Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 28, 2019 | Oct. 22, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-11311 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3386776 | |
Entity Address, Address Line One | 21557 Telegraph Road | |
Entity Address, City or Town | Southfield | |
Entity Address, State or Province | MI | |
Entity Address, Postal Zip Code | 48033 | |
City Area Code | 248 | |
Local Phone Number | 447-1500 | |
Title of 12(b) Security | Common stock, par value $0.01 | |
Trading Symbol | LEA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 60,469,982 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | LEAR CORP | |
Entity Central Index Key | 0000842162 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 28, 2019 | [1] | Dec. 31, 2018 |
CURRENT ASSETS: | |||
Cash and cash equivalents | $ 1,300.9 | $ 1,493.2 | |
Accounts receivable | 3,320.7 | 2,880.3 | |
Inventories | 1,294.1 | 1,196.8 | |
Other | 702.3 | 710.2 | |
Total current assets | 6,618 | 6,280.5 | |
LONG-TERM ASSETS: | |||
Property, plant and equipment, net | 2,599.7 | 2,598.1 | |
Goodwill | 1,600.4 | 1,405.3 | |
Other | 1,935.2 | 1,316.8 | |
Total long-term assets | 6,135.3 | 5,320.2 | |
Total assets | 12,753.3 | 11,600.7 | |
CURRENT LIABILITIES: | |||
Short-term borrowings | 18.7 | 9.9 | |
Accounts payable and drafts | 2,986.8 | 2,862.8 | |
Accrued liabilities | 1,885.2 | 1,615 | |
Current portion of long-term debt | 17.1 | 12.9 | |
Total current liabilities | 4,907.8 | 4,500.6 | |
LONG-TERM LIABILITIES: | |||
Long-term debt | 2,297.6 | 1,941 | |
Other | 1,026.3 | 640.4 | |
Total long-term liabilities | 3,323.9 | 2,581.4 | |
Redeemable noncontrolling interest | 146.5 | 158.1 | |
EQUITY: | |||
Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); no shares outstanding | 0 | 0 | |
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,563,291 shares issued as of September 28, 2019 and December 31, 2018 | 0.6 | 0.6 | |
Additional paid-in capital | 963.1 | 1,017.4 | |
Common stock held in treasury, 3,919,021 and 1,623,678 shares as of September 28, 2019 and December 31, 2018, respectively, at cost | (539) | (225.1) | |
Retained earnings | 4,608.4 | 4,113.6 | |
Accumulated other comprehensive loss | (829.3) | (705.8) | |
Lear Corporation stockholders’ equity | 4,203.8 | 4,200.7 | |
Noncontrolling interests | 171.3 | 159.9 | |
Equity | 4,375.1 | 4,360.6 | |
Total liabilities and equity | $ 12,753.3 | $ 11,600.7 | |
[1] | Unaudited. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 28, 2019 | Dec. 31, 2018 |
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 64,563,291 | 64,563,291 |
Common stock held in treasury, shares (in shares) | 3,919,021 | 1,623,678 |
Series A convertible preferred stock | ||
Preferred stock, shares authorized (in shares) | 10,896,250 | 10,896,250 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 4,825 | $ 4,891.6 | $ 14,992.7 | $ 16,206.1 |
Cost of sales | 4,365.7 | 4,365.3 | 13,582 | 14,410.3 |
Selling, general and administrative expenses | 141.9 | 150.3 | 447.3 | 462.5 |
Amortization of intangible assets | 16.7 | 12.7 | 45.3 | 38.9 |
Interest expense | 24 | 21.2 | 69.4 | 62.8 |
Other expense, net | 9.7 | 13.2 | 27.9 | 11.3 |
Consolidated income before provision for income taxes and equity in net income of affiliates | 267 | 328.9 | 820.8 | 1,220.3 |
Provision for income taxes | 33.5 | 57.6 | 149.9 | 233 |
Equity in net income of affiliates | (5.1) | (3.4) | (15.8) | (16.6) |
Consolidated net income | 238.6 | 274.7 | 686.7 | 1,003.9 |
Less: Net income attributable to noncontrolling interests | 22.7 | 22.2 | 59.1 | 66.3 |
Net income attributable to Lear | $ 215.9 | $ 252.5 | $ 627.6 | $ 937.6 |
Basic net income per share available to Lear common stockholders (Note 14) (in dollars per share) | $ 3.59 | $ 3.83 | $ 10.27 | $ 13.90 |
Diluted net income per share available to Lear common stockholders (Note 14) (in dollars per share) | 3.58 | 3.80 | 10.23 | 13.80 |
Cash dividends declared per share (in dollars per share) | $ 0.75 | $ 0.70 | $ 2.25 | $ 2.10 |
Average common shares outstanding (in shares) | 61,133,723 | 65,372,829 | 62,042,156 | 66,256,800 |
Average diluted shares outstanding (in shares) | 61,330,086 | 65,868,660 | 62,262,903 | 66,709,928 |
Consolidated comprehensive income (Condensed Consolidated Statements of Equity) | $ 96.1 | $ 236.1 | $ 552.7 | $ 845.5 |
Less: Comprehensive income attributable to noncontrolling interests | 11.3 | 11.8 | 48.6 | 50.4 |
Comprehensive income attributable to Lear | $ 84.8 | $ 224.3 | $ 504.1 | $ 795.1 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-In Capital | Common Stock Held in Treasury | Retained Earnings | Accumulated Other Comprehensive Loss, Net of Tax | Lear Corporation Stockholders' Equity | Non-controlling Interests | Redeemable Non-controlling Interests | |
Balance at beginning of period at Dec. 31, 2017 | $ 4,292.6 | $ 0.7 | $ 1,215.4 | $ (724.1) | $ 4,171.9 | $ (513.4) | $ 4,150.5 | $ 142.1 | ||
Balance at beginning of year at Dec. 31, 2017 | $ 153.4 | |||||||||
Comprehensive income (loss): | ||||||||||
Net income | 994.1 | 937.6 | 937.6 | 56.5 | ||||||
Other comprehensive loss | (149.2) | (142.5) | (142.5) | (6.7) | ||||||
Total comprehensive income (loss) | 844.9 | 937.6 | (142.5) | 795.1 | 49.8 | |||||
Stock-based compensation | 40.7 | 40.7 | 40.7 | |||||||
Net issuance of shares held in treasury in settlement of stock-based compensation | (47) | (80.1) | 33.1 | (47) | ||||||
Repurchase of shares of common stock | (490.7) | (490.7) | (490.7) | |||||||
Dividends declared to Lear Corporation stockholders | (141.1) | (141.1) | (141.1) | |||||||
Dividends declared to non-controlling interest holders | (59.7) | (59.7) | (9.3) | |||||||
Affiliate transaction | 14 | 14 | ||||||||
Acquisition of outstanding noncontrolling interest | (3.4) | (3.4) | ||||||||
Redeemable non-controlling interest adjustment | (16.9) | (16.9) | (16.9) | |||||||
Redeemable non-controlling interest adjustment | 16.9 | |||||||||
Balance at end of period at Sep. 29, 2018 | 4,435.7 | 0.7 | 1,176 | (1,181.7) | 4,953.8 | (655.9) | 4,292.9 | 142.8 | ||
Balance at end of year at Sep. 29, 2018 | 161.6 | |||||||||
Comprehensive income (loss): | ||||||||||
Net income | 9.8 | |||||||||
Other comprehensive income (loss) | (9.2) | |||||||||
Total comprehensive income (loss) | 0.6 | |||||||||
Balance at beginning of period at Jun. 30, 2018 | 4,427.4 | 0.7 | 1,166.8 | (989.9) | 4,750 | (627.7) | 4,299.9 | 127.5 | ||
Balance at beginning of year at Jun. 30, 2018 | 167.5 | |||||||||
Comprehensive income (loss): | ||||||||||
Net income | 272.2 | 252.5 | 252.5 | 19.7 | ||||||
Other comprehensive loss | (32.5) | (28.2) | (28.2) | (4.3) | ||||||
Total comprehensive income (loss) | 239.7 | 252.5 | (28.2) | 224.3 | 15.4 | |||||
Stock-based compensation | 13.6 | 13.6 | 13.6 | |||||||
Net issuance of shares held in treasury in settlement of stock-based compensation | (1.2) | (4.4) | 3.2 | (1.2) | ||||||
Repurchase of shares of common stock | (195) | (195) | (195) | |||||||
Dividends declared to Lear Corporation stockholders | (46.4) | (46.4) | (46.4) | |||||||
Dividends declared to non-controlling interest holders | (0.1) | (0.1) | (4.6) | |||||||
Redeemable non-controlling interest adjustment | (2.3) | (2.3) | (2.3) | |||||||
Redeemable non-controlling interest adjustment | 2.3 | |||||||||
Balance at end of period at Sep. 29, 2018 | 4,435.7 | 0.7 | 1,176 | (1,181.7) | 4,953.8 | (655.9) | 4,292.9 | 142.8 | ||
Balance at end of year at Sep. 29, 2018 | 161.6 | |||||||||
Comprehensive income (loss): | ||||||||||
Net income | 2.5 | |||||||||
Other comprehensive income (loss) | (6.1) | |||||||||
Total comprehensive income (loss) | (3.6) | |||||||||
Balance at beginning of period at Dec. 31, 2018 | 4,360.6 | 0.6 | 1,017.4 | (225.1) | 4,113.6 | (705.8) | 4,200.7 | 159.9 | ||
Balance at beginning of year at Dec. 31, 2018 | 158.1 | 158.1 | ||||||||
Comprehensive income (loss): | ||||||||||
Net income | 683.7 | 627.6 | 627.6 | 56.1 | ||||||
Other comprehensive loss | (128.8) | (123.5) | (123.5) | (5.3) | ||||||
Total comprehensive income (loss) | 554.9 | 627.6 | (123.5) | 504.1 | 50.8 | |||||
Stock-based compensation | 16 | 16 | 16 | |||||||
Net issuance of shares held in treasury in settlement of stock-based compensation | (30.7) | (70.3) | 41.5 | (1.9) | (30.7) | |||||
Repurchase of shares of common stock | (355.4) | (355.4) | (355.4) | |||||||
Dividends declared to Lear Corporation stockholders | (140.3) | (140.3) | (140.3) | |||||||
Dividends declared to non-controlling interest holders | (33.6) | (33.6) | ||||||||
Changes in noncontrolling interests | (5.6) | (5.6) | ||||||||
Acquisition of outstanding noncontrolling interest | (0.2) | (0.2) | ||||||||
Redeemable non-controlling interest adjustment | 9.4 | 9.4 | 9.4 | |||||||
Redeemable non-controlling interest adjustment | (9.4) | |||||||||
Balance at end of period at Sep. 28, 2019 | 4,375.1 | [1] | 0.6 | 963.1 | (539) | 4,608.4 | (829.3) | 4,203.8 | 171.3 | |
Balance at end of year at Sep. 28, 2019 | 146.5 | [1] | 146.5 | |||||||
Comprehensive income (loss): | ||||||||||
Net income | 3 | |||||||||
Other comprehensive income (loss) | (5.2) | |||||||||
Total comprehensive income (loss) | (2.2) | |||||||||
Balance at beginning of period at Jun. 29, 2019 | 4,399.5 | 0.6 | 965.3 | (466.6) | 4,435.3 | (698.2) | 4,236.4 | 163.1 | ||
Balance at beginning of year at Jun. 29, 2019 | 155 | |||||||||
Comprehensive income (loss): | ||||||||||
Net income | 237.9 | 215.9 | 215.9 | 22 | ||||||
Other comprehensive loss | (136.9) | (131.1) | (131.1) | (5.8) | ||||||
Total comprehensive income (loss) | 101 | 215.9 | (131.1) | 84.8 | 16.2 | |||||
Stock-based compensation | 1.7 | 1.7 | 1.7 | |||||||
Net issuance of shares held in treasury in settlement of stock-based compensation | (1.1) | (3.9) | 3.5 | (0.7) | (1.1) | |||||
Repurchase of shares of common stock | (75.9) | (75.9) | (75.9) | |||||||
Dividends declared to Lear Corporation stockholders | (45.7) | (45.7) | (45.7) | |||||||
Dividends declared to non-controlling interest holders | (2.4) | (2.4) | ||||||||
Changes in noncontrolling interests | (5.6) | (5.6) | ||||||||
Redeemable non-controlling interest adjustment | 3.6 | 3.6 | 3.6 | |||||||
Redeemable non-controlling interest adjustment | (3.6) | |||||||||
Balance at end of period at Sep. 28, 2019 | 4,375.1 | [1] | $ 0.6 | $ 963.1 | $ (539) | $ 4,608.4 | $ (829.3) | $ 4,203.8 | $ 171.3 | |
Balance at end of year at Sep. 28, 2019 | $ 146.5 | [1] | 146.5 | |||||||
Comprehensive income (loss): | ||||||||||
Net income | 0.7 | |||||||||
Other comprehensive income (loss) | (5.6) | |||||||||
Total comprehensive income (loss) | $ (4.9) | |||||||||
[1] | Unaudited. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Net issuances of shares held in treasury in settlement of stock-based compensation (in shares) | 23,786 | 23,416 | 308,538 | 368,332 |
Number of shares repurchased (in shares) | 616,635 | 1,149,839 | 2,603,881 | 2,697,188 |
Average price (in dollars per share) | $ 123.06 | $ 169.60 | $ 136.48 | $ 181.93 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Cash Flows from Operating Activities: | ||
Consolidated net income | $ 686.7 | $ 1,003.9 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Depreciation and amortization | 380.4 | 361.8 |
Net change in recoverable customer engineering, development and tooling | (73.4) | (8.5) |
Loss on extinguishment of debt | 10.6 | 0 |
Net change in working capital items (see below) | (162) | (328.8) |
Other, net | (43) | (6.8) |
Net cash provided by operating activities | 799.3 | 1,021.6 |
Cash Flows from Investing Activities: | ||
Additions to property, plant and equipment | (410.1) | (492.7) |
Acquisition, net of acquired cash | (321.7) | 0 |
Other, net | (7.5) | (18.5) |
Net cash used in investing activities | (739.3) | (511.2) |
Cash Flows from Financing Activities: | ||
Credit agreement repayments | (3.1) | (4.7) |
Short-term borrowings, net | 9.5 | 5.6 |
Proceeds from the issuance of senior notes | 693.3 | 0 |
Repurchase of senior notes | (333.7) | 0 |
Payment of debt issuance and other financing costs | (6.5) | 0 |
Repurchase of common stock | (359.7) | (488.1) |
Dividends paid to Lear Corporation stockholders | (141.1) | (142.1) |
Dividends paid to noncontrolling interests | (33.6) | (64.3) |
Other, net | (61.6) | (59.6) |
Net cash used in financing activities | (236.5) | (753.2) |
Effect of foreign currency translation | (20) | (32.7) |
Net Change in Cash, Cash Equivalents and Restricted Cash | (196.5) | (275.5) |
Cash, Cash Equivalents and Restricted Cash as of Beginning of Period | 1,519.8 | 1,500.4 |
Cash, Cash Equivalents and Restricted Cash as of End of Period | 1,323.3 | 1,224.9 |
Changes in Working Capital Items: | ||
Accounts receivable | (513.5) | (173.1) |
Inventories | (123.5) | (117.5) |
Accounts payable | 208.8 | (33.2) |
Accrued liabilities and other | 266.2 | (5) |
Net change in working capital items | (162) | (328.8) |
Supplementary Disclosure: | ||
Cash paid for interest | 85.2 | 93.7 |
Cash paid for income taxes, net of refunds received | $ 133.7 | $ 225.1 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Lear Corporation ("Lear," and together with its consolidated subsidiaries, the "Company") and its affiliates design and manufacture automotive seating and electrical distribution systems and related components. The Company’s main customers are automotive original equipment manufacturers. The Company operates facilities worldwide. The accompanying condensed consolidated financial statements include the accounts of Lear, a Delaware corporation, and the wholly owned and less than wholly owned subsidiaries controlled by Lear. In addition, Lear consolidates all entities, including variable interest entities, in which it has a controlling financial interest. Investments in affiliates in which Lear does not have control but does have the ability to exercise significant influence over operating and financial policies are accounted for under the equity method. The Company’s annual financial results are reported on a calendar year basis, and quarterly interim results are reported using a thirteen week reporting calendar. Certain amounts in the prior period’s financial statements have been reclassified to conform to the presentation used in the quarter ended September 28, 2019 . |
Acquisition
Acquisition | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On April 17, 2019, the Company completed the acquisition of Xevo Inc. (“Xevo”), a Seattle-based, global leader in connected car software, by acquiring all of Xevo's outstanding shares for $ 321.7 million, net of cash acquired. Xevo is a supplier of software solutions for the cloud, cars and mobile devices that are deployed in millions of vehicles worldwide with annual sales of approximately $75 million in 2018. The acquisition of Xevo has been accounted for as a business combination, and accordingly, the assets acquired and liabilities assumed are included in the accompanying condensed consolidated balance sheet as of September 28, 2019 . The operating results and cash flows of Xevo are included in the accompanying condensed consolidated financial statements from the date of acquisition and in the Company's E-Systems segment. The Company incurred transaction costs of $1.7 million in the nine months ended September 28, 2019 , which have been expensed as incurred and are recorded in selling, general and administrative expenses. The purchase price and preliminary allocation are shown below (in millions): June 29, Adjustments September 28, Net purchase price $ 320.9 $ 0.8 $ 321.7 Other assets purchased and liabilities assumed, net $ 1.2 $ 7.7 $ 8.9 Goodwill 197.5 22.1 219.6 Intangible assets 122.2 (29.0 ) 93.2 Preliminary purchase price allocation $ 320.9 $ 0.8 $ 321.7 Goodwill recognized in this transaction is primarily attributable to expected synergies related to future growth and commercialization opportunities and is not deductible for tax purposes. Intangible assets consist primarily of provisional amounts recognized for the fair value of licensing agreements and developed technology and are based on independent appraisals. Licensing agreements represent the fair values of the underlying licensing agreements with Xevo customers with estimated useful lives of approximately five years . Developed technology represents the fair value of Xevo's technology with an estimated useful life of approximately five years . Adjustments to the preliminary purchase price allocation in the third quarter of 2019 reflect changes in certain assumptions related to the valuation of developed technology. The purchase price and related allocation are preliminary and will be revised as a result of additional information regarding the assets acquired and liabilities assumed, including, but not limited to, certain tax attributes, contingent liabilities and revisions of provisional estimates of fair values resulting from the completion of independent appraisals and valuations of intangible assets. The pro-forma effects of this acquisition do not materially impact the Company's reported results for any period presented. For further information related to acquired assets measured at fair value, see Note 19 , " Financial Instruments ." |
Restructuring
Restructuring | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring Restructuring costs include employee termination benefits, fixed asset impairment charges and contract termination costs, as well as other incremental costs resulting from the restructuring actions. These incremental costs principally include equipment and personnel relocation costs. In addition to restructuring costs, the Company incurs incremental manufacturing inefficiency costs at the operating locations impacted by the restructuring actions during the related restructuring implementation period. Restructuring costs are recognized in the Company’s condensed consolidated financial statements in accordance with GAAP. Generally, charges are recorded as restructuring actions are approved and/or implemented. In the first nine months of 2019 , the Company recorded charges of $122.9 million in connection with its restructuring actions. These charges consist of $108.8 million recorded as cost of sales, $10.1 million recorded as selling, general and administrative expenses and $4.0 million recorded as other expense, net. The restructuring charges consist of employee termination costs of $105.0 million , fixed asset impairment charges of $4.0 million and contract termination costs of $2.4 million , as well as other related costs of $11.5 million . Employee termination benefits were recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Fixed asset impairment charges relate to the disposal of buildings, leasehold improvements and/or machinery and equipment with carrying values of $4.0 million in excess of related estimated fair values. The Company expects to incur approximately $67 million of additional restructuring costs related to activities initiated as of September 28, 2019 , and expects that the components of such costs will be consistent with its historical experience. Any future restructuring actions will depend upon market conditions, customer actions and other factors. A summary of 2019 activity is shown below (in millions): Accrual as of 2019 Utilization Accrual as of January 1, 2019 Charges Cash Non-cash September 28, 2019 Employee termination benefits $ 103.3 $ 105.0 $ (91.3 ) $ — $ 117.0 Asset impairment charges — 4.0 — (4.0 ) — Contract termination costs 5.4 2.4 (3.2 ) — 4.6 Other related costs — 11.5 (11.5 ) — — Total $ 108.7 $ 122.9 $ (106.0 ) $ (4.0 ) $ 121.6 |
Inventories
Inventories | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. A summary of inventories is shown below (in millions): September 28, December 31, Raw materials $ 946.9 $ 859.4 Work-in-process 110.5 104.6 Finished goods 363.3 346.0 Reserves (126.6 ) (113.2 ) Inventories $ 1,294.1 $ 1,196.8 |
Pre-Production Costs Related to
Pre-Production Costs Related to Long-Term Supply Agreements | 9 Months Ended |
Sep. 28, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Pre-Production Costs Related to Long-Term Supply Agreements | Pre-Production Costs Related to Long-Term Supply Agreements The Company incurs pre-production engineering and development ("E&D") and tooling costs related to the products produced for its customers under long-term supply agreements. The Company expenses all pre-production E&D costs for which reimbursement is not contractually guaranteed by the customer. In addition, the Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer or for which the Company does not have a non-cancelable right to use the tooling. During the first nine months of 2019 and 2018 , the Company capitalized $174.8 million and $167.6 million , respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first nine months of 2019 and 2018 , the Company also capitalized $126.7 million and $121.1 million , respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the Company has a non-cancelable right to use the tooling. These amounts are included in other current and long-term assets in the accompanying condensed consolidated balance sheets. During the first nine months of 2019 and 2018 , the Company collected $243.5 million and $277.4 million , respectively, of cash related to E&D and tooling costs. The classification of recoverable customer E&D and tooling costs related to long-term supply agreements is shown below (in millions): September 28, December 31, Current $ 207.4 $ 160.9 Long-term 98.5 80.4 Recoverable customer E&D and tooling $ 305.9 $ 241.3 |
Long-Term Assets
Long-Term Assets | 9 Months Ended |
Sep. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Long-Term Assets | Long-Term Assets Property, plant and equipment is stated at cost. Costs associated with the repair and maintenance of the Company’s property, plant and equipment are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency or safety of the Company’s property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Depreciable property is depreciated over the estimated useful lives of the assets, using principally the straight-line method. A summary of property, plant and equipment is shown below (in millions): September 28, December 31, Land $ 113.3 $ 116.8 Buildings and improvements 811.8 809.3 Machinery and equipment 3,698.0 3,463.3 Construction in progress 367.8 389.3 Total property, plant and equipment 4,990.9 4,778.7 Less – accumulated depreciation (2,391.2 ) (2,180.6 ) Property, plant and equipment, net $ 2,599.7 $ 2,598.1 Depreciation expense was $111.8 million and $107.1 million in the three months ended September 28, 2019 and September 29, 2018 , respectively, and $335.1 million and $322.9 million in the nine months ended September 28, 2019 and September 29, 2018 , respectively. The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. Except as discussed below, the Company does not believe that there were any indicators that would have resulted in long-lived asset impairment charges as of September 28, 2019 . The Company will, however, continue to assess the impact of any significant industry events on the realization of its long-lived assets. In the first nine months of 2019 and 2018 , the Company recognized fixed asset impairment charges of $4.0 million and $2.8 million , respectively, in conjunction with its restructuring actions (Note 3 , " Restructuring "), as well as additional fixed asset impairment charges of $1.0 million in the first nine months of 2018 . |
Investment in Affiliates
Investment in Affiliates | 9 Months Ended |
Sep. 28, 2019 | |
Investments in and Advances to Affiliates [Abstract] | |
Investment in Affiliates | Investment in Affiliates In July 2019, the Company deconsolidated Guangzhou Automobile Group Component Co., Ltd ("GACC") as it no longer controls this entity. As a result, the carrying values of the assets and liabilities of GACC are not reflected in the condensed consolidated balance sheet as of September 28, 2019 . In addition, the Company recorded a gain of $4.0 million related to the excess of the estimated fair value over the carrying value of its interest in GACC immediately prior to deconsolidation. The gain is included in other expense, net in the accompanying condensed consolidated statements of comprehensive income for the three and nine months ended September 28, 2019 . |
Goodwill
Goodwill | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill A summary of the changes in the carrying amount of goodwill, by operating segment, in the nine months ended September 28, 2019 , is shown below (in millions): Seating E-Systems Total Balance at January 1, 2019 $ 1,244.3 $ 161.0 $ 1,405.3 Acquisition — 219.6 219.6 Foreign currency translation and other (20.9 ) (3.6 ) (24.5 ) Balance at September 28, 2019 $ 1,223.4 $ 377.0 $ 1,600.4 Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The Company conducts its annual impairment testing as of the first day of its fourth quarter. There was no impairment of goodwill in the first nine months of 2019 and 2018. The Company will, however, continue to assess the impact of significant events or circumstances on its recorded goodwill. |
Debt
Debt | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt A summary of long-term debt, net of unamortized debt issuance costs, and the related weighted average interest rates is shown below (in millions): September 28, 2019 Debt Instrument Long-Term Debt Unamortized Debt Issuance Costs Unamortized Original Issue Discount Long-Term Debt, Net Weighted Credit Agreement — Term Loan Facility $ 239.0 $ (1.1 ) $ — $ 237.9 3.20% 5.25% Senior Notes due 2025 (the "2025 Notes") 650.0 (4.4 ) — 645.6 5.25% 3.8% Senior Notes due 2027 (the "2027 Notes") 750.0 (4.8 ) (4.2 ) 741.0 3.885% 4.25% Senior Notes due 2029 (the "2029 Notes") 375.0 (3.0 ) (1.1 ) 370.9 4.288% 5.25% Senior Notes due 2049 (the "2049 Notes") 325.0 (3.4 ) (5.4 ) 316.2 5.363% Other 3.1 — — 3.1 N/A $ 2,342.1 $ (16.7 ) $ (10.7 ) 2,314.7 Less — Current portion (17.1 ) Long-term debt $ 2,297.6 December 31, 2018 Debt Instrument Long-Term Debt Unamortized Debt Issuance Costs Unamortized Original Issue Discount Long-Term Debt, Net Weighted Average Interest Rate Credit Agreement — Term Loan Facility $ 242.2 $ (1.5 ) $ — $ 240.7 3.92% 5.375% Senior Notes due 2024 (the "2024 Notes") 325.0 (2.0 ) — 323.0 5.375% 2025 Notes 650.0 (5.0 ) — 645.0 5.25% 2027 Notes 750.0 (5.3 ) (4.6 ) 740.1 3.885% Other 5.1 — — 5.1 N/A $ 1,972.3 $ (13.8 ) $ (4.6 ) 1,953.9 Less — Current portion (12.9 ) Long-term debt $ 1,941.0 Senior Notes The issuance date, maturity date and interest payment dates of the Company's senior unsecured 2025 Notes, 2027 Notes, 2029 Notes and 2049 Notes (together, the "Notes") are as shown below: Note Issuance Date Maturity Date Interest Payment Dates 2025 Notes November 2014 January 15, 2025 January 15 and July 15 2027 Notes August 2017 September 15, 2027 March 15 and September 15 2029 Notes May 2019 May 15, 2029 May 15 and November 15 2049 Notes May 2019 May 15, 2049 May 15 and November 15 In May 2019, the Company issued $375.0 million in aggregate principal amount at maturity of 2029 Notes and $325.0 million in aggregate principal amount at maturity of 2049 Notes. The 2029 Notes have a stated coupon rate of 4.25% and were priced at 99.691% of par, resulting in a yield to maturity of 4.288% . The 2049 Notes have a stated coupon rate of 5.25% and were priced at 98.32% of par, resulting in a yield to maturity of 5.363% . The net proceeds from the offering were $693.3 million after original issue discount. The proceeds were used to redeem the $325.0 million in aggregate principal amount of the 2024 Notes at a redemption price equal to 102.688% of the principal amount of such 2024 Notes, plus accrued interest, as well as to finance the acquisition of Xevo (Note 2 , “ Acquisition ”) and for general corporate purposes. In connection with these transactions, the Company recognized a loss of $10.6 million on the extinguishment of debt in the nine months ended September 28, 2019 , and paid related issuance costs of $6.5 million . Covenants Subject to certain exceptions, the indentures governing the Notes contain restrictive covenants that, among other things, limit the ability of the Company to: (i) create or permit certain liens and (ii) consolidate, merge or sell all or substantially all of the Company’s assets. The indentures governing the Notes also provide for customary events of default. As of September 28, 2019 , the Company was in compliance with all covenants under the indentures governing the Notes. Credit Agreement The Company's unsecured credit agreement (the "Credit Agreement"), dated August 8, 2017, consists of a $1.75 billion revolving credit facility (the "Revolving Credit Facility") and a $250.0 million term loan facility (the "Term Loan Facility"). The maturity date of the Revolving Credit Facility is August 8, 2023, and the maturity date of the Term Loan Facility is August 8, 2022. As of September 28, 2019 and December 31, 2018 , there were no borrowings outstanding under the Revolving Credit Facility and $239.0 million and $242.2 million , respectively, of borrowings outstanding under the Term Loan Facility. In the first nine months of 2019 , the Company made required principal payments of $3.1 million under the Term Loan Facility. Advances under the Revolving Credit Facility and the Term Loan Facility generally bear interest based on (i) the Eurocurrency Rate (as defined in the Credit Agreement) or (ii) the Base Rate (as defined in the Credit Agreement) plus a margin, determined in accordance with a pricing grid. The range and the rate as of September 28, 2019 , are shown below (in percentages): Eurocurrency Rate Base Rate Rate as of Rate as of Minimum Maximum September 28, 2019 Minimum Maximum September 28, 2019 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 % A facility fee, which ranges from 0.125% to 0.30% of the total amount committed under the Revolving Credit Facility, is payable quarterly. Covenants The Credit Agreement contains various customary representations, warranties and covenants by the Company, including, without limitation, (i) covenants regarding maximum leverage, (ii) limitations on fundamental changes involving the Company or its subsidiaries and (iii) limitations on indebtedness and liens. As of September 28, 2019 , the Company was in compliance with all covenants under the Credit Agreement. Other As of September 28, 2019 , other long-term debt consists of amounts outstanding under finance leases. For further information related to the Company's debt, see Note 6, "Debt," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . |
Leases
Leases | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, "Leases," which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. Adoption of the standard resulted in the recognition of right-of-use assets of $438.1 million and related lease obligations of $445.8 million as of January 1, 2019. The standard did not have a significant impact on the Company's operating results or cash flows. Transition As permitted by the transition guidance, the Company adopted the standard by applying the modified retrospective method without the restatement of comparative periods. Accordingly, the Company has provided disclosures required by prior lease guidance for comparative periods. The Company elected the package of practical expedients, which permits a lessee to not reassess under the new standard its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect the practical expedient which permits the use of hindsight when determining the lease term and assessing right-of-use assets for impairment. As permitted by the transition guidance, the Company used the remaining lease term as of the date of adoption of the standard to estimate discount rates. As permitted by the standard, the Company elected, for all asset classes, the short-term lease exemption. A short-term lease is a lease that, at the commencement date, has a term of twelve months or less and does not include an option to purchase the underlying asset. Accounting Policy The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. Discount Rate The discount rate used to measure a lease obligation should be the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. Right-of-Use Assets and Lease Obligations The Company has operating leases for production, office and warehouse facilities, manufacturing and office equipment and vehicles. Operating lease assets and obligations included in the accompanying condensed consolidated balance sheet are shown below (in millions): September 28, 2019 Right-of-use assets under operating leases: Other long-term assets $ 514.0 Lease obligations under operating leases: Accrued liabilities $ 112.0 Other long-term liabilities 409.6 $ 521.6 Maturities of lease obligations as of September 28, 2019 , are shown below (in millions): September 28, 2019 2019 (1) $ 35.3 2020 123.2 2021 101.1 2022 77.9 2023 60.1 Thereafter 207.9 Total undiscounted cash flows 605.5 Less: Imputed interest (83.9 ) Lease obligations under operating leases $ 521.6 (1) For the remaining three months The Company has entered into two lease contracts, of which one is expected to commence in the fourth quarter of 2019 with a lease term of approximately nine years , and the other is expected to commence in the third quarter of 2021 with a lease term of approximately ten years . The aggregate right-of-use assets and related lease obligations are expected to be approximately $55 million . Cash flow information related to operating leases is shown below (in millions): Nine Months Ended September 28, 2019 Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ 177.1 Operating cash flows: Cash paid related to operating lease obligations $ 104.0 Lease expense included in the accompanying condensed consolidated statements of comprehensive income is shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Operating lease expense $ 36.9 $ 104.4 Short-term lease expense 3.1 12.1 Variable lease expense 1.4 3.2 Total lease expense $ 41.4 $ 119.7 The Company's short-term lease expense excludes leases with a duration of one month or less, as permitted by the standard. Variable lease expense includes payments based on performance or usage, as well as changes to index and rate-based lease payments. Additionally, the Company evaluated its supply contracts with its customers and concluded that variable lease (income) expense in these arrangements is not material. In the three and nine months ended September 29, 2018 , the Company recorded rent expense of $41.3 million and $122.6 million , respectively. The weighted average lease term and discount rate for operating leases are shown below: September 28, 2019 Weighted average remaining lease term (in years) 7.0 Weighted average discount rate 4.0 % The Company has entered into certain finance lease agreements which are not material to the condensed consolidated financial statements (Note 9 , " Debt "). |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Update ("ASU") 2016-02, "Leases," which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. Adoption of the standard resulted in the recognition of right-of-use assets of $438.1 million and related lease obligations of $445.8 million as of January 1, 2019. The standard did not have a significant impact on the Company's operating results or cash flows. Transition As permitted by the transition guidance, the Company adopted the standard by applying the modified retrospective method without the restatement of comparative periods. Accordingly, the Company has provided disclosures required by prior lease guidance for comparative periods. The Company elected the package of practical expedients, which permits a lessee to not reassess under the new standard its prior conclusions regarding lease identification, lease classification and initial direct costs. The Company did not elect the practical expedient which permits the use of hindsight when determining the lease term and assessing right-of-use assets for impairment. As permitted by the transition guidance, the Company used the remaining lease term as of the date of adoption of the standard to estimate discount rates. As permitted by the standard, the Company elected, for all asset classes, the short-term lease exemption. A short-term lease is a lease that, at the commencement date, has a term of twelve months or less and does not include an option to purchase the underlying asset. Accounting Policy The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. Discount Rate The discount rate used to measure a lease obligation should be the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. Right-of-Use Assets and Lease Obligations The Company has operating leases for production, office and warehouse facilities, manufacturing and office equipment and vehicles. Operating lease assets and obligations included in the accompanying condensed consolidated balance sheet are shown below (in millions): September 28, 2019 Right-of-use assets under operating leases: Other long-term assets $ 514.0 Lease obligations under operating leases: Accrued liabilities $ 112.0 Other long-term liabilities 409.6 $ 521.6 Maturities of lease obligations as of September 28, 2019 , are shown below (in millions): September 28, 2019 2019 (1) $ 35.3 2020 123.2 2021 101.1 2022 77.9 2023 60.1 Thereafter 207.9 Total undiscounted cash flows 605.5 Less: Imputed interest (83.9 ) Lease obligations under operating leases $ 521.6 (1) For the remaining three months The Company has entered into two lease contracts, of which one is expected to commence in the fourth quarter of 2019 with a lease term of approximately nine years , and the other is expected to commence in the third quarter of 2021 with a lease term of approximately ten years . The aggregate right-of-use assets and related lease obligations are expected to be approximately $55 million . Cash flow information related to operating leases is shown below (in millions): Nine Months Ended September 28, 2019 Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ 177.1 Operating cash flows: Cash paid related to operating lease obligations $ 104.0 Lease expense included in the accompanying condensed consolidated statements of comprehensive income is shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Operating lease expense $ 36.9 $ 104.4 Short-term lease expense 3.1 12.1 Variable lease expense 1.4 3.2 Total lease expense $ 41.4 $ 119.7 The Company's short-term lease expense excludes leases with a duration of one month or less, as permitted by the standard. Variable lease expense includes payments based on performance or usage, as well as changes to index and rate-based lease payments. Additionally, the Company evaluated its supply contracts with its customers and concluded that variable lease (income) expense in these arrangements is not material. In the three and nine months ended September 29, 2018 , the Company recorded rent expense of $41.3 million and $122.6 million , respectively. The weighted average lease term and discount rate for operating leases are shown below: September 28, 2019 Weighted average remaining lease term (in years) 7.0 Weighted average discount rate 4.0 % The Company has entered into certain finance lease agreements which are not material to the condensed consolidated financial statements (Note 9 , " Debt "). |
Pension and Other Postretiremen
Pension and Other Postretirement Benefit Plans | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Company sponsors defined benefit pension plans and other postretirement benefit plans (primarily for the continuation of medical benefits) for eligible employees in the United States and certain other countries. Net Periodic Pension and Other Postretirement Benefit (Credit) Cost The components of the Company’s net periodic pension benefit (credit) cost are shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign Service cost $ — $ 1.5 $ 0.1 $ 1.7 $ — $ 4.7 $ 0.1 $ 5.2 Interest cost 4.6 3.7 5.0 3.6 13.9 11.0 14.9 11.1 Expected return on plan assets (5.0 ) (5.2 ) (7.0 ) (5.7 ) (15.1 ) (15.6 ) (20.8 ) (17.4 ) Amortization of actuarial loss 0.5 1.9 0.6 1.6 1.4 5.8 1.6 4.7 Curtailment loss — — — 0.5 — — — 0.5 Settlement loss — — — — 0.1 — 0.2 — Net periodic benefit (credit) cost $ 0.1 $ 1.9 $ (1.3 ) $ 1.7 $ 0.3 $ 5.9 $ (4.0 ) $ 4.1 The components of the Company’s net periodic other postretirement benefit (credit) cost are shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign Service cost $ — $ 0.1 $ — $ 0.1 $ — $ 0.2 $ — $ 0.3 Interest cost 0.5 0.3 0.4 0.3 1.6 1.0 1.4 1.0 Amortization of actuarial (gain) loss (0.6 ) — (0.6 ) — (1.7 ) — (1.7 ) 0.1 Amortization of prior service credit — — — (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.3 ) Net periodic benefit (credit) cost $ (0.1 ) $ 0.4 $ (0.2 ) $ 0.3 $ (0.2 ) $ 1.1 $ (0.4 ) $ 1.1 Contributions In the nine months ended September 28, 2019 , employer contributions to the Company’s domestic and foreign defined benefit pension plans were $8.0 million . The Company expects contributions to its domestic and foreign defined benefit pension plans to be $10 million to $15 million in 2019 . The Company may elect to make contributions in excess of minimum funding requirements in response to investment performance or changes in interest rates or when the Company believes that it is financially advantageous to do so and based on its other cash requirements. Subsequent Event |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle’s life cycle. Typically, these contracts do not provide for a specified quantity of products, but once entered into, the Company is often expected to fulfill its customers’ purchasing requirements for the production life of the vehicle. Many of these contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal. The Company receives purchase orders from its customers, which provide the commercial terms for a particular production part, including price (but not quantities). Contracts may also provide for annual price reductions over the production life of the vehicle, and prices may be adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors. The principal activity from which the Company generates its revenue is the manufacturing of production parts for major automotive manufacturers. Revenue is recognized at a point in time when control of the product is transferred to the customer under standard commercial terms, as the Company does not have an enforceable right to payment prior to such transfer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for those products based on the annual purchase orders, annual price reductions and ongoing price adjustments (some of which is accounted for as variable consideration). The Company does not believe that there will be significant changes to its estimates of variable consideration. The Company's customers pay for products received in accordance with payment terms that are customary within the industry. The Company's contracts with its customers do not have significant financing components. The Company records a contract liability for advances received from its customers. As of September 28, 2019 , there were no significant contract liabilities recorded. Further, there were no significant contract liabilities recognized in revenue during the first nine months of 2019 . Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of comprehensive income. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales in the condensed consolidated statements of comprehensive income. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. A summary of the Company’s revenue by reportable operating segment and geography is shown below (in millions): Three Months Ended September 28, 2019 September 29, 2018 Seating E-Systems Total Seating E-Systems Total North America $ 1,626.5 $ 250.5 $ 1,877.0 $ 1,524.0 $ 256.3 $ 1,780.3 Europe and Africa 1,291.2 495.7 1,786.9 1,392.5 552.3 1,944.8 Asia 667.6 312.7 980.3 638.6 350.8 989.4 South America 129.7 51.1 180.8 127.9 49.2 177.1 $ 3,715.0 $ 1,110.0 $ 4,825.0 $ 3,683.0 $ 1,208.6 $ 4,891.6 Nine Months Ended September 28, 2019 September 29, 2018 Seating E-Systems Total Seating E-Systems Total North America $ 4,815.5 $ 810.0 $ 5,625.5 $ 4,975.2 $ 844.0 $ 5,819.2 Europe and Africa 4,307.0 1,650.7 5,957.7 4,882.8 1,883.7 6,766.5 Asia 1,978.2 923.6 2,901.8 1,993.1 1,059.9 3,053.0 South America 367.4 140.3 507.7 436.5 130.9 567.4 $ 11,468.1 $ 3,524.6 $ 14,992.7 $ 12,287.6 $ 3,918.5 $ 16,206.1 |
Other Expense, Net
Other Expense, Net | 9 Months Ended |
Sep. 28, 2019 | |
Other Income and Expenses [Abstract] | |
Other Expense, Net | Other Expense, Net Other expense, net includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, 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. A summary of other expense, net is shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Other expense $ 13.7 $ 16.6 $ 41.7 $ 24.2 Other income (4.0 ) (3.4 ) (13.8 ) (12.9 ) Other expense, net $ 9.7 $ 13.2 $ 27.9 $ 11.3 In the three and nine months ended September 28, 2019 , other expense includes net foreign currency transaction losses of $9.3 million and $16.5 million , respectively (Note 19 , " Financial Instruments "), and other income includes a gain of $4.0 million related to the deconsolidation of an affiliate (Note 7 , " Investment in Affiliates "). In the nine months ended September 28, 2019 , other expense also includes a loss of $10.6 million on the extinguishment of debt (Note 9 , " Debt "). In the three and nine months ended September 29, 2018 , other expense includes net foreign currency transaction losses $10.2 million and $12.6 million , respectively (Note 19 , " Financial Instruments "). In the nine months ended September 29, 2018 , other income includes a gain of $10.0 million related to gaining control of an affiliate. For further information related to obtaining control of an affiliate, see Note 5, "Investments in Affiliates and Other Related Party Transactions," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes A summary of the provision for income taxes and the corresponding effective tax rate for the three and nine months ended September 28, 2019 and September 29, 2018 , is shown below (in millions, except effective tax rates): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Provision for income taxes $ 33.5 $ 57.6 $ 149.9 $ 233.0 Pretax income before equity in net income of affiliates $ 267.0 $ 328.9 $ 820.8 $ 1,220.3 Effective tax rate 12.5 % 17.5 % 18.3 % 19.1 % In the first nine months of 2019 and 2018 , the provision for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In addition, the Company recognized tax benefits (expense) related to the significant, discrete items shown below (in millions): Nine Months Ended September 28, 2019 September 29, 2018 Restructuring charges and various other items $ 35.7 $ 9.9 Valuation allowances on deferred tax assets of a foreign subsidiary (10.4 ) 36.4 Share-based compensation 3.1 10.8 Increase in foreign withholding tax on certain undistributed foreign earnings — (22.0 ) Change in tax status of certain affiliates 18.4 — Tax rate change in foreign subsidiary — 7.2 Research and development tax credits 28.6 — Adjustment to 2017 provisional U.S. income tax expense — 9.3 $ 75.4 $ 51.6 In the third quarter of 2019, the Company completed a U.S. research and development ("R&D") tax credit study for the years 2013 to 2018. As a result of the completion of the study, the Company concluded that certain R&D tax credit carryforwards were more likely than not to be sustained upon examination and recognized a tax benefit of $28.6 million in the three and nine months ended September 28, 2019 . In addition, in the nine months ended September 28, 2019 , the Company recognized a gain of $4.0 million related to the deconsolidation of an affiliate (Note 7 , " Investment in Affiliates "), for which no tax expense was provided. In the nine months ended September 29, 2018 , the Company recognized a gain of $10.0 million related to obtaining control of an affiliate, for which no tax expense was provided. Excluding the items above, the effective tax rate for the first nine months of 2019 and 2018 approximated the U.S. federal statutory income tax rate of 21% , adjusted for income taxes on foreign earnings, losses and remittances, valuation allowances, tax credits, income tax incentives and other permanent items. The Company’s current and future provision for income taxes is impacted by the initial recognition of and changes in valuation allowances in certain countries. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities. For further information related to the Company's income taxes, see Note 7, "Income Taxes," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . For further information related to obtaining control of an affiliate, see Note 5, "Investments in Affiliates and Other Related Party Transactions," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Net Income Per Share Attributab
Net Income Per Share Attributable to Lear | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Net Income Per Share Attributable to Lear | Net Income Per Share Attributable to Lear Basic net income per share available to Lear common stockholders is computed using the two-class method by dividing net income attributable to Lear, after deducting the redemption adjustment related to the redeemable noncontrolling interest, by the average number of common shares outstanding during the period. Common shares issuable upon the satisfaction of certain conditions pursuant to a contractual agreement are considered common shares outstanding and are included in the computation of basic net income per share available to Lear common stockholders. Diluted net income per share available to Lear common stockholders is computed using the two-class method by dividing net income attributable to Lear, after deducting the redemption adjustment related to the redeemable noncontrolling interest, by the average number of common shares outstanding, including the dilutive effect of common stock equivalents computed using the treasury stock method and the average share price during the period. A summary of information used to compute basic and diluted net income per share available to Lear common stockholders is shown below (in millions, except share and per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Net income attributable to Lear $ 215.9 $ 252.5 $ 627.6 $ 937.6 Redeemable noncontrolling interest adjustment 3.6 (2.3 ) 9.4 (16.9 ) Net income available to Lear common stockholders $ 219.5 $ 250.2 $ 637.0 $ 920.7 Average common shares outstanding 61,133,723 65,372,829 62,042,156 66,256,800 Dilutive effect of common stock equivalents 196,363 495,831 220,747 453,128 Average diluted shares outstanding 61,330,086 65,868,660 62,262,903 66,709,928 Basic net income per share available to Lear common stockholders $ 3.59 $ 3.83 $ 10.27 $ 13.90 Diluted net income per share available to Lear common stockholders $ 3.58 $ 3.80 $ 10.23 $ 13.80 For further information related to the redeemable noncontrolling interest adjustment, see Note 16 , " Comprehensive Income and Equity ." |
Comprehensive Income and Equity
Comprehensive Income and Equity | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Comprehensive Income and Equity | Comprehensive Income and Equity Comprehensive Income Comprehensive income is defined as all changes in the Company’s net assets except changes resulting from transactions with stockholders. It differs from net income in that certain items recorded in equity are included in comprehensive income. Accumulated Other Comprehensive Loss A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended September 28, 2019 , is shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Defined benefit plans: Balance at beginning of period $ (173.9 ) $ (172.8 ) Reclassification adjustments (net of tax expense of $0.4 million and $0.8 million in the three and nine months ended September 28, 2019, respectively) 1.5 4.7 Other comprehensive loss recognized during the period (net of tax benefit of $1.6 million in the three and nine months ended September 28, 2019) (4.6 ) (8.9 ) Balance at end of period $ (177.0 ) $ (177.0 ) Derivative instruments and hedging: Balance at beginning of period $ (1.2 ) $ (9.7 ) Reclassification adjustments (net of tax benefit of $2.4 million and $7.2 million in the three and nine months ended September 28, 2019, respectively) (8.4 ) (25.5 ) Other comprehensive income (loss) recognized during the period (net of tax benefit (expense) of $1.1 million and ($6.2) million in the three and nine months ended September 28, 2019, respectively) (3.9 ) 21.7 Balance at end of period $ (13.5 ) $ (13.5 ) Foreign currency translation: Balance at beginning of period $ (523.1 ) $ (523.3 ) Other comprehensive loss recognized during the period (net of tax impact of $— million in the three and nine months ended September 28, 2019) (115.7 ) (115.5 ) Balance at end of period $ (638.8 ) $ (638.8 ) Total accumulated other comprehensive loss $ (829.3 ) $ (829.3 ) In the three and nine months ended September 28, 2019 , foreign currency translation adjustments are primarily related to the weakening of the Euro and the Chinese renminbi relative to the U.S. dollar and include pretax losses of $0.3 million and $0.2 million , respectively, related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future. In the three and nine months ended September 28, 2019 , foreign currency translation adjustments also include derivative net investment hedge gains of $1.7 million . A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended September 29, 2018 , is shown below (in millions): Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 Defined benefit plans: Balance at beginning of period $ (178.4 ) $ (184.0 ) Reclassification adjustments (net of tax expense of $0.3 million and $0.9 million in the three and nine months ended September 29, 2018, respectively) 1.2 3.6 Other comprehensive income (loss) recognized during the period (net of tax impact of $— million in the three and nine months ended September 29, 2018) (1.0 ) 2.2 Balance at end of period $ (178.2 ) $ (178.2 ) Derivative instruments and hedging: Balance at beginning of period $ (18.7 ) $ (22.9 ) Reclassification adjustments (net of tax benefit of $1.8 million and $2.7 million in the three and nine months ended September 29, 2018, respectively) (6.4 ) (9.9 ) Other comprehensive income recognized during the period (net of tax expense of $13.4 million and $15.5 million in the three and nine months ended September 29, 2018, respectively) 48.8 56.5 Balance at end of period $ 23.7 $ 23.7 Foreign currency translation: Balance at beginning of period $ (430.6 ) $ (306.5 ) Other comprehensive loss recognized during the period (net of tax benefit of $2.4 million in the three and nine months ended September 29, 2018) (70.8 ) (194.9 ) Balance at end of period $ (501.4 ) $ (501.4 ) Total accumulated other comprehensive loss $ (655.9 ) $ (655.9 ) In the three and nine months ended September 29, 2018 , foreign currency translation adjustments are primarily related to weakening of the Euro, the Chinese renminbi and the Brazilian real relative to the U.S. dollar and include pretax losses of $0.8 million and $1.7 million , respectively, related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future. For further information regarding reclassification adjustments related to the Company's defined benefit plans, see Note 11 , " Pension and Other Postretirement Benefit Plans ." For further information regarding reclassification adjustments related to the Company's derivative and hedging activities, see Note 19 , " Financial Instruments ." Lear Corporation Stockholders’ Equity Common Stock Share Repurchase Program On February 7, 2019, the Company's Board of Directors authorized an increase to the existing common stock share repurchase program authorization to $1.5 billion and extended the term of the program to December 31, 2021. Share repurchases in the first nine months of 2019 are shown below (in millions except for shares and per share amounts): Nine Months Ended As of September 28, 2019 September 28, 2019 Aggregate Repurchases (1) Cash paid for Repurchases Number of Shares Average Price per Share (2) Remaining Purchase Authorization $ 355.4 $ 359.7 2,603,881 $ 136.48 $ 1,227.6 (1) Includes $83.0 million of repurchases made prior to the increased authorization (2) Excludes commissions Since the first quarter of 2011, the Company's Board of Directors has authorized $5.8 billion in share repurchases under the common stock share repurchase program. As of the end of the third quarter of 2019 , the Company has repurchased, in aggregate, $4.6 billion of its outstanding common stock, at an average price of $89.72 per share, excluding commissions and related fees. The Company may implement these share repurchases through a variety of methods, including, but not limited to, open market purchases, accelerated stock repurchase programs and structured repurchase transactions. The extent to which the Company will repurchase its outstanding common stock and the timing of such repurchases will depend upon its financial condition, prevailing market conditions, alternative uses of capital and other factors. In addition to shares repurchased under the Company’s common stock share repurchase program described above, the Company classified shares withheld from the settlement of the Company’s restricted stock unit and performance share awards to cover tax withholding requirements as common stock held in treasury in the accompanying condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 . Quarterly Dividend In the first nine months of 2019 and 2018 , the Company’s Board of Directors declared quarterly cash dividends of $0.75 and $0.70 per share of common stock, respectively. Dividends declared and paid are shown below (in millions): Nine Months Ended September 28, 2019 September 29, 2018 Dividends declared $ 140.3 $ 141.1 Dividends paid 141.1 142.1 Dividends payable on common shares to be distributed under the Company’s stock-based compensation program and common shares contemplated as part of the Company’s emergence from Chapter 11 bankruptcy proceedings will be paid when such common shares are distributed. Redeemable Noncontrolling Interest In accordance with GAAP, the Company records redeemable noncontrolling interests at the greater of (1) the initial carrying amount adjusted for the noncontrolling interest holder’s share of total comprehensive income or loss and dividends ("noncontrolling interest carrying value") or (2) the redemption value as of and based on conditions existing as of the reporting date. Required redeemable noncontrolling interest adjustments are recorded as an increase to redeemable noncontrolling interests, with an offsetting adjustment to retained earnings. The redeemable noncontrolling interest is classified in mezzanine equity in the accompanying condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 . For further information related to the redeemable noncontrolling interest adjustment, see Note 15 , " Net Income Per Share Attributable to Lear ," herein, as well as Note 5, "Investments in Affiliates and Other Related Party Transactions," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. Noncontrolling Interests In July 2019, the Company deconsolidated GACC as it no longer controls this entity (Note 7 , " Investment in Affiliates "). In the first nine months of 2018, the Company gained control of an affiliate and acquired the outstanding non-controlling interest of another affiliate. For further information related to these affiliate transactions, see Note 5, "Investments in Affiliates and Other Related Party Transactions," to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018. |
Legal and Other Contingencies
Legal and Other Contingencies | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal and Other Contingencies | Legal and Other Contingencies As of September 28, 2019 and December 31, 2018 , the Company had recorded reserves for pending legal disputes, including commercial disputes and other matters, of $13.9 million and $11.0 million , respectively. Such reserves reflect amounts recognized in accordance with GAAP and exclude the cost of legal representation. Product liability and warranty reserves are recorded separately from legal reserves, as described below. Commercial Disputes The Company is involved from time to time in legal proceedings and claims, including, without limitation, commercial or contractual disputes with its customers, suppliers and competitors. These disputes vary in nature and are usually resolved by negotiations between the parties. Product Liability and Warranty Matters In the event that use of the Company’s products results in, or is alleged to result in, bodily injury and/or property damage or other losses, the Company may be subject to product liability lawsuits and other claims. Such lawsuits generally seek compensatory damages, punitive damages and attorneys’ fees and costs. In addition, if any of the Company’s products are, or are alleged to be, defective, the Company may be required or requested by its customers to participate in a recall or other corrective action involving such products. Certain of the Company’s customers have asserted claims against the Company for costs related to recalls or other corrective actions involving its products. The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend such claims. To a lesser extent, the Company is a party to agreements with certain of its customers, whereby these customers may pursue claims against the Company for contribution of all or a portion of the amounts sought in connection with product liability and warranty claims. In certain instances, allegedly defective products may be supplied by Tier 2 suppliers. The Company may seek recovery from its suppliers of materials or services included within the Company’s products that are associated with product liability and warranty claims. The Company carries insurance for certain legal matters, including product liability claims, but such coverage may be limited. The Company does not maintain insurance for product warranty or recall matters. Future dispositions with respect to the Company’s product liability claims that were subject to compromise under the Chapter 11 bankruptcy proceedings will be satisfied out of a common stock and warrant reserve established for that purpose. The Company records product warranty reserves when liability is probable and related amounts are reasonably estimable. A summary of the changes in reserves for product liability and warranty claims for the nine months ended September 28, 2019 , is shown below (in millions): Balance at January 1, 2019 $ 28.5 Expense, net (including changes in estimates) 12.4 Settlements (11.2 ) Foreign currency translation and other 0.2 Balance at September 28, 2019 $ 29.9 Environmental Matters The Company is subject to local, state, federal and foreign laws, regulations and ordinances which govern activities or operations that may have adverse environmental effects and which impose liability for clean-up costs resulting from past spills, disposals or other releases of hazardous wastes and environmental compliance. The Company’s policy is to comply with all applicable environmental laws and to maintain an environmental management program based on ISO 14001 to ensure compliance with this standard. However, the Company currently is, has been and in the future may become the subject of formal or informal enforcement actions or procedures. As of September 28, 2019 and December 31, 2018 , the Company had recorded environmental reserves of $9.3 million and $9.0 million , respectively. The Company does not believe that the environmental liabilities associated with its current and former properties will have a material adverse impact on its business, financial condition, results of operations or cash flows; however, no assurances can be given in this regard. Other Matters The Company is involved from time to time in various other legal proceedings and claims, including, without limitation, intellectual property matters, tax claims and employment matters. Although the outcome of any legal matter cannot be predicted with certainty, the Company does not believe that any of the other legal proceedings or claims in which the Company is currently involved, either individually or in the aggregate, will have a material adverse impact on its business, financial condition, results of operations or cash flows. However, no assurances can be given in this regard. Although the Company records reserves for legal disputes, product liability and warranty claims and environmental and other matters in accordance with GAAP, the ultimate outcomes of these matters are inherently uncertain. Actual results may differ significantly from current estimates. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company has two reportable operating segments: Seating, which includes complete seat systems and all major seat components, including seat covers and surface materials such as leather and fabric, seat structures and mechanisms, seat foam and headrests, and E-Systems, which includes complete electrical distribution systems, as well as sophisticated electronic control modules, electrification products, connectivity products and software solutions for the cloud, cars and mobile devices. The other category includes unallocated costs related to corporate headquarters, regional headquarters and the elimination of intercompany activities, none of which meets the requirements for being classified as an operating segment. Corporate and regional headquarters costs include various support functions, such as information technology, corporate finance, legal, executive administration and human resources, as well as advanced engineering expenses. The Company evaluates the performance of its operating segments based primarily on (i) revenues from external customers, (ii) pretax income before equity in net income of affiliates, interest expense and other expense, net, ("segment earnings") and (iii) cash flows, being defined as segment earnings less capital expenditures plus depreciation and amortization. A summary of revenues from external customers and other financial information by reportable operating segment is shown below (in millions): Three Months Ended September 28, 2019 Seating E-Systems Other Consolidated Revenues from external customers $ 3,715.0 $ 1,110.0 $ — $ 4,825.0 Segment earnings (1) 281.5 74.3 (55.1 ) 300.7 Depreciation and amortization 82.1 42.5 3.9 128.5 Capital expenditures 86.0 59.8 5.0 150.8 Total assets 7,575.3 3,078.8 2,099.2 12,753.3 Three Months Ended September 29, 2018 Seating E-Systems Other Consolidated Revenues from external customers $ 3,683.0 $ 1,208.6 $ — $ 4,891.6 Segment earnings (1) 294.0 138.4 (69.1 ) 363.3 Depreciation and amortization 80.1 36.1 3.6 119.8 Capital expenditures 109.2 49.8 1.5 160.5 Total assets 7,311.2 2,578.8 2,119.4 12,009.4 Nine Months Ended September 28, 2019 Seating E-Systems Other Consolidated Revenues from external customers $ 11,468.1 $ 3,524.6 $ — $ 14,992.7 Segment earnings (1) 817.0 287.3 (186.2 ) 918.1 Depreciation and amortization 248.4 120.2 11.8 380.4 Capital expenditures 246.2 151.4 12.5 410.1 Nine Months Ended September 29, 2018 Seating E-Systems Other Consolidated Revenues from external customers $ 12,287.6 $ 3,918.5 $ — $ 16,206.1 Segment earnings (1) 981.8 504.3 (191.7 ) 1,294.4 Depreciation and amortization 241.5 109.6 10.7 361.8 Capital expenditures 335.2 150.4 7.1 492.7 (1) See definition above For the three months ended September 28, 2019 , segment earnings include restructuring charges of $18.2 million , $9.0 million and $0.7 million in the Seating and E-Systems segments and in the other category, respectively. For the nine months ended September 28, 2019 , segment earnings include restructuring charges of $91.7 million, $26.2 million and $1.0 million in the Seating and E-Systems segments and in the other category, respectively. The Company expects to incur approximately $44 million and approximately $23 million of additional restructuring costs in the Seating and E-Systems segments, respectively, related to activities initiated as of September 28, 2019, and expects that the components of such costs will be consistent with its historical experience. For the three months ended September 29, 2018 , segment earnings include restructuring charges of $17.3 million , $2.4 million and $0.1 million in the Seating and E-Systems segments and in the other category, respectively. For the nine months ended September 29, 2018 , segment earnings include restructuring charges of $37.6 million, $7.9 million and $2.7 million in the Seating and E-Systems segments and in the other category, respectively. For further information, see Note 3 , " Restructuring ." A reconciliation of segment earnings to consolidated income before provision for income taxes and equity in net income of affiliates is shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Segment earnings $ 300.7 $ 363.3 $ 918.1 $ 1,294.4 Interest expense 24.0 21.2 69.4 62.8 Other expense, net 9.7 13.2 27.9 11.3 Consolidated income before provision for income taxes and equity in net income of affiliates $ 267.0 $ 328.9 $ 820.8 $ 1,220.3 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments | Financial Instruments Debt Instruments The carrying values of the Notes vary from their fair values. The fair values of the Notes were determined by reference to the quoted market prices of these securities (Level 2 input based on the GAAP fair value hierarchy). The carrying value of the Company’s Term Loan Facility approximates its fair value (Level 3 input based on the GAAP fair value hierarchy). The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below (in millions): September 28, December 31, Estimated aggregate fair value (1) $ 2,379.9 $ 1,921.6 Aggregate carrying value (1) (2) 2,339.0 1,967.2 (1) Term Loan Facility and Notes (excludes "other" debt) (2) Excludes the impact of unamortized original issue discount and debt issuance costs Cash, Cash Equivalents and Restricted Cash The Company has on deposit, cash that is legally restricted as to use or withdrawal. A reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported on the condensed consolidated statements of cash flows is shown below (in millions): September 28, September 29, Balance sheet - cash and cash equivalents $ 1,300.9 $ 1,198.6 Restricted cash included in other current assets 15.6 8.5 Restricted cash included in other long-term assets 6.8 17.8 Statement of cash flows - cash, cash equivalents and restricted cash $ 1,323.3 $ 1,224.9 Marketable Equity Securities Marketable equity securities, which the Company accounts for under the fair value option, are included in the accompanying condensed consolidated balance sheets as shown below (in millions): September 28, December 31, Current assets $ 16.1 $ 4.8 Other long-term assets 39.5 42.5 $ 55.6 $ 47.3 Unrealized gains and losses arising from changes in the fair value of the marketable equity securities are recognized in the accompanying condensed consolidated statements of comprehensive income as a component of other expense, net. The fair value of the marketable equity securities is determined by reference to quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy). Equity Securities Without Readily Determinable Fair Values Included in other long-term assets in the accompanying condensed consolidated balance sheets as of September 28, 2019 and December 31, 2018 , are $20.2 million and $12.7 million , respectively, of investments in equity securities without readily determinable fair values. Such investments are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. Derivative Instruments and Hedging Activities The Company has used derivative financial instruments, including forwards, futures, options, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates and interest rates and the resulting variability of the Company’s operating results. The Company is not a party to leveraged derivatives. The Company’s derivative financial instruments are subject to master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. On the date that a derivative contract for a hedging instrument is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge), (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge), (3) a hedge of a net investment in a foreign operation (a net investment hedge) or (4) a contract not designated as a hedging instrument. For a fair value hedge, the change in the fair value of the derivative is recorded in earnings and reflected in the condensed consolidated statement of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a cash flow hedge, the change in the fair value of the derivative is recorded in accumulated other comprehensive loss in the condensed consolidated balance sheet. When the underlying hedged transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings and reflected in the condensed consolidated statement of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a net investment hedge, the change in the fair value of the derivative is recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheet. When the related currency translation adjustment is required to be reclassified, usually upon sale or liquidation of the investment, the gain or loss included in accumulated other comprehensive loss is recorded in earnings. Changes in the fair value of contracts not designated as hedging instruments are recorded in earnings and reflected in the condensed consolidated statement of comprehensive income as other expense, net. Cash flows attributable to derivatives used to manage foreign currency risks are classified on the same line as the hedged item attributable to the hedged risk in the condensed consolidated statements of cash flows. Cash flows attributable to derivatives designated as net investment hedges are classified as investing activities in the consolidated statements of cash flows. Cash flows attributable to forward starting interest rate swaps are classified as financing activities in the condensed consolidated statements of cash flows. The Company formally documents its hedge relationships, including the identification of the hedge instruments and the related hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. Derivatives are recorded at fair value in other current and long-term assets and other current and long-term liabilities in the consolidated balance sheet. The Company also formally assesses whether a derivative used in a hedge transaction is highly effective in offsetting changes in either the fair value or the cash flows of the hedged item. When it is determined that a hedged transaction is no longer probable to occur, the Company discontinues hedge accounting. Foreign Exchange The Company uses forwards, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates on known foreign currency exposures. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce exposure to fluctuations in foreign exchange rates. The principal currencies hedged by the Company include the Mexican peso, various European currencies, the Thai baht, the Japanese yen, the Philippine peso and the Chinese renminbi. Foreign currency derivative contracts not designated as hedging instruments consist principally of hedges of cash transactions, intercompany loans and certain other balance sheet exposures. Net Investment Hedges In September 2019, the Company entered into $300.0 million of cross-currency interest rate swaps, which are designated as net investment hedges of the foreign currency rate exposure of its investment in certain Euro-denominated subsidiaries. Interest Rate Swaps Included in other current liabilities in the accompanying condensed consolidated balance sheet as of December 31, 2018, is $14.7 million related to the estimated fair value of forward starting interest rate swap contracts with a notional amount of $500.0 million . Balance Sheet Classification The notional amount, estimated aggregate fair value and related balance sheet classification of the Company's foreign currency derivative contracts and net investment hedges are shown below (in millions, except for maturities): September 28, December 31, Fair value of foreign currency contracts designated as cash flow hedges: Other current assets $ 22.0 $ 20.6 Other long-term assets 2.5 2.8 Other current liabilities (5.6 ) (8.4 ) Other long-term liabilities (1.7 ) (2.0 ) 17.2 13.0 Notional amount $ 1,216.5 $ 1,499.0 Outstanding maturities in months, not to exceed 24 24 Fair value of derivatives designated as net investment hedges: Other long-term assets 1.7 — Notional amount $ 300.0 $ — Outstanding maturities in months, not to exceed 60 n/a Fair value of foreign currency contracts not designated as hedging instruments: Other current assets $ 9.2 $ 6.1 Other current liabilities (3.4 ) (4.8 ) 5.8 1.3 Notional amount $ 1,164.2 $ 654.0 Outstanding maturities in months, not to exceed 15 12 Total fair value $ 24.7 $ 14.3 Total notional amount $ 2,680.7 $ 2,153.0 Accumulated Other Comprehensive Loss - Derivative Instruments and Hedging Pretax amounts related to foreign currency, net investment hedge and interest rate swap contracts that were recognized in and reclassified from accumulated other comprehensive loss are shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Gains (losses) recognized in accumulated other comprehensive loss: Foreign currency contracts $ (5.0 ) $ 54.6 $ 37.4 $ 67.3 Net investment hedges 1.7 — 1.7 — Interest rate swap contracts — 7.6 (9.5 ) 4.7 (3.3 ) 62.2 29.6 72.0 (Gains) losses reclassified from accumulated other comprehensive loss to: Net sales 1.3 (0.2 ) 2.3 2.6 Cost of sales (12.6 ) (8.0 ) (35.5 ) (15.2 ) Interest expense 0.6 — 0.9 — (10.7 ) (8.2 ) (32.3 ) (12.6 ) Comprehensive income (loss) $ (14.0 ) $ 54.0 $ (2.7 ) $ 59.4 As of September 28, 2019 and December 31, 2018 , pretax net gains (losses) of $4.4 million and ($1.7) million , respectively, related to the Company’s derivative instruments and hedging activities were recorded in accumulated other comprehensive loss. During the next twelve month period, net gains (losses) expected to be reclassified into earnings are shown below (in millions): Net gains related to foreign currency contracts $ 16.4 Net losses related to interest rate swap contracts (2.3 ) Total $ 14.1 Such gains and losses will be reclassified at the time that the underlying hedged transactions are realized. Fair Value Measurements GAAP provides that fair value is an exit price, defined as a market-based measurement that represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are based on one or more of the following three valuation techniques: 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). Further, GAAP prioritizes the inputs and assumptions used in the valuation techniques described above into a three-tier fair value hierarchy as follows: 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. The Company discloses fair value measurements and the related valuation techniques and fair value hierarchy level for its assets and liabilities that are measured or disclosed at fair value. Items Measured at Fair Value on a Recurring Basis Fair value measurements and the related valuation techniques and fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018 , are shown below (in millions): September 28, 2019 Frequency Asset (Liability) Valuation Technique Level 1 Level 2 Level 3 Foreign currency contracts, net Recurring $ 23.0 Market/ Income $ — $ 23.0 $ — Net investment hedges Recurring $ 1.7 Market/ Income $ — $ 1.7 $ — Marketable equity securities Recurring $ 55.6 Market $ 55.6 $ — $ — December 31, 2018 Frequency Asset (Liability) Valuation Technique Level 1 Level 2 Level 3 Foreign currency contracts, net Recurring $ 14.3 Market/ Income $ — $ 14.3 $ — Interest rate swap contracts Recurring $ (14.7 ) Market/ Income $ — $ (14.7 ) $ — Marketable equity securities Recurring $ 47.3 Market $ 47.3 $ — $ — The Company determines the fair value of its derivative contracts using quoted market prices to calculate the forward values and then discounts such forward values to the present value. The discount rates used are based on quoted bank deposit or swap interest rates. If a derivative contract is in a net liability position, the Company adjusts these discount rates, if required, by an estimate of the credit spread that would be applied by market participants purchasing these contracts from the Company’s counterparties. If an estimate of the credit spread is required, the Company uses significant assumptions and factors other than quoted market rates, which would result in the classification of its derivative liabilities within Level 3 of the fair value hierarchy. As of September 28, 2019 and December 31, 2018 , there were no derivative contracts that were classified within Level 3 of the fair value hierarchy. In addition, there were no transfers in or out of Level 3 of the fair value hierarchy in 2019 . Items Measured at Fair Value on a Non-Recurring Basis The Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. As a result of the acquisition of Xevo (Note 2 , " Acquisition "), Level 3 fair value estimates of $93.2 million related to intangible assets are recorded in the accompanying condensed consolidated balance sheet as of September 28, 2019 . The estimated fair values of these assets were based on third-party valuations and management's estimates, generally utilizing the income and cost approaches. Subsequent to the deconsolidation of GACC (Note 7 , " Investment in Affiliates "), the Company is accounting for its investment in GACC using the equity method. The Level 3 fair value estimate related to the Company's equity interest was based on the present value of future cash flows and reflects a discount for the lack of control and the lack of marketability associated with equity interests. As of September 28, 2019 , there were no additional significant assets or liabilities measured at fair value on a non-recurring basis. |
Accounting Pronouncements
Accounting Pronouncements | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Pronouncements | Accounting Pronouncements The Company considers the applicability and impact of all ASUs issued by the Financial Accounting Standards Board ("FASB"). The Company considered the ASUs summarized below, effective for 2019: Leases In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, "Leases," which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. On January 1, 2019, the Company adopted the standard by applying the modified retrospective method without the restatement of comparative financial information, as permitted by the transition guidance (Note 10 , " Leases "). Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2019, ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" allows for the reclassification of "stranded" tax effects as a result of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The Company elected not to reclassify such amounts. The Company reclassifies taxes from accumulated other comprehensive loss to earnings as the items to which the tax effects relate are similarly reclassified. The Company considered the ASUs summarized below, effective after 2019: Measurement of Credit Losses on Financial Instruments Effective January 1, 2020, the standard changes the impairment model for most financial instruments to a current expected credit loss model. The guidance applies to all financial assets such as loans, accounts receivable (including long-term receivables), contract assets, net investments in sales-type and direct financing leases, held-to-maturity securities and certain financial guarantees. The new model will generally result in earlier recognition of credit losses. The Company does not expect the adoption of this standard to significantly impact the Company's consolidated financial statements. Simplifying the Test for Goodwill Impairment Effective January 1, 2020, the standard simplifies the accounting for goodwill impairments and allows a goodwill impairment charge to be based on the amount of a reporting unit's carrying value in excess of its fair value. This eliminates the requirement to calculate the implied fair value of goodwill (i.e., "Step 2" under current guidance). |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 28, 2019 | |
Accounting Policies [Abstract] | |
Consolidation | The accompanying condensed consolidated financial statements include the accounts of Lear, a Delaware corporation, and the wholly owned and less than wholly owned subsidiaries controlled by Lear. In addition, Lear consolidates all entities, including variable interest entities, in which it has a controlling financial interest. Investments in affiliates in which Lear does not have control but does have the ability to exercise significant influence over operating and financial policies are accounted for under the equity method. |
Fiscal Period Reporting | The Company’s annual financial results are reported on a calendar year basis, and quarterly interim results are reported using a thirteen week reporting calendar. |
Reclassifications | Certain amounts in the prior period’s financial statements have been reclassified to conform to the presentation used in the quarter ended September 28, 2019 . |
Restructuring | Restructuring costs include employee termination benefits, fixed asset impairment charges and contract termination costs, as well as other incremental costs resulting from the restructuring actions. These incremental costs principally include equipment and personnel relocation costs. In addition to restructuring costs, the Company incurs incremental manufacturing inefficiency costs at the operating locations impacted by the restructuring actions during the related restructuring implementation period. Restructuring costs are recognized in the Company’s condensed consolidated financial statements in accordance with GAAP. Generally, charges are recorded as restructuring actions are approved and/or implemented. |
Inventories | Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. |
Pre-Production Costs Related to Long-Term Supply Agreements | The Company incurs pre-production engineering and development ("E&D") and tooling costs related to the products produced for its customers under long-term supply agreements. The Company expenses all pre-production E&D costs for which reimbursement is not contractually guaranteed by the customer. In addition, the Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer or for which the Company does not have a non-cancelable right to use the tooling. |
Property, Plant and Equipment | Property, plant and equipment is stated at cost. Costs associated with the repair and maintenance of the Company’s property, plant and equipment are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency or safety of the Company’s property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Depreciable property is depreciated over the estimated useful lives of the assets, using principally the straight-line method. |
Impairment of Long-Lived Assets | The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized. Except as discussed below, the Company does not believe that there were any indicators that would have resulted in long-lived asset impairment charges as of September 28, 2019 . The Company will, however, continue to assess the impact of any significant industry events on the realization of its long-lived assets. |
Goodwill | Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is measured and recognized. The Company conducts its annual impairment testing as of the first day of its fourth quarter. |
Leases | The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company's leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. |
Revenue Recognition | The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle’s life cycle. Typically, these contracts do not provide for a specified quantity of products, but once entered into, the Company is often expected to fulfill its customers’ purchasing requirements for the production life of the vehicle. Many of these contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been minimal. The Company receives purchase orders from its customers, which provide the commercial terms for a particular production part, including price (but not quantities). Contracts may also provide for annual price reductions over the production life of the vehicle, and prices may be adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors. The principal activity from which the Company generates its revenue is the manufacturing of production parts for major automotive manufacturers. Revenue is recognized at a point in time when control of the product is transferred to the customer under standard commercial terms, as the Company does not have an enforceable right to payment prior to such transfer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for those products based on the annual purchase orders, annual price reductions and ongoing price adjustments (some of which is accounted for as variable consideration). The Company does not believe that there will be significant changes to its estimates of variable consideration. The Company's customers pay for products received in accordance with payment terms that are customary within the industry. The Company's contracts with its customers do not have significant financing components. The Company records a contract liability for advances received from its customers. As of September 28, 2019 , there were no significant contract liabilities recorded. Further, there were no significant contract liabilities recognized in revenue during the first nine months of 2019 . Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of comprehensive income. Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales in the condensed consolidated statements of comprehensive income. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue. |
Income Taxes | The Company’s current and future provision for income taxes is impacted by the initial recognition of and changes in valuation allowances in certain countries. The Company intends to maintain these allowances until it is more likely than not that the deferred tax assets will be realized. The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities. |
Net Income Per Share Attributable to Lear | Basic net income per share available to Lear common stockholders is computed using the two-class method by dividing net income attributable to Lear, after deducting the redemption adjustment related to the redeemable noncontrolling interest, by the average number of common shares outstanding during the period. Common shares issuable upon the satisfaction of certain conditions pursuant to a contractual agreement are considered common shares outstanding and are included in the computation of basic net income per share available to Lear common stockholders. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest |
Segment Reporting | The Company has two reportable operating segments: Seating, which includes complete seat systems and all major seat components, including seat covers and surface materials such as leather and fabric, seat structures and mechanisms, seat foam and headrests, and E-Systems, which includes complete electrical distribution systems, as well as sophisticated electronic control modules, electrification products, connectivity products and software solutions for the cloud, cars and mobile devices. The other category includes unallocated costs related to corporate headquarters, regional headquarters and the elimination of intercompany activities, none of which meets the requirements for being classified as an operating segment. Corporate and regional headquarters costs include various support functions, such as information technology, corporate finance, legal, executive administration and human resources, as well as advanced engineering expenses. The Company evaluates the performance of its operating segments based primarily on (i) revenues from external customers, (ii) pretax income before equity in net income of affiliates, interest expense and other expense, net, ("segment earnings") and (iii) cash flows, being defined as segment earnings less capital expenditures plus depreciation and amortization. |
Marketable Equity Securities | Unrealized gains and losses arising from changes in the fair value of the marketable equity securities are recognized in the accompanying condensed consolidated statements of comprehensive income as a component of other expense, net. The fair value of the marketable equity securities is determined by reference to quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy). |
Derivative Instruments and Hedging Activities | The Company uses forwards, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates on known foreign currency exposures. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce exposure to fluctuations in foreign exchange rates. The principal currencies hedged by the Company include the Mexican peso, various European currencies, the Thai baht, the Japanese yen, the Philippine peso and the Chinese renminbi. The Company has used derivative financial instruments, including forwards, futures, options, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates and interest rates and the resulting variability of the Company’s operating results. The Company is not a party to leveraged derivatives. The Company’s derivative financial instruments are subject to master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. On the date that a derivative contract for a hedging instrument is entered into, the Company designates the derivative as either (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or of an unrecognized firm commitment (a fair value hedge), (2) a hedge of the exposure of a forecasted transaction or of the variability in the cash flows of a recognized asset or liability (a cash flow hedge), (3) a hedge of a net investment in a foreign operation (a net investment hedge) or (4) a contract not designated as a hedging instrument. For a fair value hedge, the change in the fair value of the derivative is recorded in earnings and reflected in the condensed consolidated statement of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a cash flow hedge, the change in the fair value of the derivative is recorded in accumulated other comprehensive loss in the condensed consolidated balance sheet. When the underlying hedged transaction is realized, the gain or loss included in accumulated other comprehensive loss is recorded in earnings and reflected in the condensed consolidated statement of comprehensive income on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a net investment hedge, the change in the fair value of the derivative is recorded in cumulative translation adjustment, which is a component of accumulated other comprehensive loss in the condensed consolidated balance sheet. When the related currency translation adjustment is required to be reclassified, usually upon sale or liquidation of the investment, the gain or loss included in accumulated other comprehensive loss is recorded in earnings. Changes in the fair value of contracts not designated as hedging instruments are recorded in earnings and reflected in the condensed consolidated statement of comprehensive income as other expense, net. Cash flows attributable to derivatives used to manage foreign currency risks are classified on the same line as the hedged item attributable to the hedged risk in the condensed consolidated statements of cash flows. Cash flows attributable to derivatives designated as net investment hedges are classified as investing activities in the consolidated statements of cash flows. Cash flows attributable to forward starting interest rate swaps are classified as financing activities in the condensed consolidated statements of cash flows. The Company formally documents its hedge relationships, including the identification of the hedge instruments and the related hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. Derivatives are recorded at fair value in other current and long-term assets and other current and long-term liabilities in the consolidated balance sheet. The Company also formally assesses whether a derivative used in a hedge transaction is highly effective in offsetting changes in either the fair value or the cash flows of the hedged item. When it is determined that a hedged transaction is no longer probable to occur, the Company discontinues hedge accounting. |
Fair Value Measurements | GAAP provides that fair value is an exit price, defined as a market-based measurement that represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are based on one or more of the following three valuation techniques: 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). Further, GAAP prioritizes the inputs and assumptions used in the valuation techniques described above into a three-tier fair value hierarchy as follows: 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. The Company discloses fair value measurements and the related valuation techniques and fair value hierarchy level for its assets and liabilities that are measured or disclosed at fair value. |
Accounting Pronouncements | The Company considers the applicability and impact of all ASUs issued by the Financial Accounting Standards Board ("FASB"). The Company considered the ASUs summarized below, effective for 2019: Leases In February 2016, the Financial Accounting Standards Board issued ASU 2016-02, "Leases," which requires lessees to record right-of-use assets and related lease obligations on the balance sheet, as well as disclose key information regarding leasing arrangements. On January 1, 2019, the Company adopted the standard by applying the modified retrospective method without the restatement of comparative financial information, as permitted by the transition guidance (Note 10 , " Leases "). Tax Effects from Accumulated Other Comprehensive Income Effective January 1, 2019, ASU 2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" allows for the reclassification of "stranded" tax effects as a result of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The Company elected not to reclassify such amounts. The Company reclassifies taxes from accumulated other comprehensive loss to earnings as the items to which the tax effects relate are similarly reclassified. The Company considered the ASUs summarized below, effective after 2019: Measurement of Credit Losses on Financial Instruments Effective January 1, 2020, the standard changes the impairment model for most financial instruments to a current expected credit loss model. The guidance applies to all financial assets such as loans, accounts receivable (including long-term receivables), contract assets, net investments in sales-type and direct financing leases, held-to-maturity securities and certain financial guarantees. The new model will generally result in earlier recognition of credit losses. The Company does not expect the adoption of this standard to significantly impact the Company's consolidated financial statements. Simplifying the Test for Goodwill Impairment Effective January 1, 2020, the standard simplifies the accounting for goodwill impairments and allows a goodwill impairment charge to be based on the amount of a reporting unit's carrying value in excess of its fair value. This eliminates the requirement to calculate the implied fair value of goodwill (i.e., "Step 2" under current guidance). |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Business Combinations [Abstract] | |
Purchase Price and Preliminary Allocation | The purchase price and preliminary allocation are shown below (in millions): June 29, Adjustments September 28, Net purchase price $ 320.9 $ 0.8 $ 321.7 Other assets purchased and liabilities assumed, net $ 1.2 $ 7.7 $ 8.9 Goodwill 197.5 22.1 219.6 Intangible assets 122.2 (29.0 ) 93.2 Preliminary purchase price allocation $ 320.9 $ 0.8 $ 321.7 |
Restructuring (Tables)
Restructuring (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of Restructuring Activity | A summary of 2019 activity is shown below (in millions): Accrual as of 2019 Utilization Accrual as of January 1, 2019 Charges Cash Non-cash September 28, 2019 Employee termination benefits $ 103.3 $ 105.0 $ (91.3 ) $ — $ 117.0 Asset impairment charges — 4.0 — (4.0 ) — Contract termination costs 5.4 2.4 (3.2 ) — 4.6 Other related costs — 11.5 (11.5 ) — — Total $ 108.7 $ 122.9 $ (106.0 ) $ (4.0 ) $ 121.6 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | A summary of inventories is shown below (in millions): September 28, December 31, Raw materials $ 946.9 $ 859.4 Work-in-process 110.5 104.6 Finished goods 363.3 346.0 Reserves (126.6 ) (113.2 ) Inventories $ 1,294.1 $ 1,196.8 |
Pre-Production Costs Related _2
Pre-Production Costs Related to Long-Term Supply Agreements (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Classification of Recoverable Customer E&D and Tooling Costs Related to Long-term Supply Agreements | The classification of recoverable customer E&D and tooling costs related to long-term supply agreements is shown below (in millions): September 28, December 31, Current $ 207.4 $ 160.9 Long-term 98.5 80.4 Recoverable customer E&D and tooling $ 305.9 $ 241.3 |
Long-Term Assets (Tables)
Long-Term Assets (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | A summary of property, plant and equipment is shown below (in millions): September 28, December 31, Land $ 113.3 $ 116.8 Buildings and improvements 811.8 809.3 Machinery and equipment 3,698.0 3,463.3 Construction in progress 367.8 389.3 Total property, plant and equipment 4,990.9 4,778.7 Less – accumulated depreciation (2,391.2 ) (2,180.6 ) Property, plant and equipment, net $ 2,599.7 $ 2,598.1 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill | A summary of the changes in the carrying amount of goodwill, by operating segment, in the nine months ended September 28, 2019 , is shown below (in millions): Seating E-Systems Total Balance at January 1, 2019 $ 1,244.3 $ 161.0 $ 1,405.3 Acquisition — 219.6 219.6 Foreign currency translation and other (20.9 ) (3.6 ) (24.5 ) Balance at September 28, 2019 $ 1,223.4 $ 377.0 $ 1,600.4 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Long-Term Debt | A summary of long-term debt, net of unamortized debt issuance costs, and the related weighted average interest rates is shown below (in millions): September 28, 2019 Debt Instrument Long-Term Debt Unamortized Debt Issuance Costs Unamortized Original Issue Discount Long-Term Debt, Net Weighted Credit Agreement — Term Loan Facility $ 239.0 $ (1.1 ) $ — $ 237.9 3.20% 5.25% Senior Notes due 2025 (the "2025 Notes") 650.0 (4.4 ) — 645.6 5.25% 3.8% Senior Notes due 2027 (the "2027 Notes") 750.0 (4.8 ) (4.2 ) 741.0 3.885% 4.25% Senior Notes due 2029 (the "2029 Notes") 375.0 (3.0 ) (1.1 ) 370.9 4.288% 5.25% Senior Notes due 2049 (the "2049 Notes") 325.0 (3.4 ) (5.4 ) 316.2 5.363% Other 3.1 — — 3.1 N/A $ 2,342.1 $ (16.7 ) $ (10.7 ) 2,314.7 Less — Current portion (17.1 ) Long-term debt $ 2,297.6 December 31, 2018 Debt Instrument Long-Term Debt Unamortized Debt Issuance Costs Unamortized Original Issue Discount Long-Term Debt, Net Weighted Average Interest Rate Credit Agreement — Term Loan Facility $ 242.2 $ (1.5 ) $ — $ 240.7 3.92% 5.375% Senior Notes due 2024 (the "2024 Notes") 325.0 (2.0 ) — 323.0 5.375% 2025 Notes 650.0 (5.0 ) — 645.0 5.25% 2027 Notes 750.0 (5.3 ) (4.6 ) 740.1 3.885% Other 5.1 — — 5.1 N/A $ 1,972.3 $ (13.8 ) $ (4.6 ) 1,953.9 Less — Current portion (12.9 ) Long-term debt $ 1,941.0 Senior Notes The issuance date, maturity date and interest payment dates of the Company's senior unsecured 2025 Notes, 2027 Notes, 2029 Notes and 2049 Notes (together, the "Notes") are as shown below: Note Issuance Date Maturity Date Interest Payment Dates 2025 Notes November 2014 January 15, 2025 January 15 and July 15 2027 Notes August 2017 September 15, 2027 March 15 and September 15 2029 Notes May 2019 May 15, 2029 May 15 and November 15 2049 Notes May 2019 May 15, 2049 May 15 and November 15 |
Credit Agreement Interest Rate Ranges | The range and the rate as of September 28, 2019 , are shown below (in percentages): Eurocurrency Rate Base Rate Rate as of Rate as of Minimum Maximum September 28, 2019 Minimum Maximum September 28, 2019 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 % |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Leases [Abstract] | |
Right-of-Use Assets and Lease Obligations | Operating lease assets and obligations included in the accompanying condensed consolidated balance sheet are shown below (in millions): September 28, 2019 Right-of-use assets under operating leases: Other long-term assets $ 514.0 Lease obligations under operating leases: Accrued liabilities $ 112.0 Other long-term liabilities 409.6 $ 521.6 |
Maturity of Lease Obligations | Maturities of lease obligations as of September 28, 2019 , are shown below (in millions): September 28, 2019 2019 (1) $ 35.3 2020 123.2 2021 101.1 2022 77.9 2023 60.1 Thereafter 207.9 Total undiscounted cash flows 605.5 Less: Imputed interest (83.9 ) Lease obligations under operating leases $ 521.6 (1) For the remaining three months |
Cash Flow Information, Lease Expense, Weighted Average Lease Term and Discount Rate | The weighted average lease term and discount rate for operating leases are shown below: September 28, 2019 Weighted average remaining lease term (in years) 7.0 Weighted average discount rate 4.0 % Cash flow information related to operating leases is shown below (in millions): Nine Months Ended September 28, 2019 Non-cash activity: Right-of-use assets obtained in exchange for operating lease obligations $ 177.1 Operating cash flows: Cash paid related to operating lease obligations $ 104.0 Lease expense included in the accompanying condensed consolidated statements of comprehensive income is shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Operating lease expense $ 36.9 $ 104.4 Short-term lease expense 3.1 12.1 Variable lease expense 1.4 3.2 Total lease expense $ 41.4 $ 119.7 |
Pension and Other Postretirem_2
Pension and Other Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Retirement Benefits [Abstract] | |
Net Periodic Pension and Other Postretirement Benefit (Credit) Cost | The components of the Company’s net periodic pension benefit (credit) cost are shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign Service cost $ — $ 1.5 $ 0.1 $ 1.7 $ — $ 4.7 $ 0.1 $ 5.2 Interest cost 4.6 3.7 5.0 3.6 13.9 11.0 14.9 11.1 Expected return on plan assets (5.0 ) (5.2 ) (7.0 ) (5.7 ) (15.1 ) (15.6 ) (20.8 ) (17.4 ) Amortization of actuarial loss 0.5 1.9 0.6 1.6 1.4 5.8 1.6 4.7 Curtailment loss — — — 0.5 — — — 0.5 Settlement loss — — — — 0.1 — 0.2 — Net periodic benefit (credit) cost $ 0.1 $ 1.9 $ (1.3 ) $ 1.7 $ 0.3 $ 5.9 $ (4.0 ) $ 4.1 The components of the Company’s net periodic other postretirement benefit (credit) cost are shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 29, 2018 September 28, 2019 September 29, 2018 U.S. Foreign U.S. Foreign U.S. Foreign U.S. Foreign Service cost $ — $ 0.1 $ — $ 0.1 $ — $ 0.2 $ — $ 0.3 Interest cost 0.5 0.3 0.4 0.3 1.6 1.0 1.4 1.0 Amortization of actuarial (gain) loss (0.6 ) — (0.6 ) — (1.7 ) — (1.7 ) 0.1 Amortization of prior service credit — — — (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.3 ) Net periodic benefit (credit) cost $ (0.1 ) $ 0.4 $ (0.2 ) $ 0.3 $ (0.2 ) $ 1.1 $ (0.4 ) $ 1.1 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue by Reportable Segment and Geography | A summary of the Company’s revenue by reportable operating segment and geography is shown below (in millions): Three Months Ended September 28, 2019 September 29, 2018 Seating E-Systems Total Seating E-Systems Total North America $ 1,626.5 $ 250.5 $ 1,877.0 $ 1,524.0 $ 256.3 $ 1,780.3 Europe and Africa 1,291.2 495.7 1,786.9 1,392.5 552.3 1,944.8 Asia 667.6 312.7 980.3 638.6 350.8 989.4 South America 129.7 51.1 180.8 127.9 49.2 177.1 $ 3,715.0 $ 1,110.0 $ 4,825.0 $ 3,683.0 $ 1,208.6 $ 4,891.6 Nine Months Ended September 28, 2019 September 29, 2018 Seating E-Systems Total Seating E-Systems Total North America $ 4,815.5 $ 810.0 $ 5,625.5 $ 4,975.2 $ 844.0 $ 5,819.2 Europe and Africa 4,307.0 1,650.7 5,957.7 4,882.8 1,883.7 6,766.5 Asia 1,978.2 923.6 2,901.8 1,993.1 1,059.9 3,053.0 South America 367.4 140.3 507.7 436.5 130.9 567.4 $ 11,468.1 $ 3,524.6 $ 14,992.7 $ 12,287.6 $ 3,918.5 $ 16,206.1 |
Other Expense, Net (Tables)
Other Expense, Net (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Other Income and Expenses [Abstract] | |
Summary of Other (Income) Expense, Net | A summary of other expense, net is shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Other expense $ 13.7 $ 16.6 $ 41.7 $ 24.2 Other income (4.0 ) (3.4 ) (13.8 ) (12.9 ) Other expense, net $ 9.7 $ 13.2 $ 27.9 $ 11.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes and Corresponding Effective Tax Rate | A summary of the provision for income taxes and the corresponding effective tax rate for the three and nine months ended September 28, 2019 and September 29, 2018 , is shown below (in millions, except effective tax rates): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Provision for income taxes $ 33.5 $ 57.6 $ 149.9 $ 233.0 Pretax income before equity in net income of affiliates $ 267.0 $ 328.9 $ 820.8 $ 1,220.3 Effective tax rate 12.5 % 17.5 % 18.3 % 19.1 % |
Schedule of Tax Benefits (Expense) | In addition, the Company recognized tax benefits (expense) related to the significant, discrete items shown below (in millions): Nine Months Ended September 28, 2019 September 29, 2018 Restructuring charges and various other items $ 35.7 $ 9.9 Valuation allowances on deferred tax assets of a foreign subsidiary (10.4 ) 36.4 Share-based compensation 3.1 10.8 Increase in foreign withholding tax on certain undistributed foreign earnings — (22.0 ) Change in tax status of certain affiliates 18.4 — Tax rate change in foreign subsidiary — 7.2 Research and development tax credits 28.6 — Adjustment to 2017 provisional U.S. income tax expense — 9.3 $ 75.4 $ 51.6 |
Net Income Per Share Attribut_2
Net Income Per Share Attributable to Lear (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Information Used to Compute Basic and Diluted Net Income Per Share | A summary of information used to compute basic and diluted net income per share available to Lear common stockholders is shown below (in millions, except share and per share data): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Net income attributable to Lear $ 215.9 $ 252.5 $ 627.6 $ 937.6 Redeemable noncontrolling interest adjustment 3.6 (2.3 ) 9.4 (16.9 ) Net income available to Lear common stockholders $ 219.5 $ 250.2 $ 637.0 $ 920.7 Average common shares outstanding 61,133,723 65,372,829 62,042,156 66,256,800 Dilutive effect of common stock equivalents 196,363 495,831 220,747 453,128 Average diluted shares outstanding 61,330,086 65,868,660 62,262,903 66,709,928 Basic net income per share available to Lear common stockholders $ 3.59 $ 3.83 $ 10.27 $ 13.90 Diluted net income per share available to Lear common stockholders $ 3.58 $ 3.80 $ 10.23 $ 13.80 |
Comprehensive Income and Equi_2
Comprehensive Income and Equity (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Equity [Abstract] | |
Summary of Changes, Net of Tax, in Accumulated Other Comprehensive Loss | A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended September 28, 2019 , is shown below (in millions): Three Months Ended Nine Months Ended September 28, 2019 September 28, 2019 Defined benefit plans: Balance at beginning of period $ (173.9 ) $ (172.8 ) Reclassification adjustments (net of tax expense of $0.4 million and $0.8 million in the three and nine months ended September 28, 2019, respectively) 1.5 4.7 Other comprehensive loss recognized during the period (net of tax benefit of $1.6 million in the three and nine months ended September 28, 2019) (4.6 ) (8.9 ) Balance at end of period $ (177.0 ) $ (177.0 ) Derivative instruments and hedging: Balance at beginning of period $ (1.2 ) $ (9.7 ) Reclassification adjustments (net of tax benefit of $2.4 million and $7.2 million in the three and nine months ended September 28, 2019, respectively) (8.4 ) (25.5 ) Other comprehensive income (loss) recognized during the period (net of tax benefit (expense) of $1.1 million and ($6.2) million in the three and nine months ended September 28, 2019, respectively) (3.9 ) 21.7 Balance at end of period $ (13.5 ) $ (13.5 ) Foreign currency translation: Balance at beginning of period $ (523.1 ) $ (523.3 ) Other comprehensive loss recognized during the period (net of tax impact of $— million in the three and nine months ended September 28, 2019) (115.7 ) (115.5 ) Balance at end of period $ (638.8 ) $ (638.8 ) Total accumulated other comprehensive loss $ (829.3 ) $ (829.3 ) A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended September 29, 2018 , is shown below (in millions): Three Months Ended Nine Months Ended September 29, 2018 September 29, 2018 Defined benefit plans: Balance at beginning of period $ (178.4 ) $ (184.0 ) Reclassification adjustments (net of tax expense of $0.3 million and $0.9 million in the three and nine months ended September 29, 2018, respectively) 1.2 3.6 Other comprehensive income (loss) recognized during the period (net of tax impact of $— million in the three and nine months ended September 29, 2018) (1.0 ) 2.2 Balance at end of period $ (178.2 ) $ (178.2 ) Derivative instruments and hedging: Balance at beginning of period $ (18.7 ) $ (22.9 ) Reclassification adjustments (net of tax benefit of $1.8 million and $2.7 million in the three and nine months ended September 29, 2018, respectively) (6.4 ) (9.9 ) Other comprehensive income recognized during the period (net of tax expense of $13.4 million and $15.5 million in the three and nine months ended September 29, 2018, respectively) 48.8 56.5 Balance at end of period $ 23.7 $ 23.7 Foreign currency translation: Balance at beginning of period $ (430.6 ) $ (306.5 ) Other comprehensive loss recognized during the period (net of tax benefit of $2.4 million in the three and nine months ended September 29, 2018) (70.8 ) (194.9 ) Balance at end of period $ (501.4 ) $ (501.4 ) Total accumulated other comprehensive loss $ (655.9 ) $ (655.9 ) |
Common Stock Repurchase Program | Share repurchases in the first nine months of 2019 are shown below (in millions except for shares and per share amounts): Nine Months Ended As of September 28, 2019 September 28, 2019 Aggregate Repurchases (1) Cash paid for Repurchases Number of Shares Average Price per Share (2) Remaining Purchase Authorization $ 355.4 $ 359.7 2,603,881 $ 136.48 $ 1,227.6 (1) Includes $83.0 million of repurchases made prior to the increased authorization (2) Excludes commissions |
Dividends Declared and Paid | Dividends declared and paid are shown below (in millions): Nine Months Ended September 28, 2019 September 29, 2018 Dividends declared $ 140.3 $ 141.1 Dividends paid 141.1 142.1 |
Legal and Other Contingencies (
Legal and Other Contingencies (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Changes in Reserves for Product Liability and Warranty Claims | A summary of the changes in reserves for product liability and warranty claims for the nine months ended September 28, 2019 , is shown below (in millions): Balance at January 1, 2019 $ 28.5 Expense, net (including changes in estimates) 12.4 Settlements (11.2 ) Foreign currency translation and other 0.2 Balance at September 28, 2019 $ 29.9 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Segment Reporting [Abstract] | |
Summary of Revenues from External Customers and Other Financial Information by Reportable Operating Segment | A summary of revenues from external customers and other financial information by reportable operating segment is shown below (in millions): Three Months Ended September 28, 2019 Seating E-Systems Other Consolidated Revenues from external customers $ 3,715.0 $ 1,110.0 $ — $ 4,825.0 Segment earnings (1) 281.5 74.3 (55.1 ) 300.7 Depreciation and amortization 82.1 42.5 3.9 128.5 Capital expenditures 86.0 59.8 5.0 150.8 Total assets 7,575.3 3,078.8 2,099.2 12,753.3 Three Months Ended September 29, 2018 Seating E-Systems Other Consolidated Revenues from external customers $ 3,683.0 $ 1,208.6 $ — $ 4,891.6 Segment earnings (1) 294.0 138.4 (69.1 ) 363.3 Depreciation and amortization 80.1 36.1 3.6 119.8 Capital expenditures 109.2 49.8 1.5 160.5 Total assets 7,311.2 2,578.8 2,119.4 12,009.4 Nine Months Ended September 28, 2019 Seating E-Systems Other Consolidated Revenues from external customers $ 11,468.1 $ 3,524.6 $ — $ 14,992.7 Segment earnings (1) 817.0 287.3 (186.2 ) 918.1 Depreciation and amortization 248.4 120.2 11.8 380.4 Capital expenditures 246.2 151.4 12.5 410.1 Nine Months Ended September 29, 2018 Seating E-Systems Other Consolidated Revenues from external customers $ 12,287.6 $ 3,918.5 $ — $ 16,206.1 Segment earnings (1) 981.8 504.3 (191.7 ) 1,294.4 Depreciation and amortization 241.5 109.6 10.7 361.8 Capital expenditures 335.2 150.4 7.1 492.7 |
Reconciliation of Segment Earnings to Consolidated Income Before Provision for Income Taxes and Equity | A reconciliation of segment earnings to consolidated income before provision for income taxes and equity in net income of affiliates is shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Segment earnings $ 300.7 $ 363.3 $ 918.1 $ 1,294.4 Interest expense 24.0 21.2 69.4 62.8 Other expense, net 9.7 13.2 27.9 11.3 Consolidated income before provision for income taxes and equity in net income of affiliates $ 267.0 $ 328.9 $ 820.8 $ 1,220.3 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Estimated Aggregate Fair Value and Carrying Value of Debt Instruments | The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below (in millions): September 28, December 31, Estimated aggregate fair value (1) $ 2,379.9 $ 1,921.6 Aggregate carrying value (1) (2) 2,339.0 1,967.2 (1) Term Loan Facility and Notes (excludes "other" debt) (2) Excludes the impact of unamortized original issue discount and debt issuance costs |
Reconciliation of Cash, Cash Equivalents | A reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported on the condensed consolidated statements of cash flows is shown below (in millions): September 28, September 29, Balance sheet - cash and cash equivalents $ 1,300.9 $ 1,198.6 Restricted cash included in other current assets 15.6 8.5 Restricted cash included in other long-term assets 6.8 17.8 Statement of cash flows - cash, cash equivalents and restricted cash $ 1,323.3 $ 1,224.9 |
Reconciliation of Restricted Cash | A reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheets to cash, cash equivalents and restricted cash reported on the condensed consolidated statements of cash flows is shown below (in millions): September 28, September 29, Balance sheet - cash and cash equivalents $ 1,300.9 $ 1,198.6 Restricted cash included in other current assets 15.6 8.5 Restricted cash included in other long-term assets 6.8 17.8 Statement of cash flows - cash, cash equivalents and restricted cash $ 1,323.3 $ 1,224.9 |
Marketable Equity Securities | Marketable equity securities, which the Company accounts for under the fair value option, are included in the accompanying condensed consolidated balance sheets as shown below (in millions): September 28, December 31, Current assets $ 16.1 $ 4.8 Other long-term assets 39.5 42.5 $ 55.6 $ 47.3 |
Notional Amount, Estimated Aggregate Fair Value and Related Balance Sheet Classification of Foreign Currency Derivative Contracts | The notional amount, estimated aggregate fair value and related balance sheet classification of the Company's foreign currency derivative contracts and net investment hedges are shown below (in millions, except for maturities): September 28, December 31, Fair value of foreign currency contracts designated as cash flow hedges: Other current assets $ 22.0 $ 20.6 Other long-term assets 2.5 2.8 Other current liabilities (5.6 ) (8.4 ) Other long-term liabilities (1.7 ) (2.0 ) 17.2 13.0 Notional amount $ 1,216.5 $ 1,499.0 Outstanding maturities in months, not to exceed 24 24 Fair value of derivatives designated as net investment hedges: Other long-term assets 1.7 — Notional amount $ 300.0 $ — Outstanding maturities in months, not to exceed 60 n/a Fair value of foreign currency contracts not designated as hedging instruments: Other current assets $ 9.2 $ 6.1 Other current liabilities (3.4 ) (4.8 ) 5.8 1.3 Notional amount $ 1,164.2 $ 654.0 Outstanding maturities in months, not to exceed 15 12 Total fair value $ 24.7 $ 14.3 Total notional amount $ 2,680.7 $ 2,153.0 |
Pretax Amounts Recognized in and Reclassified from Accumulated Other Comprehensive Loss and Net Gains (Losses) Expected to be Reclassified into Earnings | Pretax amounts related to foreign currency, net investment hedge and interest rate swap contracts that were recognized in and reclassified from accumulated other comprehensive loss are shown below (in millions): Three Months Ended Nine Months Ended September 28, September 29, September 28, September 29, Gains (losses) recognized in accumulated other comprehensive loss: Foreign currency contracts $ (5.0 ) $ 54.6 $ 37.4 $ 67.3 Net investment hedges 1.7 — 1.7 — Interest rate swap contracts — 7.6 (9.5 ) 4.7 (3.3 ) 62.2 29.6 72.0 (Gains) losses reclassified from accumulated other comprehensive loss to: Net sales 1.3 (0.2 ) 2.3 2.6 Cost of sales (12.6 ) (8.0 ) (35.5 ) (15.2 ) Interest expense 0.6 — 0.9 — (10.7 ) (8.2 ) (32.3 ) (12.6 ) Comprehensive income (loss) $ (14.0 ) $ 54.0 $ (2.7 ) $ 59.4 During the next twelve month period, net gains (losses) expected to be reclassified into earnings are shown below (in millions): Net gains related to foreign currency contracts $ 16.4 Net losses related to interest rate swap contracts (2.3 ) Total $ 14.1 |
Fair Value Measurements and Related Valuation Techniques and Fair Value Hierarchy Level | Fair value measurements and the related valuation techniques and fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018 , are shown below (in millions): September 28, 2019 Frequency Asset (Liability) Valuation Technique Level 1 Level 2 Level 3 Foreign currency contracts, net Recurring $ 23.0 Market/ Income $ — $ 23.0 $ — Net investment hedges Recurring $ 1.7 Market/ Income $ — $ 1.7 $ — Marketable equity securities Recurring $ 55.6 Market $ 55.6 $ — $ — December 31, 2018 Frequency Asset (Liability) Valuation Technique Level 1 Level 2 Level 3 Foreign currency contracts, net Recurring $ 14.3 Market/ Income $ — $ 14.3 $ — Interest rate swap contracts Recurring $ (14.7 ) Market/ Income $ — $ (14.7 ) $ — Marketable equity securities Recurring $ 47.3 Market $ 47.3 $ — $ — |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Xevo - USD ($) $ in Millions | Sep. 29, 2019 | Jun. 29, 2019 | Apr. 17, 2019 | Sep. 28, 2019 |
Business Acquisition [Line Items] | ||||
Net purchase price | $ 321.7 | $ 320.9 | $ 321.7 | |
Net Measurement Period Adjustment | $ 0.8 | |||
Annual sales | 75 | |||
Transaction costs | $ 1.7 | |||
Licensing agreements | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 5 years | |||
Developed technology | ||||
Business Acquisition [Line Items] | ||||
Estimated useful life | 5 years |
Acquisition - Purchase Price an
Acquisition - Purchase Price and Preliminary Allocation (Details) - USD ($) $ in Millions | Sep. 29, 2019 | Jun. 29, 2019 | Apr. 17, 2019 | Sep. 28, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 1,600.4 | [1] | $ 1,405.3 | |||
Xevo | ||||||
Business Acquisition [Line Items] | ||||||
Net purchase price | $ 321.7 | $ 320.9 | $ 321.7 | |||
Other assets purchased and liabilities assumed, net | 1.2 | 8.9 | ||||
Goodwill | 197.5 | 219.6 | ||||
Intangible assets | 122.2 | 93.2 | ||||
Preliminary purchase price allocation | $ 320.9 | 321.7 | ||||
Adjustments | ||||||
Net Measurement Period Adjustment | 0.8 | |||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Other Assets And Liabilities, Net | 7.7 | |||||
Goodwill | 22.1 | |||||
Intangible assets | (29) | |||||
Preliminary purchase price allocation | $ 0.8 | |||||
[1] | Unaudited. |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 122.9 | |
Carrying values in excess of estimated fair values | 4 | |
Expected restructuring costs | 67 | |
Employee termination costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 105 | |
Fixed asset impairment charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 4 | $ 2.8 |
Contract termination costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 2.4 | |
Other related costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 11.5 | |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 108.8 | |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 10.1 | |
Other expense, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 4 |
Restructuring - Summary of Rest
Restructuring - Summary of Restructuring Activities (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Accrual as of beginning of period | $ 108.7 | |
2019 charges | 122.9 | |
Utilization cash | (106) | |
Utilization, non-cash | (4) | |
Accrual as of end of period | 121.6 | |
Employee termination benefits | ||
Restructuring Reserve [Roll Forward] | ||
Accrual as of beginning of period | 103.3 | |
2019 charges | 105 | |
Utilization cash | (91.3) | |
Utilization, non-cash | 0 | |
Accrual as of end of period | 117 | |
Asset impairment charges | ||
Restructuring Reserve [Roll Forward] | ||
Accrual as of beginning of period | 0 | |
2019 charges | 4 | $ 2.8 |
Utilization cash | 0 | |
Utilization, non-cash | (4) | |
Accrual as of end of period | 0 | |
Contract termination costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrual as of beginning of period | 5.4 | |
2019 charges | 2.4 | |
Utilization cash | (3.2) | |
Utilization, non-cash | 0 | |
Accrual as of end of period | 4.6 | |
Other related costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrual as of beginning of period | 0 | |
2019 charges | 11.5 | |
Utilization cash | (11.5) | |
Utilization, non-cash | 0 | |
Accrual as of end of period | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 946.9 | $ 859.4 | |
Work-in-process | 110.5 | 104.6 | |
Finished goods | 363.3 | 346 | |
Reserves | (126.6) | (113.2) | |
Inventories | $ 1,294.1 | [1] | $ 1,196.8 |
[1] | Unaudited. |
Pre-Production Costs Related _3
Pre-Production Costs Related to Long-Term Supply Agreements - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Pre-production E&D costs for which reimbursement is contractually guaranteed by the customer | $ 174.8 | $ 167.6 |
Pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer | 126.7 | 121.1 |
Cash collected related to E&D and tooling costs | $ 243.5 | $ 277.4 |
Pre-Production Costs Related _4
Pre-Production Costs Related to Long-Term Supply Agreements - Classification of Recoverable Customer E&D and Tooling Costs Related to Long-term Supply Agreements (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 |
Pre Production Costs Related to Long Term Supply Arrangements [Line Items] | ||
Recoverable customer E&D and tooling | $ 305.9 | $ 241.3 |
Current | ||
Pre Production Costs Related to Long Term Supply Arrangements [Line Items] | ||
Recoverable customer E&D and tooling | 207.4 | 160.9 |
Long-term | ||
Pre Production Costs Related to Long Term Supply Arrangements [Line Items] | ||
Recoverable customer E&D and tooling | $ 98.5 | $ 80.4 |
Long-Term Assets - Property, Pl
Long-Term Assets - Property, Plant and Equipment (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Land | $ 113.3 | $ 116.8 | |
Buildings and improvements | 811.8 | 809.3 | |
Machinery and equipment | 3,698 | 3,463.3 | |
Construction in progress | 367.8 | 389.3 | |
Total property, plant and equipment | 4,990.9 | 4,778.7 | |
Less – accumulated depreciation | (2,391.2) | (2,180.6) | |
Property, plant and equipment, net | $ 2,599.7 | [1] | $ 2,598.1 |
[1] | Unaudited. |
Long-Term Assets - Narrative (D
Long-Term Assets - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Depreciation expense | $ 111.8 | $ 107.1 | $ 335.1 | $ 322.9 |
Restructuring charges | 122.9 | |||
Impairment of fixed asset | 1 | |||
Asset impairment charges | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 4 | $ 2.8 |
Investment in Affiliates (Detai
Investment in Affiliates (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Investments in and Advances to Affiliates [Abstract] | ||
Gain from deconsolidation of GACC | $ 4 | $ 4 |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill (Details) $ in Millions | 9 Months Ended | |
Sep. 28, 2019USD ($) | ||
Goodwill [Roll Forward] | ||
Balance at January 1, 2019 | $ 1,405.3 | |
Acquisition | 219.6 | |
Foreign currency translation and other | (24.5) | |
Balance at September 28, 2019 | 1,600.4 | [1] |
Seating | ||
Goodwill [Roll Forward] | ||
Balance at January 1, 2019 | 1,244.3 | |
Acquisition | 0 | |
Foreign currency translation and other | (20.9) | |
Balance at September 28, 2019 | 1,223.4 | |
E-Systems | ||
Goodwill [Roll Forward] | ||
Balance at January 1, 2019 | 161 | |
Acquisition | 219.6 | |
Foreign currency translation and other | (3.6) | |
Balance at September 28, 2019 | $ 377 | |
[1] | Unaudited. |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Impairment of goodwill | $ 0 | $ 0 |
Debt - Summary of Long-Term Deb
Debt - Summary of Long-Term Debt (Details) - USD ($) $ in Millions | Sep. 28, 2019 | May 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Long-Term Debt and Other | $ 2,342.1 | $ 1,972.3 | ||
Unamortized Debt Issuance Costs | (16.7) | (13.8) | ||
Unamortized Original Issue Discount | (10.7) | (4.6) | ||
Long-Term Debt and Other, Net | 2,314.7 | 1,953.9 | ||
Less — Current portion | (17.1) | [1] | (12.9) | |
Long-term debt | 2,297.6 | [1] | 1,941 | |
Credit agreement | Term Loan Facility | Credit Agreement — Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | 239 | 242.2 | ||
Unamortized Debt Issuance Costs | (1.1) | (1.5) | ||
Unamortized Original Issue Discount | 0 | 0 | ||
Long-Term Debt, Net | $ 237.9 | $ 240.7 | ||
Stated interest rate | 3.20% | 3.92% | ||
Senior notes | 5.375% Senior Notes due 2024 (the 2024 Notes) | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | $ 325 | $ 325 | ||
Unamortized Debt Issuance Costs | (2) | |||
Unamortized Original Issue Discount | 0 | |||
Long-Term Debt, Net | $ 323 | |||
Stated interest rate | 5.375% | |||
Senior notes | 5.25% Senior Notes due 2025 (the 2025 Notes) | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | $ 650 | $ 650 | ||
Unamortized Debt Issuance Costs | (4.4) | (5) | ||
Unamortized Original Issue Discount | 0 | 0 | ||
Long-Term Debt, Net | $ 645.6 | $ 645 | ||
Stated interest rate | 5.25% | 5.25% | ||
Senior notes | 3.8% Senior Notes due 2027 (the 2027 Notes) | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | $ 750 | $ 750 | ||
Unamortized Debt Issuance Costs | (4.8) | (5.3) | ||
Unamortized Original Issue Discount | (4.2) | (4.6) | ||
Long-Term Debt, Net | $ 741 | $ 740.1 | ||
Stated interest rate | 3.80% | 3.80% | ||
Weighted Average Interest Rate | 3.885% | 3.885% | ||
Senior notes | 4.25% Senior Notes due 2029 (the 2029 Notes) | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | $ 375 | |||
Unamortized Debt Issuance Costs | (3) | |||
Unamortized Original Issue Discount | (1.1) | |||
Long-Term Debt, Net | $ 370.9 | |||
Stated interest rate | 4.25% | 4.25% | ||
Weighted Average Interest Rate | 4.288% | 4.288% | ||
Senior notes | 5.25% Senior Notes due 2049 (the 2049 Notes) | ||||
Debt Instrument [Line Items] | ||||
Long-Term Debt | $ 325 | |||
Unamortized Debt Issuance Costs | (3.4) | |||
Unamortized Original Issue Discount | (5.4) | |||
Long-Term Debt, Net | $ 316.2 | |||
Stated interest rate | 5.25% | 5.25% | ||
Weighted Average Interest Rate | 5.363% | 5.363% | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Other | $ 3.1 | |||
Other | $ 5.1 | |||
[1] | Unaudited. |
Debt - Senior Notes (Details)
Debt - Senior Notes (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
May 31, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ 10,600,000 | $ 0 | ||
Payments of related issuance costs | $ 6,500,000 | $ 0 | ||
Senior notes | ||||
Debt Instrument [Line Items] | ||||
Proceeds from offering | $ 693,300,000 | |||
Senior notes | 2029 Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 375,000,000 | |||
Stated coupon rate | 4.25% | 4.25% | ||
Redemption price | 99.691% | |||
Yield to maturity | 4.288% | 4.288% | ||
Long-term debt, gross | $ 375,000,000 | |||
Loss on extinguishment of debt | 10,600,000 | |||
Payments of related issuance costs | $ 6,500,000 | |||
Senior notes | 2049 Notes | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 325,000,000 | |||
Stated coupon rate | 5.25% | 5.25% | ||
Redemption price | 98.32% | |||
Yield to maturity | 5.363% | 5.363% | ||
Long-term debt, gross | $ 325,000,000 | |||
Senior notes | 2024 Notes | ||||
Debt Instrument [Line Items] | ||||
Stated coupon rate | 5.375% | |||
Redemption price | 102.688% | |||
Long-term debt, gross | $ 325,000,000 | $ 325,000,000 |
Debt - Credit Agreement (Detail
Debt - Credit Agreement (Details) - USD ($) | 9 Months Ended | |||
Sep. 28, 2019 | Sep. 29, 2018 | Dec. 31, 2018 | Aug. 08, 2017 | |
Debt Instrument [Line Items] | ||||
Repayments of amounts outstanding | $ 3,100,000 | $ 4,700,000 | ||
Credit Agreement — Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Facility fee | 0.125% | |||
Credit Agreement — Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Facility fee | 0.30% | |||
Credit agreement | Credit Agreement — Revolving Credit Facility | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, maximum borrowing capacity | $ 1,750,000,000 | |||
Borrowings outstanding under Revolving Credit Facility | $ 0 | $ 0 | ||
Credit agreement | Credit Agreement — Term Loan Facility | Term Loan Facility | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 250,000,000 | |||
Long-term debt, gross | 239,000,000 | $ 242,200,000 | ||
Repayments of amounts outstanding | $ 3,100,000 |
Debt - Credit Agreement Interes
Debt - Credit Agreement Interest Rate Ranges (Details) | 9 Months Ended |
Sep. 28, 2019 | |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Eurocurrency Rate | |
Debt Instrument [Line Items] | |
Interest rate as of period end | 1.10% |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Eurocurrency Rate | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.00% |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Eurocurrency Rate | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.60% |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Base Rate | |
Debt Instrument [Line Items] | |
Interest rate as of period end | 0.10% |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Base Rate | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.00% |
Revolving Credit Facility | Credit Agreement — Revolving Credit Facility | Base Rate | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.60% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Eurocurrency Rate | |
Debt Instrument [Line Items] | |
Interest rate as of period end | 1.25% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Eurocurrency Rate | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.125% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Eurocurrency Rate | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.90% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Base Rate | |
Debt Instrument [Line Items] | |
Interest rate as of period end | 0.25% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Base Rate | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.125% |
Term Loan Facility | Credit Agreement — Term Loan Facility | Base Rate | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.90% |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)lease_contract | Sep. 29, 2018USD ($) | Jan. 01, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Right-of-use assets | $ 514 | |||
Lease liability | $ 521.6 | |||
Number of lease contracts | lease_contract | 2 | |||
Lease not yet commenced | $ 55 | |||
Rent expense | $ 41.3 | $ 122.6 | ||
Accounting Standards Update 2016-02 | ||||
Lessee, Lease, Description [Line Items] | ||||
Right-of-use assets | $ 438.1 | |||
Lease liability | $ 445.8 | |||
Lease One | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease not yet commenced, term of contract | 9 years | |||
Lease Two | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease not yet commenced, term of contract | 10 years |
Leases - Right-of-Use Assets an
Leases - Right-of-Use Assets and Lease Obligations (Details) $ in Millions | Sep. 28, 2019USD ($) |
Right-of-use assets under operating leases: | |
Other long-term assets | $ 514 |
Lease obligations under operating leases: | |
Accrued liabilities | 112 |
Other long-term liabilities | 409.6 |
Lease obligations under operating leases | $ 521.6 |
Leases - Maturity of Lease Liab
Leases - Maturity of Lease Liabilities (Details) $ in Millions | Sep. 28, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 35.3 |
2020 | 123.2 |
2021 | 101.1 |
2022 | 77.9 |
2023 | 60.1 |
Thereafter | 207.9 |
Total undiscounted cash flows | 605.5 |
Less: Imputed interest | (83.9) |
Lease obligations under operating leases | $ 521.6 |
Leases - Cash Flow Information
Leases - Cash Flow Information Related to Operating Leases (Details) $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Non-cash activity: | |
Right-of-use assets obtained in exchange for operating lease obligations | $ 177.1 |
Operating cash flows: | |
Cash paid related to operating lease obligations | $ 104 |
Leases - Lease Expense (Details
Leases - Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 28, 2019 | Sep. 28, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 36.9 | $ 104.4 |
Short-term lease expense | 3.1 | 12.1 |
Variable lease expense | 1.4 | 3.2 |
Total lease expense | $ 41.4 | $ 119.7 |
Leases - Weighted Average Lease
Leases - Weighted Average Lease Term and Discount Rate (Details) | Sep. 28, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term (in years) | 7 years |
Weighted average discount rate | 4.00% |
Pension and Other Postretirem_3
Pension and Other Postretirement Benefit Plans - Components of Net Periodic Benefit (Credit) Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Pension | U.S. | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 0 | $ 0.1 | $ 0 | $ 0.1 |
Interest cost | 4.6 | 5 | 13.9 | 14.9 |
Expected return on plan assets | (5) | (7) | (15.1) | (20.8) |
Amortization of actuarial (gain) loss | 0.5 | 0.6 | 1.4 | 1.6 |
Curtailment loss | 0 | 0 | 0 | 0 |
Settlement loss | 0 | 0 | 0.1 | 0.2 |
Net periodic benefit (credit) cost | 0.1 | (1.3) | 0.3 | (4) |
Pension | Foreign | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 1.5 | 1.7 | 4.7 | 5.2 |
Interest cost | 3.7 | 3.6 | 11 | 11.1 |
Expected return on plan assets | (5.2) | (5.7) | (15.6) | (17.4) |
Amortization of actuarial (gain) loss | 1.9 | 1.6 | 5.8 | 4.7 |
Curtailment loss | 0 | 0.5 | 0 | 0.5 |
Settlement loss | 0 | 0 | 0 | 0 |
Net periodic benefit (credit) cost | 1.9 | 1.7 | 5.9 | 4.1 |
Other postretirement | U.S. | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0 | 0 | 0 | 0 |
Interest cost | 0.5 | 0.4 | 1.6 | 1.4 |
Amortization of actuarial (gain) loss | (0.6) | (0.6) | (1.7) | (1.7) |
Amortization of prior service credit | 0 | 0 | (0.1) | (0.1) |
Net periodic benefit (credit) cost | (0.1) | (0.2) | (0.2) | (0.4) |
Other postretirement | Foreign | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 0.1 | 0.1 | 0.2 | 0.3 |
Interest cost | 0.3 | 0.3 | 1 | 1 |
Amortization of actuarial (gain) loss | 0 | 0 | 0 | 0.1 |
Amortization of prior service credit | 0 | (0.1) | (0.1) | (0.3) |
Net periodic benefit (credit) cost | $ 0.4 | $ 0.3 | $ 1.1 | $ 1.1 |
Pension and Other Postretirem_4
Pension and Other Postretirement Benefit Plans - Narrative (Details) - Pension $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | |
Employer's contribution towards defined benefit plan | $ 8 |
Minimum | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated employer's contribution towards defined benefit plan in current year | 10 |
Maximum | |
Defined Benefit Plan Disclosure [Line Items] | |
Estimated employer's contribution towards defined benefit plan in current year | $ 15 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Significant contract liabilities recorded | $ 0 |
Significant contract liabilities recognized in revenue | $ 0 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Revenue by Reportable Operating Segment and Geography (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | $ 4,825 | $ 4,891.6 | $ 14,992.7 | $ 16,206.1 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 1,877 | 1,780.3 | 5,625.5 | 5,819.2 |
Europe and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 1,786.9 | 1,944.8 | 5,957.7 | 6,766.5 |
Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 980.3 | 989.4 | 2,901.8 | 3,053 |
South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 180.8 | 177.1 | 507.7 | 567.4 |
Seating | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 3,715 | 3,683 | 11,468.1 | 12,287.6 |
Seating | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 1,626.5 | 1,524 | 4,815.5 | 4,975.2 |
Seating | Europe and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 1,291.2 | 1,392.5 | 4,307 | 4,882.8 |
Seating | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 667.6 | 638.6 | 1,978.2 | 1,993.1 |
Seating | South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 129.7 | 127.9 | 367.4 | 436.5 |
E-Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 1,110 | 1,208.6 | 3,524.6 | 3,918.5 |
E-Systems | North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 250.5 | 256.3 | 810 | 844 |
E-Systems | Europe and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 495.7 | 552.3 | 1,650.7 | 1,883.7 |
E-Systems | Asia | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | 312.7 | 350.8 | 923.6 | 1,059.9 |
E-Systems | South America | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues from external customers | $ 51.1 | $ 49.2 | $ 140.3 | $ 130.9 |
Other Expense, Net - Summary of
Other Expense, Net - Summary of Other (Income) Expense, Net (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Other Income and Expenses [Abstract] | ||||
Other expense | $ 13.7 | $ 16.6 | $ 41.7 | $ 24.2 |
Other income | (4) | (3.4) | (13.8) | (12.9) |
Other expense, net | $ 9.7 | $ 13.2 | $ 27.9 | $ 11.3 |
Other Expense, Net - Narrative
Other Expense, Net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Other Income and Expenses [Abstract] | ||||
Net foreign currency transaction losses | $ 9.3 | $ 10.2 | $ 16.5 | $ 12.6 |
Loss on extinguishment of debt | 10.6 | 0 | ||
Gain from deconsolidation of GACC | $ 4 | $ 4 | ||
Gain related to gaining control of an affiliate | $ 10 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 33.5 | $ 57.6 | $ 149.9 | $ 233 |
Pretax income before equity in net income of affiliates | $ 267 | $ 328.9 | $ 820.8 | $ 1,220.3 |
Effective tax rate | 12.50% | 17.50% | 18.30% | 19.10% |
Income Taxes - Tax Benefits (Ex
Income Taxes - Tax Benefits (Expense) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||
Restructuring charges and various other items | $ 35.7 | $ 9.9 |
Valuation allowances on deferred tax assets of a foreign subsidiary | (10.4) | 36.4 |
Share-based compensation | 3.1 | 10.8 |
Increase in foreign withholding tax on certain undistributed foreign earnings | 0 | (22) |
Change in tax status of certain affiliates | 18.4 | 0 |
Tax rate change in foreign subsidiary | 0 | 7.2 |
Research and development tax credits | 28.6 | 0 |
Adjustment to 2017 provisional U.S. income tax expense | 0 | 9.3 |
Income tax benefits (expense) related to significant discrete items | $ 75.4 | $ 51.6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 28, 2019 | Sep. 28, 2019 | Sep. 29, 2018 | |
Income Tax Disclosure [Abstract] | |||
Research and development tax credits | $ 28,600,000 | $ 0 | |
Gain from deconsolidation of GACC | $ 4,000,000 | 4,000,000 | |
Gain related to gaining control of an affiliate | 10,000,000 | ||
Tax expense on gain | $ 0 | $ 0 | |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Net Income Per Share Attribut_3
Net Income Per Share Attributable to Lear (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to Lear | $ 215.9 | $ 252.5 | $ 627.6 | $ 937.6 |
Redeemable noncontrolling interest adjustment | 3.6 | (2.3) | 9.4 | (16.9) |
Net income available to Lear common stockholders | $ 219.5 | $ 250.2 | $ 637 | $ 920.7 |
Average common shares outstanding (in shares) | 61,133,723 | 65,372,829 | 62,042,156 | 66,256,800 |
Dilutive effect of common stock equivalents (in shares) | 196,363 | 495,831 | 220,747 | 453,128 |
Average diluted shares outstanding (in shares) | 61,330,086 | 65,868,660 | 62,262,903 | 66,709,928 |
Basic net income per share available to Lear common stockholders (in dollars per share) | $ 3.59 | $ 3.83 | $ 10.27 | $ 13.90 |
Diluted net income per share available to Lear common stockholders (in dollars per share) | $ 3.58 | $ 3.80 | $ 10.23 | $ 13.80 |
Comprehensive Income and Equi_3
Comprehensive Income and Equity - Summary of Changes, Net of Tax, in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | $ 4,399.5 | $ 4,427.4 | $ 4,360.6 | $ 4,292.6 | ||
Balance at end of period | 4,375.1 | [1] | 4,435.7 | 4,375.1 | [1] | 4,435.7 |
Defined benefit plans | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (173.9) | (178.4) | (172.8) | (184) | ||
Reclassification adjustments | 1.5 | 1.2 | 4.7 | 3.6 | ||
Other comprehensive income (loss) recognized during the period | (4.6) | (1) | (8.9) | 2.2 | ||
Balance at end of period | (177) | (178.2) | (177) | (178.2) | ||
Reclassification adjustments, tax expense (benefit) | 0.4 | 0.3 | 0.8 | 0.9 | ||
Other comprehensive income (loss) recognized during the period, tax expense (benefit) | (1.6) | 0 | (1.6) | 0 | ||
Derivative instruments and hedging | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (1.2) | (18.7) | (9.7) | (22.9) | ||
Reclassification adjustments | (8.4) | (6.4) | (25.5) | (9.9) | ||
Other comprehensive income (loss) recognized during the period | (3.9) | 48.8 | 21.7 | 56.5 | ||
Balance at end of period | (13.5) | 23.7 | (13.5) | 23.7 | ||
Reclassification adjustments, tax expense (benefit) | (2.4) | (1.8) | (7.2) | (2.7) | ||
Other comprehensive income (loss) recognized during the period, tax expense (benefit) | (1.1) | 13.4 | 6.2 | 15.5 | ||
Foreign currency translation | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at beginning of period | (523.1) | (430.6) | (523.3) | (306.5) | ||
Other comprehensive income (loss) recognized during the period | (115.7) | (70.8) | (115.5) | (194.9) | ||
Balance at end of period | (638.8) | (501.4) | (638.8) | (501.4) | ||
Other comprehensive income (loss) recognized during the period, tax expense (benefit) | 0 | (2.4) | 0 | (2.4) | ||
Total accumulated other comprehensive loss | ||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||
Balance at end of period | $ (829.3) | $ (655.9) | $ (829.3) | $ (655.9) | ||
[1] | Unaudited. |
Comprehensive Income and Equi_4
Comprehensive Income and Equity - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 105 Months Ended | |||||||
Sep. 28, 2019 | Jun. 29, 2019 | Mar. 30, 2019 | Sep. 29, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Feb. 07, 2019 | |
Equity [Abstract] | ||||||||||
Derivative net investment hedge gains | $ 1,700,000 | $ 1,700,000 | $ 1,700,000 | |||||||
Foreign currency translation adjustments related to intercompany transactions | 300,000 | $ 800,000 | 200,000 | $ 1,700,000 | ||||||
Aggregate purchases authorized under common stock share repurchase program | 5,800,000,000 | 5,800,000,000 | 5,800,000,000 | $ 1,500,000,000 | ||||||
Aggregate repurchases | $ 75,900,000 | $ 195,000,000 | $ 355,400,000 | $ 490,700,000 | $ 4,600,000,000 | |||||
Average price (in dollars per share) | $ 123.06 | $ 169.60 | $ 136.48 | $ 181.93 | $ 89.72 | |||||
Cash dividends declared per share (in dollars per share) | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.70 | $ 0.7 | $ 0.70 | $ 2.25 | $ 2.10 |
Comprehensive Income and Equi_5
Comprehensive Income and Equity - Common Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 105 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | |
Equity [Abstract] | |||||
Aggregate Repurchases | $ 75.9 | $ 195 | $ 355.4 | $ 490.7 | $ 4,600 |
Cash paid for Repurchases | $ 359.7 | $ 488.1 | |||
Number of Shares (in shares) | 616,635 | 1,149,839 | 2,603,881 | 2,697,188 | |
Average Price per Share (in dollars per share) | $ 123.06 | $ 169.60 | $ 136.48 | $ 181.93 | $ 89.72 |
Remaining Purchase Authorization | $ 1,227.6 | $ 1,227.6 | $ 1,227.6 | ||
Purchase prior to increased authorization | $ 83 |
Comprehensive Income and Equi_6
Comprehensive Income and Equity - Dividends Declared and Paid (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Equity [Abstract] | ||||
Dividends declared | $ 45.7 | $ 46.4 | $ 140.3 | $ 141.1 |
Dividends paid | $ 141.1 | $ 142.1 |
Legal and Other Contingencies -
Legal and Other Contingencies - Narrative (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 |
Commitments and Contingencies Disclosure [Abstract] | ||
Reserves for pending legal disputes, including commercial disputes and other matters | $ 13.9 | $ 11 |
Environmental reserves | $ 9.3 | $ 9 |
Legal and Other Contingencies_2
Legal and Other Contingencies - Summary of Product Liability and Warranty Claims (Details) $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Movement in Standard Product Warranty Accrual [Roll Forward] | |
Balance at January 1, 2019 | $ 28.5 |
Expense, net (including changes in estimates) | 12.4 |
Settlements | (11.2) |
Foreign currency translation and other | 0.2 |
Balance at September 28, 2019 | $ 29.9 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019USD ($) | Sep. 29, 2018USD ($) | Sep. 28, 2019USD ($)segment | Sep. 29, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Reportable operating segments | segment | 2 | |||
Restructuring charges | $ 122.9 | |||
Operating segments | Seating | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges | $ 18.2 | $ 17.3 | 91.7 | $ 37.6 |
Additional restructuring charges | 44 | |||
Operating segments | E-Systems | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges | 9 | 2.4 | 26.2 | 7.9 |
Additional restructuring charges | 23 | |||
Other | ||||
Segment Reporting Information [Line Items] | ||||
Restructuring charges | $ 0.7 | $ 0.1 | $ 1 | $ 2.7 |
Segment Reporting - Summary of
Segment Reporting - Summary of Revenues from External Customers and Other Financial Information by Reportable Operating Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | Dec. 31, 2018 | |||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | $ 4,825 | $ 4,891.6 | $ 14,992.7 | $ 16,206.1 | |||
Segment earnings | 300.7 | 363.3 | 918.1 | 1,294.4 | |||
Depreciation and amortization | 128.5 | 119.8 | 380.4 | 361.8 | |||
Capital expenditures | 150.8 | 160.5 | 410.1 | 492.7 | |||
Total assets | 12,753.3 | [1] | 12,009.4 | 12,753.3 | [1] | 12,009.4 | $ 11,600.7 |
Seating | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | 3,715 | 3,683 | 11,468.1 | 12,287.6 | |||
E-Systems | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | 1,110 | 1,208.6 | 3,524.6 | 3,918.5 | |||
Operating segments | Seating | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | 3,715 | 3,683 | 11,468.1 | 12,287.6 | |||
Segment earnings | 281.5 | 294 | 817 | 981.8 | |||
Depreciation and amortization | 82.1 | 80.1 | 248.4 | 241.5 | |||
Capital expenditures | 86 | 109.2 | 246.2 | 335.2 | |||
Total assets | 7,575.3 | 7,311.2 | 7,575.3 | 7,311.2 | |||
Operating segments | E-Systems | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | 1,110 | 1,208.6 | 3,524.6 | 3,918.5 | |||
Segment earnings | 74.3 | 138.4 | 287.3 | 504.3 | |||
Depreciation and amortization | 42.5 | 36.1 | 120.2 | 109.6 | |||
Capital expenditures | 59.8 | 49.8 | 151.4 | 150.4 | |||
Total assets | 3,078.8 | 2,578.8 | 3,078.8 | 2,578.8 | |||
Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Revenues from external customers | 0 | 0 | 0 | 0 | |||
Segment earnings | (55.1) | (69.1) | (186.2) | (191.7) | |||
Depreciation and amortization | 3.9 | 3.6 | 11.8 | 10.7 | |||
Capital expenditures | 5 | 1.5 | 12.5 | 7.1 | |||
Total assets | $ 2,099.2 | $ 2,119.4 | $ 2,099.2 | $ 2,119.4 | |||
[1] | Unaudited. |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Earnings to Consolidated Income Before Provision for Income Taxes and Equity (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Segment Reporting [Abstract] | ||||
Segment earnings | $ 300.7 | $ 363.3 | $ 918.1 | $ 1,294.4 |
Interest expense | 24 | 21.2 | 69.4 | 62.8 |
Other expense, net | 9.7 | 13.2 | 27.9 | 11.3 |
Consolidated income before provision for income taxes and equity in net income of affiliates | $ 267 | $ 328.9 | $ 820.8 | $ 1,220.3 |
Financial Instruments - Estimat
Financial Instruments - Estimated Aggregate Fair Value and Carrying Value of Debt Instruments (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 |
Estimated aggregate fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instruments | $ 2,379.9 | $ 1,921.6 |
Aggregate carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instruments | $ 2,339 | $ 1,967.2 |
Financial Instruments - Reconci
Financial Instruments - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 | Sep. 29, 2018 | Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||||
Balance sheet - cash and cash equivalents | $ 1,300.9 | [1] | $ 1,493.2 | $ 1,198.6 | |
Restricted cash included in other current assets | 15.6 | 8.5 | |||
Restricted cash included in other long-term assets | 6.8 | 17.8 | |||
Statement of cash flows - cash, cash equivalents and restricted cash | $ 1,323.3 | $ 1,519.8 | $ 1,224.9 | $ 1,500.4 | |
[1] | Unaudited. |
Financial Instruments - Marketa
Financial Instruments - Marketable Equity Securities (Details) - Marketable Equity Securities - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Current assets | $ 16.1 | $ 4.8 |
Other long-term assets | 39.5 | 42.5 |
Marketable equity securities | $ 55.6 | $ 47.3 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 9 Months Ended | |
Sep. 28, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Investments in equity securities without readily determinable fair values | $ 20,200,000 | $ 12,700,000 |
Derivative contracts classified within Level 3 of fair value hierarchy | 0 | 0 |
Derivative contracts transfers in to Level 3 fair value hierarchy | 0 | |
Xevo | Level 3 | Estimated aggregate fair value | ||
Derivative [Line Items] | ||
Fair value estimates related to intangible assets | 93,200,000 | |
Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional amount | 2,680,700,000 | 2,153,000,000 |
Foreign currency contracts | Derivative instruments and hedging | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Pretax gains (losses) related to derivative instruments and hedging activities in accumulated other comprehensive loss | (4,400,000) | (1,700,000) |
Net investment hedges | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount | 300,000,000 | 0 |
Net investment hedges | Interest rate swap contracts | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount | 300,000,000 | |
Cash flow hedge | Interest rate swap contracts | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount | 500,000,000 | |
Other current liabilities | 14,700,000 | |
Cash flow hedge | Foreign currency contracts | Designated as hedging instrument | ||
Derivative [Line Items] | ||
Notional amount | 1,216,500,000 | 1,499,000,000 |
Other current liabilities | $ 5,600,000 | $ 8,400,000 |
Financial Instruments - Notiona
Financial Instruments - Notional Amount, Estimated Aggregate Fair Value and Related Balance Sheet Classification of Foreign Currency Derivative Contracts (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 28, 2019 | Dec. 31, 2018 | |
Designated as hedging instrument | Net investment hedges | ||
Derivatives, Fair Value [Line Items] | ||
Other long-term assets | $ 1.7 | $ 0 |
Notional amount | $ 300 | 0 |
Designated as hedging instrument | Net investment hedges | Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding maturities in months, not to exceed | 60 months | |
Foreign currency contracts | ||
Derivatives, Fair Value [Line Items] | ||
Total fair value | $ 24.7 | 14.3 |
Notional amount | 2,680.7 | 2,153 |
Foreign currency contracts | Designated as hedging instrument | Cash flow hedge | ||
Derivatives, Fair Value [Line Items] | ||
Other current assets | 22 | 20.6 |
Other long-term assets | 2.5 | 2.8 |
Other current liabilities | (5.6) | (8.4) |
Other long-term liabilities | (1.7) | (2) |
Total fair value | 17.2 | 13 |
Notional amount | $ 1,216.5 | $ 1,499 |
Foreign currency contracts | Designated as hedging instrument | Cash flow hedge | Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding maturities in months, not to exceed | 24 months | 24 months |
Foreign currency contracts | Not designated as hedging instrument | ||
Derivatives, Fair Value [Line Items] | ||
Other current assets | $ 9.2 | $ 6.1 |
Other current liabilities | (3.4) | (4.8) |
Total fair value | 5.8 | 1.3 |
Notional amount | $ 1,164.2 | $ 654 |
Foreign currency contracts | Not designated as hedging instrument | Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Outstanding maturities in months, not to exceed | 15 months | 12 months |
Financial Instruments - Pretax
Financial Instruments - Pretax Amounts Recognized in and Reclassified from Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 28, 2019 | Sep. 29, 2018 | Sep. 28, 2019 | Sep. 29, 2018 | |
Derivative [Line Items] | ||||
Gains (losses) recognized in accumulated other comprehensive loss | $ (3.3) | $ 62.2 | $ 29.6 | $ 72 |
(Gains) losses reclassified from accumulated other comprehensive loss | (10.7) | (8.2) | (32.3) | (12.6) |
Comprehensive income (loss) | (14) | 54 | (2.7) | 59.4 |
Net sales | ||||
Derivative [Line Items] | ||||
(Gains) losses reclassified from accumulated other comprehensive loss | 1.3 | (0.2) | 2.3 | 2.6 |
Cost of sales | ||||
Derivative [Line Items] | ||||
(Gains) losses reclassified from accumulated other comprehensive loss | (12.6) | (8) | (35.5) | (15.2) |
Interest expense | ||||
Derivative [Line Items] | ||||
(Gains) losses reclassified from accumulated other comprehensive loss | 0.6 | 0 | 0.9 | 0 |
Foreign currency contracts | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in accumulated other comprehensive loss | (5) | 54.6 | 37.4 | 67.3 |
Net investment hedges | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in accumulated other comprehensive loss | 1.7 | 0 | 1.7 | 0 |
Interest rate swap contracts | ||||
Derivative [Line Items] | ||||
Gains (losses) recognized in accumulated other comprehensive loss | $ 0 | $ 7.6 | $ (9.5) | $ 4.7 |
Financial Instruments - Net Gai
Financial Instruments - Net Gains (Losses) Expected to be Reclassified into Earnings (Details) $ in Millions | 9 Months Ended |
Sep. 28, 2019USD ($) | |
Fair Value Disclosures [Abstract] | |
Net gains related to foreign currency contracts | $ 16.4 |
Net losses related to interest rate swap contracts | (2.3) |
Total | $ 14.1 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Measurements and Related Valuation Techniques and Fair Value Hierarchy Level (Details) - USD ($) $ in Millions | Sep. 28, 2019 | Dec. 31, 2018 |
Foreign currency contracts, net | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | $ 24.7 | $ 14.3 |
Recurring | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Marketable equity securities | 55.6 | 47.3 |
Recurring | Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Marketable equity securities | 55.6 | 47.3 |
Recurring | Level 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Marketable equity securities | 0 | 0 |
Recurring | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Marketable equity securities | 0 | 0 |
Recurring | Foreign currency contracts, net | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 23 | 14.3 |
Recurring | Foreign currency contracts, net | Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 0 | 0 |
Recurring | Foreign currency contracts, net | Level 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 23 | 14.3 |
Recurring | Foreign currency contracts, net | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 0 | 0 |
Recurring | Net investment hedges | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 1.7 | |
Recurring | Net investment hedges | Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 0 | |
Recurring | Net investment hedges | Level 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 1.7 | |
Recurring | Net investment hedges | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | $ 0 | |
Recurring | Interest rate swap contracts | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | (14.7) | |
Recurring | Interest rate swap contracts | Level 1 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | 0 | |
Recurring | Interest rate swap contracts | Level 2 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | (14.7) | |
Recurring | Interest rate swap contracts | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Asset (Liability) | $ 0 |
Uncategorized Items - lear-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,300,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 2,300,000 |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,300,000 |