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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lear Corp | NYSE:LEA | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
2.23 | 1.79% | 126.60 | 127.94 | 125.51 | 126.48 | 778,347 | 01:00:00 |
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
13-3386776
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
||
21557 Telegraph Road, Southfield, MI
|
|
48033
|
(Address of principal executive offices)
|
|
(Zip code)
|
Large accelerated filer
|
x
|
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
¨
|
Emerging growth company
|
¨
|
|
|
|
|
|
|
Page No.
|
|
|
|
|
Item 3 – Quantitative and Qualitative Disclosures about Market Risk (included in Item 2)
|
|
|
|
(1)
|
Unaudited.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Net sales
|
$
|
4,981.5
|
|
|
$
|
4,526.4
|
|
|
$
|
15,103.2
|
|
|
$
|
13,914.1
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
4,425.6
|
|
|
4,012.5
|
|
|
13,387.0
|
|
|
12,324.1
|
|
||||
Selling, general and administrative expenses
|
158.2
|
|
|
153.6
|
|
|
471.1
|
|
|
456.9
|
|
||||
Amortization of intangible assets
|
12.5
|
|
|
15.2
|
|
|
34.1
|
|
|
41.7
|
|
||||
Interest expense
|
21.7
|
|
|
20.6
|
|
|
63.9
|
|
|
62.0
|
|
||||
Other (income) expense, net
|
(21.8
|
)
|
|
14.2
|
|
|
(12.3
|
)
|
|
(0.8
|
)
|
||||
Consolidated income before provision for income taxes and equity in net income of affiliates
|
385.3
|
|
|
310.3
|
|
|
1,159.4
|
|
|
1,030.2
|
|
||||
Provision for income taxes
|
77.8
|
|
|
88.2
|
|
|
240.2
|
|
|
287.4
|
|
||||
Equity in net income of affiliates
|
(7.5
|
)
|
|
(12.9
|
)
|
|
(41.3
|
)
|
|
(49.2
|
)
|
||||
Consolidated net income
|
315.0
|
|
|
235.0
|
|
|
960.5
|
|
|
792.0
|
|
||||
Less: Net income attributable to noncontrolling interests
|
19.8
|
|
|
20.6
|
|
|
47.6
|
|
|
46.8
|
|
||||
Net income attributable to Lear
|
$
|
295.2
|
|
|
$
|
214.4
|
|
|
$
|
912.9
|
|
|
$
|
745.2
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income per share available to Lear common stockholders
|
$
|
4.00
|
|
|
$
|
3.01
|
|
|
$
|
12.92
|
|
|
$
|
10.19
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per share available to Lear common stockholders
|
$
|
3.96
|
|
|
$
|
2.98
|
|
|
$
|
12.80
|
|
|
$
|
10.10
|
|
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per share
|
$
|
0.50
|
|
|
$
|
0.30
|
|
|
$
|
1.50
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
||||||||
Average common shares outstanding
|
68,061,718
|
|
|
71,259,766
|
|
|
68,874,682
|
|
|
73,102,327
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Average diluted shares outstanding
|
68,834,279
|
|
|
72,052,270
|
|
|
69,536,808
|
|
|
73,809,220
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Consolidated comprehensive income (Note 13)
|
$
|
392.3
|
|
|
$
|
245.3
|
|
|
$
|
1,265.4
|
|
|
$
|
816.0
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
22.6
|
|
|
20.6
|
|
|
53.7
|
|
|
44.2
|
|
||||
Comprehensive income attributable to Lear
|
$
|
369.7
|
|
|
$
|
224.7
|
|
|
$
|
1,211.7
|
|
|
$
|
771.8
|
|
|
Nine Months Ended
|
||||||
|
September 30,
2017 |
|
October 1,
2016 |
||||
Cash Flows from Operating Activities:
|
|
|
|
||||
Consolidated net income
|
$
|
960.5
|
|
|
$
|
792.0
|
|
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
313.2
|
|
|
283.4
|
|
||
Net change in recoverable customer engineering, development and tooling
|
(37.4
|
)
|
|
2.1
|
|
||
Loss on extinguishment of debt
|
21.2
|
|
|
—
|
|
||
Net change in working capital items (see below)
|
(31.0
|
)
|
|
3.0
|
|
||
Other, net
|
(42.2
|
)
|
|
13.4
|
|
||
Net cash provided by operating activities
|
1,184.3
|
|
|
1,093.9
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Additions to property, plant and equipment
|
(430.2
|
)
|
|
(300.3
|
)
|
||
Acquisition of Antolin Seating
|
(286.8
|
)
|
|
—
|
|
||
Other, net
|
16.9
|
|
|
51.8
|
|
||
Net cash used in investing activities
|
(700.1
|
)
|
|
(248.5
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
New credit agreement borrowings
|
250.0
|
|
|
—
|
|
||
Prior credit agreement repayments
|
(468.7
|
)
|
|
(15.6
|
)
|
||
Short-term borrowings, net
|
(7.2
|
)
|
|
8.9
|
|
||
Proceeds from the issuance of senior notes
|
744.7
|
|
|
—
|
|
||
Repurchase of senior notes
|
(517.0
|
)
|
|
—
|
|
||
Payment of debt issuance and other financing costs
|
(11.7
|
)
|
|
—
|
|
||
Repurchase of common stock
|
(332.2
|
)
|
|
(557.7
|
)
|
||
Dividends paid to Lear Corporation stockholders
|
(104.4
|
)
|
|
(68.1
|
)
|
||
Dividends paid to noncontrolling interests
|
(42.7
|
)
|
|
(14.8
|
)
|
||
Other, net
|
(56.6
|
)
|
|
(52.1
|
)
|
||
Net cash used in financing activities
|
(545.8
|
)
|
|
(699.4
|
)
|
||
Effect of foreign currency translation
|
43.7
|
|
|
(1.0
|
)
|
||
Net Change in Cash and Cash Equivalents
|
(17.9
|
)
|
|
145.0
|
|
||
Cash and Cash Equivalents as of Beginning of Period
|
1,271.6
|
|
|
1,196.6
|
|
||
Cash and Cash Equivalents as of End of Period
|
$
|
1,253.7
|
|
|
$
|
1,341.6
|
|
|
|
|
|
||||
Changes in Working Capital Items:
|
|
|
|
||||
Accounts receivable
|
$
|
(280.6
|
)
|
|
$
|
(440.2
|
)
|
Inventories
|
(114.7
|
)
|
|
(87.3
|
)
|
||
Accounts payable
|
245.6
|
|
|
203.6
|
|
||
Accrued liabilities and other
|
118.7
|
|
|
326.9
|
|
||
Net change in working capital items
|
$
|
(31.0
|
)
|
|
$
|
3.0
|
|
|
|
|
|
||||
Supplementary Disclosure:
|
|
|
|
||||
Cash paid for interest
|
$
|
91.6
|
|
|
$
|
85.3
|
|
Cash paid for income taxes, net of refunds received
|
$
|
224.9
|
|
|
$
|
151.6
|
|
|
|
|
|
Purchase price paid, net of cash acquired
|
|
$
|
286.8
|
|
Acquisition date contingent consideration
|
|
4.7
|
|
|
Net purchase price
|
|
$
|
291.5
|
|
|
|
|
||
Property, plant and equipment
|
|
$
|
81.7
|
|
Other assets purchased and liabilities assumed, net
|
|
(34.2
|
)
|
|
Goodwill
|
|
122.6
|
|
|
Intangible assets
|
|
121.4
|
|
|
Preliminary purchase price allocation
|
|
$
|
291.5
|
|
Purchase price paid, net of cash acquired
|
|
$
|
148.5
|
|
|
|
|
||
Property, plant and equipment
|
|
$
|
11.2
|
|
Other assets purchased and liabilities assumed, net
|
|
7.2
|
|
|
Goodwill
|
|
77.1
|
|
|
Intangible assets
|
|
53.0
|
|
|
Preliminary purchase price allocation
|
|
$
|
148.5
|
|
|
Accrual as of
|
|
2017
|
|
Utilization
|
|
Accrual as of
|
||||||||||||
|
January 1, 2017
|
|
Charges
|
|
Cash
|
|
Non-cash
|
|
September 30, 2017
|
||||||||||
Employee termination benefits
|
$
|
69.4
|
|
|
$
|
41.0
|
|
|
$
|
(27.7
|
)
|
|
$
|
—
|
|
|
$
|
82.7
|
|
Asset impairment charges
|
—
|
|
|
0.4
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|||||
Contract termination costs
|
4.6
|
|
|
1.5
|
|
|
(1.2
|
)
|
|
—
|
|
|
4.9
|
|
|||||
Other related costs
|
—
|
|
|
4.9
|
|
|
(4.9
|
)
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
74.0
|
|
|
$
|
47.8
|
|
|
$
|
(33.8
|
)
|
|
$
|
(0.4
|
)
|
|
$
|
87.6
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Raw materials
|
$
|
909.2
|
|
|
$
|
746.3
|
|
Work-in-process
|
124.0
|
|
|
106.4
|
|
||
Finished goods
|
199.7
|
|
|
167.9
|
|
||
Inventories
|
$
|
1,232.9
|
|
|
$
|
1,020.6
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Current
|
$
|
232.5
|
|
|
$
|
185.9
|
|
Long-term
|
54.0
|
|
|
43.4
|
|
||
Recoverable customer E&D and tooling
|
$
|
286.5
|
|
|
$
|
229.3
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Land
|
$
|
119.1
|
|
|
$
|
101.7
|
|
Buildings and improvements
|
772.2
|
|
|
648.1
|
|
||
Machinery and equipment
|
2,939.2
|
|
|
2,459.6
|
|
||
Construction in progress
|
348.1
|
|
|
296.4
|
|
||
Total property, plant and equipment
|
4,178.6
|
|
|
3,505.8
|
|
||
Less – accumulated depreciation
|
(1,800.5
|
)
|
|
(1,486.5
|
)
|
||
Property, plant and equipment, net
|
$
|
2,378.1
|
|
|
$
|
2,019.3
|
|
Property, plant and equipment
|
$
|
16.2
|
|
Other assets and liabilities assumed, net
|
42.7
|
|
|
Goodwill
|
94.1
|
|
|
Intangible assets
|
66.0
|
|
|
|
$
|
219.0
|
|
|
Seating
|
|
E-Systems
|
|
Total
|
||||||
Balance at January 1, 2017
|
$
|
1,091.2
|
|
|
$
|
30.1
|
|
|
$
|
1,121.3
|
|
Acquisition
|
122.6
|
|
|
—
|
|
|
122.6
|
|
|||
Consolidation of affiliate
|
—
|
|
|
94.1
|
|
|
94.1
|
|
|||
Foreign currency translation and other
|
48.9
|
|
|
0.2
|
|
|
49.1
|
|
|||
Balance at September 30, 2017
|
$
|
1,262.7
|
|
|
$
|
124.4
|
|
|
$
|
1,387.1
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||||
Debt Instrument
|
Long-Term Debt
|
|
Debt Issuance Costs
(2)
|
|
Long-Term
Debt, Net
|
|
Weighted
Average
Interest
Rate
|
|
Long-Term Debt
|
|
Debt Issuance Costs
(2)
|
|
Long-Term
Debt, Net
|
|
Weighted
Average
Interest
Rate
|
||||||||||||
Credit Agreement — Term Loan Facility
|
$
|
250.0
|
|
|
$
|
(1.9
|
)
|
|
$
|
248.1
|
|
|
2.7%
|
|
$
|
468.7
|
|
|
$
|
(1.6
|
)
|
|
$
|
467.1
|
|
|
2.105%
|
4.75% Senior Notes due 2023 ("2023 Notes")
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
500.0
|
|
|
(4.8
|
)
|
|
495.2
|
|
|
4.75%
|
||||||
5.375% Senior Notes due 2024 ("2024 Notes")
|
325.0
|
|
|
(2.5
|
)
|
|
322.5
|
|
|
5.375%
|
|
325.0
|
|
|
(2.8
|
)
|
|
322.2
|
|
|
5.375%
|
||||||
5.25% Senior Notes due 2025 ("2025 Notes")
|
650.0
|
|
|
(6.0
|
)
|
|
644.0
|
|
|
5.25%
|
|
650.0
|
|
|
(6.6
|
)
|
|
643.4
|
|
|
5.25%
|
||||||
3.8% Senior Notes due 2027 ("2027 Notes")
(1)
|
744.8
|
|
|
(6.0
|
)
|
|
738.8
|
|
|
3.885%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
||||||
Other
|
8.6
|
|
|
—
|
|
|
8.6
|
|
|
N/A
|
|
5.7
|
|
|
—
|
|
|
5.7
|
|
|
N/A
|
||||||
|
$
|
1,978.4
|
|
|
$
|
(16.4
|
)
|
|
1,962.0
|
|
|
|
|
$
|
1,949.4
|
|
|
$
|
(15.8
|
)
|
|
1,933.6
|
|
|
|
||
Less — Current portion
|
|
|
|
|
(9.0
|
)
|
|
|
|
|
|
|
|
(35.6
|
)
|
|
|
||||||||||
Long-term debt
|
|
|
|
|
$
|
1,953.0
|
|
|
|
|
|
|
|
|
$
|
1,898.0
|
|
|
|
Note
|
Issuance Date
|
|
Maturity Date
|
|
Interest Payable Dates
|
2024 Notes
|
March 2014
|
|
March 15, 2024
|
|
March 15 and September 15
|
2025 Notes
|
November 2014
|
|
January 15, 2025
|
|
January 15 and July 15
|
2027 Notes
|
August 2017
|
|
September 15, 2027
|
|
March 15 and September 15
|
|
|
Eurocurrency Rate
|
|
Base Rate
|
||||||||||||||
|
|
Minimum
|
|
Maximum
|
|
Rate as of
September 30, 2017 |
|
Minimum
|
|
Maximum
|
|
Rate as of
September 30, 2017 |
||||||
Revolving Credit Agreement
|
|
1.00
|
%
|
|
1.60
|
%
|
|
1.30
|
%
|
|
0.00
|
%
|
|
0.60
|
%
|
|
0.30
|
%
|
Term Loan Facility
|
|
1.125
|
%
|
|
1.90
|
%
|
|
1.50
|
%
|
|
0.125
|
%
|
|
0.90
|
%
|
|
0.50
|
%
|
2017
(1)
|
$
|
1.6
|
|
2018
|
6.3
|
|
|
2019
|
7.8
|
|
|
2020
|
14.0
|
|
|
2021
|
14.0
|
|
|
2022
|
206.3
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
|
September 30, 2017
|
|
October 1, 2016
|
||||||||||||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||||||||||
Service cost
|
$
|
1.3
|
|
|
$
|
1.8
|
|
|
$
|
1.4
|
|
|
$
|
1.6
|
|
|
$
|
3.8
|
|
|
$
|
5.3
|
|
|
$
|
4.2
|
|
|
$
|
4.8
|
|
Interest cost
|
5.5
|
|
|
4.0
|
|
|
7.5
|
|
|
3.8
|
|
|
16.4
|
|
|
11.2
|
|
|
22.4
|
|
|
11.9
|
|
||||||||
Expected return on plan assets
|
(7.3
|
)
|
|
(5.9
|
)
|
|
(9.5
|
)
|
|
(5.9
|
)
|
|
(21.7
|
)
|
|
(17.0
|
)
|
|
(28.6
|
)
|
|
(17.5
|
)
|
||||||||
Amortization of actuarial loss
|
0.6
|
|
|
1.3
|
|
|
0.6
|
|
|
0.8
|
|
|
1.9
|
|
|
3.8
|
|
|
2.0
|
|
|
2.3
|
|
||||||||
Settlement loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
|
0.8
|
|
|
0.2
|
|
|
—
|
|
||||||||
Net periodic benefit cost
|
$
|
0.1
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
0.3
|
|
|
$
|
0.6
|
|
|
$
|
4.1
|
|
|
$
|
0.2
|
|
|
$
|
1.5
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
|
September 30, 2017
|
|
October 1, 2016
|
||||||||||||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
0.1
|
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
0.4
|
|
Interest cost
|
0.6
|
|
|
0.4
|
|
|
0.9
|
|
|
0.4
|
|
|
1.8
|
|
|
1.2
|
|
|
2.4
|
|
|
1.2
|
|
||||||||
Amortization of actuarial (gain) loss
|
(0.7
|
)
|
|
0.1
|
|
|
(0.3
|
)
|
|
0.1
|
|
|
(2.0
|
)
|
|
0.2
|
|
|
(0.9
|
)
|
|
0.2
|
|
||||||||
Amortization of prior service credit
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||||
Special termination benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
||||||||
Net periodic benefit (credit) cost
|
$
|
(0.1
|
)
|
|
$
|
0.5
|
|
|
$
|
0.6
|
|
|
$
|
0.5
|
|
|
$
|
(0.1
|
)
|
|
$
|
1.6
|
|
|
$
|
1.6
|
|
|
$
|
1.8
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Other expense
|
$
|
34.4
|
|
|
$
|
15.5
|
|
|
$
|
47.2
|
|
|
$
|
34.7
|
|
Other income
|
(56.2
|
)
|
|
(1.3
|
)
|
|
(59.5
|
)
|
|
(35.5
|
)
|
||||
Other (income) expense, net
|
$
|
(21.8
|
)
|
|
$
|
14.2
|
|
|
$
|
(12.3
|
)
|
|
$
|
(0.8
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Provision for income taxes
|
$
|
77.8
|
|
|
$
|
88.2
|
|
|
$
|
240.2
|
|
|
$
|
287.4
|
|
Pretax income before equity in net income of affiliates
|
$
|
385.3
|
|
|
$
|
310.3
|
|
|
$
|
1,159.4
|
|
|
$
|
1,030.2
|
|
Effective tax rate
|
20.2
|
%
|
|
28.4
|
%
|
|
20.7
|
%
|
|
27.9
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Net income attributable to Lear
|
$
|
295.2
|
|
|
$
|
214.4
|
|
|
$
|
912.9
|
|
|
$
|
745.2
|
|
Less: Redeemable noncontrolling interest adjustment
|
(22.7
|
)
|
|
—
|
|
|
(22.7
|
)
|
|
—
|
|
||||
Net income available to Lear common stockholders
|
$
|
272.5
|
|
|
$
|
214.4
|
|
|
$
|
890.2
|
|
|
$
|
745.2
|
|
|
|
|
|
|
|
|
|
||||||||
Average common shares outstanding
|
68,061,718
|
|
|
71,259,766
|
|
|
68,874,682
|
|
|
73,102,327
|
|
||||
Dilutive effect of common stock equivalents
|
772,561
|
|
|
792,504
|
|
|
662,126
|
|
|
706,893
|
|
||||
Average diluted shares outstanding
|
68,834,279
|
|
|
72,052,270
|
|
|
69,536,808
|
|
|
73,809,220
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic net income per share available to Lear common stockholders
|
$
|
4.00
|
|
|
$
|
3.01
|
|
|
$
|
12.92
|
|
|
$
|
10.19
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income per share available to Lear common stockholders
|
$
|
3.96
|
|
|
$
|
2.98
|
|
|
$
|
12.80
|
|
|
$
|
10.10
|
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||
|
Equity
|
|
Lear
Corporation
Stockholders'
Equity
|
|
Non-
controlling
Interests
|
|
Equity
|
|
Lear
Corporation
Stockholders'
Equity
|
|
Non-
controlling
Interests
|
||||||||||||
Beginning equity balance
|
$
|
3,756.2
|
|
|
$
|
3,621.9
|
|
|
$
|
134.3
|
|
|
$
|
3,192.9
|
|
|
$
|
3,057.2
|
|
|
$
|
135.7
|
|
Stock-based compensation transactions
|
14.9
|
|
|
14.9
|
|
|
—
|
|
|
8.4
|
|
|
8.4
|
|
|
—
|
|
||||||
Repurchase of common stock
|
(77.9
|
)
|
|
(77.9
|
)
|
|
—
|
|
|
(332.2
|
)
|
|
(332.2
|
)
|
|
—
|
|
||||||
Dividends declared to Lear Corporation stockholders
|
(34.8
|
)
|
|
(34.8
|
)
|
|
—
|
|
|
(105.8
|
)
|
|
(105.8
|
)
|
|
—
|
|
||||||
Dividends declared to noncontrolling interest holders
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
(33.2
|
)
|
|
—
|
|
|
(33.2
|
)
|
||||||
Adoption of ASU 2016-09 (Note 11, "Taxes")
|
—
|
|
|
—
|
|
|
—
|
|
|
54.5
|
|
|
54.5
|
|
|
—
|
|
||||||
Redeemable non-controlling interest adjustment
|
(22.7
|
)
|
|
(22.7
|
)
|
|
—
|
|
|
(22.7
|
)
|
|
(22.7
|
)
|
|
—
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
315.0
|
|
|
295.2
|
|
|
19.8
|
|
|
960.5
|
|
|
912.9
|
|
|
47.6
|
|
||||||
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Defined benefit plan adjustments
|
(1.8
|
)
|
|
(1.8
|
)
|
|
—
|
|
|
(3.0
|
)
|
|
(3.0
|
)
|
|
—
|
|
||||||
Derivative instruments and hedging activities
|
(10.8
|
)
|
|
(10.8
|
)
|
|
—
|
|
|
57.2
|
|
|
57.2
|
|
|
—
|
|
||||||
Foreign currency translation adjustments
|
89.9
|
|
|
87.1
|
|
|
2.8
|
|
|
250.7
|
|
|
244.6
|
|
|
6.1
|
|
||||||
Other comprehensive income
|
77.3
|
|
|
74.5
|
|
|
2.8
|
|
|
304.9
|
|
|
298.8
|
|
|
6.1
|
|
||||||
Comprehensive income
|
392.3
|
|
|
369.7
|
|
|
22.6
|
|
|
1,265.4
|
|
|
1,211.7
|
|
|
53.7
|
|
||||||
Ending equity balance
|
$
|
4,027.3
|
|
|
$
|
3,871.1
|
|
|
$
|
156.2
|
|
|
$
|
4,027.3
|
|
|
$
|
3,871.1
|
|
|
$
|
156.2
|
|
|
Three Months Ended
September 30, 2017 |
|
Nine Months Ended
September 30, 2017 |
||||
Defined benefit plans:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(194.0
|
)
|
|
$
|
(192.8
|
)
|
Reclassification adjustments (net of tax expense of $0.3 million and $1.2 million in the three and nine months ended September 30, 2017, respectively)
|
0.9
|
|
|
3.4
|
|
||
Other comprehensive loss recognized during the period (net of tax impact of $— million in the three and nine months ended September 30, 2017)
|
(2.7
|
)
|
|
(6.4
|
)
|
||
Balance at end of period
|
$
|
(195.8
|
)
|
|
$
|
(195.8
|
)
|
|
|
|
|
||||
Derivative instruments and hedging:
|
|
|
|
||||
Balance at beginning of period
|
$
|
22.9
|
|
|
$
|
(45.1
|
)
|
Reclassification adjustments (net of tax benefit of $1.0 million and tax expense of $1.9 million in the three and nine months ended September 30, 2017, respectively)
|
(3.1
|
)
|
|
5.7
|
|
||
Other comprehensive income (loss) recognized during the period (net of tax benefit of $3.2 million and tax expense of $16.6 million in the three and nine months ended September 30, 2017, respectively)
|
(7.7
|
)
|
|
51.5
|
|
||
Balance at end of period
|
$
|
12.1
|
|
|
$
|
12.1
|
|
|
|
|
|
||||
Foreign currency translation:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(440.2
|
)
|
|
$
|
(597.7
|
)
|
Other comprehensive income recognized during the period (net of tax impact of $— million in the three and nine months ended September 30, 2017)
|
87.1
|
|
|
244.6
|
|
||
Balance at end of period
|
$
|
(353.1
|
)
|
|
$
|
(353.1
|
)
|
|
Three Months Ended October 1, 2016
|
|
Nine Months Ended October 1, 2016
|
||||||||||||||||||||
|
Equity
|
|
Lear
Corporation
Stockholders'
Equity
|
|
Non-
controlling
Interests
|
|
Equity
|
|
Lear
Corporation
Stockholders'
Equity
|
|
Non-
controlling
Interests
|
||||||||||||
Beginning equity balance
|
$
|
3,156.1
|
|
|
$
|
3,012.8
|
|
|
$
|
143.3
|
|
|
$
|
3,017.7
|
|
|
$
|
2,927.4
|
|
|
$
|
90.3
|
|
Stock-based compensation transactions
|
15.6
|
|
|
15.6
|
|
|
—
|
|
|
6.7
|
|
|
6.7
|
|
|
—
|
|
||||||
Repurchase of common stock
|
(152.7
|
)
|
|
(152.7
|
)
|
|
—
|
|
|
(557.7
|
)
|
|
(557.7
|
)
|
|
—
|
|
||||||
Dividends declared to Lear Corporation stockholders
|
(21.9
|
)
|
|
(21.9
|
)
|
|
—
|
|
|
(67.5
|
)
|
|
(67.5
|
)
|
|
—
|
|
||||||
Dividends declared to noncontrolling interest holders
|
(0.4
|
)
|
|
—
|
|
|
(0.4
|
)
|
|
(13.2
|
)
|
|
—
|
|
|
(13.2
|
)
|
||||||
Consolidation of affiliate
|
1.0
|
|
|
—
|
|
|
1.0
|
|
|
41.0
|
|
|
—
|
|
|
41.0
|
|
||||||
Non-controlling interests — other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
2.2
|
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net income
|
235.0
|
|
|
214.4
|
|
|
20.6
|
|
|
792.0
|
|
|
745.2
|
|
|
46.8
|
|
||||||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Defined benefit plan adjustments
|
1.5
|
|
|
1.5
|
|
|
—
|
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
||||||
Derivative instruments and hedging activities
|
0.8
|
|
|
0.8
|
|
|
—
|
|
|
(10.6
|
)
|
|
(10.6
|
)
|
|
—
|
|
||||||
Foreign currency translation adjustments
|
8.0
|
|
|
8.0
|
|
|
—
|
|
|
34.8
|
|
|
37.4
|
|
|
(2.6
|
)
|
||||||
Other comprehensive income (loss)
|
10.3
|
|
|
10.3
|
|
|
—
|
|
|
24.0
|
|
|
26.6
|
|
|
(2.6
|
)
|
||||||
Comprehensive income
|
245.3
|
|
|
224.7
|
|
|
20.6
|
|
|
816.0
|
|
|
771.8
|
|
|
44.2
|
|
||||||
Ending equity balance
|
$
|
3,243.0
|
|
|
$
|
3,078.5
|
|
|
$
|
164.5
|
|
|
$
|
3,243.0
|
|
|
$
|
3,078.5
|
|
|
$
|
164.5
|
|
|
Three Months Ended
October 1, 2016 |
|
Nine Months Ended
October 1, 2016 |
||||
Defined benefit plans:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(196.3
|
)
|
|
$
|
(194.6
|
)
|
Reclassification adjustments (net of tax expense of $0.3 million and $1.0 million in the three and nine months ended October 1, 2016, respectively)
|
0.8
|
|
|
2.5
|
|
||
Other comprehensive income (loss) recognized during the period (net of tax impact of $— million in the three and nine months ended October 1, 2016)
|
0.7
|
|
|
(2.7
|
)
|
||
Balance at end of period
|
$
|
(194.8
|
)
|
|
$
|
(194.8
|
)
|
|
|
|
|
||||
Derivative instruments and hedging:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(50.1
|
)
|
|
$
|
(38.7
|
)
|
Reclassification adjustments (net of tax expense of $6.0 million and $16.7 million in the three and nine months ended October 1, 2016, respectively)
|
17.1
|
|
|
46.2
|
|
||
Other comprehensive loss recognized during the period (net of tax benefit of $6.0 million and $20.5 million in the three and nine months ended October 1, 2016, respectively)
|
(16.3
|
)
|
|
(56.8
|
)
|
||
Balance at end of period
|
$
|
(49.3
|
)
|
|
$
|
(49.3
|
)
|
|
|
|
|
||||
Foreign currency translation:
|
|
|
|
||||
Balance at beginning of period
|
$
|
(467.4
|
)
|
|
$
|
(496.8
|
)
|
Other comprehensive income recognized during the period (net of tax impact of $— million in the three and nine months ended October 1, 2016)
|
8.0
|
|
|
37.4
|
|
||
Balance at end of period
|
$
|
(459.4
|
)
|
|
$
|
(459.4
|
)
|
Balance at January 1, 2017
|
$
|
49.1
|
|
Expense, net (including changes in estimates)
|
12.5
|
|
|
Settlements
|
(15.5
|
)
|
|
Foreign currency translation and other
|
3.0
|
|
|
Balance at September 30, 2017
|
$
|
49.1
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||
|
Seating
|
|
E-Systems
|
|
Other
|
|
Consolidated
|
||||||||
Revenues from external customers
|
$
|
3,868.9
|
|
|
$
|
1,112.6
|
|
|
$
|
—
|
|
|
$
|
4,981.5
|
|
Segment earnings
(1)
|
298.8
|
|
|
155.5
|
|
|
(69.1
|
)
|
|
385.2
|
|
||||
Depreciation and amortization
|
76.7
|
|
|
31.3
|
|
|
3.7
|
|
|
111.7
|
|
||||
Capital expenditures
|
109.7
|
|
|
42.7
|
|
|
3.8
|
|
|
156.2
|
|
||||
Total assets
|
7,413.5
|
|
|
2,262.7
|
|
|
2,035.8
|
|
|
11,712.0
|
|
|
Three Months Ended October 1, 2016
|
||||||||||||||
|
Seating
|
|
E-Systems
|
|
Other
|
|
Consolidated
|
||||||||
Revenues from external customers
|
$
|
3,513.3
|
|
|
$
|
1,013.1
|
|
|
$
|
—
|
|
|
$
|
4,526.4
|
|
Segment earnings
(1)
|
269.5
|
|
|
140.3
|
|
|
(64.7
|
)
|
|
345.1
|
|
||||
Depreciation and amortization
|
67.9
|
|
|
27.5
|
|
|
3.3
|
|
|
98.7
|
|
||||
Capital expenditures
|
80.3
|
|
|
34.9
|
|
|
3.4
|
|
|
118.6
|
|
||||
Total assets
|
6,348.8
|
|
|
1,746.6
|
|
|
2,182.0
|
|
|
10,277.4
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
Seating
|
|
E-Systems
|
|
Other
|
|
Consolidated
|
||||||||
Revenues from external customers
|
$
|
11,762.0
|
|
|
$
|
3,341.2
|
|
|
$
|
—
|
|
|
$
|
15,103.2
|
|
Segment earnings
(1)
|
941.8
|
|
|
476.7
|
|
|
(207.5
|
)
|
|
1,211.0
|
|
||||
Depreciation and amortization
|
213.2
|
|
|
89.0
|
|
|
11.0
|
|
|
313.2
|
|
||||
Capital expenditures
|
287.1
|
|
|
126.2
|
|
|
16.9
|
|
|
430.2
|
|
||||
Total assets
|
7,413.5
|
|
|
2,262.7
|
|
|
2,035.8
|
|
|
11,712.0
|
|
|
Nine Months Ended October 1, 2016
|
||||||||||||||
|
Seating
|
|
E-Systems
|
|
Other
|
|
Consolidated
|
||||||||
Revenues from external customers
|
$
|
10,755.7
|
|
|
$
|
3,158.4
|
|
|
$
|
—
|
|
|
$
|
13,914.1
|
|
Segment earnings
(1)
|
848.8
|
|
|
441.5
|
|
|
(198.9
|
)
|
|
1,091.4
|
|
||||
Depreciation and amortization
|
193.8
|
|
|
80.5
|
|
|
9.1
|
|
|
283.4
|
|
||||
Capital expenditures
|
204.6
|
|
|
79.5
|
|
|
16.2
|
|
|
300.3
|
|
||||
Total assets
|
6,348.8
|
|
|
1,746.6
|
|
|
2,182.0
|
|
|
10,277.4
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Segment earnings
|
$
|
385.2
|
|
|
$
|
345.1
|
|
|
$
|
1,211.0
|
|
|
$
|
1,091.4
|
|
Interest expense
|
21.7
|
|
|
20.6
|
|
|
63.9
|
|
|
62.0
|
|
||||
Other (income) expense, net
|
(21.8
|
)
|
|
14.2
|
|
|
(12.3
|
)
|
|
(0.8
|
)
|
||||
Consolidated income before provision for income taxes and equity in net income of affiliates
|
$
|
385.3
|
|
|
$
|
310.3
|
|
|
$
|
1,159.4
|
|
|
$
|
1,030.2
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Estimated aggregate fair value
|
$
|
2,037.8
|
|
|
$
|
2,004.8
|
|
Aggregate carrying value
(1)
|
1,975.0
|
|
|
1,943.7
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Fair value of foreign currency contracts designated as cash flow hedges:
|
|
|
|
||||
Other current assets
|
$
|
29.2
|
|
|
$
|
11.2
|
|
Other long-term assets
|
7.5
|
|
|
0.5
|
|
||
Other current liabilities
|
(14.7
|
)
|
|
(58.3
|
)
|
||
Other long-term liabilities
|
(2.5
|
)
|
|
(9.9
|
)
|
||
|
19.5
|
|
|
(56.5
|
)
|
||
Notional amount
|
$
|
1,287.8
|
|
|
$
|
1,275.0
|
|
Outstanding maturities in months, not to exceed
|
24
|
|
|
24
|
|
||
|
|
|
|
||||
Fair value of foreign currency contracts not designated as hedging instruments:
|
|
|
|
||||
Other current assets
|
$
|
6.1
|
|
|
$
|
5.9
|
|
Other current liabilities
|
(4.2
|
)
|
|
(3.8
|
)
|
||
|
1.9
|
|
|
2.1
|
|
||
|
|
|
|
||||
Notional amount
|
$
|
1,020.3
|
|
|
$
|
681.2
|
|
Outstanding maturities in months, not to exceed
|
12
|
|
|
12
|
|
||
|
|
|
|
||||
Total fair value
|
$
|
21.4
|
|
|
$
|
(54.4
|
)
|
Total notional amount
|
$
|
2,308.1
|
|
|
$
|
1,956.2
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Gains (losses) recognized in accumulated other comprehensive loss:
|
$
|
(5.5
|
)
|
|
$
|
(22.3
|
)
|
|
$
|
68.1
|
|
|
$
|
(77.2
|
)
|
|
|
|
|
|
|
|
|
||||||||
(Gains) losses reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
|
|
|
||||||||
Net sales
|
0.8
|
|
|
2.2
|
|
|
1.4
|
|
|
3.6
|
|
||||
Cost of sales
|
(4.6
|
)
|
|
20.9
|
|
|
6.5
|
|
|
59.3
|
|
||||
|
(3.8
|
)
|
|
23.1
|
|
|
7.9
|
|
|
62.9
|
|
||||
Comprehensive income (loss)
|
$
|
(9.3
|
)
|
|
$
|
0.8
|
|
|
$
|
76.0
|
|
|
$
|
(14.3
|
)
|
Market:
|
|
This approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
|
|
|
Income
:
|
|
This approach uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.
|
|
|
|
Cost:
|
|
This approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).
|
Level 1:
|
|
Observable inputs, such as quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
|
|
|
|
Level 2:
|
|
Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.
|
|
|
|
Level 3:
|
|
Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability. Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date.
|
|
September 30, 2017
|
||||||||||||||||||
|
Frequency
|
|
Asset
(Liability)
|
|
Valuation
Technique
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Foreign currency contracts, net
|
Recurring
|
|
$
|
21.4
|
|
|
Market/ Income
|
|
$
|
—
|
|
|
$
|
21.4
|
|
|
$
|
—
|
|
Marketable equity securities
|
Recurring
|
|
$
|
40.7
|
|
|
Market
|
|
$
|
40.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Standards Pending Adoption
|
|
Description
|
|
Effective Date
|
|
Anticipated Impact
|
ASU 2014-09, Revenue from Contracts with Customers
(1)
|
|
The standard replaces existing revenue recognition guidance and requires additional financial statement disclosures. The provisions of these updates may be applied through either a full retrospective or a modified retrospective approach.
|
|
January 1, 2018
|
|
The Company is finalizing its review of the impact of adopting this standard and is developing and executing a comprehensive implementation plan. Reviews of a significant portion of commercial contracts have been completed and changes to processes and internal controls are being identified to meet the standard’s reporting and disclosure requirements. At this time, the Company does not believe that this standard will have a material effect on its revenues, results of operations or financial position. The Company expects to make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new standard. The Company currently plans to adopt the new standard using the modified retrospective approach; however, a final decision regarding the adoption method has not been made at this time.
|
ASU 2016-02, Leases
|
|
The standard requires that a lessee recognize on its balance sheet right-of-use assets and corresponding liabilities resulting from leasing transactions, as well as additional financial statement disclosures. Currently, GAAP only requires balance sheet recognition for leases classified as capital leases. The provisions of this update apply to substantially all leased assets, with certain permitted exceptions, and must be adopted using a modified retrospective approach.
|
|
January 1, 2019
|
|
The Company is currently evaluating the impact of this update. For additional information on the Company’s operating lease commitments, see Note 11, "Commitments and Contingencies," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.
|
ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
|
The standard was issued to address the net presentation of the components of net benefit cost. It requires the classification of service cost in the same line item as other current employee compensation costs. It also requires the presentation of the remaining components of net benefit cost in a separate line item outside any subtotal for income from operations.
|
|
January 1, 2018
|
|
The update will result in the retrospective reclassification of the non-service cost components of net benefit cost from cost of sales and selling, general and administrative expenses to other expense, net. There will be no impact on consolidated net income.
|
Standard
|
|
Description
|
|
Effective Date
|
ASU 2015-11, Simplifying the Measurement of Inventory
|
|
The standard requires the measurement of inventory at the lower of cost or net realizable value rather than at the lower of cost or market.
|
|
January 1, 2017
|
ASU 2016-05, Effects of Derivative Contract Novations on Existing Hedge Accounting Relationships and ASU 2016-06, Contingent Put and Call Options in Debt Instruments.
|
|
The standards provide clarification when there is a change in a counterparty to a derivative hedging instrument and the steps required when assessing the economic characteristics of embedded put or call options.
|
|
January 1, 2017
|
ASU 2016-07, Simplifying the Transition to Equity Method of Accounting
|
|
The standard eliminates the requirement to retroactively apply the equity method of accounting as a result of an increase in the level of ownership or degree of influence.
|
|
January 1, 2017
|
ASU 2016-17, Interests Held through Related Parties that Are under Common Control
|
|
The standard changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity in certain instances involving entities under common control.
|
|
January 1, 2017
|
Standard
|
|
Description
|
|
Effective Date
|
ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The standard requires equity investments and other ownership interests in unconsolidated entities (other than those accounted for using the equity method of accounting) to be measured at fair value through earnings. A practicability exception exists for equity investments without readily determinable fair values.
|
|
January 1, 2018
|
ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments
|
|
The standard addresses the classification of cash flows related to various transactions, including debt prepayment and extinguishment costs, contingent consideration and proceeds from insurance claims.
|
|
January 1, 2018
|
ASU 2016-16, Income Taxes - Intra-Entity Transfers of Assets Other than Inventory
|
|
The standard requires the recognition of the income tax effects of intercompany sales and transfers (other than inventory) when the sales and transfers occur.
|
|
January 1, 2018
|
ASU 2016-18, Restricted Cash
|
|
The standard provides guidance on the presentation of restricted cash on the statement of cash flows.
|
|
January 1, 2018
|
ASU 2017-01, Clarifying the Definition of a Business
|
|
The standard provides a new framework to use when determining if a set of assets and activities is a business.
|
|
January 1, 2018
|
ASU 2017-05, Gains and Losses from the Derecognition of Nonfinancial Assets
|
|
The standard provides guidance for recognizing gains and losses on nonfinancial assets (including land, buildings and intangible assets) to noncustomers. Adoption must coincide with ASU 2014-09.
|
|
January 1, 2018
|
ASU 2017-09, Stock Compensation - Scope of Modification Accounting
|
|
The standard provides guidance intended to reduce diversity in practice when accounting for a modification to the terms and conditions of a share-based payment award.
|
|
January 1, 2018
|
ASU 2017-12, Targeted Improvements to Accounting for Hedging Activities
|
|
The standard contains changes intended to better portray the economic results of hedging activities, as well as targeted improvements to simplify hedge accounting.
|
|
January 1, 2019
|
ASU 2016-13, Measurement of Credit Losses on Financial Instruments
|
|
The standard changes the impairment model for most financial instruments to an "expected loss" model. The new model will generally result in earlier recognition of credit losses.
|
|
January 1, 2020
|
ASU 2017-04, Simplifying the Test for Goodwill Impairment
|
|
The standard simplifies the accounting for goodwill impairments and allows a goodwill impairment charge to be based on the amount of a reporting unit's carrying value in excess of its fair value. This eliminates the requirement to calculate the implied fair value of goodwill or what is known as "Step 2" under the current guidance.
|
|
January 1, 2020
|
|
Nine Months Ended
|
|
|
|||
|
September 30, 2017
|
|
October 1, 2016
|
|
% Change
|
|
North America
|
13.0
|
|
13.5
|
|
(4
|
)%
|
Europe and Africa
|
17.1
|
|
16.7
|
|
2
|
%
|
Asia
|
34.9
|
|
33.3
|
|
5
|
%
|
South America
|
2.3
|
|
1.9
|
|
21
|
%
|
Other
|
1.2
|
|
1.1
|
|
9
|
%
|
Global light vehicle production
|
68.5
|
|
66.5
|
|
3
|
%
|
|
2017
|
|
2016
|
||
North America
|
39
|
%
|
|
41
|
%
|
Europe and Africa
|
40
|
%
|
|
39
|
%
|
Asia
|
18
|
%
|
|
17
|
%
|
South America
|
3
|
%
|
|
3
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
2017 |
|
October 1,
2016 |
|
September 30,
2017 |
|
October 1,
2016 |
||||||||
Costs related to restructuring actions, including manufacturing inefficiencies of $1 million in the nine months ended September 30, 2017, and $2 million and $5 million in the three and nine months ended October 1, 2016, respectively
|
$
|
17
|
|
|
$
|
17
|
|
|
$
|
50
|
|
|
$
|
56
|
|
Acquisition and other related costs
|
1
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Acquisition-related inventory fair value adjustment
|
1
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
Loss on extinguishment of debt
|
21
|
|
|
—
|
|
|
21
|
|
|
—
|
|
||||
Gains related to affiliates
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|
(30
|
)
|
||||
Tax benefit, net
|
(14
|
)
|
|
(2
|
)
|
|
(68
|
)
|
|
(15
|
)
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
|
September 30, 2017
|
|
October 1, 2016
|
||||||||||||||||||||
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Seating
|
$
|
3,868.9
|
|
|
77.7
|
%
|
|
$
|
3,513.3
|
|
|
77.6
|
%
|
|
$
|
11,762.0
|
|
|
77.9
|
%
|
|
$
|
10,755.7
|
|
|
77.3
|
%
|
E-Systems
|
1,112.6
|
|
|
22.3
|
|
|
1,013.1
|
|
|
22.4
|
|
|
3,341.2
|
|
|
22.1
|
|
|
3,158.4
|
|
|
22.7
|
|
||||
Net sales
|
4,981.5
|
|
|
100.0
|
|
|
4,526.4
|
|
|
100.0
|
|
|
15,103.2
|
|
|
100.0
|
|
|
13,914.1
|
|
|
100.0
|
|
||||
Cost of sales
|
4,425.6
|
|
|
88.8
|
|
|
4,012.5
|
|
|
88.6
|
|
|
13,387.0
|
|
|
88.6
|
|
|
12,324.1
|
|
|
88.6
|
|
||||
Gross profit
|
555.9
|
|
|
11.2
|
|
|
513.9
|
|
|
11.4
|
|
|
1,716.2
|
|
|
11.4
|
|
|
1,590.0
|
|
|
11.4
|
|
||||
Selling, general and administrative expenses
|
158.2
|
|
|
3.2
|
|
|
153.6
|
|
|
3.4
|
|
|
471.1
|
|
|
3.1
|
|
|
456.9
|
|
|
3.3
|
|
||||
Amortization of intangible assets
|
12.5
|
|
|
0.3
|
|
|
15.2
|
|
|
0.3
|
|
|
34.1
|
|
|
0.3
|
|
|
41.7
|
|
|
0.3
|
|
||||
Interest expense
|
21.7
|
|
|
0.4
|
|
|
20.6
|
|
|
0.5
|
|
|
63.9
|
|
|
0.4
|
|
|
62.0
|
|
|
0.4
|
|
||||
Other (income) expense, net
|
(21.8
|
)
|
|
(0.4
|
)
|
|
14.2
|
|
|
0.3
|
|
|
(12.3
|
)
|
|
(0.1
|
)
|
|
(0.8
|
)
|
|
—
|
|
||||
Provision for income taxes
|
77.8
|
|
|
1.6
|
|
|
88.2
|
|
|
2.0
|
|
|
240.2
|
|
|
1.6
|
|
|
287.4
|
|
|
2.1
|
|
||||
Equity in net income of affiliates
|
(7.5
|
)
|
|
(0.2
|
)
|
|
(12.9
|
)
|
|
(0.3
|
)
|
|
(41.3
|
)
|
|
(0.3
|
)
|
|
(49.2
|
)
|
|
(0.4
|
)
|
||||
Net income attributable to noncontrolling interests
|
19.8
|
|
|
0.4
|
|
|
20.6
|
|
|
0.5
|
|
|
47.6
|
|
|
0.4
|
|
|
46.8
|
|
|
0.3
|
|
||||
Net income attributable to Lear
|
$
|
295.2
|
|
|
5.9
|
%
|
|
$
|
214.4
|
|
|
4.7
|
%
|
|
$
|
912.9
|
|
|
6.0
|
%
|
|
$
|
745.2
|
|
|
5.4
|
%
|
(in millions)
|
|
Cost of Sales
|
||
Third quarter 2016
|
|
$
|
4,013
|
|
Material cost
|
|
304
|
|
|
Labor and other
|
|
95
|
|
|
Depreciation
|
|
14
|
|
|
Third quarter 2017
|
|
$
|
4,426
|
|
|
Three Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
3,868.9
|
|
|
$
|
3,513.3
|
|
Segment earnings
(1)
|
298.8
|
|
|
269.5
|
|
||
Margin
|
7.7
|
%
|
|
7.7
|
%
|
|
Three Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
1,112.6
|
|
|
$
|
1,013.1
|
|
Segment earnings
(1)
|
155.5
|
|
|
140.3
|
|
||
Margin
|
14.0
|
%
|
|
13.8
|
%
|
|
Three Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
Segment earnings
(1)
|
(69.1
|
)
|
|
(64.7
|
)
|
||
Margin
|
N/A
|
|
|
N/A
|
|
(in millions)
|
|
Cost of Sales
|
||
First nine months of 2016
|
|
$
|
12,324
|
|
Material cost
|
|
760
|
|
|
Labor and other
|
|
269
|
|
|
Depreciation
|
|
34
|
|
|
First nine months of 2017
|
|
$
|
13,387
|
|
|
Nine Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
11,762.0
|
|
|
$
|
10,755.7
|
|
Segment earnings
(1)
|
941.8
|
|
|
848.8
|
|
||
Margin
|
8.0
|
%
|
|
7.9
|
%
|
|
Nine Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
3,341.2
|
|
|
$
|
3,158.4
|
|
Segment earnings
(1)
|
476.7
|
|
|
441.5
|
|
||
Margin
|
14.3
|
%
|
|
14.0
|
%
|
|
Nine Months Ended
|
||||||
|
September 30, 2017
|
|
October 1, 2016
|
||||
Net sales
|
$
|
—
|
|
|
$
|
—
|
|
Segment earnings
(1)
|
(207.5
|
)
|
|
(198.9
|
)
|
||
Margin
|
N/A
|
|
|
N/A
|
|
|
Nine Months Ended
|
||||||||||
|
September 30, 2017
|
|
October 1, 2016
|
|
Incremental Increase (Decrease) in Operating
Cash Flow
|
||||||
Consolidated net income and depreciation and amortization
|
$
|
1,274
|
|
|
$
|
1,075
|
|
|
$
|
199
|
|
Net change in working capital items:
|
|
|
|
|
|
||||||
Accounts receivable
|
(281
|
)
|
|
(440
|
)
|
|
159
|
|
|||
Inventory
|
(115
|
)
|
|
(87
|
)
|
|
(28
|
)
|
|||
Accounts payable
|
246
|
|
|
204
|
|
|
42
|
|
|||
Accrued liabilities and other
|
119
|
|
|
327
|
|
|
(208
|
)
|
|||
Net change in working capital items
|
(31
|
)
|
|
3
|
|
|
(34
|
)
|
|||
Other
|
(58
|
)
|
|
16
|
|
|
(74
|
)
|
|||
Net cash provided by operating activities
|
$
|
1,184
|
|
|
$
|
1,094
|
|
|
$
|
90
|
|
Note
|
|
Aggregate Principal Amount at Maturity
|
|
Stated Coupon Rate
|
|||
Senior unsecured notes due 2024 (the "2024 Notes")
|
|
$
|
325
|
|
|
5.375
|
%
|
Senior unsecured notes due 2025 (the "2025 Notes")
|
|
650
|
|
|
5.25
|
%
|
|
Senior unsecured notes due 2027
|
|
750
|
|
|
3.8
|
%
|
|
|
|
$
|
1,725
|
|
|
|
|
2017
(1)
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Senior notes
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,725
|
|
|
$
|
1,725
|
|
Credit agreement —
term loan facility
|
2
|
|
|
6
|
|
|
8
|
|
|
14
|
|
|
14
|
|
|
206
|
|
|
250
|
|
|||||||
Scheduled interest payments
|
—
|
|
|
80
|
|
|
80
|
|
|
80
|
|
|
80
|
|
|
335
|
|
|
655
|
|
|||||||
Total
|
$
|
2
|
|
|
$
|
86
|
|
|
$
|
88
|
|
|
$
|
94
|
|
|
$
|
94
|
|
|
$
|
2,266
|
|
|
$
|
2,630
|
|
Payment Date
|
|
Dividend Per Share
|
|
Declaration Date
|
|
Record Date
|
||
March 23, 2017
|
|
$
|
0.50
|
|
|
February 10, 2017
|
|
March 3, 2017
|
June 28, 2017
|
|
$
|
0.50
|
|
|
May 18, 2017
|
|
June 9, 2017
|
September 19, 2017
|
|
$
|
0.50
|
|
|
August 9, 2017
|
|
August 31, 2017
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Notional amount (contract maturities < 24 months)
|
$
|
2,308
|
|
|
$
|
1,956
|
|
Fair value
|
21
|
|
|
(54
|
)
|
|
|
|
Potential Earnings Benefit (Adverse Earnings Impact)
|
||||||
|
Hypothetical Strengthening %
(1)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
U.S. dollar
|
10%
|
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
Euro
|
10%
|
|
22
|
|
|
16
|
|
|
|
|
Estimated Change in Fair Value
|
||||||
|
Hypothetical Change %
(2)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
U.S. dollar
|
10%
|
|
$
|
34
|
|
|
$
|
50
|
|
Euro
|
10%
|
|
69
|
|
|
35
|
|
•
|
general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates;
|
•
|
currency controls and the ability to economically hedge currencies;
|
•
|
the financial condition and restructuring actions of our customers and suppliers;
|
•
|
changes in actual industry vehicle production levels from our current estimates;
|
•
|
fluctuations in the production of vehicles or the loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier;
|
•
|
disruptions in the relationships with our suppliers;
|
•
|
labor disputes involving us or our significant customers or suppliers or that otherwise affect us;
|
•
|
the outcome of customer negotiations and the impact of customer-imposed price reductions;
|
•
|
the impact and timing of program launch costs and our management of new program launches;
|
•
|
the costs, timing and success of restructuring actions;
|
•
|
increases in our warranty, product liability or recall costs;
|
•
|
risks associated with conducting business in foreign countries;
|
•
|
the impact of regulations on our foreign operations;
|
•
|
the operational and financial success of our joint ventures;
|
•
|
competitive conditions impacting us and our key customers and suppliers;
|
•
|
disruptions to our information technology systems, including those related to cybersecurity;
|
•
|
the cost and availability of raw materials, energy, commodities and product components and our ability to mitigate such costs;
|
•
|
the outcome of legal or regulatory proceedings to which we are or may become a party;
|
•
|
the impact of pending legislation and regulations or changes in existing federal, state, local or foreign laws or regulations;
|
•
|
unanticipated changes in cash flow, including our ability to align our vendor payment terms with those of our customers;
|
•
|
limitations imposed by our existing indebtedness and our ability to access capital markets on commercially reasonable terms;
|
•
|
impairment charges initiated by adverse industry or market developments;
|
•
|
our ability to execute our strategic objectives;
|
•
|
changes in discount rates and the actual return on pension assets;
|
•
|
costs associated with compliance with environmental laws and regulations;
|
•
|
developments or assertions by or against us relating to intellectual property rights;
|
•
|
our ability to utilize our net operating loss, capital loss and tax credit carryforwards;
|
•
|
global sovereign fiscal matters and creditworthiness, including potential defaults and the related impacts on economic activity, including the possible effects on credit markets, currency values, monetary unions, international treaties and fiscal policies;
|
•
|
the impact of potential changes in tax and trade policies in the United States and related actions by countries in which we do business;
|
•
|
the anticipated changes in economic and other relationships between the United Kingdom and the European Union; and
|
•
|
other risks described in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended
December 31, 2016
, and our other Securities and Exchange Commission ("SEC") filings.
|
(a)
|
Disclosure Controls and Procedures
|
(b)
|
Changes in Internal Control over Financial Reporting
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of
Publicly Announced
Plans or Programs
|
|
Approximate Dollar
Value of Shares that
May Yet be
Purchased Under
the Program
(in millions)
|
||||
July 2, 2017 through July 29, 2017
|
|
—
|
|
|
$—
|
|
—
|
|
|
$
|
745.7
|
|
July 30, 2017 through August 26, 2017
|
|
276,345
|
|
|
$144.85
|
|
276,345
|
|
|
705.7
|
|
|
August 27, 2017 through September 30, 2017
|
|
251,057
|
|
|
$150.52
|
|
251,057
|
|
|
667.8
|
|
|
Total
|
|
527,402
|
|
|
$147.55
|
|
527,402
|
|
|
$
|
667.8
|
|
|
Exhibit
Number
|
|
Exhibit
|
|
1.1
|
|
|
|
4.1
|
|
|
|
4.2
|
|
|
|
10.1
|
|
|
*
|
10.2
|
|
|
*
|
10.3
|
|
|
*
|
10.4
|
|
|
*
|
10.5
|
|
|
*
|
10.6
|
|
|
*
|
31.1
|
|
|
*
|
31.2
|
|
|
*
|
32.1
|
|
|
*
|
32.2
|
|
|
**
|
101.INS
|
|
XBRL Instance Document.
|
**
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
**
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
**
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
**
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
**
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
*
|
Filed herewith.
|
**
|
Submitted electronically with the Report.
|
LEAR CORPORATION
|
|
|
|
|
|
|
|
Dated:
|
October 25, 2017
|
By:
|
/s/ Matthew J. Simoncini
|
|
|
|
Matthew J. Simoncini
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
By:
|
/s/ Jeffrey H. Vanneste
|
|
|
|
Jeffrey H. Vanneste
|
|
|
|
Senior Vice President and Chief Financial Officer
|
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