lear ip 2004_sholders_meet
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2004 Annual Meeting of Shareholders
May 13, 2004
2004 Annual Meeting of Shareholders
May 13, 2004
fast forward
advance relentlesslyworld’s leading automotive interior supplier
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Agenda
I. IntroductionBob Rossiter, Chairman & CEO
II. Americas ReviewDon Stebbins, President & COO - Americas
III. International ReviewDoug DelGrosso, President & COO - International
IV. Financial ReviewDave Wajsgras, SVP & CFO
I. IntroductionBob Rossiter, Chairman & CEO
II. Americas ReviewDon Stebbins, President & COO - Americas
III. International ReviewDoug DelGrosso, President & COO - International
IV. Financial ReviewDave Wajsgras, SVP & CFO
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Americas Review
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AmericasBusiness Summary
Top 5 Customers
General Motors
Ford
DaimlerChrysler
BMW
Toyota
2003 Revenue $9.6 billion
Operations in 7 countries
68K employees
169 facilities
2003 Revenue $9.6 billion
Operations in 7 countries
68K employees
169 facilities
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AmericasNorth America Market Share Rankings
RankRank ShareShare
Source: Internal Market Share Study
Seat Systems # 1 47 %Door Panels # 1 26 %Floor & Acoustic Systems # 2 37 %Headliners # 2 20 %Electrical Distribution Systems # 3 14 %Instrument Panels # 5 4 %
Total Interior # 1 37%
Seat Systems # 1 47 %Door Panels # 1 26 %Floor & Acoustic Systems # 2 37 %Headliners # 2 20 %Electrical Distribution Systems # 3 14 %Instrument Panels # 5 4 %
Total InteriorTotal Interior # 1# 1 3737%%
ProductProduct RankRank ShareShare
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AmericasSales by Segment
Car31%Truck
69%
TruckTruck
SUV 56 %
Pickup 36
Van 7
Medium/Heavy 1Total 100 %
CarCar
Mid Size 49 %
Compact 21
Full Size 15
Luxury 11
Sports 4Total 100 %
Americas Total Sales of $9.6 BillionAmericas Total Sales of $9.6 Billion
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AmericasProduct On Top Selling Vehicles in North America
Source: Based on available industry data
On 28 of 30 TopOn 28 of 30 Top--Selling Vehicles in North AmericaSelling Vehicles in North America
1 Ford - Total F-Series Pickup 11 DCX - Caravan 21 Ford - Econoline
2 GM - Total Silverado Pickup 12 GM - Cavalier 22 GM - Malibu
3 DCX - Ram Pickup 13 GM - TrailBlazer 23 Honda - Odyssey
4 Toyota - Camry 14 Ford - Focus 24 Ford - Escape
5 Honda - Accord 15 Ford – Ranger 25 Ford - Mustang
6 Ford - Explorer 16 Nissan – Altima 26 DCX - Jeep Liberty
7 Ford - Taurus 17 GM – Total GMC Sierra Pickup 27 Toyota - Tacoma
8 Honda - Civic 18 DCX – Jeep Grand Cherokee 28 GM - S-10
9 Toyota - Corolla/Matrix 19 GM – Tahoe 29 Honda - CRV
10 GM - Impala 20 Ford – Expedition 30 DCX - Chrysler Town & Country
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2002 2003 2004 YTD
AmericasPPM’s
65% Improvement
Parts Per Million (PPM) Defective*
* Based on internal and customer data
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11% improvement in 2003
4th consecutive year of improvement in TGW
Highest quality seat manufacturer that supplies multiple OEMs
Independent J.D. Power Survey Shows Independent J.D. Power Survey Shows Continuous Improvement in Lear’s TGWContinuous Improvement in Lear’s TGW
Source: 2003 J.D. Power Seat Survey
Lear’s 2003 J.D. PowerLear’s 2003 J.D. PowerResultsResults
10.39.5
8.3 7.97.0
1999 2000 2001 2002 2003
Things Gone Wrong (TGW)per 100 vehicles
AmericasJ.D. Power Seat Survey - 4th Consecutive Year of Improvement
Continuous Improvement
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“Supplier of the Year”
Four World Excellence Awards
Interior Excellence Award
Fortune Magazine Ranked Lear as America’s Most Admired Automotive Supplier for Second Consecutive Year
Americas Recent Industry Awards & Recognition
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AmericasSales Backlog
Sales BacklogSales Backlog(billions)(billions)
$1.6
$2.6
2004 - 2006 2004 - 2008
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Lear Working in Close Partnership with GM to Lear Working in Close Partnership with GM to Deliver “World Class” Interiors for Next Generation Deliver “World Class” Interiors for Next Generation
Large and Luxury VehiclesLarge and Luxury Vehicles
AmericasGM Total Interior Integrator Program On Track
Total Interior prototypes have been completed and shipped to GM
Refining engineering designs with GM to harmonize total interior with overall vehicle aesthetics
Interiors feature several Lear innovations integrated as a vehicle system for the first time
Spray PUR TM seamless polyurethane coating on instrument panelSonotec lightweight acoustical productsFlexible seating architecture
Ongoing studies confirm that consumer appeal remains on target throughout the development process
Total Interior prototypes have been completed and shipped to GM
Refining engineering designs with GM to harmonize total interior with overall vehicle aesthetics
Interiors feature several Lear innovations integrated as a vehicle system for the first time
Spray PUR TM seamless polyurethane coating on instrument panelSonotec lightweight acoustical productsFlexible seating architecture
Ongoing studies confirm that consumer appeal remains on target throughout the development process
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Real Time Access on the Performance of Real Time Access on the Performance of Complete Portfolio of BusinessComplete Portfolio of Business
AmericasGlobal Lear Program Management Process (LPMP)
Customers
30 + 17 + 289 + 34 + 1100 = “One LEAR”
AcquisitionsFacilities
CountriesPrograms
Current Functionality:Timing PlansSupplier StatusOpen IssuesFinancial Status
Current Functionality:Timing PlansSupplier StatusOpen IssuesFinancial Status
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Customer Service
Operational Excellence
Product Innovation & Growth
Commercial Responsibility
Teamwork
Customer Service
Operational Excellence
Product Innovation & Growth
Commercial Responsibility
Teamwork
Americas2004 Plan
Leverage Leadership Position in Total InteriorsLeverage Leadership Position in Total Interiors
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International Review
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InternationalEurope & Asia Business Summary
Top 5 Customers
Ford Group
GM Group
BMW
PSA
Fiat
* Includes African operations
Represents approximately one-third of global salesOperations in 27 countries
Europe*: 35K employees94 facilities
Asia: 7K employees26 facilities
PPM: 36% improvement
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InternationalWestern Europe Market Share Rankings
Source: Internal Market Share Study and 2004 estimates of outsourced IP/cockpit market.
• Seat Systems #1 27%
• Electrical Distribution Systems #3 14%
• Headliners #3 13%
• Instrument Panels / Cockpits #4 8%
• Door Panels #5 7%
• Seat Systems #1 27%
• Electrical Distribution Systems #3 14%
• Headliners #3 13%
• Instrument Panels / Cockpits #4 8%
• Door Panels #5 7%
ProductProduct RankRank ShareShare
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InternationalProduct On Top Selling Vehicles in Western Europe
Source: Based on available company and industry data
On 23 of 30 TopOn 23 of 30 Top--Selling Vehicles in Western EuropeSelling Vehicles in Western Europe
1 Peugeot - 206 11 Mercedes C-class 21 Opel - Zafira
2 VW - Golf 12 Audi - A4 22 Citroen - C3
3 Ford - Focus 13 Ford - Fiesta 23 VW - Seat Ibiza
4 Peugeot - 307 14 Renault - Scenic 24 Opel - Vectra
5 BMW - 3 Series 15 Renault - Laguna 25 Citroen - Xsara
6 Opel - Astra 16 Ford - Mondeo 26 Fiat - Stilo
7 Opel - Corsa 17 VW - Polo 27 BMW - 5 Series
8 Renault - Clio 18 Mercedes E-class 28 BMW - Mini
9 VW - Passat 19 Citroen - Xsara Picasso 29 Audi - A6
10 Fiat - Punto 20 Renault - Megane 30 Mercedes A-class
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2002 2003 2004 Target
68%Improvement
InternationalPPM’s
Parts Per Million (PPM) Defective*
* Based on internal and customer data
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U.S. data for seats supplied by Lear’s European plants
21% improvement from 2002
Independent J.D. Power Survey Shows Solid Independent J.D. Power Survey Shows Solid Improvement in Lear’s European TGWImprovement in Lear’s European TGW
Source: 2003 J.D. Power Seat Survey
Lear’s 2003 J.D. PowerLear’s 2003 J.D. PowerResults for Lear EuropeResults for Lear Europe
7.1
5.6
2002 2003
Things Gone Wrong (TGW)per 100 vehicles
InternationalJ.D. Power Seat Survey Shows Improvement for European Seats
21% Improvement
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Global Value Achievement Award
“Supplier of the Year”
2003 Presidents Award
Green Partner Award
Quality Master Awards
Fortune Magazine Ranked Lear as World’s Most Admired Automotive Supplier for Second Consecutive Year
International Recent Industry Awards & Recognition
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InternationalSales Backlog
Sales BacklogSales Backlog(billions)(billions)
$1.4
$1.8
2004 - 2006 2004 - 2008
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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High quality producer with technical expertise
Improves overall competitiveness in electrical/electronics market
Provides avenue for growth and customer diversification
Acquisition Consistent with our Acquisition Consistent with our Electrical/Electronics StrategyElectrical/Electronics Strategy
Grote & HartmannGrote & Hartmann****Electrical/Electronics Global Market Opportunity*
InternationalElectrical/Electronics Market
Wire Harness/ Terminals & Connectors
Add Body Electronics & Mechatronics
Add Safety Electronics
Add Audio, Infotainment
& Other
$18$25
$28
$44
(in billions)
* Based on internal Lear estimates** Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Eleven joint ventures
4,000 employees
InternationalLear China Overview
Products- Seats - Door Panels - Wiring - Carpet/Acoustics
Customers- Jiangling (Ford) - ChangAn (Ford)- SAIC (GM) - FAW (VW)- Nanjing - Iveco (Fiat) - DFM (Nissan, PSA)- China Brilliance (BMW) - Others
Key Strategic Points- Follow customers’ footprint- Potential manufacturing for export- Leverage partners’ resources for technology
• Lower technology risk- Controlled growth and investment
Nanjing- Fiat
Nanchang- Isuzu, Suzuki, Ford
Chongqing- ChangAn, Suzuki- Ford
Wuhan (2)- Citroen- Renault/Nissan
Shiyan / Xiangfan- Nissan
Nanjing- Fiat
Nanchang- Ford , Isuzu
Chongqing- ChangAn, Suzuki,
-
Ford
Wuhan (2)- Citroen- Renault/Nissan
Shiyan / Xiangfan- Nissan
ChangChun- Audi
ShenyangBMW-
Shanghai (3)- SGM, SVW
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InternationalEurope & Asia 2004 Plan
Provide ‘World Class’ Value to Provide ‘World Class’ Value to Customers and ShareholdersCustomers and Shareholders
Exceed Customer Requirements
Continue to Improve Quality and Customer Satisfaction
Leverage Existing Infrastructure
Grow Market Share & Improve BusinessStructure
Aggressively Grow Business with Asian OEMs
Exceed Customer Requirements
Continue to Improve Quality and Customer Satisfaction
Leverage Existing Infrastructure
Grow Market Share & Improve BusinessStructure
Aggressively Grow Business with Asian OEMs
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Financial Review
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Leveraging our Total Interior Capabilities to Deliver Leveraging our Total Interior Capabilities to Deliver Value to our Customers and ShareholdersValue to our Customers and Shareholders
Financial ReviewFinancial Highlights - Full Year 2003
Record net sales of $15.75 billion, up 9% from 2002
Net income of $5.55 per share, up 19% from 2002*
Return on invested capital** increased to 10.6%
Strong free cash flow**of $509 million
Net debt** to capital ratio improved to 45.8%, lowest level in 10 years
Record net sales of $15.75 billion, up 9% from 2002
Net income of $5.55 per share, up 19% from 2002*
Return on invested capital** increased to 10.6%
Strong free cash flow**of $509 million
Net debt** to capital ratio improved to 45.8%, lowest level in 10 years
* Excluding the cumulative effect of a change in accounting for goodwill of $4.46 per share in 2002.** Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivable, less capital
expenditures. Net debt represents total debt plus utilization of our ABS facility, less cash and cash equivalents. For further information onthese measures, as well as return on invested capital, please see slides titled “Use of Non-GAAP Financial Information” at the end of this presentation.
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Meeting Our Commitments and Meeting Our Commitments and Delivering Shareholder ValueDelivering Shareholder Value
Financial Review Financial Priorities
We are focused on:
Profitable growth
Improving ROIC
Generating cash
Financial discipline
We are focused on:We are focused on:
Profitable growth
Improving ROIC
Generating cash
Financial discipline
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$3.1
$4.7
$6.2$7.3
$9.1
$12.4
$14.1 $13.6$14.4
$15.7
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Financial ReviewFocused Strategy has Supported Rapid Growth
Net sales have steadily increased since IPO to about $15.7 billion today17 major acquisitions during the 1990’s 60% acquisition growth40% organic growth
No strategic hole in Lear’s product line upLear ranks 129 among the Fortune 500 and is the 23rd
fastest growing company in the U.S. over the last ten years
SALESCAGR20%
Net Sales(in billions)
Net Income
CAGR 23%
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Comprehensive Approach to Profitably Comprehensive Approach to Profitably Growing Our BusinessGrowing Our Business
Financial ReviewGrowth Strategy
Deliver record sales backlog
Pursue strategic acquisitions
Accelerate new product innovations
Win new total interior integrator programs
Continue to form alliances and joint ventures
Deliver record sales backlog
Pursue strategic acquisitions
Accelerate new product innovations
Win new total interior integrator programs
Continue to form alliances and joint ventures
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New cockpit and interior programs
Growth in seating systems with Korean automakers
Electrical distribution and electronics systems, including TPMS
Added content on replacement programs
New cockpit and interior programs
Growth in seating systems with Korean automakers
Electrical distribution and electronics systems, including TPMS
Added content on replacement programs
Sales Backlog*
(in billions)Major New BusinessMajor New Business
Three-Year Five-Year
Financial ReviewRecord Backlog Supports Continued Growth
Record Backlog Supports Continued Growth and Record Backlog Supports Continued Growth and Diversification of SalesDiversification of Sales
$4.4
$3.0
* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
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Financial ReviewGrote & Hartmann Acquisition
Total transaction value: $220 million
Headquarters: Wuppertal, Germany; 1,900 employees
Major products: terminals & connectors and junction boxes
≈ $275 million in revenue, with about 75% in Europe
Major customers: VW, BMW, Ford, Opel, DCX, Renault, MAN and PSA group
Total transaction value: $220 million
Headquarters: Wuppertal, Germany; 1,900 employees
Major products: terminals & connectors and junction boxes
≈ $275 million in revenue, with about 75% in Europe
Major customers: VW, BMW, Ford, Opel, DCX, Renault, MAN and PSA group
Acquisition Expected to be Slightly Accretive in 2005Acquisition Expected to be Slightly Accretive in 2005
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Financial ReviewStrategic Joint Ventures Position Lear for Growth
Asian JVsChina 11 *India 1 *Thailand 1 *Japan 2 **
Total 15
- - - -* Manufacturing JVs** Sales and Engineering JVs
Asia
15
North
America
11
Europe
3
29 Global Strategic Joint Ventures
12 Consolidated / 17 Non-consolidated
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Financial ReviewReturn on Invested Capital Improving
Trailing Twelve Month ROICTrailing Twelve Month ROIC**
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
11.0%
1Q2001
2Q2001
3Q2001
4Q2001
1Q2002
2Q2002
3Q2002
4Q2002
1Q2003
2Q2003
3Q2003
4Q2003
8.5%8.5%
10.6%10.6%
9.8%9.8%
* Return on Invested Capital (ROIC) represents income before restructuring charges, amortization, interest, other expense and income taxes times (1 - effective tax rate) divided by average invested capital. Average invested capital is the sum of total assets, sold accounts receivable and the present value of operating leases (assuming a discount rate of 10%) less the sum of accounts payable and drafts and accrued liabilities, based on the account values on the last day of the prior four quarters. Please see slides titled “Use of Non-GAAP Financial Information” at the end of this presentation for further information.
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$3.4
$3.0
$2.7
$2.3
$1.946%
70%
65%63%
58%
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
1999* 2000 2001** 2002** 2003
(in billions)
Net
Deb
t
* UTA acquisition 5/99** Includes ABS debt of $261 million in 2001 and $189 million in 2002 (implemented in 2001).*** Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivable, less
capital expenditures. Net debt represents total debt plus utilization of our ABS facility, less cash and cash equivalents. Please see slides titled “Use of Non-GAAP Financial Information” at the end of this presentation for further information.
Net DebtNet Debt******/Capital/Capital
Financial ReviewContinuing to Reduce Our Net Debt
Free Cash FlowFree Cash Flow****** $179M$179M $410M$410M $318M$318M $395M$395M $509M$509M
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Financial ReviewHow Investors View Our Performance
GROWTHEight consecutive quarters of higher year-over-year sales
RETURNSMargins flat year over year, due to tough production/mix environmentROIC steadily improved from 2001 to 2003
RISKDeleveraging balance sheet – lowest leverage in 10 yearsConsistent results and “No Surprises” over past eight quartersInitiated dividend program
INTANGIBLESCompany is delivering on strategy Improving quality, validated by J.D. Power SurveyProactive manufacturing capacity/efficiency actionsCompany rated “Most Admired” auto supplier in Fortune survey
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Financial Review2004 Guidance - Net Income Per Share**
Full Year EPS Guidance Remains UnchangedFull Year EPS Guidance Remains Unchanged
2002 2003 2004 Guidance
$0.70* $1.01
$4.65*
$5.55 $5.85$6.25
First Quarter
Full Year
* Represents income per share before cumulative effect of a change in accounting principle, which excludes the impact of goodwill impairment of $298.5 million after-tax, or $4.50 per share in the first quarter of 2002 and $4.46 per share in the full year of 2002.
** Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
$1.30
Second Quarter $1.27$1.54
$1.65 to
$1.55
Net Sales $14.4B $15.7B $16.6B
ADVANCE RELENTLESSLY™
www.lear.comLEA
NYSEListed
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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 “free cash flow,” “ROIC” and “net debt.” Free cash flow represents net cash provided by operating activities before the net change in sold accounts receivable, less capital expenditures. The Company believes it is appropriate to exclude the net change in sold accounts receivable in the calculation of free cash flow since the sale of receivables may be viewed as a substitute for borrowing activity. ROIC represents income before restructuring charges, amortization, interest, other expense and income taxes times (1 - effective tax rate) divided by average invested capital. Average invested capital is the sum of total assets, sold accounts receivable and the present value of operating leases (assuming a discount rate of 10%) less the sum of accounts payable and drafts and accrued liabilities, based on the account values on the last day of the prior four quarters. Net debt represents total debt plus utilization under the Company’s ABS facility, less cash and cash equivalents.
Management believes that the non-GAAP financial measures used in this presentation are useful to both management and investors in their analysis of the Company’s financial position and results of operations. In particular, management believes that free cash flow is useful in analyzing the Company’s ability to service and repay its debt. Management believes that ROIC is a commonly used measure that provides useful information regarding the efficiency with which the Company’s assets are deployed. Management believes that net debt provides useful information regarding a company’s financial condition. Further, management uses these non-GAAP measures for planning and forecasting in future periods.
Neither free cash flow, ROIC nor net debt should be considered in isolation or as substitutes for net cash provided by operating activities, total debt or other balance sheet, income statement or cash flow statement data prepared in accordance with GAAP or as measures of profitability or liquidity. In addition, the calculation of free cash flow does not reflect cash used to service debt and thus, does not reflect funds available for investment or other discretionary uses. Also, these non-GAAP financial measures, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.
Set forth on the following slides are reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.
Use of Non-GAAP Financial Information
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2003 2002Free cash flow
Net cash provided by operating activities $ 586.3 $ 545.1
Net change in sold accounts receivable 298.1 122.2
Net cash provided by operating activities before net change in sold accounts receivable 884.4 667.3
Capital expenditures ( 375.6 ) ( 272.6 )
Free cash flow $ 508.8 $ 394.7
Twelve Months(in millions)
Use of Non-GAAP Financial InformationFree Cash Flow
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2001 2000 1999Free cash flow
Net cash provided by operating activities $ 829.8 $ 753.1 $ 560.3
Net change in sold accounts receivable ( 245.0 ) ( 21.2 ) 10.4
Net cash provided by operating activities before net change in sold accounts receivable 584.8 731.9 570.7
Capital expenditures ( 267.0 ) ( 322.3 ) ( 391.4 )
Free cash flow $ 317.8 $ 409.6 $ 179.3
(in millions)
Use of Non-GAAP Financial InformationFree Cash Flow
Twelve Months
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Use of Non-GAAP Financial InformationReturn on Invested Capital
Q4 2003 Q4 2001 Q1 2001Income before restructuring charges,amortization, interest, other expenseand income taxes
Income before income taxes $ 534.2 $ 89.9 $ 395.9Restructuring charges - 159.3 4.2Amortization - 90.2 90.1Interest expense 186.6 254.7 313.9Other expense, net 52.0 85.8 44.1
Income before restructuring charges,amortization, interest, other expenseand income taxes $ 772.8 $ 679.9 $ 848.2(return on invested capital earnings)
(in millions) Twelve Months
Note: Income before restructuring charges, amortization, interest, other expense and income taxes is used to calculate return on invested capital.
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(in millions)Net debtShort-term borrowings $ 17.1 $ 37.3 $ 63.2 $ 72.4 $ 103.6Current portion of long-term debt 4.0 3.9 129.5 155.6 63.6Long-term debt 2,057.2 2,132.8 2,293.9 2,852.1 3,324.8Total debt 2,078.3 2,174.0 2,486.6 3,080.1 3,492.0Cash and cash equivalents ( 169.3 ) ( 91.7 ) ( 87.6 ) ( 98.8 ) (106.9 )Asset backed securitization - 189.0 260.7 - -Net debt $ 1,909.0 $ 2,271.3 $ 2,659.7 $ 2,981.3 $ 3,385.1
2003 2002 2001 2000 1999
Use of Non-GAAP Financial InformationNet Debt
December 31,
Note: Net debt to capital is defined as net debt divided by net debt plus stockholders’ equity.
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This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated financial results. Actual results may differ materially from anticipated results as a result of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which the Company operates, including changes in interest rates and fuel prices, fluctuations in the production of vehicles for which the Company is a supplier, labor disputes involving the Company or its significant customers or that otherwise affect the Company, the Company’s ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions, the impact and timing of program launch costs, costs and timing of facility closures or similar actions, increases in warranty or product liability costs, risks associated with conducting business in foreign countries, fluctuations in foreign exchange rates, adverse changes in economic conditions or political instability in the jurisdictions in which the Company operates, competitive conditions impacting the Company’s key customers, raw material cost and availability, the outcome of legal or regulatory proceedings, unanticipated changes in cash flow and other risks detailed from time to time in the Company’s Securities and Exchange Commission filings.
This presentation also contains information on the Company’s sales backlog. The Company’s incremental sales backlog reflects: (i) formally awarded new programs; (ii) targeted programs for which the Company believes there is a substantial likelihood of award; (iii) phased-out and cancelled programs; (iv) estimates regarding customer-mandated changes in selling prices; and (v) estimates of expected changes in vehicle content. Changes in any of these components may significantly impact the Company’s backlog. In addition, backlog may be impacted by various assumptions imbedded in the calculation, including vehicle production levels on new, replacement or targeted programs, foreign exchange rates and the timing of major program launches. For purposes of the backlog data included in this presentation, the Company has made the following assumptions: (1) North American vehicle production of 16.0 million units; (2) Western European vehicle production of 16.0 million units; (3) South American vehicle production of 1.9 million units; and (4) a Euro exchange rate of $1.20/Euro. Please refer to the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2003 for further information on the Company’s calculation of backlog.
Statements regarding the anticipated timing and impact of the Grote & Hartmann acquisition are also included. Actual events or results may differ materially from anticipated events or results as a result of certain risks and uncertainties, including, but not limited to, whether or not the conditions to the completion of the transaction are satisfied, the possibility that the transaction will not close, the timing of the closing of the transaction and Lear’s ability to successfully integrate Grote & Hartmann’s operations.
In addition, the full year net income per share guidance is based on assumed 71.0 million shares outstanding and does not reflect the potential dilutive impact of the convertible senior notes. The forward-looking statements in this presentation are made as of the date hereof, and the Company does not assume any obligation to update them.
Forward-Looking Statements