2. Agenda
Strategic Overview
Bob Rossiter, Chairman & CEO
Financial Review and Outlook
Dave Wajsgras, SVP & CFO
Our Approach to Creating Shareholder Value
Jim Vandenberghe, Vice Chairman
Q & A Session
2
3. Highlights of Today’s Presentation
Our customer-focused strategy has delivered profitable
growth
Industry trends for automotive interiors continue to be
positive
Near-term business conditions are difficult
Lear’s near-term results are being negatively impacted,
but our longer-term outlook remains positive
We have a balanced approach to creating shareholder
value
3
5. Strategic Evolution
Going Forward Profitably Grow the Business
Operational Excellence;
1999-2003
Reduce Debt
Seat Systems to
1994-1999
Total Interior Capability
Seat Components
1990-1994
to Seat Systems
5
6. Lear’s Strategy has Supported Rapid Growth
Net Sales
(in billions)
$17.0
$18.0
me
I nc o
$16.0 Net 2%
GR 2
$14.0 CA SALES
CAGR
$12.0
18%
$10.0
$8.0
$6.0
$3.1
$4.0
$2.0
$0.0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Steadily increased net sales over the last ten years to $17 billion in 2004
Transformed from a seat assembly operation to one of the world’s largest
automotive interior systems suppliers
129 ranking and 23rd fastest growing company over the last ten years among the
Fortune 500
6
7. Product And Geographic Diversity
2004
1994 Product Mix
Seating Systems
Seats and Seating
67%
Components
100%
Interior Electronic / Electrical
17% 16%
Geographic Mix
Europe
17% Europe
39%
North America
55%
Rest of World
North America
6%
83%
7
8. And Diversified Our Customer Mix
Present
1994
Extended Ford & GM-
Classic Ford & GM Saab, Volvo,
Jaguar and Land Rover
46%
Classic Ford & GM 10%
75%
DaimlerChrysler
BMW
Fiat
All Other VW
PSA
Mazda
25% All Other
Other Asian Renault / Nissan
8
9. Global Market Leadership
North
America Europe Global
Seating Systems #1 #1 #1
Door Panels #1 #3 #2
Flooring & Acoustics #2 #8 #2
Headliners #2 #3 #3
Electrical Distribution #3 #3 #3
Instrument Panels #5 #4 #7
Source: 2003 Lear Market Share study
Leadership Position in
Total Interiors
9
11. Present Business Assessment and Outlook
Lear’s strategic focus on interiors has supported healthy
net sales and earnings growth in recent years
European financial results improving; Asian growth
strategy working
While we have a high variable cost structure, we are
vulnerable to erratic volume declines, adverse platform
mix and raw material cost pressures
In response, we have been working aggressively to
improve our global cost structure
Over the longer term, we remain positive about the outlook
for Lear
11
12. Revenue Growth by Major Region
% of
Total
Revenue
$16,960
$18,000
$15,747
$14,425
$14,073 ≈45%
$13,625
$15,000
ils)
Com ercial Sales ($m
$12,000
$9,000
m
≈55%
$6,000
$3,000
$0
2000 2001 2002 2003 2004
Americas International
Recent Revenue Growth Has Been Healthy,
Driven Largely By New Business Outside the Americas
12
13. Overall in Europe,
We are Growing Sales and Steadily Improving Margins
Europe CPV European Financials
• Growing sales and
$354
improving margins
$310
• Positive cash flow
$247
• Expanding our low-cost
manufacturing and
sourcing in Eastern
Europe
2002 2003 2004
3rd Consecutive Year Of Improving Financials
13
14. We are Rapidly Growing Our Business
in Asia and with Asian Automakers Globally*
(in millions)
$1,800
2004 Asian-Related Sales:
• Predominantly with
$1,250
Asian OEMs
• 60% in North America $850
• 40% in Asia
2002 2003 2004 Future
Asian-Related Sales More Than Doubled From 2002 To 2004
* Consolidated and unconsolidated sales
14
15. Adverse Industry Factors
Concentrated in the Near Term
First quarter industry production environment
challenging:
– Big Three in North America down about 10%
– Lear’s top platforms globally down about 20%
Raw material pricing impact
– Timing of customer productivity agreements /
negotiations
– Benefits of efficiency actions to ramp-up throughout
year
15
16. Strategy to Mitigate
Higher Raw Material Prices
Supply base compression
Re-sourcing – develop new sources of supply
In-sourcing – fill open capacity where appropriate
Lear’s Cost Technology Optimization process
Low-cost country manufacturing and engineering
Supplier Lean Manufacturing and Six Sigma
Further consolidation of administrative functions
Factor into customer productivity requirements
16
17. Platform Mix to Improve in 2006
Following Major New Model Changeovers
and Product Freshenings this Year
2005 Calendar Year
• BMW 3-Series (MC)
• Hyundai Sonata (MC)
• Peugeot 407 Coupe (MC)
• Chevrolet Impala (MC)
• Chevrolet HHR (New)
• Dodge Ram (MF)
• Ford Explorer (MC)
• Mercury Mountaineer ( MC)
• Fiat Punto (MC)
• Ford Fusion (New)
• Cadillac DTS* (MC)
* Total Interior Integration Program
(New) = New Model
• Buick Lucerne* (MC)
(MC) = Model Changeover
(MF) = Major Freshening
2005 is a Transition Year for Lear; 2006 Mix Expected to Improve With Full Year
Benefit of 2005 Launches and Launch of GMT 900
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18. Strengthened Our Financial Position
65% *
63% Net Debt /Capital
58%
46%
42%
2000 2001 2002 2003 2004
* 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.
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20. We Have a Balanced, Long-Term
Approach to Creating Shareholder Value
Leverage our core capabilities as a leader in automotive
interiors to profitably grow our business:
– Deliver the highest quality and customer satisfaction
– Leverage our scale, expertise and common architecture
– Grow our low-cost manufacturing and engineering
capability
– Invest in profitable new business development worldwide
Return cash to shareholders
Maintain a strong and flexible balance sheet
20
21. Highest Quality and Customer Satisfaction
Internal quality, as measured by defects per million,
continues to show improvement
Lear continues to rank as the highest quality seat
manufacturer serving multiple automakers in latest
J.D. Power survey
Lear has received awards for quality and service excellence
from all of our major customers worldwide
Lear is the most admired auto supplier in the Corporate
Reputation Survey by Fortune magazine, with the industry's
highest score for the quality of our products and services
21
22. Leveraging Our Scale, Expertise and
Common Architecture Strategy
One of the world’s leading automotive interior suppliers,
with $17 billion in annual sales and 110,000 employees
in 34 countries
Nearly 90 years of automotive history
Cost Technology Optimization (CTO) Centers in the
United States, Germany, Spain, the Philippines and
Brazil
Common Seat Architecture on more than a dozen
programs covering over 4 million vehicles worldwide
22
23. Ongoing Manufacturing
Footprint and Efficiency Actions
Efficiency Actions
Downsizing, closures and relocations impacted 15
facilities in 2004
Growth Opportunities
New facilities opened to support business in China,
Korea, Czech Republic and Slovakia
Low-Cost Countries
Presently, Lear has low-cost operations in 13 countries
Plans to expand operations in Mexico, Honduras,
Poland, Romania and the Philippines
Approximately 20% of sales manufactured in low-cost
locations
Investing In Footprint Actions Globally To Support Growth
Opportunities And Low-Cost Country Strategy
23
24. Record Sales Backlog Supports Continued Growth
Sales Backlog*
Major New Business
(in millions)
2005 backlog up $150 million
$3,800
from last year on a comparable
basis
Three-year backlog up $750
million from last year on a
comparable basis
$1,550 Interior and electronics /
electrical represent 50% of the
three-year backlog
European and Asian customers
represent over half of the three-
year backlog
2005 2005 - 2007
Record Net New Business Supports Continued Growth
And Diversification Of Sales
24* Please see slide titled “Forward-Looking Statements” at the end of this presentation for further information.
25. Growth Drivers
Leverage JVs and strategic partnerships to support
Japanese and Korean OEMs globally
Support growth of traditional North American and
European customers in Asia
Leverage Total Interior Integration capabilities
Product innovation
Strategic niche acquisitions
Goal is to be the Partner of Choice for All Customers
25
26. Longer-Term Outlook
Remains Positive for Lear
Consumer trends and automaker emphasis on interiors
supports continued growth
Lear has a very strong three-year sales backlog of $3.8 billion
Lear’s platform mix to improve in 2006 with full-year benefit of
major 2005 launches and introduction of GMT 900
Strong and flexible overall financial position to continue
Recent 25% increase in dividend indicates management’s
confidence in the outlook for our business
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28. Use of Non-GAAP Financial Information
The Company has provided information regarding “net debt,” a non-GAAP financial measure. Net debt represents
total debt plus utilization under the Company’s ABS facility, less cash and cash equivalents. Management believes
that net debt provides useful information regarding the Company’s financial condition. Further, management uses net
debt for planning and forecasting in future periods.
Net debt should not be considered in isolation or as a substitute for total debt or other balance sheet data prepared in
accordance with GAAP. Also, net debt, 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 slide is a reconciliation of net debt to total debt.
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29. Use of Non-GAAP Financial Information
Net Debt
(in millions) December 31,
Net debt 2003 2002 2001 2000
2004
Short-term borrowings $ 35.4 $ 17.1 $ 37.3 $ 63.2 $ 72.4
Current portion of long-term debt 632.8 4.0 3.9 129.5 155.6
Long-term debt 1,866.9 2,057.2 2,132.8 2,293.9 2,852.1
Total debt 2,535.1 2,078.3 2,174.0 2,486.6 3,080.1
Cash and cash equivalents ( 584.9 ) ( 169.3 ) ( 91.7 ) ( 87.6 ) ( 98.8 )
Asset backed securitization - - 189.0 260.7 -
Net debt 1,950.2 $ 1,909.0 $ 2,271.3 $ 2,659.7 $ 2,981.3
Note: Net Debt to Capital is defined as Net Debt divided by Net Debt plus Stockholders’ Equity.
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30. 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. 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, fluctuations in the production of vehicles for which the Company is a supplier, labor disputes involving
the Company or its significant customers or suppliers or that otherwise affect the Company, the Company’s ability to achieve
cost reductions that offset or exceed customer-mandated selling price reductions, the outcome of customer productivity
negotiations, the impact and timing of program launch costs, the costs and timing of facility closures or similar actions,
increases in the Company’s warranty or product liability costs, risks associated with conducting business in foreign countries,
competitive conditions impacting the Company’s key customers, raw material cost and availability, the Company’s ability to
mitigate the significant impact of recent increases in raw material prices, the outcome of legal or regulatory proceedings to
which the Company is or may become a party, unanticipated changes in free cash flow and other risks described 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: anticipated net sales from awarded new programs, less net sales from phased-out and cancelled programs. The
calculation of backlog does not reflect customer price reductions on existing or newly awarded programs. The backlog may be
impacted by various assumptions embedded in the calculation, including vehicle production levels on new and replacement
programs, foreign exchange rates and the timing of program launches.
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.
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