
	Three Months Ended						Nine Months Ended							Three Months Ended				Six Months Ended
	October 3, 2020			September 28, 2019			October 3, 2020			September 28, 2019				July 3, 2021		July 4, 2020		July 3, 2021		July 4, 2020
Net sales	$	4,900.1		$	4,825.0		$	11,802.3		$	14,992.7		Net sales	$	4,760.7	$	2,444.5	$	10,115.1	$	6,902.2

Cost of sales		4,457.3			4,365.7			11,152.7			13,582.0		Cost of sales	4,359.3		2,571.9		9,220.9		6,695.4
Selling, general and administrative expenses		147.7			141.9			442.3			447.3		Selling, general and administrative expenses	170.8		150.9		339.7		294.6
Amortization of intangible assets		16.3			16.7			49.4			45.3		Amortization of intangible assets	25.1		16.0		41.6		33.1
Interest expense		26.5			24.0			78.1			69.4		Interest expense	22.3		27.2		44.6		51.6
Other expense, net		17.1			9.7			54.4			27.9
Consolidated income before provision for income taxes and equity in net income of affiliates		235.2			267.0			25.4			820.8
Provision for income taxes		44.6			33.5			30.1			149.9
Other (income) expense, net													Other (income) expense, net	(46.1)		(3.2)		(39.8)		37.3
Consolidated income (loss) before provision (benefit) for income taxes and equity in net income of affiliates													Consolidated income (loss) before provision (benefit) for income taxes and equity in net income of affiliates	229.3		(318.3)		508.1		(209.8)
Provision (benefit) for income taxes													Provision (benefit) for income taxes	39.3		(41.0)		98.2		(14.5)
Equity in net income of affiliates		(6.5	)		(5.1	)		(15.9	)		(15.8	)	Equity in net income of affiliates	(4.9)		(7.8)		(10.8)		(9.4)
Consolidated net income		197.1			238.6			11.2			686.7
Consolidated net income (loss)													Consolidated net income (loss)	194.9		(269.5)		420.7		(185.9)
Less: Net income attributable to noncontrolling interests		22.7			22.7			54.3			59.1		Less: Net income attributable to noncontrolling interests	19.7		24.4		41.8		31.6
Net income (loss) attributable to Lear	$	174.4		$	215.9		$	(43.1	)	$	627.6		Net income (loss) attributable to Lear	$	175.2	$	(293.9)	$	378.9	$	(217.5)

Basic net income (loss) per share available to Lear common stockholders (Note 14)	$	2.90		$	3.59		$	(0.72	)	$	10.27		Basic net income (loss) per share available to Lear common stockholders (Note 14)	$	2.91	$	(4.89)	$	6.28	$	(3.61)

Diluted net income (loss) per share available to Lear common stockholders (Note 14)	$	2.89		$	3.58		$	(0.72	)	$	10.23		Diluted net income (loss) per share available to Lear common stockholders (Note 14)	$	2.89	$	(4.89)	$	6.25	$	(3.61)

Cash dividends declared per share	$	-		$	0.75		$	0.77		$	2.25		Cash dividends declared per share	$	0.25	$	0	$	0.50	$	0.77

Average common shares outstanding		60,159,356			61,133,723			60,260,886			62,042,156		Average common shares outstanding	60,292,000		60,102,925		60,302,398		60,310,559

Average diluted shares outstanding		60,330,941			61,330,086			60,260,886			62,262,903		Average diluted shares outstanding	60,611,505		60,102,925		60,585,907		60,310,559

Consolidated comprehensive income (loss) (Condensed Consolidated Statements of Equity)	$	290.7		$	96.1		$	(49.2	)	$	552.7		Consolidated comprehensive income (loss) (Condensed Consolidated Statements of Equity)	$	259.4	$	(142.1)	$	398.8	$	(339.9)
Less: Comprehensive income attributable to noncontrolling interests		33.0			11.3			60.9			48.6		Less: Comprehensive income attributable to noncontrolling interests	21.6		25.5		42.6		27.9
Comprehensive income (loss) attributable to Lear	$	257.7		$	84.8		$	(110.1	)	$	504.1		Comprehensive income (loss) attributable to Lear	$	237.8	$	(167.6)	$	356.2	$	(367.8)

The Company’s provision (benefit) for income taxes is impacted by the level and mix of earnings among tax jurisdictions. ~~In the first nine months of 2020, pretax~~Pretax income before equity in net income of affiliates was ~~significantly lower than~~$508.1 million in the first ~~nine~~six months of ~~2019,~~2021, as compared to pretax losses before equity in net income of affiliates of $209.8 million in the first six months of 2020, primarily due to the COVID-19 ~~pandemic, and as~~pandemic. As a result ~~relatively small changes~~of COVID-19-related pretax losses in ~~the provision for income taxes~~many jurisdictions in 2020, ~~can cause disproportionate changes in the~~an effective tax rate ~~as compared to 2019. The higher effective tax rate in~~comparison between the first ~~nine~~six months of 2021 and the first six months of 2020 ~~as compared to the first nine months of 2019, was also due to the net discrete tax expense and lower tax benefit on the Company’s restructuring charges and various other items in 2020.~~

~~For further information related to the redeemable noncontrolling interest adjustment, see Note 15, "Comprehensive Income (Loss) and Equity."~~

A summary of the financial measures for our Seating segment is shown below (dollar amounts in millions):

Three Months Ended

October 3,
2020

September 28,
2019

Net sales

$
3,691.6

$
3,715.0

Segment earnings ⁽¹⁾

250.7

281.5

Margin

6.8
%

7.6
%

⁽¹⁾	~~See definition above~~


	Three Months Ended
	July 3, 2021			July 4, 2020
Net sales	$	3,608.2		$	1,754.9
Segment earnings (1)	252.2			(116.4)
Margin	7.0		%	(6.6)		%

(1) See definition above

Seating net sales were ~~$3.7~~$3.6 billion in the ~~third quarters~~second quarter of 2021, as compared to $1.8 billion in the second quarter of 2020, ~~and 2019,~~ reflecting ~~a decrease~~an increase of ~~$23 million~~$1.9 billion or 1%106%. ~~Lower~~Higher production volumes on Lear platforms ~~negatively impacted~~increased net sales by ~~$189 million. This decrease was~~$1.5 billion, largely ~~offset~~due to the COVID-19-related production shutdowns in the second quarter of 2020. Net sales also benefited by $0.3 billion as a result of foreign exchange rate fluctuations and the impact of new ~~business, which increased net sales by $180 million.~~

business.

Segment earnings, including restructuring costs, and the related margin on net sales were ~~$251~~$252 million and ~~6.8%~~7.0% in the ~~third~~second quarter of ~~2020,~~2021, as compared to ~~$282~~($116) million and ~~7.6%~~(6.6)% in the ~~third~~second quarter of ~~2019. Lower~~2020. Higher production volumes on Lear platforms ~~and costs~~

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~~LEAR CORPORATION~~

~~related to the COVID-19 pandemic, offset by the impact of new business, reduced~~increased segment earnings by ~~$36 million.~~$302 million, largely due to the COVID-19-related production shutdowns in the second quarter of 2020. Favorable operating performance, including the benefit of operational restructuring actions, was partially offset by the impact of selling price ~~reductions. Segment earnings were also negatively impacted by higher restructuring~~reductions and increased commodity costs.

E-Systems

A summary of financial measures for our E-Systems segment is shown below (dollar amounts in millions):

Three Months Ended

October 3,
2020

September 28,
2019

Net sales

$
1,208.5

$
1,110.0

Segment earnings⁽¹⁾

86.0

74.3

Margin

7.1
%

6.7
%

⁽¹⁾	~~See definition above~~


	Three Months Ended
	July 3, 2021			July 4, 2020
Net sales	$	1,152.5		$	689.6
Segment earnings(1)	26.6			(113.4)
Margin	2.3		%	(16.4)		%

(1) See definition above

E-Systems net sales were $1.2 billion in the ~~third~~second quarter of 2021, as compared to $0.7 billion in the second quarter of 2020, ~~as compared to $1.1 billion in the third quarter of 2019,~~ an increase of ~~$99 million~~$0.5 billion or 9%67%. ~~The~~Higher production volumes on Lear platforms, largely due to the COVID-19-related production shutdowns in the second quarter of 2020, and the impact of new business increased net sales by ~~$113 million. This increase was partially offset~~$0.2 billion and $0.1 billion, respectively. Net sales also benefited by ~~lower production volumes on Lear platforms, which reduced net sales by $21 million.~~

$0.1 billion as a result of foreign exchange rate fluctuations.

Segment earnings, including restructuring costs, and the related margin on net sales were ~~$86~~$27 million and ~~7.1%~~2.3% in the ~~third~~second quarter of ~~2020,~~2021, as compared to ~~$74~~($113) million and ~~6.7%~~(16.4)% in the ~~third~~second quarter of ~~2019. The impact of new business was offset by lower~~2020. Higher production volumes on Lear platforms, ~~and costs related~~largely due to the ~~COVID-19 pandemic.~~COVID-19-related production shutdowns in the second quarter of 2020, and the impact of new business increased segment earnings by $82 million. Improved operating performance and lower restructuring costs ~~was~~were partially offset by the impact of selling price reductions.

Other

A summary of financial measures for our other category, which is not an operating segment, is shown below (dollar amounts in millions):

Three Months Ended

October 3,
2020

September 28,
2019

Net sales

$
-

$
-

Segment earnings⁽¹⁾

(57.9
)

(55.1
)
Margin

N/A

N/A

⁽¹⁾	~~See definition above~~


	Three Months Ended
	July 3, 2021		July 4, 2020
Net sales	$	—	$	—
Segment earnings (1)	(73.3)		(64.5)
Margin	N/A		N/A

(1) See definition above

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Segment earnings related to our other category were ($~~58)~~73) million in the ~~third~~second quarter of 2021, as compared to ($65) million in the second quarter of 2020, primarily reflecting an increase in compensation-related costs related to our 2020 salary reduction and deferral actions, as ~~compared to ($55) million~~well as 2020 reductions in ~~the third quarter of 2019.~~

~~Nine~~discretionary spending.

Six Months Ended ~~October~~July 3, ~~2020~~2021 vs. ~~Nine~~Six Months Ended ~~September 28, 2019~~

July 4, 2020

Net sales for the ~~nine~~six months ended ~~October~~July 3, ~~2020~~2021 were ~~$11.8~~$10.1 billion, as compared to ~~$15.0~~$6.9 billion for the ~~nine~~six months ended ~~September 28, 2019, a decrease~~July 4, 2020, an increase of $3.2 billion or ~~21%~~47%. ~~Lower~~Higher production volumes on Lear platforms globally increased net sales by $2.3 billion, largely due to the ~~COVID-19 pandemic, negatively impacted net~~COVID-19-related production shutdowns in the first half of 2020. Net sales also benefited by ~~more than $3.2 billion.~~

$0.8 billion as a result of foreign exchange rate fluctuations and the impact of new business in Europe and North America.

(in millions)

Cost of Sales

First nine months of 2019

$
13,582.0

Material cost

(2,151.2
)
Labor and other

(291.1
)
Depreciation

13.0

First nine months of 2020

$
11,152.7


(in millions)	Cost of Sales
First six months of 2020	$	6,695.4
Material cost	2,129.1
Labor and other	375.9
Depreciation	20.5
First six months of 2021	$	9,220.9

Cost of sales in the first ~~nine~~six months of ~~2020 were $11.2~~2021 was $9.2 billion, as compared to ~~$13.6~~$6.7 billion in the first ~~nine~~six months of ~~2019. Lower~~2020. Higher production volumes on Lear platforms globally increased cost of sales, largely due to the ~~COVID-19 pandemic, reduced cost~~COVID-19-related production shutdowns in the first half of 2020. Cost of sales ~~by more than $2.5 billion.~~

also increased as a result of foreign exchange rate fluctuations and the impact of new business in Europe and North America.

Gross profit and gross margin were ~~$650~~$894 million and ~~5.5%~~8.8% of net sales, respectively, for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$1.4 billion~~$207 million and ~~9.4%~~3.0% of net sales, respectively, for the ~~nine~~six months ended ~~September 28, 2019. Lower~~July 4, 2020. Higher production volumes on Lear platforms, ~~globally,~~ largely due to the ~~COVID-19 pandemic,~~COVID-19-related production shutdowns in the first half of 2020, and ~~costs related to~~ the ~~COVID-19 pandemic negatively impacted~~impact of new business increased gross profit by ~~$786~~$521 million. Favorable operating performance, including the benefit of operational restructuring actions, ~~and lower restructuring costs~~ was partially offset by the impact of selling price ~~reductions.~~reductions and increased commodity costs. These factors had a corresponding impact on gross margin.

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~~LEAR CORPORATION~~

Selling, general and administrative expenses, including engineering and development expenses, were ~~$442~~$340 million in the first ~~nine~~six months of ~~2020,~~2021, as compared to ~~$447~~$295 million in the first ~~nine~~six months of ~~2019.~~2020, primarily reflecting increases in engineering costs to support our sales backlog and compensation-related costs reflecting our 2020 salary reduction and deferral actions. These increases were partially offset by a decrease in restructuring costs. As a percentage of net sales, selling, general and administrative expenses were ~~3.7%~~3.4% in the first ~~nine~~six months of ~~2020,~~2021, as compared to ~~3.0%~~4.3% in the first ~~nine~~six months of ~~2019, reflecting the significant decrease in net sales in~~ 2020.

Amortization of intangible assets was ~~$49~~$42 million in the first ~~nine~~six months of ~~2020,~~2021, including an impairment charge of $9 million, as compared to $33 million in the first six months of 2020.

Interest expense was $45 million in the first ~~nine~~six months of ~~2019.~~

~~Interest expense was $78~~2021, as compared to $52 million in the first ~~nine~~six months of ~~2020, as compared to $69 million in the first nine months of 2019.~~

2020.

Other (income) expense, net, which 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, was ~~$54~~income of $40 million ~~for~~in the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$28~~expense of $37 million ~~for~~in the ~~nine~~six months ended ~~September 28, 2019.~~July 4, 2020. In the first ~~nine~~six months of 2021, we recognized a gain of $47 million related to a favorable indirect tax ruling in a foreign jurisdiction and a loss of $1 million related to the impairment of an affiliate. In the first six months of 2020, we recognized a loss of $21 million ~~related to the~~on extinguishment of debt and a pension settlement loss of $10 million. In the first nine months of 2019, we recognized a loss of $11 million related to the extinguishment of debt and a gain of $4 million related to the deconsolidation of an affiliate.

debt.

For the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, the provision for income taxes was ~~$30~~$98 million, representing an effective tax rate of ~~118.5%~~19.3% on pretax income before equity in net income of affiliates of ~~$25~~$508 million. For the ~~nine~~six months ended ~~September 28, 2019,~~July 4, 2020, the ~~provision~~benefit for income taxes was ~~$150~~$15 million, representing an effective tax rate of ~~18.3%~~6.9% on pretax ~~income~~losses before equity in net income of affiliates of ~~$821 million.~~$210 million, for reasons described below. In the first ~~nine~~six months of 2021, we measured our tax expense based on the estimated annual effective rate. In the first six months of 2020, ~~pretax income before equity in net income of affiliates was significantly lower than in~~we measured our tax expense based on the ~~first nine months of 2019, primarily due to the COVID-19 pandemic, and as a result, relatively small changes in the provision for income taxes in 2020 can cause disproportionate changes in the~~discrete effective tax rate method, as ~~compared to 2019. The higher effective tax rate in the first nine months of 2020, as compared~~allowed by ASC 740, "Income Taxes." For further information, see Note 13 "Income Taxes," to the ~~first nine months of 2019, was also due to the net discrete tax expense and lower tax benefit on our restructuring charges and various other items~~condensed consolidated financial statements included in ~~2020.~~

this Report.

In the first ~~nine~~six months of ~~2020~~2021 and ~~2019,~~2020, the provision and benefit for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In the first ~~nine~~six months of 2021, we recognized tax benefits of $27 million related to the release of valuation allowances on deferred tax assets of foreign subsidiaries, the release of tax reserves at several foreign

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LEAR CORPORATION

subsidiaries, restructuring charges and various other items, offset by tax expense of $16 million related to a favorable indirect tax ruling in a foreign jurisdiction. In the first six months of 2020, we recognized tax expense of $22 million related to the net increase of valuation allowances on deferred tax assets of foreign subsidiaries and net tax benefits of ~~$21~~$31 million related to a loss on the extinguishment of debt, restructuring charges and various other ~~items and $5 million related to an increase~~items. The benefit for income taxes in our research and development tax credits resulting from the completion of a research and development tax credit study, partially offset by net tax expense of $12 million related to a net increase in valuation allowances on deferred tax assets. In the first ~~nine~~six months of ~~2019, we recognized~~2020 includes a tax ~~benefits~~benefit of ~~$29 million related to an increase in our research and development tax credits for the years 2013 through 2018, $18~~$28 million related to changes in the U.S. net operating loss carryback rules provided under the CARES Act, which include the positive and negative tax ~~status~~rate impact of ~~certain affiliates, $3 million related to share-based compensation~~various U.S. permanent and ~~$36 million related to restructuring~~temporary differences, including the negative tax rate impact from the inclusion of foreign branch income. Excluding these items, the effective tax rate for the second quarters of 2021 and ~~various~~2020 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 items, partially offset by tax expense of $10 million related to the establishment of a valuation allowance on deferred tax assets of a foreign subsidiary. In addition, we recognized a gain of $4 million related to the deconsolidation of an affiliate, for which no tax expense was provided.

In the first nine months of 2020 and 2019, we measured our tax expense based on the estimated annual effective rate. For further information, see Note 13, "Income Taxes," to the condensed consolidated financial statements included in this Report.

permanent items.

Equity in net income of affiliates was ~~$16~~$11 million in the first ~~nine~~six months of ~~2020 and 2019.~~

2021, as compared to $9 million in the first six months of 2020.

Net income (loss) attributable to Lear was ~~($43)~~$379 million, or ~~($0.72)~~$6.25 per diluted share, for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$628~~($218) million, or ~~$10.23~~($3.61) per diluted share, for the ~~nine~~six months ended ~~September 28, 2019.~~July 4, 2020. Net income ~~(loss)~~ and diluted net income ~~(loss)~~ per share ~~decreased~~increased for the reasons described above. ~~In addition, diluted net income (loss) per share was impacted by the decrease in average shares outstanding between periods.~~

Reportable Operating Segments

We have two reportable operating segments: Seating and E-Systems. For a description of our reportable operating segments, see "Executive Overview" and "Three Months Ended ~~October~~July 3, ~~2020~~2021 vs. Three Months Ended ~~September 28, 2019~~ July 4, 2020 — Reportable Operating Segments" above.

Seating

A summary of the financial measures for our Seating segment is shown below (dollar amounts in millions):

Nine Months Ended

October 3,
2020

September 28,
2019

Net sales

$
8,813.1

$
11,468.1

Segment earnings ⁽¹⁾

320.4

817.0

Margin

3.6
%

7.1
%

⁽¹⁾	~~See definition above~~


	Six Months Ended
	July 3, 2021			July 4, 2020
Net sales	$	7,604.2		$	5,121.5
Segment earnings (1)	544.2			69.7
Margin	7.2		%	1.4		%

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~~LEAR CORPORATION~~

See definition above

Seating net sales were ~~$8.8~~$7.6 billion for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$11.5~~$5.1 billion for the ~~nine~~six months ended ~~September 28, 2019, a decrease~~July 4, 2020, an increase of ~~$2.7~~$2.5 billion or ~~23%~~48%. ~~Lower~~Higher production volumes on Lear platforms ~~globally,~~increased net sales by $2.0 billion, largely due to the ~~COVID-19 pandemic, negatively impacted net~~COVID-19-related production shutdowns in the first half of 2020. Net sales also benefited by ~~nearly $2.7 billion.~~

$0.4 billion as a result of foreign exchange rate fluctuations and the impact of new business.

Segment earnings, including restructuring costs, and the related margin on net sales were ~~$320~~$544 million and ~~3.6%~~7.2% for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$817~~$70 million and ~~7.1%~~1.4% for the ~~nine~~six months ended ~~September 28, 2019. Lower~~July 4, 2020. Higher production volumes on Lear platforms ~~globally,~~increased segment earnings by $391 million, largely due to the ~~COVID-19 pandemic, and costs related to~~COVID-19-related production shutdowns in the ~~COVID-19 pandemic negatively impacted segment earnings by $587 million.~~first half of 2020. Favorable operating performance, including the benefit of operational restructuring actions, was partially offset by the impact of selling price ~~reductions. Segment earnings were also favorably impacted by lower restructuring~~reductions and increased commodity costs.

E-Systems

A summary of financial measures for our E-Systems segment is shown below (dollar amounts in millions):

Nine Months Ended

October 3,
2020

September 28,
2019

Net sales

$
2,989.2

$
3,524.6

Segment earnings ⁽¹⁾

5.0

287.3

Margin

0.2
%

8.2
%

⁽¹⁾	~~See definition above~~


	Six Months Ended
	July 3, 2021			July 4, 2020
Net sales	$	2,510.9		$	1,780.7
Segment earnings (1)	115.9			(81.0)
Margin	4.6		%	(4.5)		%

(1) See definition above

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E-Systems net sales were ~~$3.0~~$2.5 billion for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$3.5~~$1.8 billion for the ~~nine~~six months ended ~~September 28, 2019, a decrease~~July 4, 2020, an increase of ~~$535 million~~$0.7 billion or ~~15%~~41%. ~~Lower~~Higher production volumes on Lear platforms, ~~globally,~~ largely due to the ~~COVID-19 pandemic, negatively impacted~~COVID-19-related production shutdowns in the first half of 2020, and the impact of new business increased net sales by ~~more than $600 million.~~

$0.3 billion and $0.2 billion, respectively. Net sales also benefited by $0.1 billion as a result of foreign exchange rate fluctuations.

Segment earnings, including restructuring costs, and the related margin on net sales were $5$116 million and ~~0.2%~~4.6% for the ~~nine~~six months ended ~~October~~July 3, ~~2020,~~2021, as compared to ~~$287~~($81) million and ~~8.2%~~(4.5)% for the ~~nine~~six months ended ~~September 28, 2019. Lower~~July 4, 2020. Higher production volumes on Lear platforms, ~~globally,~~ largely due to the ~~COVID-19 pandemic,~~COVID-19-related production shutdowns in the first half of 2020, and ~~costs related to~~ the ~~COVID-19 pandemic negatively impacted~~impact of new business increased segment earnings by ~~$224~~$113 million. Improved operating performance ~~was more than~~and lower restructuring costs were partially offset by the impact of selling price ~~reductions and, to a lesser extent, higher restructuring costs.~~

reductions.

Other

A summary of financial measures for our other category, which is not an operating segment, is shown below (dollar amounts in millions):

Nine Months Ended

October 3,
2020

September 28,
2019

Net sales

$
-

$
-

Segment earnings⁽¹⁾

(167.5
)

(186.2
)
Margin

N/A

N/A

⁽¹⁾	~~See definition above~~


	Six Months Ended
	July 3, 2021		July 4, 2020
Net sales	$	—	$	—
Segment earnings(1)	(147.2)		(109.6)
Margin	N/A		N/A

(1) See definition above

Segment earnings related to our other category were ($~~168)~~147) million in the first ~~nine~~six months of ~~2020,~~2021, as compared to ($~~186)~~110) million in the first ~~nine~~six months of ~~2019,~~2020, primarily reflecting ~~lower~~an increase in compensation-related costs related to our 2020 salary reduction and deferral actions, as well as 2020 reductions in ~~2020.~~

discretionary spending.

LIQUIDITY AND CAPITAL RESOURCES

Our primary liquidity needs are to fund general business requirements, including working capital requirements, capital expenditures, operational restructuring actions and debt service requirements. Our principal sources of liquidity are cash flows from operating activities, borrowings under available credit facilities and our existing cash balance.

Cash Provided by Subsidiaries

A substantial portion of our operating income is generated by our subsidiaries. As a result, we are dependent on the earnings and cash flows of and the combination of dividends, royalties, intercompany loan repayments and other distributions and advances from our subsidiaries to provide the funds necessary to meet our obligations.

As of July 3, 2021 and December 31, 2020, cash and cash equivalents of $703 million and $780 million, respectively, were held in foreign subsidiaries and can be repatriated, primarily through the repayment of intercompany loans and the payment of dividends, without creating additional income tax expense. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Lear.

For further information related to potential dividends from our non-U.S. subsidiaries, see Note 9, "Income Taxes," to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020.

Adequacy of Liquidity Sources

As of ~~October~~July 3, ~~2020,~~2021, we had ~~$1.25~~$1.4 billion of cash and cash equivalents on hand and $1.75 billion in available borrowing capacity under our ~~Revolving Credit Facility.~~revolving credit facility. Together with cash provided by operating activities, we believe that this will enable us to meet our liquidity needs for the foreseeable future and to satisfy ordinary course business obligations.

In ~~response~~addition, we expect to continue to pay quarterly dividends and repurchase shares of our common stock pursuant to our authorized common stock share repurchase program, although such actions are at the ~~COVID-19 pandemic, we took a number~~discretion of ~~proactive steps to preserve cash~~our Board of Directors and ~~maximize~~will depend on our financial ~~flexibility in order to~~ ~~efficiently manage through the~~ ~~COVID-19~~ ~~pandemic, including:~~

•

~~Aggressively reducing operating costs, capital expenditures and working capital, including reducing discretionary spending~~

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~~LEAR CORPORATION~~

•

~~Reducing salaried employee costs throughout the organization through salary reductions and deferrals~~

operations, capital requirements, prevailing market conditions, alternative uses of capital and other factors that our Board of Directors may consider at its discretion.

•

~~Suspending share repurchases and quarterly dividends~~

•

~~Maximizing opportunities offered under government incentive programs throughout the world~~

•

~~Reducing the compensation of the Board of Directors~~

•

~~Reducing hourly factory worker costs through temporary layoffs~~

•

~~Delaying planned pension funding and deferring other retirement plan contributions~~

Our future financial results and our ability to continue to meet our liquidity needs are subject to, and will be affected by, cash flows from operations, including the continuing effects of the COVID-19 pandemic, as well as restructuring activities, automotive industry conditions, the financial condition of our customers and suppliers and other related factors.

Additionally, an economic downturn or reduction in production levels could negatively impact our financial condition.

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For further discussion of the risks and uncertainties affecting our cash flows from operations and our overall liquidity, see "— Executive Overview" above, "— Forward-Looking Statements" below ~~Part II — Item 1A, "Risk Factors," included in this Report~~ and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Cash Provided~~2020, as supplemented and updated by ~~Subsidiaries~~

~~As of October 3, 2020 and December 31, 2019, cash and cash equivalents of $788 million and $895 million, respectively, were held~~Part II — Item 1A, "Risk Factors," in foreign subsidiaries and can be repatriated, primarily through the repayment of intercompany loans and the payment of dividends, without creating additional income tax expense. There are no significant restrictions on the ability of our subsidiaries to pay dividends or make other distributions to Lear.

For further information related to potential dividends from our non-U.S. subsidiaries, see Note 8, "Income Taxes," to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.

this Report.

Cash Flows

A summary of net cash provided by (used in) operating activities is shown below (in millions):


	Nine Months Ended										Six Months Ended
	October 3, 2020			September 28, 2019			Increase (Decrease) in Operating Cash Flow				July 3, 2021		July 4, 2020		Increase (Decrease) in Operating Cash Flow
Consolidated net income and depreciation and amortization	$	408		$	1,067		$	(659	)	Consolidated net income and depreciation and amortization	$	712	$	75	$	637
Net change in working capital items:										Net change in working capital items:
Accounts receivable		(417	)		(513	)		96		Accounts receivable	284		557		(273)
Inventory		(14	)		(124	)		110		Inventory	(200)		(12)		(188)
Accounts payable		124			209			(85	)	Accounts payable	(233)		(867)		634
Accrued liabilities and other		169			266			(97	)	Accrued liabilities and other	13		(37)		50
Net change in working capital items		(138	)		(162	)		24		Net change in working capital items	(136)		(359)		223
Other		(8	)		(106	)		98		Other	(68)		(18)		(50)
Net cash provided by operating activities	$	262		$	799		$	(537	)
Net cash provided by (used in) operating activities										Net cash provided by (used in) operating activities	$	508	$	(302)	$	810

In the first ~~nine~~six months of ~~2020~~2021 and ~~2019,~~2020, net cash provided by (used in) operating activities was ~~$262~~$508 million and ~~$799~~($302) million, respectively. The overall ~~decrease~~increase in operating cash flows of ~~$537~~$810 million was primarily due to ~~lower~~higher earnings in ~~2020.~~

2021, as well as a smaller increase in working capital during first six months of 2021, as compared to the first six months of 2020, which was significantly impacted by the COVID-19 pandemic.

Net cash used in investing activities was ~~$297~~$283 million in the first ~~nine~~six months of ~~2020,~~2021, as compared to ~~$739~~$176 million in the first ~~nine~~six months of ~~2019. In the first nine months of 2019, we paid $322 million for the acquisition of Xevo.~~2020. Capital spending was ~~$285~~$253 million in the first ~~nine~~six months of ~~2020,~~2021, as compared to ~~$410~~$195 million in the first ~~nine~~six months of ~~2019.~~2020. Capital spending is estimated to be approximately ~~$425~~$625 million in ~~2020, which reflects a delay in certain program launches and a reduction in discretionary spending in response to the COVID-19 pandemic.~~

2021.

Net cash used in financing activities was ~~$212~~$132 million in the first ~~nine~~six months of ~~2020,~~2021, as compared to ~~$237~~net cash provided by financing activities of $801 million in the first ~~nine~~six months of ~~2019.~~2020. In the first ~~quarter~~six months of 2021, we paid $29 million for repurchases of our common stock, $31 million of dividends to Lear stockholders and $53 million of dividends to noncontrolling interest holders. In the first six months of 2020, we borrowed $1.0 billion under ~~the Revolving Credit Facility~~our revolving credit facility as a proactive measure in response to the COVID-19 ~~pandemic, which was repaid~~pandemic. Also, in ~~full in the third quarter of 2020. In~~ 2020, we received net proceeds of $669 million related to the issuance of ~~the~~3.5% senior notes due 2030 and additional 5.25% senior notes due 2049 ~~Notes~~ and paid $6 million of related issuance costs and $667 million related to the redemption of ~~the~~our outstanding ~~2025 Notes. Also in~~5.25% senior notes due 2025. In 2020, we paid $70 million for repurchases of our common stock, ~~$52~~$48 million of dividends to Lear stockholders and ~~$46~~$43 million of dividends to noncontrolling interest holders. ~~In 2019, we received net proceeds of $693 million~~

Capitalization

For information related to ~~the issuance of the 2029 and 2049 Notes and paid $6 million of related issuance costs and $334~~

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~~LEAR CORPORATION~~

million related to the redemption of the outstanding 2024 Notes. Also in 2019, we paid $360 million for repurchases of our common stock, $141 million of dividends to Lear stockholders and $34 million of dividends to noncontrolling interest holders.

~~Capitalization~~

From time to time, we utilize uncommitted credit facilities to fund our capital expenditures and working capital requirements at certain of our foreign subsidiaries, in addition to cash provided by operating activities. The availability of uncommitted lines of credit may be affected by our financial performance, credit ratings and other factors. As of October 3, 2020 and December 31, 2019, our short-term borrowings outstanding were $4 million and $19 million, respectively.

~~Senior Notes~~

~~As of October 3, 2020,~~ our senior notes ~~(collectively, the "Notes") consisted of the amounts shown below (in millions, except stated coupon rates):~~

Note

Aggregate
Principal
Amount at
Maturity

Stated
Coupon
Rate

Senior unsecured notes due 2027 (the "2027 Notes")

750

3.80
%
Senior unsecured notes due 2029 (the "2029 Notes")

375

4.25
%
2030 Notes

350

3.50
%
2049 Notes

625

5.25
%

$
2,100

~~The issue, maturity~~ and ~~interest payment dates of the Notes are shown below:~~

~~Note~~	~~Issuance Date(s)~~	~~Maturity Date~~	~~Interest Payment Dates~~
~~2027 Notes~~	~~August 2017~~	~~September 15, 2027~~	~~March 15 and September 15~~
~~2029 Notes~~	~~May 2019~~	~~May 15, 2029~~	~~May 15 and November 15~~
~~2030 Notes~~	~~February 2020~~	~~May 30, 2030~~	~~May 30 and November 30~~
~~2049 Notes~~	~~May 2019 and February 2020~~	~~May 15, 2049~~	~~May 15 and November 15~~

In February 2020, we issued $350 million in aggregate principal amount at maturity of 2030 Notes and an additional $300 million in aggregate principal amount at maturity of 2049 Notes. The 2030 Notes have a stated coupon rate of 3.5% and were issued at 99.774% of par, resulting in a yield to maturity of 3.525%. The 2049 Notes have a stated coupon rate of 5.25% and were issued at 106.626% of par, resulting in a yield to maturity of 4.821%.

The net proceeds from the offering were $669 million after original issue discount. The proceeds were used to redeem the $650 million in aggregate principal amount of 2025 Notes at a redemption price equal to 102.625% of the principal amount of such 2025 Notes, plus accrued interest.

~~In connection with these transactions, we recognized a loss of $21 million on the extinguishment of debt and paid related issuance costs of $6 million.~~

The indentures governing the Notes contain certain investment-grade style restrictive covenants and customary events of default. As of October 3, 2020, we were in compliance with all covenants under the indentures governing the Notes.

~~For further information related to the Notes, including information on early redemption, covenants and events of default,~~credit agreement, see Note 8, "Debt," to the condensed consolidated financial statements included in this Report and Note 6,7, "Debt," to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Credit Agreement~~

Our Credit Agreement, dated August 8, 2017, consists of a $1.75 billion Revolving Credit Facility and a $250 million Term Loan Facility. In February 2020, we entered into an agreement to extend the maturity date of the Revolving Credit Facility by one year to August 8, 2024, and paid related issuance costs of $1 million. The maturity date of the Term Loan Facility remains August 8, 2022.

~~In March 2020, as a proactive measure in response to the COVID-19 pandemic, we borrowed $1.0 billion under the Revolving Credit Facility, which was repaid in full in September~~ 2020.

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As of October 3, 2020 and December 31, 2019, there were $225 million and $234 million of borrowings outstanding under the Term Loan Facility, respectively. During the first nine months of 2020, we made required principal payments of $9 million under the Term Loan Facility.

The Credit Agreement contains various financial and other covenants that require us to maintain a minimum leverage coverage ratio. As of October 3, 2020, we were in compliance with all covenants under the Credit Agreement. Although we expect to maintain compliance with all covenants, the impact of the COVID-19 pandemic may negatively affect our ability to comply with certain of these covenants. In the event that we are unable to maintain compliance with such covenants, we expect to obtain an amendment or waiver from our lenders, refinance the indebtedness subject to the covenants or take other mitigating actions prior to a potential breach.

For ~~further~~ information related to ~~the Credit Agreement, including information on pricing, covenants~~our common stock share repurchase program and ~~events of default,~~dividends, see "— Executive Overview — Share Repurchase Program and Quarterly Cash Dividends" above, Note ~~8, "Debt,~~15, "Comprehensive Income (Loss) and Equity," to the condensed consolidated financial statements included in this Report and Note ~~6, "Debt,~~12, "Capital Stock, Accumulated Other Comprehensive Loss and Equity," to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

~~Accounts Receivable Factoring~~

During the second quarter of 2020, we entered into an uncommitted factoring arrangement which provides for aggregate purchases of specified customer accounts in North America. The factoring arrangement results in true sales of the factored receivables, which are excluded from amounts reported in the consolidated balance sheets when the receivables are factored in accordance with ASC 860, "Transfers and Servicing." There were no receivables factored during the first nine months of 2020. ~~We cannot provide any assurances that the factoring arrangement will be available or utilized in the future.~~

~~Common Stock Share Repurchase Program~~

In March 2020, as a proactive measure in response to the COVID-19 pandemic, we suspended share repurchases under our share repurchase program. Share repurchases prior to the suspension are shown below (in millions except for shares and per share amounts):

Nine Months Ended

As of

October 3, 2020

October 3, 2020

Aggregate
Repurchases

Cash paid for
Repurchases

Number of
Shares

Average Price per
Share⁽¹⁾

Remaining
Purchase
Authorization

$
70

$
70

641,149

$
109.22

$
1,430

⁽¹⁾	~~Excludes commissions~~

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 the end of the third quarter of 2020, we have repurchased, in aggregate, $4.7 billion of our outstanding common stock, at an average price of $90.07 per share, excluding commissions and related fees.

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 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 (see "— Forward-Looking Statements").

For further information related to our common stock share repurchase program, see Note 15, "Comprehensive Income (Loss) and Equity," to the condensed consolidated financial statements included in this Report.

~~Dividends~~

In March 2020, as a proactive measure in response to the COVID-19 pandemic, we suspended our quarterly cash dividend. A summary of the first quarter 2020 dividend (prior to the suspension) is shown below:

Payment Date

Dividend
Per Share

Declaration
Date

Record
Date
March 18, 2020

$
0.77

February 6, 2020

February 28, 2020

Although we do expect to pay quarterly cash dividends at some point in the future, such payments are at the discretion of our Board of Directors and will depend upon our financial condition, results of operations, capital requirements, alternative uses of capital and other factors that our Board of Directors may consider in its discretion.

Market Risk Sensitivity

In the normal course of business, we are exposed to market risks associated with fluctuations in foreign exchange rates, interest rates and commodity prices. We manage a portion of these risks through the use of derivative financial instruments in

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accordance with our

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policies. We enter into all hedging transactions for periods consistent with the underlying exposures. We do not enter into derivative instruments for trading purposes.

Foreign Exchange

Operating results may be impacted by our buying, selling and financing in currencies other than the functional currency of our operating companies ("transactional exposure"). We may mitigate a portion of this risk by entering into forward foreign exchange, futures and option contracts. The foreign exchange contracts are executed with banks that we believe are creditworthy. Gains and losses related to foreign exchange contracts are deferred where appropriate and included in the measurement of the foreign currency transaction subject to the hedge. Gains and losses incurred related to foreign exchange contracts are generally offset by the direct effects of currency movements on the underlying transactions.

A summary of the notional amount and estimated aggregate fair value of our outstanding foreign exchange contracts is shown below (in millions):


	October 3, 2020			December 31, 2019			July 3, 2021		December 31, 2020
Notional amount (contract maturities < 24 months)	$	2,954		$	2,163	Notional amount (contract maturities < 24 months)	$	3,076	$	2,494
Fair value		(3	)		50	Fair value	58		48

Currently, our most significant foreign currency transactional exposures relate to the Mexican peso, various European currencies, the Chinese renminbi, the Japanese yen, the Thai baht, the ~~Japanese yen,~~Brazilian real and the Honduran ~~lempira and the Brazilian real.~~ lempira.

A sensitivity analysis of our net transactional exposure is shown below (in millions):

Potential Earnings Benefit
(Adverse Earnings Impact)

Hypothetical
Strengthening % ⁽¹⁾

October 3,
2020

December 31,
2019

U.S. dollar

10
%

$
26

$
(16
)
Euro

10
%

(4
)

19

⁽¹⁾	~~Relative to all other currencies to which it is exposed for a twelve-month period~~


		Potential Earnings Benefit (Adverse Earnings Impact)
	Hypothetical Strengthening % (1)	July 3, 2021		December 31, 2020
U.S. dollar	10%	$	10	$	23
Euro	10%	(5)		(4)

(1) Relative to all other currencies to which it is exposed for a twelve-month period

A sensitivity analysis related to the aggregate fair value of our outstanding foreign exchange contracts is shown below (in millions):

Estimated Change in Fair Value

Hypothetical
Change % ⁽²⁾

October 3,
2020

December 31,
2019

U.S. dollar

10
%

$
63

$
50

Euro

10
%

62

69

⁽²⁾	~~Relative to all other currencies to which it is exposed for a twelve-month period~~


		Estimated Change in Fair Value
	Hypothetical Change % (2)	July 3, 2021		December 31, 2020
U.S. dollar	10%	$	74	$	80
Euro	10%	49		59

(2)Relative to all other currencies to which it is exposed for a twelve-month period

There are certain shortcomings inherent in the sensitivity analyses above. The analyses assume that all currencies would uniformly strengthen or weaken relative to the U.S. dollar or Euro. In reality, some currencies may strengthen while others may weaken, causing the earnings impact to increase or decrease depending on the currency and the direction of the rate movement.

In addition to the transactional exposure described above, our operating results are impacted by the translation of our foreign operating income into U.S. dollars ("translational exposure"). In ~~2019,~~2020, net sales outside of the United States accounted for ~~82%~~79% of our consolidated net sales, although certain non-U.S. sales are U.S. dollar denominated. We do not enter into foreign exchange contracts to mitigate our translational exposure.

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Commodity Prices

and Availability

Raw material, energy and commodity costs can be volatile, reflecting changes in supply and demand and global trade and tariff policies. We have developed and implemented strategies to mitigate the impact of higher raw material, energy and commodity costs, such as the selective in-sourcing of components, the continued consolidation of our supply base, longer-term purchase commitments and the selective expansion of low-cost country sourcing and engineering, as well as value engineering and product benchmarking. However, these strategies, together with commercial negotiations with our customers and suppliers, typically offset only a portion of the adverse impact. Certain of these strategies also may limit our opportunities in a declining commodity cost environment. In addition, the availability of raw materials, commodities and product components fluctuates from time to time due to factors outside of our control, including trade laws and tariffs, natural disasters, global pandemics like COVID-19 and resulting supply chain disruptions. Currently, due to a variety of global factors, the insufficient availability of semiconductor chips is adversely affecting, and may continue to adversely affect, a number of industries, including the automotive industry, resulting in reduced levels of automotive production. If ~~these~~the costs ~~increase,~~of raw materials, commodities and product components increases or the availability thereof is restricted, it could have an adverse impact on our operating results in the foreseeable future. See "— Forward-Looking Statements" below and Item 1A, "Risk Factors — Increases in the costs and restrictions on the availability of raw materials, energy, commodities and product components could adversely affect our financial performance," in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~

2020, as supplemented and updated by Part II — Item 1A, "Risk Factors," in this Report.

We have commodity price risk with respect to purchases of certain raw materials, including steel, copper, diesel fuel, chemicals, resins and leather. Our main cost exposures relate to steel, copper and leather. The majority of the steel used in our products is comprised of fabricated components that are integrated into a seat system, such as seat frames, recliner mechanisms, seat tracks and other

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mechanical components. Therefore, our exposure to changes in steel prices is primarily indirect, through these purchased components. Approximately ~~91%~~92% of our copper purchases and a significant portion of our leather purchases are subject to price index agreements with our customers and suppliers.

For further information related to the financial instruments described above, see Note 18, "Financial Instruments," to the condensed consolidated financial statements included in this Report.

OTHER MATTERS

Legal and Environmental Matters

We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial and contractual disputes, product liability claims and environmental and other matters. As of ~~October~~July 3, ~~2020,~~2021, we had recorded reserves for pending legal disputes, including commercial disputes and other matters, of ~~$16~~$17 million. In addition, as of ~~October~~July 3, ~~2020,~~2021, we had recorded reserves for product liability claims and environmental matters of ~~$45~~$43 million and $9 million, respectively. Although these reserves were determined in accordance with GAAP, the ultimate outcomes of these matters are inherently uncertain, and actual results may differ significantly from current estimates. For a description of risks related to various legal proceedings and claims, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. For a more complete description of our outstanding material legal proceedings, see Note 16, "Legal and Other Contingencies," to the condensed consolidated financial statements included in this Report.

Significant Accounting Policies and Critical Accounting Estimates

Certain of our accounting policies require management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on our historical experience, the terms of existing contracts, our evaluation of trends in the industry, information provided by our customers and suppliers and information available from other outside sources, as appropriate. However, these estimates and assumptions are subject to an inherent degree of uncertainty. As a result, actual results in these areas may differ significantly from our estimates. For a discussion of our significant accounting policies and critical accounting estimates, see Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations — Significant Accounting Policies and Critical Accounting Estimates," and Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. There have been no significant changes in our significant accounting policies or critical accounting estimates during the first ~~nine~~six months of ~~2020, with the exception of credit losses. See Note 18, "Financial Instruments — Accounts Receivable," to the condensed consolidated financial statements included in this Report.~~

2021.

Recently Issued Accounting Pronouncements

For information on the impact of recently issued accounting pronouncements, see Note 19, "Accounting Pronouncements," to the condensed consolidated financial statements included in this Report.

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Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by us or on our behalf. The words "will," "may," "designed to," "outlook," "believes," "should," "anticipates," "plans," "expects," "intends," "estimates," "forecasts" and similar expressions identify certain of these forward-looking statements. We also may provide forward-looking statements in oral statements or other written materials released to the public. All such forward-looking statements contained or incorporated in this Report or in any other public statements which address operating performance, events or developments that we expect or anticipate may occur in the future, including, without limitation, statements related to business opportunities, awarded sales contracts, sales backlog and ongoing commercial arrangements, or statements expressing views about future operating results, are forward-looking statements. Actual results may differ materially from any or all forward-looking statements made by us. Important factors, risks and uncertainties that may cause actual results to differ materially from anticipated results include, but are not limited to:

•

~~general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates;~~

•general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates;

~~the impact of the COVID-19 pandemic on our business and the global economy;~~

•the impact of the ongoing COVID-19 pandemic on our business and the global economy;

~~changes in actual industry vehicle production levels from our current estimates;~~

•changes in actual industry vehicle production levels from our current estimates;

~~fluctuations in the production of vehicles or the loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier;~~

•fluctuations in the production of vehicles or the loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier;

~~the outcome of customer negotiations and the impact of customer-imposed price reductions;~~

•

~~the cost and availability of raw materials, energy, commodities and product components and our ability to mitigate such costs;~~

~~Table~~•the outcome of ~~Contents~~customer negotiations and the impact of customer-imposed price reductions;

~~LEAR CORPORATION~~

•

~~disruptions in relationships with our suppliers;~~

•the cost and availability of raw materials, energy, commodities and product components and our ability to mitigate such costs;

~~the financial condition of and adverse developments affecting our customers and suppliers;~~

•disruptions in relationships with our suppliers;

~~risks associated with conducting business in foreign countries;~~

•the financial condition of and adverse developments affecting our customers and suppliers;

~~currency controls and the ability to economically hedge currencies;~~

•risks associated with conducting business in foreign countries;

global sovereign fiscal matters and creditworthiness, including potential defaults and the related impacts on economic activity, including the possible effects on credit markets, currency values, monetary unions, international treaties and fiscal policies;

•currency controls and the ability to economically hedge currencies;

~~competitive conditions impacting us and our key customers and suppliers;~~

•global sovereign fiscal matters and creditworthiness, including potential defaults and the related impacts on economic activity, including the possible effects on credit markets, currency values, monetary unions, international treaties and fiscal policies;

~~labor disputes involving us or our significant customers or suppliers or that otherwise affect us;~~

•competitive conditions impacting us and our key customers and suppliers;

~~the operational and financial success of our joint ventures;~~

•labor disputes involving us or our significant customers or suppliers or that otherwise affect us;

~~the impact and timing of program launch costs and our management of new program launches;~~

•the operational and financial success of our joint ventures;

~~limitations imposed by our existing indebtedness and our ability to access capital markets on commercially reasonable terms;~~

•the impact and timing of program launch costs and our management of new program launches;

~~changes affecting the availability of LIBOR;~~

•

changes in discount rates and the actual return on pension assets;

•

impairment charges initiated by adverse industry or market developments;

•

our ability to execute our strategic objectives;

•limitations imposed by our existing indebtedness and our ability to access capital markets on commercially reasonable terms;

~~disruptions to our information technology systems, or those of our customers or suppliers, including those related to cybersecurity;~~

•changes affecting the availability of LIBOR;

~~increases in our warranty, product liability or recall costs;~~

•disruptions to our information technology systems, or those of our customers or suppliers, including those related to cybersecurity;

~~the outcome of legal or regulatory proceedings to which we are or may become a party;~~

•increases in our warranty, product liability or recall costs;

~~the impact of pending legislation and regulations or changes in existing federal, state, local or foreign laws or regulations;~~

•the outcome of legal or regulatory proceedings to which we are or may become a party;

~~the impact of regulations on our foreign operations;~~

•

~~costs associated with compliance with environmental laws~~•the impact of pending legislation and regulations or changes in existing federal, state, local or foreign laws or regulations;

•the impact of regulations on our foreign operations;

~~developments or assertions by or against us relating to intellectual property rights;~~

•costs associated with compliance with environmental laws and regulations;

~~the impact of potential changes in tax and trade policies in the United States and related actions by countries in which we do business;~~

•developments or assertions by or against us relating to intellectual property rights;

~~the anticipated changes in economic and other relationships between the United Kingdom and the European Union; and~~

•the impact of potential changes in tax and trade policies in the United States and related actions by countries in which we do business;

other risks described in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented and updated by Part II — Item 1A, "Risk Factors,” in this Report, and our other Securities and Exchange Commission ("SEC") filings.

•the anticipated changes in economic and other relationships between the United Kingdom and the European Union; and

•other risks described in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2020, as supplemented and updated by Part II — Item 1A, "Risk Factors," in this Report, and our other Securities and Exchange Commission filings.

The forward-looking statements in this Report are made as of the date hereof, and we do not assume any obligation to update, amend or clarify them to reflect events, new information or circumstances occurring after the date hereof.

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ITEM 4 — CONTROLS AND PROCEDURES

(a)Disclosure Controls and Procedures

~~Disclosure Controls and Procedures~~

The Company has evaluated, under the supervision and with the participation of the Company’s management, including the Company’s President and Chief Executive Officer along with the Company’s Senior Vice President and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Report. The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Based on the evaluation described above, the Company’s President and Chief Executive Officer along with the Company’s Senior Vice President and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the desired control objectives were achieved as of the end of the period covered by this Report.

(b)Changes in Internal Control over Financial Reporting

~~Changes in Internal Control over Financial Reporting~~

There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended ~~October~~July 3, ~~2020,~~2021, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II — OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

We are involved from time to time in various legal proceedings and claims, including, without limitation, commercial or contractual disputes, product liability claims and environmental and other matters. For a description of risks related to various legal proceedings and claims, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, ~~2019.~~2020. For a description of our outstanding material legal proceedings, see Note 16, "Legal and Other Contingencies," to the condensed consolidated financial statements included in this Report.

ITEM 1A — RISK FACTORS

There have been no material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019, except for the addition of the risk factor set forth below:~~

•

~~Pandemics or disease outbreaks, such as COVID-19, have disrupted, and may continue to disrupt, our business, which could adversely affect our financial performance.~~

~~Pandemics or disease outbreaks, such as COVID-19, have disrupted,~~2020, and may continue to disrupt, the global economy. The COVID-19 pandemic has led to a dramatic reduction in economic activity worldwide. International, federal, state and local public health and governmental authorities have taken extraordinary actions to contain and combat the outbreak and spread of COVID-19 throughout most regions of the world, including travel bans, quarantines, "stay-at-home" orders and similar mandates that have caused many individuals to substantially restrict their daily activities and many businesses to curtail or cease normal operations.

The automotive industry has been particularly negatively impacted by the evolving situation with a sudden and sharp decline in consumer demand and automotive manufacturers suspending or severely limiting automobile production globally. We have experienced, and may continue to experience, reductions in orders from our customers globally, which in turn has adversely affected, and may continue to affect, our financial performance. This reduction in orders may be further exacerbated by the global economic downturn resulting from the pandemic, which could decrease consumer demand for vehicles or result in the financial distress of one or more of our customers or suppliers. As described in more detail under "Our industry is cyclical and a decline in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of one or more of our major customers could adversely affect our financial performance" and "Adverse developments affecting or the financial distress of one or more of our suppliers could adversely affect our financial performance" in Item 1A, "Risk Factors," in our AnnualQuarterly Report on Form ~~10-K~~10-Q for the ~~year~~quarter ended December 31, 2019, decreases in consumer demand for automotive vehicles, declines in the production levels of our major customers, financial distress of one or more of our major customers or suppliers or other adverse developments affecting one or more of our suppliers, could adversely affect our financial performance. In addition, if COVID-19 were to affect a significant amount of the workforce employed or operating at our facilities, we could experience delays or the inability to produce and deliver products to our customers on a timely basis.

Unprecedented industry disruptions related to the COVID-19 pandemic impacted operations in every region of the world. Our operations in China were impacted first, with most plants in the country closed for several weeks during the first quarter of 2020, resulting in significant decreases in vehicle production. Beginning in mid-March 2020, our operations in Europe, North America, South America and Asia (outside of China) were impacted, with virtually all of our plants closed at the end of the first quarter and closures continuing throughout April and, in most cases, a portion of May. As described in more detail under "Our substantial international operations make us vulnerable to risks associated with doing business in foreign countries" in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019, our substantial international operations make us vulnerable to risks associated with doing business in foreign countries.

While all of our global manufacturing plants have resumed production, we may experience unexpected delays or obstacles, such as higher employee absenteeism, supply chain disruptions or government mandates, that may hamper our ability to fully resume operations. Further, we may not be able to operate at optimal levels of efficiency given new work rules and procedures that will need to be implemented to protect our employees. The suspension of production at our manufacturing facilities, or difficulties or inefficiencies in resuming production, would likely adversely impact our future results of operations, financial condition and liquidity, and that impact may be material.

~~Table of Contents~~

~~LEAR CORPORATION~~

As described in more detail under "Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance" in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019, the volatility created by COVID-19 could adversely affect our access to the debt and capital markets. In addition, our ability to continue implementing important strategic initiatives and capital expenditures may be reduced as we devote time and other resources to responding to the impacts of the COVID-19 pandemic.

COVID-19 continues to spread globally and the extent to which our financial performance will be adversely affected will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the effectiveness of actions to contain the virus or treat its impact and how quickly and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts on our business and financial performance as a result of its global economic impact, including a recession that has occurred or may occur in the future, which will likely result in lower demand for new vehicles for a period of time, as new vehicle sales are typically correlated with positive consumer confidence and low unemployment.

The COVID-19 pandemic may also exacerbate other risks disclosed in Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2019, including, but not limited to, our competitiveness, demand for our products and shifting consumer preferences.

~~Table of Contents~~

~~LEAR CORPORATION~~

3, 2021.

ITEM 2 — UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

As discussed in Part I — Item 2, "Management’s Discussion and Analysis of Financial Condition and Results of Operations — ~~Liquidity and Capital Resources~~Executive Overview — ~~Capitalization — Common Stock~~ Share Repurchase Program and Quarterly Cash Dividends," and Note 15, "Comprehensive Income (Loss) and Equity," to the condensed consolidated financial statements included in this Report, in March 2020, as a proactive measure in response to the COVID-19 pandemic, we suspended ~~share repurchases under~~ our share ~~repurchase program. We have a remaining repurchase authorization~~repurchases. Share repurchases were reinstated in the second quarter of ~~$1,430.0 million under our common stock share repurchase program.~~

~~As shown below, there were no~~2021.

A summary of the shares of our common stock repurchased during the quarter ended ~~October~~July 3, ~~2020.~~

2021, is shown below:


Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
April 4, 2021 through May 1, 2021	—	—	—	$	1,430.0
May 2, 2021 through May 29, 2021	53,083	$186.90	53,083	1,420.1
May 30, 2021 through July 3, 2021	116,731	$182.04	116,731	1,398.8
Total	169,814	$183.56	169,814	$	1,398.8

Period

Total Number of Shares Purchased

Average Price Paid per
Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

Approximate Dollar Value of Shares that May Yet be Purchased Under the Program
(in millions)

July 5, 2020 through August 1, 2020

-

-

-

$
1,430.0

August 2, 2020 through August 29, 2020

-

-

-

1,430.0

August 30, 2020 through October 3, 2020

-

-

-

1,430.0

Total

-

-

-

$
1,430.0

Table of Contents

LEAR CORPORATION

ITEM 6 — EXHIBITS

Exhibit Index

	~~Exhibit~~ ~~Number~~	~~Exhibit Name~~
*		~~31.1~~ Exhibit Number	Exhibit Name
*		31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer.
*		31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer.
*		32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*		32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
**		101.INS	XBRL Instance Document
***		101.SCH	XBRL Taxonomy Extension Schema Document.
***		101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
***		101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
***		101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
***		101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
**		104	Cover Page Interactive Data File

*		Filed herewith.
**		The XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.
***		Submitted electronically with the Report.

Table of Contents

LEAR CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

~~LEAR CORPORATION~~

LEAR CORPORATION

~~Dated:~~

~~October 30, 2020~~

~~By:~~

Dated:

August 6, 2021

By:

/s/ Raymond E. Scott

Raymond E. Scott

President and Chief Executive Officer

By:

/s/ Jason M. Cardew

Jason M. Cardew

Senior Vice President and Chief Financial Officer


Securities registered pursuant to Section 12(b) of the Act:
Title of ~~Each Class~~ each class	Trading symbol(s)	~~Trading Symbol(s)~~	Name of ~~Each Exchange~~each exchange on ~~Which Registered~~ which registered
Common stock, par value $0.01	LEA	~~LEA~~	New York Stock Exchange

	~~Page No.~~
		Page No.
Part I – Financial Information
Item 1 – Condensed Consolidated Financial Statements
Introduction to the Condensed Consolidated Financial Statements			3
Condensed Consolidated Balance Sheets - ~~October~~July 3, ~~2020~~2021 (Unaudited) and December 31, ~~2019~~2020			4
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - Three and ~~Nine~~Six Months Ended ~~October~~July 3, ~~2020~~2021 and ~~September 28, 2019~~July 4, 2020			5
Condensed Consolidated Statements of Equity (Unaudited) - Three and ~~Nine~~Six Months Ended ~~October~~July 3, ~~2020~~2021 and ~~September 28, 2019~~July 4, 2020			6
Condensed Consolidated Statements of Cash Flows (Unaudited) - ~~Nine~~Six Months Ended ~~October~~July 3, ~~2020~~2021 and ~~September 28, 2019~~July 4, 2020			10
Notes to the Condensed Consolidated Financial Statements			11
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations			33 34
Item 3 – Quantitative and Qualitative Disclosures about Market Risk (included in Item 2)
Item 4 – Controls and Procedures			48 49
Part II – Other Information
Item 1 – Legal Proceedings			49
Item 1A – Risk Factors			49
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds			51 49
Item 6 – Exhibits			52 50
Signatures			53 51


	October 3, 2020 ⁽¹⁾			December 31, 2019				July 3, 2021(1)		December 31, 2020
ASSETS							ASSETS
CURRENT ASSETS:							CURRENT ASSETS:
Cash and cash equivalents	$	1,250.4		$	1,487.7		Cash and cash equivalents	$	1,401.7	$	1,306.7
Accounts receivable		3,386.8			2,982.6		Accounts receivable	2,965.0		3,269.2
Inventories		1,265.6			1,258.2		Inventories	1,590.3		1,401.1
Other		695.7			678.2		Other	897.3		799.7
Total current assets		6,598.5			6,406.7		Total current assets	6,854.3		6,776.7
LONG-TERM ASSETS:							LONG-TERM ASSETS:
Property, plant and equipment, net		2,627.3			2,704.2		Property, plant and equipment, net	2,695.0		2,736.2
Goodwill		1,629.0			1,614.3		Goodwill	1,667.4		1,655.8
Other		2,039.9			1,955.5		Other	2,047.0		2,029.9
Total long-term assets		6,296.2			6,274.0		Total long-term assets	6,409.4		6,421.9
Total assets	$	12,894.7		$	12,680.7		Total assets	$	13,263.7	$	13,198.6

LIABILITIES AND EQUITY							LIABILITIES AND EQUITY
CURRENT LIABILITIES:							CURRENT LIABILITIES:
Short-term borrowings	$	4.4		$	19.2

Accounts payable and drafts		2,943.4			2,821.7		Accounts payable and drafts	$	2,886.5	$	3,141.6
Accrued liabilities		2,087.8			1,811.2		Accrued liabilities	1,984.1		1,920.9
Current portion of long-term debt		18.9			14.1		Current portion of long-term debt	4.8		14.2
Total current liabilities		5,054.5			4,666.2		Total current liabilities	4,875.4		5,076.7
LONG-TERM LIABILITIES:							LONG-TERM LIABILITIES:
Long-term debt		2,299.8			2,293.7		Long-term debt	2,301.3		2,300.3
Other		1,145.0			1,101.3		Other	1,194.9		1,206.7
Total long-term liabilities		3,444.8			3,395.0		Total long-term liabilities	3,496.2		3,507.0

Redeemable noncontrolling interest		119.3			118.4


EQUITY:							EQUITY:
Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); 0 shares outstanding		-			-		Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); 0 shares outstanding	0		0
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,563,291 shares issued as of October 3, 2020 and December 31, 2019		0.6			0.6
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,571,405 shares issued as of July 3, 2021 and December 31, 2020							Common stock, $0.01 par value, 300,000,000 shares authorized; 64,571,405 shares issued as of July 3, 2021 and December 31, 2020	0.6		0.6
Additional paid-in capital		957.5			969.1		Additional paid-in capital	973.6		963.6
Common stock held in treasury, 4,577,977 and 4,127,806 shares as of October 3, 2020 and December 31, 2019, respectively, at cost		(606.3	)		(563.1	)
Common stock held in treasury, 4,593,846 and 4,519,891 shares as of July 3, 2021 and December 31, 2020, respectively, at cost							Common stock held in treasury, 4,593,846 and 4,519,891 shares as of July 3, 2021 and December 31, 2020, respectively, at cost	(618.6)		(598.6)
Retained earnings		4,620.7			4,715.8		Retained earnings	5,155.1		4,806.8
Accumulated other comprehensive loss		(839.7	)		(772.7	)	Accumulated other comprehensive loss	(727.8)		(705.1)
Lear Corporation stockholders’ equity		4,132.8			4,349.7		Lear Corporation stockholders’ equity	4,782.9		4,467.3
Noncontrolling interests		143.3			151.4		Noncontrolling interests	109.2		147.6
Equity		4,276.1			4,501.1		Equity	4,892.1		4,614.9
Total liabilities and equity	$	12,894.7		$	12,680.7		Total liabilities and equity	$	13,263.7	$	13,198.6

	Three Months Ended October 3, 2020
	Common Stock		Additional Paid-In Capital			Common Stock Held in Treasury			Retained Earnings			Accumulated Other Comprehensive Loss, Net of Tax			Lear Corporation Stockholders' Equity				Three Months Ended July 3, 2021
Balance at July 4, 2020	$	0.6	$	955.6		$	(612.6	)	$	4,447.1		$	(923.0	)	$	3,867.7
																			Common Stock		Additional Paid-In Capital		Common Stock Held in Treasury		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Lear Corporation Stockholders' Equity
Balance at April 3, 2021																		Balance at April 3, 2021	$	0.6	$	964.3	$	(589.6)	$	4,995.2	$	(790.4)	$	4,580.1
Comprehensive income:																		Comprehensive income:
Net income		-		-			-			174.4			-			174.4		Net income	—		—		—		175.2		—		175.2
Other comprehensive income		-		-			-			-			83.3			83.3		Other comprehensive income	—		—		—		—		62.6		62.6
Total comprehensive income		-		-			-			174.4			83.3			257.7		Total comprehensive income	—		—		—		175.2		62.6		237.8
Stock-based compensation		-		9.1			-			-			-			9.1		Stock-based compensation	—		12.2		—		—		—		12.2
Net issuance of 45,531 shares held in treasury in settlement of stock-based compensation		-		(7.2	)		6.3			(0.8	)		-			(1.7	)
Net issuance of 17,688 shares held in treasury in settlement of stock-based compensation																		Net issuance of 17,688 shares held in treasury in settlement of stock-based compensation	—		(2.9)		2.2		—		—		(0.7)
Repurchase of 169,814 shares of common stock at average price of $183.56 per share																		Repurchase of 169,814 shares of common stock at average price of $183.56 per share	—		—		(31.2)		—		—		(31.2)
Dividends declared to Lear Corporation stockholders																		Dividends declared to Lear Corporation stockholders	—		—		—		(15.3)		—		(15.3)
Dividends declared to noncontrolling interest holders		-		-			-			-			-			-		Dividends declared to noncontrolling interest holders	—		0		0		0		—		—
Balance at October 3, 2020	$	0.6	$	957.5		$	(606.3	)	$	4,620.7		$	(839.7	)	$	4,132.8

Balance at July 3, 2021																		Balance at July 3, 2021	$	0.6	$	973.6	$	(618.6)	$	5,155.1	$	(727.8)	$	4,782.9

	Nine Months Ended October 3, 2020
	Common Stock		Additional Paid-In Capital			Common Stock Held in Treasury			Retained Earnings			Accumulated Other Comprehensive Loss, Net of Tax			Lear Corporation Stockholders' Equity
Balance at January 1, 2020	$	0.6	$	969.1		$	(563.1	)	$	4,715.8		$	(772.7	)	$	4,349.7
Comprehensive income (loss):
Net income (loss)		-		-			-			(43.1	)		-			(43.1	)
Other comprehensive income (loss)		-		-			-			-			(67.0	)		(67.0	)
Total comprehensive income (loss)		-		-			-			(43.1	)		(67.0	)		(110.1	)
Adoption of accounting standard update 2016-13 (Note 18)		-		-			-			(0.8	)		-			(0.8	)
Stock-based compensation		-		25.5			-			-			-			25.5
Net issuance of 190,978 shares held in treasury in settlement of stock-based compensation		-		(37.1	)		26.8			(3.3	)		-			(13.6	)
Repurchase of 641,149 shares of common stock at average price of $109.22 per share		-		-			(70.0	)		-			-			(70.0	)
Dividends declared to Lear Corporation stockholders		-		-			-			(46.8	)		-			(46.8	)
Dividends declared to noncontrolling interest holders		-		-			-			-			-			-
Redeemable noncontrolling interest adjustment		-		-			-			(1.1	)		-			(1.1	)
Balance at October 3, 2020	$	0.6	$	957.5		$	(606.3	)	$	4,620.7		$	(839.7	)	$	4,132.8

☒
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

☐
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934


	Six Months Ended July 3, 2021
	Common Stock		Additional Paid-In Capital		Common Stock Held in Treasury		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Lear Corporation Stockholders' Equity
Balance at January 1, 2021	$	0.6	$	963.6	$	(598.6)	$	4,806.8	$	(705.1)	$	4,467.3
Comprehensive income (loss):
Net income	—		—		—		378.9		—		378.9
Other comprehensive income (loss)	—		—		—		—		(22.7)		(22.7)
Total comprehensive income (loss)	—		—		—		378.9		(22.7)		356.2
Stock-based compensation	—		29.9		—		—		—		29.9
Net issuance of 95,859 shares held in treasury in settlement of stock-based compensation	—		(19.9)		11.2		—		—		(8.7)
Repurchase of 169,814 shares of common stock at average price of $183.56 per share	—		—		(31.2)		—		—		(31.2)
Dividends declared to Lear Corporation stockholders	—		—		—		(30.6)		—		(30.6)
Dividends declared to noncontrolling interest holders	—		0		0		0		—		—


Balance at July 3, 2021	$	0.6	$	973.6	$	(618.6)	$	5,155.1	$	(727.8)	$	4,782.9

	Three Months Ended October 3, 2020
	Lear Corporation Stockholders' Equity			Non- controlling Interests			Equity			Redeemable Non- controlling Interests			Three Months Ended July 3, 2021
Balance at July 4, 2020	$	3,867.7		$	115.5		$	3,983.2		$	114.3
													Lear Corporation Stockholders' Equity		Non-controlling Interests		Equity
Balance at April 3, 2021												Balance at April 3, 2021	$	4,580.1	$	168.6	$	4,748.7
Comprehensive income:												Comprehensive income:
Net income		174.4			22.4			196.8			0.3	Net income	175.2		19.7		194.9
Other comprehensive income		83.3			5.6			88.9			4.7	Other comprehensive income	62.6		1.9		64.5
Total comprehensive income		257.7			28.0			285.7			5.0	Total comprehensive income	237.8		21.6		259.4
Stock-based compensation		9.1			-			9.1			-	Stock-based compensation	12.2		—		12.2
Net issuance of 45,531 shares held in treasury in settlement of stock-based compensation		(1.7	)		-			(1.7	)		-
Net issuance of 17,688 shares held in treasury in settlement of stock-based compensation												Net issuance of 17,688 shares held in treasury in settlement of stock-based compensation	(0.7)		—		(0.7)
Repurchase of 169,814 shares of common stock at average price of $183.56 per share												Repurchase of 169,814 shares of common stock at average price of $183.56 per share	(31.2)		—		(31.2)
Dividends declared to Lear Corporation stockholders												Dividends declared to Lear Corporation stockholders	(15.3)		—		(15.3)
Dividends declared to noncontrolling interest holders		-			(0.2	)		(0.2	)		-	Dividends declared to noncontrolling interest holders	—		(81.0)		(81.0)
Balance at October 3, 2020	$	4,132.8		$	143.3		$	4,276.1		$	119.3

Balance at July 3, 2021												Balance at July 3, 2021	$	4,782.9	$	109.2	$	4,892.1

	Three Months Ended September 28, 2019
	Common Stock		Additional Paid-In Capital			Common Stock Held in Treasury			Retained Earnings			Accumulated Other Comprehensive Loss, Net of Tax			Lear Corporation Stockholders' Equity
Balance at June 29, 2019	$	0.6	$	965.3		$	(466.6	)	$	4,435.3		$	(698.2	)	$	4,236.4
Comprehensive income (loss):
Net income		-		-			-			215.9			-			215.9
Other comprehensive loss		-		-			-			-			(131.1	)		(131.1	)
Total comprehensive income (loss)		-		-			-			215.9			(131.1	)		84.8
Stock-based compensation		-		1.7			-			-			-			1.7
Net issuance of 23,726 shares held in treasury in settlement of stock-based compensation		-		(3.9	)		3.5			(0.7	)		-			(1.1	)
Repurchase of 616,635 shares of common stock at average price of $123.06 per share		-		-			(75.9	)		-			-			(75.9	)
Dividends declared to Lear Corporation stockholders		-		-			-			(45.7	)		-			(45.7	)
Dividends declared to noncontrolling interest holders		-		-			-			-			-			-
Changes in noncontrolling interests		-		-			-			-			-			-
Redeemable noncontrolling interest adjustment		-		-			-			3.6			-			3.6
Balance at September 28, 2019	$	0.6	$	963.1		$	(539.0	)	$	4,608.4		$	(829.3	)	$	4,203.8




	Three Months Ended July 4, 2020
	Common Stock		Additional Paid-In Capital		Common Stock Held in Treasury		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Lear Corporation Stockholders' Equity
Balance at April 4, 2020	$	0.6	$	946.0	$	(615.6)	$	4,741.8	$	(1,049.3)	$	4,023.5
Comprehensive income (loss):
Net income (loss)	—		—		—		(293.9)		—		(293.9)
Other comprehensive income	—		—		—		—		126.3		126.3
Total comprehensive income (loss)	—		—		—		(293.9)		126.3		(167.6)

Stock-based compensation	—		12.5		—		—		—		12.5
Net issuance of 21,616 shares held in treasury in settlement of stock-based compensation	—		(2.9)		3.0		(0.8)		—		(0.7)


Dividends declared to noncontrolling interest holders	—		0		0		0		—		—

Balance at July 4, 2020	$	0.6	$	955.6	$	(612.6)	$	4,447.1	$	(923.0)	$	3,867.7

	Nine Months Ended September 28, 2019
	Common Stock		Additional Paid-In Capital			Common Stock Held in Treasury			Retained Earnings			Accumulated Other Comprehensive Loss, Net of Tax			Lear Corporation Stockholders' Equity
Balance at January 1, 2019	$	0.6	$	1,017.4		$	(225.1	)	$	4,113.6		$	(705.8	)	$	4,200.7
Comprehensive income (loss):
Net income		-		-			-			627.6			-			627.6
Other comprehensive loss		-		-			-			-			(123.5	)		(123.5	)
Total comprehensive income (loss)		-		-			-			627.6			(123.5	)		504.1
Stock-based compensation		-		16.0			-			-			-			16.0
Net issuance of 308,538 shares held in treasury in settlement of stock-based compensation		-		(70.3	)		41.5			(1.9	)		-			(30.7	)
Repurchase of 2,603,881 shares of common stock at average price of $136.48 per share		-		-			(355.4	)		-			-			(355.4	)
Dividends declared to Lear Corporation stockholders		-		-			-			(140.3	)		-			(140.3	)
Dividends declared to noncontrolling interest holders		-		-			-			-			-			-
Changes in noncontrolling interests		-		-			-			-			-			-
Redeemable noncontrolling interest adjustment		-		-			-			9.4			-			9.4
Acquisition of outstanding noncontrolling interest		-		-			-			-			-			-
Balance at September 28, 2019	$	0.6	$	963.1		$	(539.0	)	$	4,608.4		$	(829.3	)	$	4,203.8


	Six Months Ended July 4, 2020
	Common Stock		Additional Paid-In Capital		Common Stock Held in Treasury		Retained Earnings		Accumulated Other Comprehensive Loss, Net of Tax		Lear Corporation Stockholders' Equity
Balance at January 1, 2020	$	0.6	$	969.1	$	(563.1)	$	4,715.8	$	(772.7)	$	4,349.7
Comprehensive income (loss):
Net income (loss)	—		—		—		(217.5)		—		(217.5)
Other comprehensive loss	—		—		—		—		(150.3)		(150.3)
Total comprehensive income (loss)	—		—		—		(217.5)		(150.3)		(367.8)
Adoption of accounting standard update 2016-13	—		—		—		(0.8)		—		(0.8)
Stock-based compensation	—		16.4		—		—		—		16.4
Net issuance of 145,447 shares held in treasury in settlement of stock-based compensation	—		(29.9)		20.5		(2.5)		—		(11.9)
Repurchase of 641,149 shares of common stock at average price of $109.22 per share	—		—		(70.0)		—		—		(70.0)
Dividends declared to Lear Corporation stockholders	—		—		—		(46.8)		—		(46.8)
Dividends declared to noncontrolling interest holders	—		0		0		0		—		—
Redeemable noncontrolling interest adjustment	—		—		—		(1.1)		—		(1.1)
Balance at July 4, 2020	$	0.6	$	955.6	$	(612.6)	$	4,447.1	$	(923.0)	$	3,867.7


	Accrual as of		2020		Utilization						Accrual as of			Accrual at January 1, 2021				2021				Utilization								Accrual at July 3, 2021
	January 1, 2020		Charges		Cash			Non-cash			October 3, 2020					Charges				Cash				Non-cash						Accrual at July 3, 2021
Employee termination benefits	$	152.8	$	84.3	$	(104.9	)	$	0		$	132.2	Employee termination benefits	Accrual at January 1, 2021		$	134.8			$	26.3			$	(44.6)			$	0			$	116.5
Asset impairment charges		0		14.5		0			(14.5	)		0	Asset impairment charges	0				0.4				0				(0.4)				0
Contract termination costs		4.9		0.9		(1.0	)		0			4.8	Contract termination costs	4.2				(0.8)				(1.1)				0				2.3
Other related costs		0		9.4		(9.4	)		0			0	Other related costs	0				6.7				(6.7)				0				0
Total	$	157.7	$	109.1	$	(115.3	)	$	(14.5	)	$	137.0	Total	$	139.0			$	32.6			$	(52.4)			$	(0.4)			$	118.8

	October 3, 2020
			Unamortized			Unamortized						Weighted
	Long-Term		Debt			Original Issue			Long-Term			Average		July 3, 2021
Debt Instrument	Debt		Issuance Costs			Premium (Discount)			Debt, Net			Interest Rate	Debt Instrument	Long-Term Debt		Unamortized Debt Issuance Costs		Unamortized Original Issue Premium (Discount)		Long-Term Debt, Net		Weighted Average Interest Rate
Credit Agreement — Term Loan Facility	$	225.0	$	(0.7	)	$	0		$	224.3		1.360%	Credit Agreement — Term Loan Facility	$	210.9	$	(0.4)	$	0	$	210.5	1.350%
3.8% Senior Notes due 2027 (the "2027 Notes")		750.0		(4.2	)		(3.7	)		742.1		3.885%	3.8% Senior Notes due 2027 (the "2027 Notes")	750.0		(3.7)		(3.3)		743.0		3.885%
4.25% Senior Notes due 2029 (the "2029 Notes")		375.0		(2.7	)		(1.0	)		371.3		4.288%	4.25% Senior Notes due 2029 (the "2029 Notes")	375.0		(2.5)		(0.9)		371.6		4.288%
3.5% Senior Notes due 2030 (the "2030 Notes")		350.0		(2.7	)		(0.7	)		346.6		3.525%	3.5% Senior Notes due 2030 (the "2030 Notes")	350.0		(2.4)		(0.7)		346.9		3.525%
5.25% Senior Notes due 2049 (the "2049 Notes")		625.0		(6.3	)		14.3			633.0		5.103%	5.25% Senior Notes due 2049 (the "2049 Notes")	625.0		(6.2)		13.9		632.7		5.103%
Other		1.4		-			-			1.4		N/A	Other	1.4		—		—		1.4		N/A
	$	2,326.4	$	(16.6	)	$	8.9			2,318.7				$	2,312.3	$	(15.2)	$	9.0	$	2,306.1
Less — Current portion										(18.9	)		Less — Current portion							(4.8)
Long-term debt									$	2,299.8			Long-term debt							$	2,301.3


	October 3, 2020			December 31, 2019				July 3, 2021		December 31, 2020
Raw materials	$	954.7		$	906.3		Raw materials	$	1,137.9	$	1,051.6
Work-in-process		110.4			107.0		Work-in-process	113.5		109.8
Finished goods		364.9			380.4		Finished goods	489.9		396.9
Reserves		(164.4	)		(135.5	)	Reserves	(151.0)		(157.2)
Inventories	$	1,265.6		$	1,258.2		Inventories	$	1,590.3	$	1,401.1


	October 3, 2020		December 31, 2019			July 3, 2021		December 31, 2020
Current	$	203.2	$	157.2	Current	$	267.4	$	212.0
Long-term		135.6		113.8	Long-term	142.6		121.4
Recoverable customer E&D and tooling	$	338.8	$	271.0	Recoverable customer E&D and tooling	$	410.0	$	333.4


	October 3, 2020			December 31, 2019				July 3, 2021		December 31, 2020
Land	$	111.9		$	113.1		Land	$	111.4	$	114.1
Buildings and improvements		838.1			831.3		Buildings and improvements	851.2		880.7
Machinery and equipment		4,124.7			3,844.1		Machinery and equipment	4,407.1		4,339.2
Construction in progress		271.5			382.4		Construction in progress	315.8		311.1
Total property, plant and equipment		5,346.2			5,170.9		Total property, plant and equipment	5,685.5		5,645.1
Less – accumulated depreciation		(2,718.9	)		(2,466.7	)	Less – accumulated depreciation	(2,990.5)		(2,908.9)
Property, plant and equipment, net	$	2,627.3		$	2,704.2		Property, plant and equipment, net	$	2,695.0	$	2,736.2


	Eurocurrency Rate									Base Rate										Eurocurrency Rate						Base Rate
							Rate as of									Rate as of								Rate as of						Rate as of
	Minimum			Maximum			October 3, 2020			Minimum			Maximum			October 3, 2020				Minimum		Maximum		July 3, 2021		Minimum		Maximum		July 3, 2021
Revolving Credit Facility		1.00	%		1.60	%		1.10	%		0.00	%		0.60	%		0.10	%	Revolving Credit Facility	1.00	%	1.60	%	1.10	%	0.00	%	0.60	%	0.10	%
Term Loan Facility		1.125	%		1.90	%		1.25	%		0.125	%		0.90	%		0.25	%	Term Loan Facility	1.125	%	1.90	%	1.25	%	0.125	%	0.90	%	0.25	%

	December 31, 2019
			Unamortized			Unamortized						Weighted
	Long-Term		Debt			Original Issue			Long-Term			Average
Debt Instrument	Debt		Issuance Costs			Discount			Debt, Net			Interest Rate
Credit Agreement — Term Loan Facility	$	234.4	$	(1.0	)	$	0		$	233.4		2.880%
5.25% Senior Notes due 2025 (the "2025 Notes")		650.0		(4.2	)		0			645.8		5.250%
2027 Notes		750.0		(4.7	)		(4.1	)		741.2		3.885%
2029 Notes		375.0		(2.9	)		(1.1	)		371.0		4.288%
2049 Notes issued 2019		325.0		(3.3	)		(5.3	)		316.4		5.363%
	$	2,334.4	$	(16.1	)	$	(10.5	)		2,307.8
Less — Current portion										(14.1	)
Long-term debt									$	2,293.7


	December 31, 2020
Debt Instrument	Long-Term Debt		Unamortized Debt Issuance Costs		Unamortized Original Issue Premium (Discount)		Long-Term Debt, Net		Weighted Average Interest Rate
Credit Agreement — Term Loan Facility	$	220.3	$	(0.6)	$	0	$	219.7	1.360%
2027 Notes	750.0		(4.1)		(3.5)		742.4		3.885%
2029 Notes	375.0		(2.6)		(1.0)		371.4		4.288%
2030 Notes	350.0		(2.6)		(0.7)		346.7		3.525%
2049 Notes	625.0		(6.3)		14.2		632.9		5.103%
Other	1.4		—		—		1.4		N/A
	$	2,321.7	$	(16.2)	$	9.0	2,314.5
Less — Current portion							(14.2)
Long-term debt							$	2,300.3

	October 3, 2020
2020⁽¹⁾	$	35.9
2021		129.6
2022		103.7
2023		81.6
2024		67.3
Thereafter		220.8
Total undiscounted cash flows		638.9
Less: Imputed interest		(86.7	)
Lease obligations under operating leases	$	552.2


	July 3, 2021
2021 (1)	$	75.8
2022	128.9
2023	100.1
2024	83.2
2025	68.6
Thereafter	198.4
Total undiscounted cash flows	655.0
Less: Imputed interest	(78.7)
Lease obligations under operating leases	$	576.3

	~~October 3,~~ ~~2020~~
		July 3, 2021
Weighted average remaining lease term ~~(in years)~~				~~6.9~~Seven years
Weighted average discount rate		3.4	~~3.4%~~	%

Nine Months Ended								As of
October 3, 2020								October 3, 2020
Aggregate Repurchases		Cash paid for Repurchases		Number of Shares		Average Price per Share⁽¹⁾		Remaining Purchase Authorization
$	70.0	$	70.0		641,149	$	109.22	$	1,430.0


Six Months Ended							As of July 3, 2021
July 3, 2021 (1)
Aggregate Repurchases		Cash Paid for Repurchases		Number of Shares	Average Price per Share (2)		Remaining Purchase Authorization
$	31.2	$	29.2	169,814	$	183.56	$	1,398.8

Balance at January 1, 2020	$	32.0
Expense, net (including changes in estimates)		20.1
Settlements		(7.0	)
Foreign currency translation and other		(0.4	)
Balance at October 3, 2020	$	44.7


Balance at January 1, 2021	$	48.7
Expense, net (including changes in estimates)	2.2
Settlements	(7.2)
Foreign currency translation and other	(0.5)
Balance at July 3, 2021	$	43.2


	July 3, 2021		December 31, 2020
Estimated aggregate fair value (1)	$	2,632.4	$	2,633.3
Aggregate carrying value (1) (2)	2,310.9		2,320.3

	October 3, 2020		September 28, 2019
Balance sheet - cash and cash equivalents	$	1,250.4	$	1,300.9
						July 3, 2021		July 4, 2020
Balance sheet:					Balance sheet:
Cash and cash equivalents					Cash and cash equivalents	$	1,401.7	$	1,775.5
Restricted cash included in other current assets		5.1		15.6	Restricted cash included in other current assets	1.4		36.0
Restricted cash included in other long-term assets		2.7		6.8	Restricted cash included in other long-term assets	1.6		1.6
Statement of cash flows - cash, cash equivalents and restricted cash	$	1,258.2	$	1,323.3
Statement of cash flows:					Statement of cash flows:
Cash, cash equivalents and restricted cash					Cash, cash equivalents and restricted cash	$	1,404.7	$	1,813.1

Net losses related to:
Foreign currency contracts	$	6.6
Interest rate swap contracts		2.4
Total	$	9.0


Foreign currency contracts	$	50.9
Interest rate swap contracts	(2.4)

Total	$	48.5

~~Market:~~
Market:						This approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

Income:						This approach uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.

Cost:						This approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).


Level 1:						Observable inputs, such as quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2:						Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.

Level 3:						Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability. Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date.

	October 3, 2020
	Frequency	Asset (Liability)			Valuation Technique	Level 1		Level 2			Level 3
Foreign currency contracts, net	Recurring	$	(3.2	)	Market/ Income	$	0	$	(3.2	)	$	0
Net investment hedges	Recurring	$	(7.9	)	Market/ Income	$	0	$	(7.9	)	$	0
Marketable equity securities	Recurring	$	50.8		Market	$	50.8	$	0		$	0

	December 31, 2019													July 3, 2021
	Frequency	Asset (Liability)			Valuation Technique	Level 1		Level 2			Level 3			Frequency	Asset (Liability)		Valuation Technique	Level 1		Level 2		Level 3
Foreign currency contracts, net	Recurring	$	50.3		Market/ Income	$	0	$	50.3		$	0	Foreign currency contracts, net	Recurring	$	58.4	Market/ Income	$	0	$	58.4	$	0
Net investment hedges	Recurring	$	(4.4	)	Market/ Income	$	0	$	(4.4	)	$	0	Net investment hedges	Recurring	(15.3)		Market/ Income	0		(15.3)		0
Marketable equity securities	Recurring	$	59.2		Market	$	59.2	$	0		$	0	Marketable equity securities	Recurring	56.4		Market	56.4		0		0

	Nine Months Ended
	October 3, 2020 ⁽¹⁾		September 28, 2019 ^(1) (2)		% Change
North America		9.2		12.5		(26	)%
Europe and Africa		11.5		16.4		(30	)%
Asia		26.4		32.5		(19	)%
South America		1.4		2.4		(41	)%
Other		1.0		1.1		(8	)%
Global light vehicle production		49.4		64.9		(24	)%


	Six Months Ended
	July 3, 2021 (1)	July 4, 2020 (1) (2)	% Change
North America	6.8	5.2	32	%
Europe and Africa	9.2	7.0	30	%
Asia	20.5	16.0	28	%
South America	1.3	0.8	63	%
Other	0.7	0.7	7	%
Global light vehicle production	38.5	29.7	30	%


(in millions)	Cost of Sales
Second quarter 2020	$	2,571.9
Material cost	1,515.9
Labor and other	261.7
Depreciation	9.8
Second quarter 2021	$	4,359.3

(in millions)	Cost of Sales
Third quarter 2019	$	4,365.7
Material cost		18.8
Labor and other		64.6
Depreciation		8.2
Third quarter 2020	$	4,457.3