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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________ 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 2024.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                     to                     .
Commission file number: 001-11311
 learlogoa21.jpg
(Exact name of registrant as specified in its charter) 
_______________________________________
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)
(248) 447-1500
(Registrant's telephone number, including area code)
_______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 LEANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
As of April 26, 2024, the number of shares outstanding of the registrant's common stock was 56,787,794 shares.


LEAR CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED MARCH 30, 2024
INDEX

 Page No.

2

LEAR CORPORATION AND SUBSIDIARIES
PART I — FINANCIAL INFORMATION

ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have prepared the unaudited condensed consolidated financial statements of Lear Corporation and subsidiaries pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, for the year ended December 31, 2023.
The financial information presented reflects all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, cash flows and financial position for the interim periods presented. These results are not necessarily indicative of a full year's results of operations.

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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
March 30, 2024 (1)
December 31,
2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$930.4 $1,196.3 
Accounts receivable4,154.9 3,681.2 
Inventories1,735.4 1,758.0 
Other1,087.0 1,001.4 
Total current assets7,907.7 7,636.9 
LONG-TERM ASSETS:
Property, plant and equipment, net2,910.4 2,977.4 
Goodwill1,719.9 1,737.9 
Other2,334.0 2,343.3 
Total long-term assets6,964.3 7,058.6 
Total assets$14,872.0 $14,695.5 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Short-term borrowings$27.0 $27.5 
Accounts payable and drafts3,688.7 3,434.2 
Accrued liabilities2,227.0 2,205.2 
Current portion of long-term debt0.3 0.3 
Total current liabilities5,943.0 5,667.2 
LONG-TERM LIABILITIES:
Long-term debt2,743.0 2,742.6 
Other1,199.8 1,225.1 
Total long-term liabilities3,942.8 3,967.7 
EQUITY:
Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); no shares outstanding
  
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,571,405 shares issued as of March 30, 2024 and December 31, 2023
0.6 0.6 
Additional paid-in capital1,039.2 1,050.5 
Common stock held in treasury, 7,679,165 and 7,592,473 shares as of March 30, 2024 and December 31, 2023, respectively, at cost
(1,056.7)(1,044.6)
Retained earnings5,664.8 5,601.1 
Accumulated other comprehensive loss(755.0)(688.8)
Lear Corporation stockholders' equity4,892.9 4,918.8 
Noncontrolling interests93.3 141.8 
Equity4,986.2 5,060.6 
Total liabilities and equity$14,872.0 $14,695.5 
 (1)     Unaudited
The accompanying notes are an integral part of these condensed consolidated balance sheets.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in millions, except share and per share data)
 Three Months Ended
 March 30,
2024
April 1,
2023
Net sales$5,994.6 $5,845.5 
Cost of sales5,596.5 5,415.5 
Selling, general and administrative expenses186.5 176.8 
Amortization of intangible assets15.1 15.9 
Interest expense, net26.1 24.2 
Other expense, net13.5 13.7 
Consolidated income before provision for income taxes and equity in net income of affiliates156.9 199.4 
Provision for income taxes40.5 45.6 
Equity in net income of affiliates(10.5)(9.6)
Consolidated net income126.9 163.4 
Less: Net income attributable to noncontrolling interests17.3 19.8 
Net income attributable to Lear$109.6 $143.6 
Basic net income per share attributable to Lear (Note 14)
$1.91 $2.42 
Diluted net income per share attributable to Lear (Note 14)
$1.90 $2.41 
Cash dividends declared per share$0.77 $0.77 
Average common shares outstanding57,251,970 59,316,555 
Average diluted shares outstanding57,569,739 59,558,966 
Consolidated comprehensive income (Condensed Consolidated Statements of Equity)$58.5 $264.1 
Less: Comprehensive income attributable to noncontrolling interests15.1 20.2 
Comprehensive income attributable to Lear$43.4 $243.9 
The accompanying notes are an integral part of these condensed consolidated statements.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended March 30, 2024
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2024$0.6 $1,050.5 $(1,044.6)$5,601.1 $(688.8)$4,918.8 
Comprehensive income (loss):
Net income— — — 109.6 — 109.6 
Other comprehensive loss— — — — (66.2)(66.2)
Total comprehensive income (loss)— — — 109.6 (66.2)43.4 
Stock-based compensation— 18.6 — — — 18.6 
Net issuance of 129,082 shares held in treasury in settlement of stock-based compensation
— (29.9)18.1 (1.0)— (12.8)
Repurchase of 215,774 shares of common stock at average price of $139.50 per share
— — (30.2)— — (30.2)
Dividends declared to Lear Corporation stockholders— — — (44.9)— (44.9)
Dividends declared to noncontrolling interest holders— — — — — — 
Balance at March 30, 2024$0.6 $1,039.2 $(1,056.7)$5,664.8 $(755.0)$4,892.9 
The accompanying notes are an integral part of these condensed consolidated statements.
6

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended March 30, 2024
Lear Corporation Stockholders' EquityNon-controlling InterestsEquity
Balance at January 1, 2024$4,918.8 $141.8 $5,060.6 
Comprehensive income (loss):
Net income109.6 17.3 126.9 
Other comprehensive loss(66.2)(2.2)(68.4)
Total comprehensive income (loss)43.4 15.1 58.5 
Stock-based compensation18.6 — 18.6 
Net issuance of 129,082 shares held in treasury in settlement of stock-based compensation
(12.8)— (12.8)
Repurchase of 215,774 shares of common stock at average price of
$139.50 per share
(30.2)— (30.2)
Dividends declared to Lear Corporation stockholders(44.9)— (44.9)
Dividends declared to noncontrolling interest holders— (63.6)(63.6)
Balance at March 30, 2024$4,892.9 $93.3 $4,986.2 
The accompanying notes are an integral part of these condensed consolidated statements.


7

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended April 1, 2023
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2023$0.6 $1,023.1 $(753.9)$5,214.1 $(805.1)$4,678.8 
Comprehensive income:
Net income— — — 143.6 — 143.6 
Other comprehensive income— — — — 100.3 100.3 
Total comprehensive income— — — 143.6 100.3 243.9 
Stock-based compensation— 18.9 — (1.0)— 17.9 
Net issuance of 125,666 shares held in treasury in settlement of stock-based compensation
— (28.6)17.5 — — (11.1)
Repurchase of 182,902 shares of common stock at average price of $137.24 per share
— — (25.1)— — (25.1)
Dividends declared to Lear Corporation stockholders— — — (46.7)— (46.7)
Balance at April 1, 2023$0.6 $1,013.4 $(761.5)$5,310.0 $(704.8)$4,857.7 
The accompanying notes are an integral part of these condensed consolidated statements.



8

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended April 1, 2023
Lear Corporation Stockholders' EquityNon-controlling InterestsEquity
Balance at January 1, 2023$4,678.8 $151.5 $4,830.3 
Comprehensive income:
Net income143.6 19.8 163.4 
Other comprehensive income100.3 0.4 100.7 
Total comprehensive income243.9 20.2 264.1 
Stock-based compensation17.9 — 17.9 
Net issuance of 125,666 shares held in treasury in settlement of stock-based compensation
(11.1)— (11.1)
Repurchase of 182,902 shares of common stock at average price of
$137.24 per share
(25.1)— (25.1)
Dividends declared to Lear Corporation stockholders(46.7)— (46.7)
Balance at April 1, 2023$4,857.7 $171.7 $5,029.4 
The accompanying notes are an integral part of these condensed consolidated statements.


9

LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three Months Ended
March 30,
2024
April 1,
2023
Cash Flows from Operating Activities:
Consolidated net income$126.9 $163.4 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization155.3 147.2 
Net change in recoverable customer engineering, development and tooling(35.9)(34.6)
Net change in working capital items (see below)(297.0)(311.6)
Other, net16.1  
Net cash used in operating activities(34.6)(35.6)
Cash Flows from Investing Activities:
Additions to property, plant and equipment(113.6)(111.8)
Other, net2.7 2.3 
Net cash used in investing activities(110.9)(109.5)
Cash Flows from Financing Activities:
Repurchases of common stock(44.6)(25.1)
Dividends paid to Lear Corporation stockholders(45.5)(46.8)
Other, net(13.8)(10.6)
Net cash used in financing activities(103.9)(82.5)
Effect of foreign currency translation(16.7)11.0 
Net Change in Cash, Cash Equivalents and Restricted Cash(266.1)(216.6)
Cash, Cash Equivalents and Restricted Cash as of Beginning of Period1,198.5 1,117.4 
Cash, Cash Equivalents and Restricted Cash as of End of Period$932.4 $900.8 
Changes in Working Capital Items:
Accounts receivable$(518.7)$(671.2)
Inventories1.5 (93.5)
Accounts payable296.9 352.6 
Accrued liabilities and other(76.7)100.5 
Net change in working capital items$(297.0)$(311.6)
Supplementary Disclosure:
Cash paid for interest$24.6 $22.0 
Cash paid for income taxes, net of refunds received$50.3 $45.5 
The accompanying notes are an integral part of these condensed consolidated statements.
10

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation
Lear Corporation ("Lear," and together with its consolidated subsidiaries, the "Company") and its affiliates design, develop, engineer and manufacture complete seat systems, key seat components, complete electrical distribution and connection systems, high- and low-voltage power distribution products, electronic controllers and other electronic products. The Company's main customers are automotive original equipment manufacturers. The Company operates facilities worldwide.
The accompanying condensed consolidated financial statements include the accounts of Lear, a Delaware corporation, and the wholly owned and less than wholly owned subsidiaries controlled by Lear. In addition, Lear consolidates all entities, including variable interest entities, in which it has a controlling financial interest. Investments in affiliates in which Lear does not have control, but does have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method.
The Company's annual financial results are reported on a calendar year basis, and quarterly interim results are reported using a thirteen week reporting calendar.
(2) Acquisition
I.G. Bauerhin
On April 26, 2023, the Company completed the acquisition of I.G. Bauerhin ("IGB"), a privately held supplier of automotive seat heating, ventilation and active cooling, steering wheel heating, seat sensors and electronic control modules, headquartered in Grundau-Rothenbergen, Germany. IGB has more than 4,600 employees at nine manufacturing plants in seven countries with annual sales of approximately $290 million. The acquisition of IGB furthers the Company's comprehensive strategy to develop and integrate a complete portfolio of thermal comfort systems for automotive seating.
The acquisition of IGB was accounted for as a business combination, and accordingly, the assets acquired and liabilities assumed are included in the accompanying condensed consolidated balance sheets as of March 30, 2024 and December 31, 2023. The operating results and cash flows of IGB are included in the accompanying condensed consolidated financial statements from the date of acquisition in the Company's Seating segment.
The preliminary purchase price and related allocation are shown below (in millions):
December 31,
2023
AdjustmentsMarch 30,
2024
Preliminary purchase price, net of acquired cash$174.5 $ $174.5 
Property, plant and equipment47.5  47.5 
Other assets purchased and liabilities assumed, net38.1 3.5 41.6 
Goodwill73.5 (3.5)70.0 
Intangible assets15.4  15.4 
Preliminary purchase price allocation$174.5 $ $174.5 
Goodwill recognized is primarily attributable to the assembled workforce and expected synergies related to future growth.
Intangible assets consist of amounts recognized for the fair value of developed technology and customer-based assets which were both based on an independent appraisal. Developed technology assets have a weighted average useful life of approximately nine years. Customer-based assets include IGB's established relationships with its customers and the ability of these customers to generate future economic profits for the Company and have a weighted average useful life of approximately thirteen years.
The purchase price and related allocation are preliminary and may be revised as a result of further adjustments made to the purchase price and additional information obtained regarding assets acquired and liabilities assumed, including, but not limited to, certain tax attributes and contingent liabilities.
The pro-forma effects of this acquisition do not materially impact the Company's reported results for any period presented.
For further information related to acquired assets measured at fair value, see Note 18, "Financial Instruments."
11

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(3) Restructuring
Restructuring costs include employee termination benefits, asset impairment charges and contract termination costs, as well as other incremental net costs resulting from the restructuring actions. Employee termination benefits are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Other incremental net costs principally include equipment and personnel relocation costs. In addition to restructuring costs, the Company also incurs incremental manufacturing inefficiency costs at the operating locations impacted by the restructuring actions during the related restructuring implementation period. Restructuring costs are recognized in the Company's condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States ("GAAP"). Generally, charges are recorded as restructuring actions are approved, communicated and/or implemented.
A summary of the changes in the Company's restructuring reserves is shown below (in millions):
Balance at January 1, 2024$121.6 
Provision for employee termination benefits48.4 
Payments, utilizations and foreign currency(36.4)
Balance at March 30, 2024$133.6 
Charges recorded in connection with the Company's restructuring actions are shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Employee termination benefits$48.4 $11.7 
Asset impairments - property, plant and equipment0.2 0.1 
Contract termination costs1.1 0.8 
Other related costs3.9 2.0 
$53.6 $14.6 
Restructuring charges by income statement line item are shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Cost of sales$47.6 $12.9 
Selling, general and administrative expenses6.0 1.7 
$53.6 $14.6 
Restructuring charges by operating segment are shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Seating$43.4 $12.0 
E-Systems8.4 2.3 
Other1.8 0.3 
$53.6 $14.6 
The Company expects to incur approximately $53 million and approximately $14 million of additional restructuring costs in its Seating and E-Systems segments, respectively, related to activities initiated as of March 30, 2024, and expects that the components of such costs will be consistent with its historical experience.
12

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(4) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard costing, which approximates actual cost on a first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. The Company records reserves for inventory in excess of production and/or forecasted requirements and for obsolete inventory in production and service inventories.
A summary of inventories is shown below (in millions):
March 30,
2024
December 31,
2023
Raw materials$1,291.0 $1,260.7 
Work-in-process141.8 141.0 
Finished goods500.7 540.8 
Reserves(198.1)(184.5)
Inventories$1,735.4 $1,758.0 
(5) Pre-Production Costs Related to Long-Term Supply Agreements
The Company incurs pre-production engineering and development ("E&D") and tooling costs related to the products produced for its customers under long-term supply agreements. The Company expenses all pre-production E&D costs for which reimbursement is not contractually guaranteed by the customer. In addition, the Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer or for which the Company does not have a non-cancelable right to use the tooling.
During the first three months of 2024 and 2023, the Company capitalized $64.3 million and $60.1 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first three months of 2024 and 2023, the Company also capitalized $50.4 million and $56.3 million, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the Company has a non-cancelable right to use the tooling. These amounts are included in other current and long-term assets in the accompanying condensed consolidated balance sheets.
During the first three months of 2024 and 2023, the Company collected $79.2 million and $80.2 million, respectively, of cash related to E&D and tooling costs.
The classification of recoverable customer E&D and tooling costs related to long-term supply agreements included in the accompanying condensed consolidated balance sheets is shown below (in millions):
March 30,
2024
December 31,
2023
Current$255.0 $220.2 
Long-term160.3 164.3 
Recoverable customer E&D and tooling$415.3 $384.5 
(6) Long-Lived Assets
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Costs associated with the repair and maintenance of the Company's property, plant and equipment are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency or safety of the Company's property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Depreciable property is depreciated over the estimated useful lives of the assets, using principally the straight-line method.
13

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of property, plant and equipment is shown below (in millions):
March 30,
2024
December 31,
2023
Land$104.3 $105.6 
Buildings and improvements919.5 919.4 
Machinery and equipment5,372.2 5,324.4 
Construction in progress362.0 408.7 
Total property, plant and equipment6,758.0 6,758.1 
Less – accumulated depreciation(3,847.6)(3,780.7)
Property, plant and equipment, net$2,910.4 $2,977.4 
In the first three months of 2024 and 2023, depreciation expense was $140.2 million and $131.3 million, respectively.
The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset. Fair value estimates of long-lived assets are based on independent appraisals or discounted cash flows, giving consideration to the highest and best use of the assets. Key assumptions used in the appraisals are based on a combination of market and cost approaches, as appropriate.
In the first three months of 2024 and 2023, the Company recognized property, plant and equipment impairment charges of $0.2 million and $0.1 million, respectively, in conjunction with its restructuring actions (Note 3, "Restructuring"). In the first three months of 2024 and 2023, the Company recognized additional property, plant and equipment impairment charges of $4.1 million and $2.2 million, respectively. The impairment charges are included in cost of sales in the accompanying condensed consolidated statements of comprehensive income.
Definite-Lived Intangible Assets
In the first three months of 2023, the Company recognized impairment charges of $0.9 million related to certain intangible assets of its E-Systems segment resulting from a change in the intended use of such assets. The impairment charges are included in amortization of intangible assets in the accompanying condensed consolidated statement of comprehensive income.
(7) Goodwill
A summary of the changes in the carrying amount of goodwill, by operating segment, in the three months ended March 30, 2024, is shown below (in millions):
SeatingE-SystemsTotal
Balance at January 1, 2024$1,341.5 $396.4 $1,737.9 
Acquisition(3.5) (3.5)
Foreign currency translation and other(12.6)(1.9)(14.5)
Balance at March 30, 2024$1,325.4 $394.5 $1,719.9 
Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit's fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The annual goodwill impairment assessment is completed as of the first day of the Company's fourth quarter.
There was no impairment of goodwill in the first three months of 2024 and 2023. The Company will, however, continue to assess the impact of significant industry and other events on its recorded goodwill.
14

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
For further information related to the acquisition, see Note 2, "Acquisition."
(8) Debt
Short-Term Borrowings
The Company utilizes uncommitted lines of credit as needed for its short-term working capital fluctuations. As of March 30, 2024 and December 31, 2023, the Company had lines of credit from banks totaling $330.9 million and $337.7 million, respectively. As of March 30, 2024 and December 31, 2023, the Company had short-term debt balances outstanding related to draws on its lines of credit of $27.0 million and $27.5 million, respectively.
Long-Term Debt
A summary of long-term debt, net of unamortized debt issuance costs and unamortized original issue premium (discount), and the related weighted average interest rates is shown below (in millions):
March 30, 2024
Debt InstrumentLong-Term DebtUnamortized Debt Issuance CostsUnamortized Original Issue Premium (Discount)Long-Term
Debt, Net
Weighted
Average
Interest
Rate
Delayed-Draw Term Loan Facility (the "Term Loan")$150.0 $(0.5)$ $149.5 6.555%
3.8% Senior Notes due 2027 (the "2027 Notes")
550.0 (1.5)(1.4)547.1 3.885%
4.25% Senior Notes due 2029 (the "2029 Notes")
375.0 (1.6)(0.6)372.8 4.288%
3.5% Senior Notes due 2030 (the "2030 Notes")
350.0 (1.7)(0.5)347.8 3.525%
2.6% Senior Notes due 2032 (the "2032 Notes")
350.0 (2.4)(0.6)347.0 2.624%
5.25% Senior Notes due 2049 (the "2049 Notes")
625.0 (5.6)12.6 632.0 5.103%
3.55% Senior Notes due 2052 (the "2052 Notes")
350.0 (3.7)(0.4)345.9 3.558%
Other1.2 — — 1.2 N/A
$2,751.2 $(17.0)$9.1 $2,743.3 
Less — Current portion(0.3)
Long-term debt$2,743.0 
December 31, 2023
Debt InstrumentLong-Term DebtUnamortized Debt Issuance CostsUnamortized Original Issue Premium (Discount)Long-Term
Debt, Net
Weighted
Average
Interest
Rate
Term Loan$150.0 $(0.5)$ $149.5 6.575%
2027 Notes550.0 (1.6)(1.4)547.0 3.885%
2029 Notes375.0 (1.7)(0.6)372.7 4.288%
2030 Notes350.0 (1.8)(0.5)347.7 3.525%
2032 Notes350.0 (2.5)(0.7)346.8 2.624%
2049 Notes625.0 (5.6)12.6 632.0 5.103%
2052 Notes350.0 (3.7)(0.4)345.9 3.558%
Other1.3 — — 1.3 N/A
$2,751.3 $(17.4)$9.0 2,742.9 
Less — Current portion(0.3)
Long-term debt$2,742.6 
15

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Senior Notes
The issuance, maturity and interest payment dates of the Company's senior unsecured 2027 Notes, 2029 Notes, 2030 Notes, 2032 Notes, 2049 Notes and 2052 Notes (collectively, the "Notes") are shown below:
NoteIssuance Date(s)Maturity DateInterest Payment Dates
2027 NotesAugust 2017September 15, 2027March 15 and September 15
2029 NotesMay 2019May 15, 2029May 15 and November 15
2030 NotesFebruary 2020May 30, 2030May 30 and November 30
2032 NotesNovember 2021January 15, 2032January 15 and July 15
2049 NotesMay 2019 and February 2020May 15, 2049May 15 and November 15
2052 NotesNovember 2021January 15, 2052January 15 and July 15
Subject to certain exceptions, the indentures governing the Notes contain restrictive covenants that, among other things, limit the ability of the Company to: (i) create or permit certain liens and (ii) consolidate, merge or sell all or substantially all of the Company's assets. The indentures governing the Notes also provide for customary events of default.
As of March 30, 2024, the Company was in compliance with all covenants under the indentures governing the Notes.
Credit Agreement
The Company's $2.0 billion amended and restated unsecured revolving credit agreement (the "Credit Agreement") expires on October 28, 2027.
As of March 30, 2024 and December 31, 2023, there were no borrowings outstanding under the Credit Agreement.
Advances under the Credit Agreement generally bear interest based on (i) Term Benchmark, Central Bank Rate and Risk Free Rate ("RFR") (in each case, as defined in the Credit Agreement) or (ii) Alternate Base Rate ("ABR") and Canadian Prime Rate (in each case, as defined in the Credit Agreement). As of March 30, 2024, the ranges and rates are as follows:
Term Benchmark, Central Bank Rate
and RFR Loans
ABR and Canadian Prime Rate Loans
MinimumMaximum
Rate as of March 30, 2024
MinimumMaximum
Rate as of March 30, 2024
Credit Agreement0.925 %1.450 %1.125 %0.000 %0.450 %0.125 %
A facility fee, which ranges from 0.075% to 0.20% of the total amount committed under the Credit Agreement, is payable quarterly.
The Credit Agreement contains various customary representations, warranties and covenants by the Company, including, without limitation, (i) covenants regarding maximum leverage, (ii) limitations on fundamental changes involving the Company or its subsidiaries and (iii) limitations on indebtedness and liens.
As of March 30, 2024, the Company was in compliance with all covenants under the Credit Agreement.
Term Loan
In May 2023, the Company borrowed $150 million under its unsecured delayed-draw term loan facility (the "Term Loan") to finance, in part, the acquisition of IGB (Note 2, "Acquisition"). The Term Loan matures on May 1, 2026, three years after the funding date. Advances under the Term Loan generally bear interest based on the Daily or Term SOFR (as defined in the Term Loan agreement) plus a margin determined in accordance with a pricing grid that ranges from 1.00% to 1.525%. As of March 30, 2024, the interest rate was 6.555%.
The Term Loan contains the same covenants as the Credit Agreement. As of March 30, 2024, the Company was in compliance with all covenants under the Term Loan.
Other Long-Term Debt
As of March 30, 2024 and December 31, 2023, other long-term debt, including the current portion, consisted of amounts outstanding under finance lease agreements.
16

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
For further information related to the Company's debt, see Note 7, "Debt," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
(9) Leases
The Company has operating leases for production, office and warehouse facilities, manufacturing and office equipment and vehicles. Operating lease assets and obligations included in the accompanying condensed consolidated balance sheets are shown below (in millions):
March 30,
2024
December 31, 2023
Right-of-use assets under operating leases:
Other long-term assets$733.2 $733.5 
Lease obligations under operating leases:
Accrued liabilities$154.4 $151.9 
Other long-term liabilities618.7 623.0 
$773.1 $774.9 
Maturities of lease obligations as of March 30, 2024, are shown below (in millions):
March 30, 2024
2024 (1)
$137.8 
2025164.8 
2026138.9 
2027115.2 
202893.1 
Thereafter231.7 
Total undiscounted cash flows881.5 
Less: Imputed interest(108.4)
Lease obligations under operating leases$773.1 
(1) For the remaining nine months
Cash flow information related to operating leases is shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations$53.1 $64.8 
Operating cash flows:
Cash paid related to operating lease obligations$48.0 $44.3 
Lease expense included in the accompanying condensed consolidated statements of comprehensive income is shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Operating lease expense$47.3 $44.2 
Short-term lease expense5.6 5.1 
Variable lease expense2.1 2.6 
Total lease expense$55.0 $51.9 
17

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In the three months ended March 30, 2024, the Company recognized impairment charges of $0.9 million related to its right-of-use assets. The impairment charges are included in cost of sales in the accompanying condensed consolidated statement of comprehensive income.
The weighted average lease term and discount rate for operating leases are shown below:
March 30,
2024
Weighted average remaining lease termSeven years
Weighted average discount rate4.0 %
The Company is party to finance lease agreements, which are not material to the accompanying condensed consolidated financial statements (Note 8, "Debt").
For further information related to the Company's leases, see Note 8, "Leases," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
(10) Pension and Other Postretirement Benefit Plans
The Company sponsors defined benefit pension plans covering certain eligible employees in the United States and certain foreign countries. The Company also sponsors postretirement benefit plans (primarily for the continuation of medical benefits) covering certain eligible retirees in the United States and Canada.
Net Periodic Pension and Other Postretirement Benefit (Credit) Cost
The components of the Company's net periodic pension benefit (credit) cost are shown below (in millions):
 Three Months Ended
 March 30, 2024April 1, 2023
 U.S.ForeignU.S.Foreign
Service cost$ $1.0 $ $0.8 
Interest cost5.1 3.9 5.2 4.1 
Expected return on plan assets(5.3)(3.7)(5.0)(4.0)
Amortization of actuarial loss0.2 0.5 0.2 0.5 
Settlement gain(0.1) (0.1) 
Net periodic benefit (credit) cost$(0.1)$1.7 $0.3 $1.4 
The components of the Company's net periodic other postretirement benefit (credit) cost are shown below (in millions):
Three Months Ended
 March 30, 2024April 1, 2023
 U.S.ForeignU.S.Foreign
Interest cost$0.4 $0.2 $0.4 $0.2 
Amortization of actuarial gain(0.8)(0.1)(0.9) 
Net periodic benefit (credit) cost$(0.4)$0.1 $(0.5)$0.2 
(11) Revenue Recognition
The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle's life cycle. Typically, these contracts do not provide for a specified quantity of products, but once entered into, the Company is often expected to fulfill its customers' purchasing requirements for the production life of the vehicle. Many of these contracts may be terminated by the Company's customers at any time. Historically, terminations of these contracts have been infrequent. The Company receives purchase orders from its customers, which provide the commercial terms for a particular production part, including price (but not quantities). Contracts may also provide for annual price reductions over the production life of the vehicle, and prices may be adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors.
18

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Revenue is recognized at a point in time when control of the product is transferred to the customer under standard commercial terms, as the Company does not have an enforceable right to payment prior to such transfer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for those products based on the current purchase orders, annual price reductions and ongoing price adjustments. In the first three months of 2024 and 2023, revenue recognized related to prior years represented approximately 1% of consolidated net sales. The Company's customers pay for products received in accordance with payment terms that are customary within the industry. The Company's contracts with its customers do not have significant financing components.
The Company records a contract liability for advances received from its customers. As of March 30, 2024 and December 31, 2023, there were no significant contract liabilities recorded. Further, in the first three months of 2024 and 2023, there were no significant contract liabilities recognized in revenue.
Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of comprehensive income. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales in the condensed consolidated statements of comprehensive income.
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue.
A summary of the Company's revenue by reportable operating segment and geography is shown below (in millions):
Three Months Ended
March 30, 2024April 1, 2023
SeatingE-SystemsTotalSeatingE-SystemsTotal
North America$2,000.0 $475.9 $2,475.9 $2,011.9 $368.1 $2,380.0 
Europe and Africa1,622.1 631.7 2,253.8 1,596.7 634.3 2,231.0 
Asia714.6 345.1 1,059.7 688.3 331.2 1,019.5 
South America140.9 64.3 205.2 156.1 58.9 215.0 
$4,477.6 $1,517.0 $5,994.6 $4,453.0 $1,392.5 $5,845.5 
(12) Other Expense, Net
Other expense, net includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on the disposal of fixed assets, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense.
A summary of other expense, net is shown below (in millions):
 Three Months Ended
 March 30,
2024
April 1,
2023
Other expense$19.0 $17.1 
Other income(5.5)(3.4)
Other expense, net$13.5 $13.7 
In the three months ended March 30, 2024, other expense includes net foreign currency transaction losses of $11.3 million, including losses of $6.3 million related to the hyper-inflationary environment and significant currency devaluation in Argentina.
In the three months ended April 1, 2023, other expense includes net foreign currency transaction losses of $4.7 million, net of gains of $1.0 million related to foreign exchange rate volatility in Russia, and a loss of $5.0 million related to the impairment of an affiliate.
19

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(13) Income Taxes
A summary of the provision for income taxes and the corresponding effective tax rate for the three months ended March 30, 2024 and April 1, 2023, is shown below (in millions, except effective tax rates):
Three Months Ended
March 30,
2024
April 1,
2023
Provision for income taxes$40.5 $45.6 
Pretax income before equity in net income of affiliates$156.9 $199.4 
Effective tax rate25.8 %22.9 %
The Company's provision for income taxes is impacted by the level and mix of earnings among tax jurisdictions. In addition, the Company recognized discrete tax benefits (expense) on the significant items shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Restructuring charges and various other items$13.3 $3.7 
Share-based compensation(0.6)(0.5)
$12.7 $3.2 
Excluding the items above, the effective tax rate for the first three months of 2024 and 2023 approximated the U.S. federal statutory income tax rate of 21%, adjusted for income taxes on foreign earnings, losses and remittances, valuation allowances, tax credits, income tax incentives and other permanent items.
The Company's current and future provision for income taxes is impacted by the initial recognition of and changes in valuation allowances in certain countries. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. The Company's future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company's deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company's decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.
For further information related to the Company's income taxes, see Note 9, "Income Taxes," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.
(14) Net Income Per Share Attributable to Lear
Basic net income per share attributable to Lear is computed by dividing net income attributable to Lear by the average number of common shares outstanding during the period. Common shares issuable upon the satisfaction of certain conditions pursuant to a contractual agreement are considered common shares outstanding and are included in the computation of basic net income per share attributable to Lear.
Diluted net income per share attributable to Lear is computed using the treasury stock method by dividing net income attributable to Lear by the average number of common shares outstanding, including the dilutive effect of common stock equivalents using the average share price during the period.
20

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of information used to compute basic and diluted net income per share attributable to Lear is shown below (in millions, except share and per share data):
 Three Months Ended
 March 30,
2024
April 1,
2023
Net income attributable to Lear$109.6 $143.6 
Average common shares outstanding57,251,970 59,316,555 
Dilutive effect of common stock equivalents317,769 242,411 
Average diluted shares outstanding57,569,739 59,558,966 
Basic net income per share attributable to Lear$1.91 $2.42 
Diluted net income per share attributable to Lear$1.90 $2.41 
(15) Comprehensive Income and Equity
Comprehensive Income
Comprehensive income is defined as all changes in the Company's net assets except changes resulting from transactions with stockholders. It differs from net income in that certain items recorded in equity are included in comprehensive income.
Accumulated Other Comprehensive Loss
A summary of changes, net of tax, in accumulated other comprehensive loss for the three months ended March 30, 2024, is shown below (in millions):
Three Months Ended March 30, 2024
Defined benefit plans:
Balance at beginning of period$(107.3)
Reclassification adjustments(0.3)
Other comprehensive income recognized during the period (net of tax benefit of $0.3 million )
0.4 
Balance at end of period$(107.2)
Derivative instruments and hedging:
Balance at beginning of period$107.9 
Reclassification adjustments (net of tax benefit of $9.3 million)
(34.9)
Other comprehensive income recognized during the period (net of tax expense of $13.1 million)
48.4 
Balance at end of period$121.4 
Foreign currency translation:
Balance at beginning of period$(689.4)
Other comprehensive loss recognized during the period (net of tax expense of $0.6 million)
(79.8)
Balance at end of period$(769.2)
Total accumulated other comprehensive loss$(755.0)
In the three months ended March 30, 2024, foreign currency translation adjustments are primarily related to the weakening of the Euro and, to a lesser extent, the Chinese renminbi relative to the U.S. dollar and include pretax losses of $0.1 million related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future. In the three months ended March 30, 2024, foreign currency translation adjustments also include net investment hedge gains of $2.9 million.

21

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of changes, net of tax, in accumulated other comprehensive loss for the three months ended April 1, 2023, is shown below (in millions):
Three Months Ended April 1, 2023
Defined benefit plans:
Balance at beginning of period$(95.7)
Reclassification adjustments(0.3)
Other comprehensive income recognized during the period0.3 
Balance at end of period$(95.7)
Derivative instruments and hedging:
Balance at beginning of period$33.4 
Reclassification adjustments (net of tax benefit of $4.6 million)
(17.8)
Other comprehensive income recognized during the period (net of tax expense of $19.5 million)
76.2 
Balance at end of period$91.8 
Foreign currency translation:
Balance at beginning of period$(742.8)
Other comprehensive income recognized during the period (net of tax benefit of $0.2 million)
41.9 
Balance at end of period$(700.9)
Total accumulated other comprehensive loss$(704.8)
In the three months ended April 1, 2023, foreign currency translation adjustments are primarily related to the strengthening of the Euro and, to a lesser extent, the Brazilian real relative to the U.S. dollar and include pretax gains of $0.1 million related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future. In the three months ended April 1, 2023, foreign currency translation adjustments also include net investment hedge losses of $0.8 million.
For further information regarding reclassification adjustments related to the Company's defined benefit plans, see Note 10, "Pension and Other Postretirement Benefit Plans." For further information regarding reclassification adjustments related to the Company's derivative and hedging activities, see Note 18, "Financial Instruments."
Lear Corporation Stockholders' Equity
Common Stock Share Repurchase Program
The Company may implement share repurchases through a variety of methods, including, but not limited to, open market purchases, accelerated stock repurchase programs and structured repurchase transactions. The extent to which the Company may repurchase its outstanding common stock and the timing of such repurchases will depend upon its financial condition, results of operations, capital requirements, prevailing market conditions, alternative uses of capital and other factors.
The Company has a common stock share repurchase program (the "Repurchase Program") which permits the discretionary repurchase of its common stock. Since the inception of the Repurchase Program in the first quarter of 2011, the Company's Board of Directors (the "Board") has authorized $6.7 billion in share repurchases, including an increase in the Company's share repurchase authorization to $1.5 billion on February 16, 2024. As of March 30, 2024, the Company has repurchased, in aggregate, $5.2 billion of its outstanding common stock, at an average price of $93.61 per share, excluding commissions and related fees, and has a remaining repurchase authorization of $1.5 billion which expires on December 31, 2026.
22

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Share repurchases in the first three months of 2024 and the remaining repurchase authorization as of March 30, 2024, are shown below (in millions, except for share and per share amounts):
Three Months Ended March 30, 2024As of March 30, 2024
Aggregate Repurchases (1)
Cash Paid for Repurchases (2)
Number of Shares
Average Price per Share (3)
Remaining Purchase Authorization
$30.1 $44.6 215,774 $139.50 $1,469.9 
(1)     Excludes excise tax
(2)     Includes $16.6 million of 2023 share repurchases paid for in the first quarter of 2024 and excludes $2.1 million of first quarter 2024 share repurchases to be paid for in the second quarter of 2024
(3)     Excludes commissions
In addition to shares repurchased under the Repurchase Program described above, the Company classifies shares withheld from the settlement of the Company's restricted stock unit and performance share awards to cover tax withholding requirements as common stock held in treasury in the condensed consolidated balance sheets.
Quarterly Dividend
The Board declared quarterly cash dividends of $0.77 per share of common stock in the first three months of 2024 and 2023.
Dividends declared and paid are shown below (in millions):
Three Months Ended
March 30,
2024
April 1,
2023
Dividends declared$44.9 $46.7 
Dividends paid45.5 46.8 
Dividends payable on shares of common stock to be distributed under the Company's stock-based compensation program will be paid when such shares are distributed.
(16) Legal and Other Contingencies
As of March 30, 2024 and December 31, 2023, the Company had recorded reserves for pending legal disputes, including commercial disputes, product liability claims and other legal matters, of $12.9 million and $13.5 million, respectively. Such reserves reflect amounts recognized in accordance with GAAP and typically exclude the cost of legal representation. Reserves for warranty and recall matters are recorded separately from legal reserves, as described below.
Commercial Disputes
The Company is involved from time to time in legal proceedings and claims, including, without limitation, commercial or contractual disputes with its customers, suppliers and competitors. These disputes vary in nature and are usually resolved by negotiations between the parties.
Product Liability, Warranty and Recall Matters
In the event that use of the Company's products results in, or is alleged to result in, bodily injury and/or property damage or other losses, the Company may be subject to product liability lawsuits and other claims. Such lawsuits generally seek compensatory damages, punitive damages and attorneys' fees and costs. In addition, if any of the Company's products are, or are alleged to be, defective, the Company may be required or requested by its customers to support warranty costs or to participate in a recall or other corrective action involving such products. Certain of the Company's customers have asserted claims against the Company for costs related to recalls or other corrective actions involving its products. The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend such claims.
The Company is party to agreements with certain of its customers, whereby these customers may pursue claims against the Company for contribution of all or a portion of the amounts sought in connection with warranty and recall matters.
23

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
In certain instances, allegedly defective products may be supplied by the Company's suppliers. The Company may seek recovery from its suppliers of materials or services included within the Company's products that are associated with product liability claims or warranty and recall matters. The Company carries insurance for certain legal matters, including product liability claims, but such coverage may be limited. The Company does not maintain insurance for warranty and recall matters.
The Company records reserves for warranty and recall matters when liability is probable and related amounts are reasonably estimable.
A summary of the changes in reserves for warranty and recall matters for the three months ended March 30, 2024, is shown below (in millions):
Balance at January 1, 2024$32.4 
Expense, net (including changes in estimates)1.7 
Settlements(3.1)
Foreign currency translation and other(0.2)
Balance at March 30, 2024$30.8 
Environmental Matters
The Company is subject to local, state, federal and foreign laws, regulations and ordinances which govern activities or operations that may have or have had adverse environmental effects. These regulations impose liability for clean-up costs resulting from past spills, disposals or other releases of hazardous wastes and environmental compliance. The Company's policy is to comply with all applicable environmental laws and to maintain an environmental management program based on ISO 14001 to ensure compliance with this standard. However, the Company currently is, has been and in the future may become, the subject of formal or informal enforcement actions or procedures.
As of March 30, 2024 and December 31, 2023, the Company had recorded environmental reserves of $4.9 million. The Company does not believe that the environmental liabilities associated with its current and former properties will have a material adverse impact on its business, financial condition, results of operations or cash flows; however, no assurances can be given in this regard.
Other Matters
The Company is involved from time to time in various other legal proceedings and claims, including, without limitation, intellectual property matters, tax claims and employment matters. Although the outcome of any legal matter cannot be predicted with certainty, the Company does not believe that any of the other legal proceedings or claims in which the Company is currently involved, either individually or in the aggregate, will have a material adverse impact on its business, financial condition, results of operations or cash flows. However, no assurances can be given in this regard.
Although the Company records reserves for legal disputes, warranty and recall matters, and environmental and other matters in accordance with GAAP, the ultimate outcomes of these matters are inherently uncertain. Actual results may differ significantly from current estimates.
(17) Segment Reporting
The Company is organized under two reportable operating segments: Seating, which consists of the design, development, engineering and manufacture of complete seat systems and key seat components, and E-Systems, which consists of the design, development, engineering and manufacture of complete electrical distribution and connection systems; high-voltage power distribution products, including battery disconnect units ("BDUs"); and low-voltage power distribution products, electronic controllers and other electronic products. Included in the Company's complete seat systems and components are thermal comfort systems and configurable seating product technologies. All of these products are compatible with traditional internal combustion engine ("ICE") architectures and electrified powertrains, including the full range of hybrid, plug-in hybrid and battery electric architectures. Key seat component product offerings include seat trim covers; surface materials such as leather and fabric; seat mechanisms; seat foam; headrests; and thermal comfort systems such as seat heating, ventilation, active cooling, pneumatic lumbar and massage products. Key components of the Company's electrical distribution and connection systems portfolio include wire harnesses, terminals and connectors, high-voltage battery connection systems and engineered components. High-voltage battery connection systems include intercell connect boards, bus bars and main battery connection
24

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
systems. High-voltage power distribution products control the flow and distribution of high-voltage power throughout electrified vehicles and include BDUs which control all electrical energy flowing into and out of high-voltage batteries in electrified vehicles. Low-voltage power distribution products, electronic controllers and other electronic products facilitate signal, data and/or power management within the vehicle and include the associated software required to facilitate these functions. Key components of the Company's other electronic products portfolio include zone control modules, body domain control modules and low-voltage and high-voltage power distribution modules. The Company's software offerings include embedded control, cybersecurity software and software to control hardware devices. The Company's customers traditionally have sourced its electronic hardware together with the software that the Company embeds in it. The other category includes unallocated costs related to corporate headquarters, regional headquarters and the elimination of intercompany activities, none of which meets the requirements for being classified as an operating segment. Corporate and regional headquarters costs include various support functions, such as information technology, advanced research and development, corporate finance, legal, executive administration and human resources.
Each of the Company's operating segments reports its results from operations and makes its requests for capital expenditures directly to the chief operating decision maker. The economic performance of each operating segment is driven primarily by automotive production volumes in the geographic regions in which it operates, as well as by the success of the vehicle platforms for which it supplies products. Also, each operating segment operates in the competitive Tier 1 automotive supplier environment and is continually working with its customers to manage costs and improve quality. The Company's production processes generally make use of hourly labor, dedicated facilities, sequential manufacturing and assembly processes and commodity raw materials.
The Company evaluates the performance of its operating segments based primarily on (i) revenues from external customers, (ii) pretax income before equity in net income of affiliates, interest expense, net and other expense, net ("segment earnings") and (iii) cash flows, being defined as segment earnings less capital expenditures plus depreciation and amortization.
A summary of revenues from external customers and other financial information by reportable operating segment is shown below (in millions):
 Three Months Ended March 30, 2024
 SeatingE-SystemsOtherConsolidated
Revenues from external customers$4,477.6 $1,517.0 $ $5,994.6 
Segment earnings (1)
241.6 54.1 (99.2)196.5 
Depreciation and amortization100.6 49.6 5.1 155.3 
Capital expenditures63.6 45.6 4.4 113.6 
Total assets8,867.0 4,084.7 1,920.3 14,872.0 
Three Months Ended April 1, 2023
 SeatingE-SystemsOtherConsolidated
Revenues from external customers$4,453.0 $1,392.5 $ $5,845.5 
Segment earnings (1)
285.8 42.3 (90.8)237.3 
Depreciation and amortization95.9 46.2 5.1 147.2 
Capital expenditures63.6 43.6 4.6 111.8 
Total assets8,549.8 3,981.5 1,872.9 14,404.2 
(1) See definition above

25

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A reconciliation of segment earnings to consolidated income before provision for income taxes and equity in net income of affiliates is shown below (in millions):
 Three Months Ended
 March 30,
2024
April 1,
2023
Segment earnings$196.5 $237.3 
Interest expense, net26.1 24.2 
Other expense, net13.5 13.7 
Consolidated income before provision for income taxes and equity in net income of affiliates$156.9 $199.4 
(18) Financial Instruments
Debt Instruments
The carrying values of the Notes vary from their fair values. The fair values of the Notes were determined by reference to the quoted market prices of these securities (Level 2 input based on the GAAP fair value hierarchy). The carrying value of the Term Loan approximates its fair value (Level 3 input based on the GAAP fair value hierarchy). The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below (in millions):
March 30,
2024
December 31,
2023
Estimated aggregate fair value (1)
$2,451.0 $2,464.5 
Aggregate carrying value (1) (2)
2,750.0 2,750.0 
(1) Excludes "other" debt
(2) Excludes the impact of unamortized debt issuance costs and unamortized original issue premium (discount)
Cash, Cash Equivalents and Restricted Cash
The Company has cash on deposit that is legally restricted as to use or withdrawal. A reconciliation of cash and cash equivalents reported on the accompanying condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported on the accompanying condensed consolidated statements of cash flows is shown below (in millions):
March 30,
2024
April 1,
2023
Balance sheet:
Cash and cash equivalents$930.4 $898.5 
Restricted cash included in other current assets0.4 0.6 
Restricted cash included in other long-term assets1.6 1.7 
Statement of cash flows:
Cash, cash equivalents and restricted cash$932.4 $900.8 
Accounts Receivable
The Company's allowance for credit losses on financial assets measured at amortized cost, primarily accounts receivable, reflects management's estimate of credit losses over the remaining expected life of such assets, measured primarily using historical experience, as well as current conditions and forecasts that affect the collectability of the reported amount. Expected credit losses for newly recognized financial assets, as well as changes to expected credit losses during the period, are recognized in earnings. The Company also considers geographic and segment specific risk factors in the development of expected credit losses. As of March 30, 2024 and December 31, 2023, accounts receivable are reflected net of reserves of $37.9 million and $35.6 million, respectively. Changes in expected credit losses were not significant in the first three months of 2024.
26

LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Marketable Equity Securities
Marketable equity securities, which the Company accounts for under the fair value option, are included in the accompanying condensed consolidated balance sheets as shown below (in millions):
March 30,
2024
December 31,
2023
Current assets$5.0 $4.8 
Other long-term assets73.4 68.5 
$78.4 $73.3 
Unrealized gains and losses arising from changes in the fair value of the marketable equity securities are recognized in other expense, net in the condensed consolidated statements of comprehensive income. The fair value of the marketable equity securities is determined by reference to quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy).
Equity Securities Without Readily Determinable Fair Values
As of March 30, 2024 and December 31, 2023, investments in equity securities without readily determinable fair values of $11.2 million are included in other long-term assets in the accompanying condensed consolidated balance sheets. Such investments are valued at cost, less cumulative impairments of $17.0 million as of March 30, 2024 and December 31, 2023. In the three months ended April 1, 2023, the Company recognized a loss of $5.0 million related to the impairment of an investment in equity securities without a readily determinable fair value.
Derivative Instruments and Hedging Activities
The Company has used derivative financial instruments, including forwards, futures, options, swaps and other derivative contracts, to reduce the effects of fluctuations in foreign exchange rates and interest rates and the resulting variability of the Company's operating results. The Company is not a party to leveraged derivatives. The Company's derivative financial instruments are subject to master arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. On the date that a derivative contract for a hedge instrument is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge), (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge), (3) a hedge of a net investment in a foreign operation (a net investment hedge) or (4) a contract not designated as a hedge instrument.
For a fair value hedge, the change in the fair value of the derivative is recorded in earnings and reflected in the condensed consolidated statements of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a cash flow hedge, the change in the fair value of the derivative is recorded in accumulated other comprehensive loss in the condensed consolidated balance sheets. When the underlying hedged transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings and reflected in the condensed consolidated statements of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a net investment hedge, the change in the fair value of the derivative is recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. When the related currency translation adjustment is required to be reclassified, usually upon the sale or liquidation of the investment, the gain or loss included in accumulated other comprehensive loss is recorded in earnings and reflected in other expense, net in the condensed consolidated statements of comprehensive income. Changes in the fair value of contracts not designated as hedge instruments are recorded in earnings and reflected in other expense, net in the condensed consolidated statements of comprehensive income. Cash flows attributable to derivatives used to manage foreign currency risks are classified on the same line as the hedged item attributable to the hedged risk in the condensed consolidated statements of cash flows. Upon settlement, cash flows attributable to derivatives designated as net investment hedges are classified as investing activities in the condensed consolidated statements of cash flows. Cash flows attributable to forward starting interest rate swaps are classified as financing activities in the condensed consolidated statements of cash flows.
The Company formally documents its hedge relationships, including the identification of the hedge instruments and the related hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. Derivatives are recorded at fair value in other current and long-term assets and other current and long-term liabilities in the condensed consolidated balance sheets. The Company also formally assesses whether a derivative used in a hedge transaction is highly
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LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
effective in offsetting changes in either the fair value or the cash flows of the hedged item. When it is determined that a hedged transaction is no longer probable to occur, the Company discontinues hedge accounting.
Foreign Exchange
The Company uses forwards, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates on known foreign currency exposures. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce exposure to fluctuations in foreign exchange rates. The principal currencies hedged by the Company include the Mexican peso, various European currencies, the Chinese renminbi, the Philippine peso and the Japanese yen.
Foreign curr