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Lear Receives $1B Revolving Credit Line, Raises Buyback Plan to $1.5B; Reaffirms FY12, Offers FY13 Guidance

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Lear Corporation (NYSE: LEA), a leading global supplier of automotive seating and electrical distribution systems, today launched financing actions to increase liquidity and announced an increase in its existing share repurchase program authorization.  These actions are expected to improve the Company's financial flexibility, extend debt maturities and significantly increase cash returned to shareholders over the next three years.  In addition, the Company affirmed its earnings outlook for 2012 and issued its financial outlook for 2013.

The financing actions include the launch of an offering of $500 million in senior unsecured notes due 2023 and a new $1 billion revolving line of credit, which will replace the Company's existing $500 million facility.  The final terms of the bond offering will depend upon market conditions and other factors.  With respect to the revolving line of credit, the Company presently has commitments for the vast majority of the $1 billion facility and expects to complete the transaction by the end of January. 

Combined, the proposed financing actions will increase the Company's liquidity by approximately $1 billion.  The Company intends to use this liquidity for general corporate purposes, including the redemption of $70 million in aggregate principal amount of our existing notes during 2013, investments in additional component capabilities and emerging markets and share repurchases under our common stock share repurchase program.

The Company also announced that it is increasing its existing share repurchase program authorization by $800 million to $1.5 billion and extending the authorization until January 10, 2016.  As of December 31, 2012, the Company has repurchased $502 million of its shares.  The new repurchase program provides for future share repurchases of approximately $1 billion, including $198 million available under the previous program.

Lear expects 2012 net sales of approximately $14.5 billion, core operating earnings in the range of $745 to $785 million, adjusted capital spending of approximately $435 million, free cash flow of approximately $275 million and adjusted net income attributable to Lear of $520 to $560 million.  For 2013, Lear expects net sales of $15.0 to $15.5 billion, core operating earnings in the range of $725 to $775 million, adjusted capital spending of approximately $450 million, free cash flow of approximately $275 million and adjusted net income attributable to Lear of $420 to $455 million.  Lear's financial outlook is based on forecasted global industry vehicle production of 79 million units in 2012 and 81 million units in 2013.  In addition, the Company expects margins to improve in 2014 and 2015.

Posted-In: News Guidance Financing Buybacks

 

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