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Item 5. Market for Registrant’s Common Equity

2022-02-10 compared with 2021-02-10 · 12 added, 100 removed, 26 unchanged (81% of the section changed)

7 unchanged sentences

The Transfer Agent and Registrar for our common stock is Computershare Trust Company, N.A., located in Canton, Massachusetts.

On January 31, 2021, there were 251 registered holders of record of our common stock.

On February 7, 2022, there were 244 registered holders of record of our common stock.

For certain information regarding our equity compensation plans, see Part III — Item 12, "Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Equity Compensation Plan Information."

1 unchanged sentence

Since the first quarter of 2011, our Board of Directors has authorized $6.1 billion in share repurchases under our common stock share repurchase program.

As of December 31, 2020, we have a remaining repurchase authorization of $1.4 billion, which will expire on December 31, 2022.

In March 2020, as a proactive measure in response to the COVID-19 pandemic, we suspended share repurchases under our share repurchase program.

We may implement our 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 we will repurchase our outstanding common stock and the timing of such repurchases will depend upon our financial condition, prevailing market conditions, alternative uses of capital and other factors.

As of December 31, 2021, we have repurchased, in aggregate, $4.8 billion of our outstanding common stock, at an average price of $90.97 per share, excluding commissions and related fees.

As of December 31, 2021, we have a remaining repurchase authorization of $1.3 billion, which expires on December 31, 2022.

In March 2020, as a proactive measure in response to the COVID-19 pandemic, we suspended share repurchases under our common stock share repurchase program.

Share repurchases were reinstated in the second quarter of 2021.

Since the reinstatement through December 31, 2021, we repurchased approximately $100 million of shares.

There were no shares repurchased during the fiscal quarter ended December 31, 2021.

We 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 we may repurchase our outstanding common stock and the timing of such repurchases will depend upon our financial condition, results of operations, capital requirements, prevailing market conditions, alternative uses of capital and other factors.

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations — Forward-Looking Statements," and Note 12, "Capital Stock, Accumulated Other Comprehensive Loss and Equity," to the consolidated financial statements included in this Report.

As of December 31, 2020, we have paid $4.7 billion in aggregate for repurchases of our outstanding common stock, at an average price of $90.07 per share, excluding commissions and related fees, since the first quarter of 2011.

A summary of the shares of our common stock repurchased during the fiscal quarter ended December 31, 2020, is shown below:

Period Total Number

Purchased Average

per Share Total Number of Shares

Purchased as Part of

Publicly Announced

Plans or Programs Approximate Dollar

Value of Shares that

May Yet be Purchased

Under the Program

(in millions)

October 4, 2020 through October 31, 2020 — $ — — $ 1,430.0

November 1, 2020 through November 28, 2020 — — — 1,430.0

November 29, 2020 through December 31, 2020 — — — 1,430.0

Total — $ — — $ 1,430.0

Performance Graph

9 unchanged sentences

S&P 500 $ 100.00 $ 121.82 $ 116.47 $ 153.13 $ 181.29 $ 233.28

Current Peer Group (1)

$ 100.00 $ 95.59 $ 125.89 $ 75.43 $ 92.92 $ 109.54

Previous Peer Group (1)

Peer Group (1)

$ 100.00 $ 130.45 $ 79.67 $ 98.20 $ 115.28 $ 125.39

1 unchanged sentence

As a result, we have selected a peer group comprised of representative independent automotive suppliers whose common stock is publicly traded.

Our current peer group, referenced in the graph above, consists of Adient plc, American Axle & Manufacturing Holdings Inc., Aptiv PLC, Autoliv, Inc., BorgWarner Inc., Continental AG, Cooper-Standard Holdings Inc., Dana Incorporated, Faurecia, Gentex Corporation, Gentherm Incorporated, Magna International, Inc., Tenneco Inc., Valeo and Visteon Corporation, which we believe provides a more meaningful comparison of stock performance than our previous peer group.

Our previous peer group, referenced in the graph above, consisted of Adient plc, American Axle & Manufacturing Holdings Inc., Aptiv PLC, BorgWarner Inc., Dana Incorporated, Gentex Corporation, Magna International, Inc., Superior Industries International, Inc., Tenneco Inc.

and Visteon Corporation.

ITEM 6 – SELECTED FINANCIAL DATA

The following statement of operations, statement of cash flows and balance sheet data were derived from our consolidated financial statements.

Our consolidated financial statements for the years ended December 31, 2020, 2019, 2018, 2017 and 2016, have been audited by Ernst & Young LLP.

The selected financial data below should be read in conjunction with Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements and the notes thereto included in this Report.

For the year ended December 31, 2020 (1)

Income Statement:

(in millions) (6)

Net sales $ 17,045.5 $ 19,810.3 $ 21,148.5 $ 20,467.0 $ 18,557.6

Gross profit 1,108.9 1,737.5 2,318.3 2,291.1 2,122.6

Selling, general and administrative expenses 588.9 605.0 612.8 635.2 608.2

Amortization of intangible assets 65.9 62.3 51.4 47.6 53.0

Interest expense 99.6 92.0 84.1 85.7 82.5

Other (income) expense, net (7)

55.2 24.6 31.6 (4.1) 40.6

Consolidated income before provision for income taxes and equity in net income of affiliates 299.3 953.6 1,538.4 1,526.7 1,338.3

Provision for income taxes 93.9 146.1 311.9 197.5 370.2

Equity in net income of affiliates (28.5) (23.2) (20.2) (51.7) (72.4)

Consolidated net income 233.9 830.7 1,246.7 1,380.9 1,040.5

Net income attributable to noncontrolling interests 75.4 77.1 96.9 67.5 65.4

Net income attributable to Lear $ 158.5 $ 753.6 $ 1,149.8 $ 1,313.4 $ 975.1

For the year ended December 31, 2020 (1)

Income Statement Data:

Basic net income per share available to Lear common stockholders $ 2.63 $ 12.80 $ 17.35 $ 18.79 $ 13.48

Diluted net income per share available to Lear common stockholders $ 2.62 $ 12.75 $ 17.22 $ 18.59 $ 13.33

Weighted average shares outstanding –

basic 60,254,380 61,697,192 65,672,164 68,542,563 72,345,436

Weighted average shares outstanding – diluted 60,426,962 61,923,528 66,161,816 69,277,981 73,124,949

Dividends per share $ 1.02 $ 3.00 $ 2.80 $ 2.00 $ 1.20

Statement of Cash Flows Data:

(in millions)

Cash flows from operating activities $ 663.1 $ 1,284.3 $ 1,779.8 $ 1,783.1 $ 1,619.3

Cash flows from investing activities (468.8) (922.4) (693.5) (868.6) (637.1)

Cash flows from financing activities (411.7) (361.9) (1,030.5) (742.0) (872.9)

Capital expenditures 452.3 603.9 677.0 594.5 528.3

As of or for the year ended December 31, 2020 2019 2018 2017 2016

Balance Sheet Data:

(in millions)

Current assets $ 6,776.7 $ 6,406.7 $ 6,280.5 $ 6,613.0 $ 5,649.3

Total assets 13,198.6 12,680.7 11,600.7 11,945.9 9,900.6

Current liabilities 5,076.7 4,666.2 4,500.6 4,854.3 4,182.3

Long-term debt 2,300.3 2,293.7 1,941.0 1,951.5 1,898.0

Equity 4,614.9 4,501.1 4,360.6 4,292.6 3,192.9

Other Data (unaudited):

Employees at year end 174,600 164,100 169,000 165,000 148,400

North American content per vehicle (8)

$ 509 $ 451 $ 452 $ 456 $ 422

North American vehicle production (in millions) (9)

13.0 16.3 17.0 17.1 17.8

European content per vehicle (10)

$ 370 $ 359 $ 385 $ 354 $ 316

European vehicle production (in millions) (11)

16.9 21.7 22.6 23.0 22.3

(1) 2020 results include $149.9 million of restructuring and related manufacturing inefficiency charges (including $23.3 million of asset impairment charges), $21.1 million loss on the extinguishment of debt, $4.0 million impairment of an investment, $33.8 million of tax benefits related to restructuring charges and various other items, a $15.5 million tax benefit related to the U.S.

deferred tax effect of our foreign branches and $28.9 million of tax expense related to a net increase in valuation allowances on deferred tax assets.

(2) 2019 results include $189.7 million of restructuring and related manufacturing inefficiency charges (including $9.5 million of asset impairment charges), $1.6 million of transaction costs, $1.1 million loss related to litigation, $1.6 million related to a favorable indirect tax ruling in a foreign jurisdiction, $10.6 million loss on the extinguishment of debt, $5.0 million impairment of an investment, $4.0 million gain related to the deconsolidation of an affiliate, $1.6 million gain related to an affiliate and $122 million of net tax benefits related to an increase in research and development tax credits for the years 2013 through 2018, changes in the tax status of certain affiliates, the U.S.

tax impact of the foreign tax credit regulations issued in the fourth quarter of 2019, net reductions in tax reserves, share-based compensation, various tax-related items, including the release of valuation allowances, tax rate changes and audit adjustments, restructuring charges and various other special items partially offset by the establishment of valuation allowances on the deferred tax assets of foreign subsidiaries.

(3) 2018 results include $104.3 million of restructuring and related manufacturing inefficiency charges (including $4.7 million of fixed asset impairment charges), $0.5 million of transaction costs, $5.4 million pension settlement charge, $17.1 million gain related to litigation, $15.8 million related to a favorable indirect tax ruling in a foreign jurisdiction, $10.0 million gain related to obtaining control of an affiliate, $8.9 million loss related to affiliates and $49.1 million of net tax benefits related to the reversal of valuation allowances on the deferred tax assets of certain foreign subsidiaries, share-based compensation, a tax rate change in a foreign subsidiary, an adjustment to the 2017 provisional income tax expense, restructuring charges and various other items partially offset by an increase in foreign withholding tax on certain undistributed foreign earnings and the establishment of valuation allowances on the deferred tax assets of certain foreign subsidiaries and various other items.

(4) 2017 results include $74.5 million of restructuring and related manufacturing inefficiency charges (including $1.3 million of fixed asset impairment charges), $3.8 million of transaction costs, $5.0 million charge due to an acquisition-related inventory fair value adjustment, $15.4 million litigation charge, $21.2 million loss on the extinguishment of debt, $54.2 million gain related to obtaining control of an affiliate and $214.8 million of net tax benefits related to U.S.

corporate tax reform and its associated transition tax, foreign tax credits on repatriated earnings, the reversal of valuation allowances on the deferred tax assets of certain foreign subsidiaries, share-based compensation, an incentive tax credit in a foreign subsidiary, the redemption of senior notes due 2023, restructuring charges and various other items.

(5) 2016 results include $69.6 million of restructuring and related manufacturing inefficiency charges (including $4.7 million of fixed asset impairment charges), $34.2 million non-cash pension settlement charge, $1.3 million of transaction costs, $30.3 million gain related to obtaining control of an affiliate and $23.6 million of net tax benefits related to restructuring charges, a non-cash pension settlement charge and various other items.

(6) The income statement for 2016 has been restated to reflect a non-cash pension settlement charge as other (income) expense, net in conjunction with the 2018 adoption of Accounting Standards Update 2017-07, "Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost." As a result, gross profit

increased $20.5 million, selling, general and administrative expenses decreased $13.7 million, and other expense, net increased $34.2 million.

(7) Includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, losses on the extinguishment of debt, gains and losses on the disposal of fixed assets, gains and losses on the consolidation and deconsolidation of affiliates, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense.

(8) "North American content per vehicle" is our net sales in North America divided by total North American vehicle production.

Content per vehicle data excludes business conducted through non-consolidated joint ventures.

Content per vehicle data for 2019 has been updated to reflect actual production levels.

(9) "North American vehicle production" includes car and light truck production in the United States, Canada and Mexico based on IHS Markit.

Production data for 2019 has been updated to reflect actual production levels.

(10) "European content per vehicle" is our net sales in Europe and Africa divided by total European and African vehicle production.

Content per vehicle data excludes business conducted through non-consolidated joint ventures.

Content per vehicle data for 2019 has been updated to reflect actual production levels.

(11) "European vehicle production" includes car and light truck production with gross vehicle weights up to 3.5 tons in Austria, Belarus, Belgium, Bosnia, Bulgaria, Czech Republic, Finland, France, Germany, Hungary, Italy, Morocco, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine and the United Kingdom based on IHS Markit.

Production data for 2019 has been updated to reflect actual production levels.

Our peer group, referenced in the graph above, consists of Adient plc, American Axle & Manufacturing Holdings Inc., Aptiv PLC, Autoliv, Inc., BorgWarner Inc., Continental AG, Cooper-Standard Holdings Inc., Dana Incorporated, Faurecia, Gentex Corporation, Gentherm Incorporated, Magna International, Inc., Tenneco Inc., Valeo and Visteon Corporation.

ITEM 6 – RESERVED

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity