Lear Corporation 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.
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