006 Forecast 3rd Qtr 4th Qtr 4 4.1 East 11.6 11.4 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 2005 Actual 2006 Forecast 3rd Qtr 4th Qtr 4.8 5 East 13.9 13.6 90 20.4 West 30.6 38.6 34.6 31.6 North 45.9
Slide 29: 2006 Outlook: Trend of Capital Spending
2006 Outlook Trend of Capital Spending* (in millions) 2003 2004 2005 2006 Directional HQ 45 15 45 43.9 Seating 376 429 229 202 Electrical / Electronics 103 103 Interior 191 126 Capital Spending Level Should Trend Lower On An Ongoing Basis Please see slide titled "Forward-Looking Statements" at the e
Slide 30: 2006 Outlook: Directional Assessment
2006 Outlook Directional Assessment* Full Year: Given the level of uncertainties, financial guidance for 2006 will not be provided at this time. Shown below is a directional assessment of our outlook for this year: Pretax income to improve (excluding restructuring and other special charges) Capital
Slide 31: Closing Comments
Closing Comments* 2005 in Perspective Financial results unacceptable Lear remained a leader in quality Operating fundamentals sound Continued progress in sales diversification Improvement Plans in Place Global restructuring actions Manufacturing cost structure improvements Pricing approach based on
Slide 32: Advance Relentlessly
ADVANCE RELENTLESSLY(tm) www.lear.com LEA NYSE Listed R
Slide 33: 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 certain non-GAAP financial measures. These measures include "pretax income excluding imp
Slide 34: Use of Non-GAAP Financial Information: Interior Product Segment
Use of Non-GAAP Financial Information Interior Product Segment
Slide 35: 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 result of certain risks and