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Offering | Aggregate | Amount of | ||||||||||||||||||||
Title of Each Class of Securities | Amount to be | Price | Offering | Registration | ||||||||||||||||||
to be Registered | Registered | Per Note | Price | Fee(1) | ||||||||||||||||||
7.875% Senior Notes due 2018 | $ | 350,000,000 | 99.276 | % | $ | 347,466,000 | $ | 24,774.33 | ||||||||||||||
8.125% Senior Notes due 2020 | $ | 350,000,000 | 99.164 | % | $ | 347,074,000 | $ | 24,746.38 | ||||||||||||||
Guarantees of 7.875% Senior Notes due 2018 (2) | — | — | — | — | ||||||||||||||||||
Guarantees of 8.125% Senior Notes due 2020(2) | $ | 49,520.71 | ||||||||||||||||||||
(1) | Calculated in accordance with Rule 457(r) under the Securities Act of 1933, as amended (the “Securities Act”), and relates to the registration statement on Form S-3 (File No. 333-165593) filed by Lear Corporation and certain subsidiary guarantors. | |
(2) | Pursuant to Rule 457(n) of the Securities Act, no separate fee is payable with respect to guarantees of the debt securities being registered. |
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Per 2018 Note | Per 2020 Note | Total | ||||||||||
Public Offering Price(1) | 99.276% | 99.164 | % | $ | 694,540,000 | |||||||
Underwriting Discount | 1.893% | 1.893 | % | $ | 13,147,642 | |||||||
Proceeds to Lear (before expenses) | 97.397% | 97.287 | % | $ | 681,392,358 |
(1) | Plus accrued interest, if any from March 26, 2010. |
Citi | J.P. Morgan | Barclays Capital | UBS Investment Bank |
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Prospectus | ||||
About This Prospectus | ii | |||
Incorporation by Reference | ii | |||
Cautionary Statement Regarding Forward-Looking Statements | iii | |||
Lear Corporation | 1 | |||
Risk Factors | 1 | |||
Subsidiary Guarantors | 1 | |||
Consolidated Ratio of Earnings to Fixed Charges | 2 | |||
Use of Proceeds | 2 | |||
Description of Securities | 2 | |||
Description of Capital Stock | 2 | |||
Description of Debt Securities | 6 | |||
Description of Warrants | 20 | |||
Description of Subscription Rights | 21 | |||
Description of Stock Purchase Contracts and Stock Purchase Units | 21 | |||
Plan of Distribution | 21 | |||
Validity of the Securities | 23 | |||
Experts | 23 | |||
Where You Can Find More Information | 23 |
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• | general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates; | |
• | the financial condition and restructuring actions of our customers and suppliers; | |
• | changes in actual industry vehicle production levels from our current estimates; | |
• | fluctuations in the production of vehicles for which we are a supplier; | |
• | the loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier; | |
• | disruptions in the relationships with our suppliers; | |
• | labor disputes involving us or our significant customers or suppliers or that otherwise affect us; | |
• | the outcome of customer negotiations; | |
• | the impact and timing of program launch costs; | |
• | the costs, timing and success of restructuring actions; | |
• | increases in our warranty or product liability costs; | |
• | risks associated with conducting business in foreign countries; | |
• | competitive conditions impacting our key customers and suppliers; | |
• | the cost and availability of raw materials and energy; | |
• | our ability to mitigate increases in raw material, energy and commodity costs; | |
• | the outcome of legal or regulatory proceedings to which we are or may become a party; | |
• | unanticipated changes in cash flow, including our ability to align our vendor payment terms with those of our customers; | |
• | our ability to access capital markets on commercially reasonable terms; | |
• | further impairment charges initiated by adverse industry or market developments; | |
• | our anticipated future performance, including, without limitation, our ability to maintain or increase revenue and gross margins, control future operating expenses and make necessary capital expenditures; and | |
• | other risks, described below in “Risk Factors,” the other information provided in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the risks and information provided from time to time in our filings with the Securities and Exchange Commission (“SEC”). |
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• BMW | • ChangAn | • Chery | • Chrysler | |||
• Daimler | • Dongfeng | • Fiat | • First Autoworks | |||
• Ford | • GAZ | • Geely | • General Motors | |||
• Honda | • Hyundai | • Isuzu | • Jaguar | |||
• Land Rover | • Mahindra & Mahindra | • Mazda | • Mitsubishi | |||
• Nissan | • Porsche | • PSA | • Renault | |||
• Saab | • Subaru | • Suzuki | • Tata | |||
• Toyota | • Volkswagen | • Volvo |
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Issuer | Lear Corporation, a Delaware corporation. | |
Notes Offered | $350,000,000 aggregate principal amount of 7.875% senior notes due 2018. | |
$350,000,000 aggregate principal amount of 8.125% senior notes due 2020. | ||
Maturity | March 15, 2018, in the case of the 2018 notes. | |
March 15, 2020, in the case of the 2020 notes. | ||
Interest Payment Dates | March 15 and September 15 of each year, beginning onSeptember 15, 2010. | |
Guarantees | The notes will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis, by certain of our subsidiaries, which we refer to in this prospectus supplement as the “subsidiary guarantors.” | |
Ranking | The notes will be: | |
• our senior unsecured obligations; | ||
• guaranteed on a senior unsecured basis by the subsidiary guarantors; | ||
• effectively subordinated in right of payment to our existing and future secured debt and the secured debt of the subsidiary guarantors, including our obligations and the obligations of the subsidiary guarantors under the First Lien Facility, to the extent of the value of such security; | ||
• effectively subordinated in right of payment to all existing and future debt and other liabilities, including trade payables, of our non-guarantor subsidiaries; | ||
• equal in right of payment to all of our existing and future senior unsecured debt; and | ||
• senior in right of payment to all of our existing and future subordinated debt and the subordinated debt of the subsidiary guarantors. | ||
As of December 31, 2009, on a pro forma consolidated basis after giving effect to the completion of this offering and the application of the net proceeds therefrom, we and the subsidiary guarantors would have had $694.5 million of senior debt (net of original issue discount on the notes of $5.5 million), none of which was secured. The indenture governing the notes will permit us, subject to specified limitations, to incur additional debt, some or all of which may be senior debt and some or all of which may be secured. For the fiscal year ended December 31, 2009, the subsidiaries that are not guaranteeing the notes had net sales of $9.0 billion and generated net income attributable to Lear of $14.9 million. In |
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addition, as of December 31, 2009, the subsidiaries that are not guaranteeing the notes held $4.3 billion of our total assets and had outstanding indebtedness of $47.3 million. For a presentation of the financial information required byRule 3-10 ofRegulation S-X for our subsidiary guarantors and our non-guarantor subsidiaries, see Note 20, “Supplemental Guarantor Condensed Consolidating Financial Statements,” to the consolidated financial statements incorporated by reference herein. | ||
Optional Redemption of 2018 Notes | At any time on or after March 15, 2014, we may redeem some or all of the 2018 notes at the redemption prices specified in this prospectus supplement under “Description of Notes — Optional Redemption.” Prior to March 15, 2014, during any12-month period, we may at our option redeem up to 10% of the aggregate principal amount of the 2018 notes at a redemption price equal to 103% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. Prior to March 15, 2014, we may also redeem some or all of the 2018 notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. | |
At any time prior to March 15, 2013, we may redeem up to 35% of the aggregate principal amount of the 2018 notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 107.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date,providedthat at least 65% of the original aggregate principal amount of the 2018 notes issued remains outstanding after the redemption. | ||
Optional Redemption of 2020 Notes | At any time on or after March 15, 2015, we may redeem some or all of the 2020 notes at the redemption prices specified in this prospectus supplement under “Description of Notes — Optional Redemption.” Prior to March 15, 2015, during any12-month period, we may at our option redeem up to 10% of the aggregate principal amount of the 2020 notes at a redemption price equal to 103% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date. Prior to March 15, 2015, we may also redeem some or all of the 2020 notes at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date plus a “make-whole” premium. | |
At any time prior to March 15, 2013, we may redeem up to 35% of the aggregate principal amount of the 2020 notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 108.125% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date,providedthat at least 65% of the original aggregate principal amount of the 2020 notes issued remains outstanding after the redemption. | ||
Covenants | We will issue the notes under an indenture among us, the subsidiary guarantors and The Bank of New York Mellon |
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Trust Company, N.A., as trustee. The indenture will include covenants that limit our ability and the ability of each of our restricted subsidiaries to: | ||
• incur additional debt; | ||
• pay dividends and make other restricted payments; | ||
• create or permit certain liens; | ||
• issue or sell capital stock of restricted subsidiaries; | ||
• use the proceeds from sales of assets and subsidiary stock; | ||
• create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us; | ||
• enter into transactions with affiliates; | ||
• enter into sale and leaseback transactions; and | ||
• consolidate or merge or sell all or substantially all of our assets. | ||
When the notes are issued, all of our subsidiaries, other than certain joint ventures, will be restricted subsidiaries, as defined in the indenture. These covenants will be subject to a number of important exceptions and qualifications as described under “Description of Notes — Certain Covenants.” During any future period in which Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. (“S&P”), have each assigned an investment grade rating to the notes, certain of the covenants will cease to be in effect. If one of these rating agencies then downgrades their rating below an investment grade rating, the suspended covenants will thereafter again be in effect. See “Description of Notes — Certain Covenants — Suspended Covenants.” | ||
Change of Control | Following a change of control, we will be required to offer to purchase all of the notes at a purchase price of 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. | |
Absence of Established Market for the Notes | The notes are a new issue of securities, and currently there is no market for them. We do not intend to apply for the notes to be listed on any securities exchange or to arrange for any quotation system to quote them. The underwriters have advised us that they intend to make a market for the notes but they are not obligated to do so. The underwriters may discontinue any market-making in the notes at any time in their sole discretion. Accordingly, we cannot assure you that a liquid market will develop for the notes. | |
Use of Proceeds | We expect the net proceeds from this offering to be approximately $679.9 million, after payment of the underwriting discount and offering expenses. We intend to use the net proceeds from the offering, together with our current cash and cash equivalents, to repay in full all amounts outstanding under the First Lien Term Facility and the Second Lien Facility. As of March 19, 2010, the aggregate principal amounts outstanding under the First Lien Term |
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Facility and the Second Lien Facility were $375 million and $550 million, respectively. See “Use of Proceeds.” | ||
Risk Factors | You should carefully consider the information set forth in the section entitled “Risk Factors” and the other information included and incorporated by reference in this prospectus supplement in deciding whether to purchase the notes. | |
Conflict of Interest | Because J.P. Morgan Securities Inc., an underwriter in this offering, and/or its affiliates act as administrative agent in the First Lien Facility, the Second Lien Facility and the Revolving Credit Facility, and will receive more than 5% of the net proceeds of this offering, it may be deemed to have a “conflict of interest” with us under the provisions of Rule 2720 of the Conduct Rules of the Financial Industry Regulatory Authority, or FINRA. In accordance with this rule, Citigroup Global Markets Inc., or Citi, has assumed the responsibilities of acting as a qualified independent underwriter. In its role as a qualified independent underwriter, Citi has performed a due diligence investigation and participated in the preparation of this prospectus supplement. We will pay Citi $10,000 as compensation for this role. We have agreed to indemnify Citi against liabilities incurred in connection with acting as a qualified independent underwriter, including liabilities under the Securities Act. |
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Successor | Predecessor | ||||||||||||||||||||
Two Month | Ten Month | ||||||||||||||||||||
Period Ended | Period Ended | ||||||||||||||||||||
December 31, | November 7, | Year Ended December 31, | |||||||||||||||||||
2009(1) | 2009(2) | 2008(3) | 2007(4) | ||||||||||||||||||
Statement of Operations Data:(in millions) | |||||||||||||||||||||
Net sales | $ | 1,580.9 | $ | 8,158.7 | $ | 13,570.5 | $ | 15,995.0 | |||||||||||||
Gross profit | 72.8 | 287.4 | 747.6 | 1,151.8 | |||||||||||||||||
Selling, general and administrative expenses | 71.2 | 376.7 | 511.5 | 572.8 | |||||||||||||||||
Amortization of intangible assets | 4.5 | 4.1 | 5.3 | 5.2 | |||||||||||||||||
Goodwill impairment charges | — | 319.0 | 530.0 | — | |||||||||||||||||
Divestiture of Interior business | — | — | — | 10.7 | |||||||||||||||||
Interest expense | 11.1 | 151.4 | 190.3 | 199.2 | |||||||||||||||||
Other (income) expense, net(5) | 19.8 | (16.6 | ) | 51.9 | 40.7 | ||||||||||||||||
Reorganization items and fresh-start accounting adjustments, net | — | (1,474.8 | ) | — | — | ||||||||||||||||
Consolidated income (loss) before provision (benefit) for income taxes and equity in net (income) loss of affiliates | (33.8 | ) | 927.6 | (541.4 | ) | 323.2 | |||||||||||||||
Provision (benefit) for income taxes | (24.2 | ) | 29.2 | 85.8 | 89.9 | ||||||||||||||||
Equity in net (income) loss of affiliates | (1.9 | ) | 64.0 | 37.2 | (33.8 | ) | |||||||||||||||
Consolidated net income (loss) | (7.7 | ) | 834.4 | (664.4 | ) | 267.1 | |||||||||||||||
Net income (loss) attributable to noncontrolling interests | (3.9 | ) | 16.2 | 25.5 | 25.6 | ||||||||||||||||
Net income (loss) attributable to Lear | $ | (3.8 | ) | $ | 818.2 | $ | (689.9 | ) | $ | 241.5 | |||||||||||
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Successor | Predecessor | ||||||||||||||||||||
Two Month | Ten Month | ||||||||||||||||||||
Period Ended | Period Ended | ||||||||||||||||||||
December 31, | November 7, | Year Ended December 31, | |||||||||||||||||||
2009(1) | 2009(2) | 2008(3) | 2007(4) | ||||||||||||||||||
Basic net income (loss) per share attributable to Lear | $ | (0.11 | ) | $ | 10.56 | $ | (8.93 | ) | $ | 3.14 | |||||||||||
Diluted net income (loss) per share attributable to Lear | $ | (0.11 | ) | $ | 10.55 | $ | (8.93 | ) | $ | 3.09 | |||||||||||
Weighted average shares outstanding — basic | 34,525,187 | 77,499,860 | 77,242,360 | 76,826,765 | |||||||||||||||||
Weighted average shares outstanding — diluted | 34,525,187 | 77,559,792 | 77,242,360 | 78,214,248 | |||||||||||||||||
Statement of Cash Flow Data: (in millions) | |||||||||||||||||||||
Cash flows from operating activities | 324.0 | (499.2 | ) | 163.6 | 487.5 | ||||||||||||||||
Cash flows from investing activities | (39.5 | ) | (52.7 | ) | (144.4 | ) | (340.0 | ) | |||||||||||||
Cash flows from financing activities | 30.2 | 165.0 | 987.3 | (70.4 | ) | ||||||||||||||||
Capital expenditures | 41.3 | 77.5 | 167.7 | 202.2 | |||||||||||||||||
Other Data(unaudited): | |||||||||||||||||||||
Ratio of earnings to fixed charges(6) | — | 6.3 | x | — | 2.4x | ||||||||||||||||
Successor | Predecessor | ||||||||||||
December 31, | December 31, | December 31, | |||||||||||
As of or Year Ended | 2009 | 2008 | 2007 | ||||||||||
Balance Sheet Data:(in millions) | |||||||||||||
Current assets | $ | 3,787.0 | $ | 3,674.2 | $ | 3,718.0 | |||||||
Total assets | 6,073.3 | 6,872.9 | 7,800.4 | ||||||||||
Current liabilities | 2,400.8 | 4,609.8 | 3,603.9 | ||||||||||
Long-term debt | 927.1 | 1,303.0 | 2,344.6 | ||||||||||
Equity | 2,181.8 | 247.7 | 1,117.5 | ||||||||||
Other Data(unaudited): | |||||||||||||
Employees at year end | 74,870 | 80,112 | 91,455 | ||||||||||
North American content per vehicle(7) | $ | 345 | $ | 391 | $ | 483 | |||||||
North American vehicle production (in millions)(8) | 8.5 | 12.6 | 15.0 | ||||||||||
European content per vehicle(9) | $ | 293 | $ | 350 | $ | 342 | |||||||
European vehicle production (in millions)(10) | 15.7 | 18.8 | 20.2 | ||||||||||
(1) | Results include $44.5 million of restructuring and related manufacturing inefficiency charges, a $1.9 million loss related to a transaction with an affiliate, $15.1 million of charges as a result of the bankruptcy proceedings and the application of fresh-start accounting and a $27.6 million tax benefit primarily related to the settlement of a tax matter in a foreign jurisdiction. | |
(2) | Results include $319.0 million of goodwill impairment charges, a gain of $1,474.8 million related to reorganization items and fresh-start accounting adjustments, $23.9 million of fees and expenses related to our capital restructuring, $115.5 million of restructuring and related manufacturing inefficiency charges (including $5.6 million of fixed asset impairment charges), $42.0 million of impairment charges related to our investments in two equity affiliates, a $9.9 million loss related to a transaction with an affiliate and a $23.1 million tax benefit related to reorganization items and fresh-start accounting adjustments. | |
(3) | Results include $530.0 million of goodwill impairment charges, $193.9 million of restructuring and related manufacturing inefficiency charges (including $17.5 million of fixed asset impairment charges), $7.5 million of gains related to the extinguishment of debt, a $34.2 million impairment charge related to |
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an investment in an affiliate, $22.2 million of gains related to the sales of our interests in two affiliates and $8.5 million of net tax benefits related to a reduction in recorded tax reserves, the reversal of a valuation allowance in a European subsidiary and the establishment of a valuation allowance in another European subsidiary. | ||
(4) | Results include $20.7 million of charges related to the divestiture of our interior business, $181.8 million of restructuring and related manufacturing inefficiency charges (including $16.8 million of fixed asset impairment charges), $36.4 million of a curtailment gain related to the freeze of the U.S. salaried pension plan, $34.9 million of merger transaction costs, $3.9 million of losses related to the acquisition of the noncontrolling interest in an affiliate and $24.8 million of net tax benefits related to changes in valuation allowances in several foreign jurisdictions, tax rates and various other tax items. | |
(5) | Includes non-income related taxes, foreign exchange gains and losses, discounts and expenses associated with our asset-backed securitization and factoring facilities, gains and losses related to certain derivative instruments and hedging activities, gains and losses on the extinguishment of debt, gains and losses on the sales of fixed assets and other miscellaneous income and expense. | |
(6) | “Fixed charges” consist of interest on debt, amortization of deferred financing fees and that portion of rental expenses representative of interest. “Earnings” consist of consolidated income (loss) before provision (benefit) for income taxes, equity in the undistributed net (income) loss of affiliates and fixed charges. Earnings in the two month period ended December 31, 2009 and in the year ended December 31, 2008 were insufficient to cover fixed charges by $33.2 million and $537.3 million, respectively. Accordingly, such ratio is not presented for these periods. | |
(7) | “North American content per vehicle” is our net sales in North America divided by estimated total North American vehicle production. Content per vehicle data excludes business conducted through non-consolidated joint ventures. Content per vehicle data for 2008 has been updated to reflect actual production levels. | |
(8) | “North American vehicle production” includes car and light truck production in the United States, Canada and Mexico as provided by Ward’s Automotive. Production data for 2008 has been updated to reflect actual production levels. | |
(9) | “European content per vehicle” is our net sales in Europe divided by estimated total European vehicle production. Content per vehicle data excludes business conducted through non-consolidated joint ventures. Content per vehicle data for 2008 has been updated to reflect actual production levels. | |
(10) | “European vehicle production” includes car and light truck production in Austria, Belgium, Bosnia, Czech Republic, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Turkey, Ukraine and the United Kingdom as provided by CSM Worldwide. Production data for 2008 has been updated to reflect actual production levels. |
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• | exposure to local economic conditions; | |
• | expropriation and nationalization; | |
• | currency exchange rate fluctuations and currency controls; | |
• | withholding and other taxes on remittances and other payments by subsidiaries; | |
• | investment restrictions or requirements; | |
• | export and import restrictions; and | |
• | increases in working capital requirements related to long supply chains. |
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• | make it more difficult for us to satisfy our obligations under our indebtedness, including the notes offered hereby; | |
• | limit our ability to borrow money to fund working capital, capital expenditure, debt service, product development or other corporate requirements; | |
• | require us to dedicate a substantial portion of our cash flow to payments on our indebtedness, which would reduce the amount of cash flow available to fund working capital, capital expenditure, product development and other corporate requirements; | |
• | increase our vulnerability to general adverse industry and economic conditions; | |
• | limit our ability to respond to business opportunities; and | |
• | subject us to financial and other restrictive covenants, the failure of which to satisfy could result in a default under our indebtedness. |
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• | our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control; and | |
• | our ability to access the capital and financial markets on commercially reasonable terms. |
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• | we or any of our subsidiary guarantors were or was insolvent or rendered insolvent by reason of issuing the notes or the guarantees; |
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• | payment of the consideration left us or any of our subsidiary guarantors with an unreasonably small amount of capital to carry on the business; or | |
• | we or any of our subsidiary guarantors intended to, or believed that we or it would, incur debts beyond our or its ability to pay as they mature. |
• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets; | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts and liabilities, including contingent liabilities, as they become absolute and mature; or | |
• | it could not pay its debts as they become due. |
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• | incur or guarantee additional debt; | |
• | pay dividends and make other restricted payments; | |
• | create or incur certain liens; | |
• | engage in sales of assets and subsidiary stock; | |
• | enter into transactions with affiliates; | |
• | sell or dispose of our assets or enter into merger or consolidation transactions; | |
• | make investments, including acquisitions; | |
• | enter into lines of businesses which are not reasonably related to those businesses in which we are engaged; | |
• | enter into contracts containing restrictions on granting liens or making distributions, loans or transferring assets to us or any guarantor under the First Lien Facility; and/or | |
• | repay indebtedness (including the notes) prior to stated maturities. |
• | could elect to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be due and payable; | |
• | may have the ability to require us to apply all of our available cash to repay these borrowings; or | |
• | may prevent us from making debt service payments under our other agreements, including the indenture governing the notes, any of which could result in an event of default under the notes. |
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As of December 31, 2009 | ||||||||
Actual | As Adjusted | |||||||
(In millions) | ||||||||
Cash and cash equivalents | $ | 1,554.0 | $ | 1,306.3 | (2) | |||
Short-term debt: | ||||||||
Short-term borrowings | $ | 37.1 | $ | 37.1 | ||||
Current portion of long-term debt | 8.1 | 4.3 | (3) | |||||
Total short-term debt | $ | 45.2 | $ | 41.4 | ||||
Long-term debt: | ||||||||
First lien facility(1) | $ | 375.0 | $ | — | (3) | |||
Second lien facility | 550.0 | — | (3) | |||||
2018 notes | — | 347.4 | (4) | |||||
2020 notes | — | 347.1 | (4) | |||||
Other long-term debt | 10.2 | 10.2 | ||||||
Less current portion | (8.1 | ) | (4.3 )(3) | |||||
Total long-term debt, less current portion | $ | 927.1 | $ | 700.4 | ||||
Total debt | $ | 972.3 | $ | 741.8 | ||||
Equity | 2,181.8 | 2,169.5 | (5) | |||||
Total capitalization | $ | 3,154.1 | $ | 2,911.3 | ||||
(1) | Effective as of March 19, 2010, we added the $110 million Revolving Credit Facility to the First Lien Facility. See “Summary — Recent Developments — Revolving Credit Facility.” | |
(2) | Reflects cash proceeds from the issuance of the 2018 notes and the 2020 notes, net of debt issuance costs of $14.6 million and $2.6 million related to the notes and the Revolving Credit Facility, respectively, and the extinguishment of $925 million of term loans provided under the First Lien Facility and the Second Lien Facility. | |
(3) | Reflects the extinguishment of $925 million of term loans provided under the First Lien Facility and the Second Lien Facility. |
(4) | Reflects the issuance of $350 million aggregate principal amount of 2018 notes and $350 million aggregate principal amount of 2020 notes, net of aggregate original issue discount of $5.5 million. |
(5) | Reflects a $12.3 million write-off of unamortized financing fees related to the term loans provided under the First Lien Facility and the Second Lien Facility. |
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Successor | Predecessor | ||||||||||||||||||||||||
Two Month | Ten Month | ||||||||||||||||||||||||
Period Ended | Period Ended | ||||||||||||||||||||||||
December 31, | November 7, | Year Ended December 31, | |||||||||||||||||||||||
2009(1) | 2009(2) | 2008(3) | 2007(4) | 2006(5) | 2005(6) | ||||||||||||||||||||
Statement of Operations Data:(in millions) | |||||||||||||||||||||||||
Net sales | $ | 1,580.9 | $ | 8,158.7 | $ | 13,570.5 | $ | 15,995.0 | $ | 17,838.9 | $ | 17,089.2 | |||||||||||||
Gross profit | 72.8 | 287.4 | 747.6 | 1,151.8 | 930.8 | 739.5 | |||||||||||||||||||
Selling, general and administrative expenses | 71.2 | 376.7 | 511.5 | 572.8 | 644.6 | 629.2 | |||||||||||||||||||
Amortization of intangible assets | 4.5 | 4.1 | 5.3 | 5.2 | 5.2 | 4.9 | |||||||||||||||||||
Goodwill impairment charges | — | 319.0 | 530.0 | — | 2.9 | 1,012.8 | |||||||||||||||||||
Divestiture of Interior business | — | — | 10.7 | 636.0 | — | ||||||||||||||||||||
Interest expense | 11.1 | 151.4 | 190.3 | 199.2 | 209.8 | 183.2 | |||||||||||||||||||
Other (income) expense, net(7) | 19.8 | (16.6 | ) | 51.9 | 40.7 | 85.7 | 38.0 | ||||||||||||||||||
Reorganization items and fresh-start accounting adjustments, net | — | (1,474.8 | ) | — | — | — | — | ||||||||||||||||||
Consolidated income (loss) before provision (benefit) for income taxes, equity in net (income) loss of affiliates and cumulative effect of a change in accounting principle | (33.8 | ) | 927.6 | (541.4 | ) | 323.2 | (653.4 | ) | (1,128.6 | ) | |||||||||||||||
Provision (benefit) for income taxes | (24.2 | ) | 29.2 | 85.8 | 89.9 | 54.9 | 194.3 | ||||||||||||||||||
Equity in net (income) loss of affiliates | (1.9 | ) | 64.0 | 37.2 | (33.8 | ) | (16.2 | ) | 51.4 |
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Successor | Predecessor | ||||||||||||||||||||||||
Two Month | Ten Month | ||||||||||||||||||||||||
Period Ended | Period Ended | ||||||||||||||||||||||||
December 31, | November 7, | Year Ended December 31, | |||||||||||||||||||||||
2009(1) | 2009(2) | 2008(3) | 2007(4) | 2006(5) | 2005(6) | ||||||||||||||||||||
Statement of Operations Data:(in millions) | |||||||||||||||||||||||||
Consolidated income (loss) before cumulative effect of a change in accounting principle | (7.7 | ) | 834.4 | (664.4 | ) | 267.1 | (692.1 | ) | (1,374.3 | ) | |||||||||||||||
Cumulative effect of a change in accounting principle(8) | — | — | — | — | (2.9 | ) | — | ||||||||||||||||||
Consolidated net income (loss) | (7.7 | ) | 834.4 | (664.4 | ) | 267.1 | (689.2 | ) | (1,374.3 | ) | |||||||||||||||
Net income (loss) attributable to noncontrolling interests | (3.9 | ) | 16.2 | 25.5 | 25.6 | 18.3 | 7.2 | ||||||||||||||||||
Net income (loss) attributable to Lear | $ | (3.8 | ) | $ | 818.2 | $ | (689.9 | ) | $ | 241.5 | $ | (707.5 | ) | $ | (1,381.5 | ) | |||||||||
Basic net income (loss) per share attributable to Lear | $ | (0.11 | ) | $ | 10.56 | $ | (8.93 | ) | $ | 3.14 | $ | (10.31 | ) | $ | (20.57 | ) | |||||||||
Diluted net income (loss) per share attributable to Lear | $ | (0.11 | ) | $ | 10.55 | $ | (8.93 | ) | $ | 3.09 | $ | (10.31 | ) | $ | (20.57 | ) | |||||||||
Weighted average shares outstanding — basic | 34,525,187 | 77,499,860 | 77,242,360 | 76,826,765 | 68,607,262 | 67,166,668 | |||||||||||||||||||
Weighted average shares outstanding — diluted | 34,525,187 | 77,559,792 | 77,242,360 | 78,214,248 | 68,607,262 | 67,166,668 | |||||||||||||||||||
Dividends per share | $ | — | $ | — | $ | — | $ | — | $ | 0.25 | $ | 1.00 | |||||||||||||
Statement of Cash Flow Data:(in millions) | |||||||||||||||||||||||||
Cash flows from operating activities | 324.0 | (499.2 | ) | 163.6 | 487.5 | 299.1 | 571.5 | ||||||||||||||||||
Cash flows from investing activities | (39.5 | ) | (52.7 | ) | (144.4 | ) | (340.0 | ) | (312.2 | ) | (541.6 | ) | |||||||||||||
Cash flows from financing activities | 30.2 | 165.0 | 987.3 | (70.4 | ) | 263.6 | (357.7 | ) | |||||||||||||||||
Capital expenditures | 41.3 | 77.5 | 167.7 | 202.2 | 347.6 | 568.4 | |||||||||||||||||||
Other Data (unaudited): | |||||||||||||||||||||||||
Ratio of earnings to fixed charges(9) | — | 6.3x | — | 2.4x | — | — |
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Successor | Predecessor | ||||||||||||||||||||
December 31, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
As of or Year Ended | 2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Balance Sheet Data:(in millions) | |||||||||||||||||||||
Current assets | $ | 3,787.0 | $ | 3,674.2 | $ | 3,718.0 | $ | 3,890.3 | $ | 3,846.4 | |||||||||||
Total assets | 6,073.3 | 6,872.9 | 7,800.4 | 7,850.5 | 8,288.4 | ||||||||||||||||
Current liabilities | 2,400.8 | 4,609.8 | 3,603.9 | 3,887.3 | 4,106.7 | ||||||||||||||||
Long-term debt | 927.1 | 1,303.0 | 2,344.6 | 2,434.5 | 2,243.1 | ||||||||||||||||
Equity | 2,181.8 | 247.7 | 1,117.5 | 640.0 | 1,171.2 | ||||||||||||||||
Other Data(unaudited): | |||||||||||||||||||||
Employees at year end | 74,870 | 80,112 | 91,455 | 104,276 | 115,113 | ||||||||||||||||
North American content per vehicle(10) | $ | 345 | $ | 391 | $ | 483 | $ | 645 | $ | 586 | |||||||||||
North American vehicle production (in millions)(11) | 8.5 | 12.6 | 15.0 | 15.2 | 15.8 | ||||||||||||||||
European content per vehicle(12) | $ | 293 | $ | 350 | $ | 342 | $ | 338 | $ | 350 | |||||||||||
European vehicle production (in millions)(13) | 15.7 | 18.8 | 20.2 | 19.0 | 18.7 |
(1) | Results include $44.5 million of restructuring and related manufacturing inefficiency charges, a $1.9 million loss related to a transaction with an affiliate, $15.1 million of charges as a result of the bankruptcy proceedings and the application of fresh-start accounting and a $27.6 million tax benefit primarily related to the settlement of a tax matter in a foreign jurisdiction. | |
(2) | Results include $319.0 million of goodwill impairment charges, a gain of $1,474.8 million related to reorganization items and fresh-start accounting adjustments, $23.9 million of fees and expenses related to our capital restructuring, $115.5 million of restructuring and related manufacturing inefficiency charges (including $5.6 million of fixed asset impairment charges), $42.0 million of impairment charges related to our investments in two equity affiliates, a $9.9 million loss related to a transaction with an affiliate and a $23.1 million tax benefit related to reorganization items and fresh-start accounting adjustments. | |
(3) | Results include $530.0 million of goodwill impairment charges, $193.9 million of restructuring and related manufacturing inefficiency charges (including $17.5 million of fixed asset impairment charges), $7.5 million of gains related to the extinguishment of debt, a $34.2 million impairment charge related to an investment in an affiliate, $22.2 million of gains related to the sales of our interests in two affiliates and $8.5 million of net tax benefits related to a reduction in recorded tax reserves, the reversal of a valuation allowance in a European subsidiary and the establishment of a valuation allowance in another European subsidiary. | |
(4) | Results include $20.7 million of charges related to the divestiture of our interior business, $181.8 million of restructuring and related manufacturing inefficiency charges (including $16.8 million of fixed asset impairment charges), $36.4 million of a curtailment gain related to the freeze of the U.S. salaried pension plan, $34.9 million of merger transaction costs, $3.9 million of losses related to the acquisition of the noncontrolling interest in an affiliate and $24.8 million of net tax benefits related to changes in valuation allowances in several foreign jurisdictions, tax rates and various other tax items. | |
(5) | Results include $636.0 million of charges related to the divestiture of our interior business, $2.9 million of goodwill impairment charges, $10.0 million of fixed asset impairment charges, $99.7 million of restructuring and related manufacturing inefficiency charges (including $5.8 million of fixed asset impairment charges), $47.9 million of charges related to the extinguishment of debt, $26.9 million of gains related to the sales of our interests in two affiliates and $19.5 million of net tax benefits related to the expiration of the statute of limitations in a foreign taxing jurisdiction, a tax audit resolution, a favorable tax ruling and several other tax items. | |
(6) | Results include $1,012.8 million of goodwill impairment charges, $82.3 million of fixed asset impairment charges, $104.4 million of restructuring and related manufacturing inefficiency charges (including |
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$15.1 million of fixed asset impairment charges), $39.2 million of litigation-related charges, $46.7 million of charges related to the divestiture and/or capital restructuring of joint ventures, $300.3 million of tax charges, consisting of a U.S. deferred tax asset valuation allowance of $255.0 million and an increase in related tax reserves of $45.3 million, and $17.8 million of tax benefits related to a tax law change in Poland. | ||
(7) | Includes non-income related taxes, foreign exchange gains and losses, discounts and expenses associated with our asset-backed securitization and factoring facilities, gains and losses related to certain derivative instruments and hedging activities, gains and losses on the extinguishment of debt, gains and losses on the sales of fixed assets and other miscellaneous income and expense. | |
(8) | The cumulative effect of a change in accounting principle in 2006 resulted from the adoption of FASB Accounting Standards Codificationtm718, “Compensation — Stock Compensation.” | |
(9) | “Fixed charges” consist of interest on debt, amortization of deferred financing fees and that portion of rental expenses representative of interest. “Earnings” consist of consolidated income (loss) before provision (benefit) for income taxes and equity in the undistributed net (income) loss of affiliates, fixed charges and cumulative effect of a change in accounting principle. Earnings in the two month period ended December 31, 2009 and in the years ended December 31, 2008, 2006 and 2005 were insufficient to cover fixed charges by $33.2 million, $537.3 million, $651.8 million and $1,123.3 million, respectively. Accordingly, such ratio is not presented for these years. | |
(10) | “North American content per vehicle” is our net sales in North America divided by estimated total North American vehicle production. Content per vehicle data excludes business conducted through non-consolidated joint ventures. Content per vehicle data for 2008 has been updated to reflect actual production levels. | |
(11) | “North American vehicle production” includes car and light truck production in the United States, Canada and Mexico as provided by Ward’s Automotive. Production data for 2008 has been updated to reflect actual production levels. | |
(12) | “European content per vehicle” is our net sales in Europe divided by estimated total European vehicle production. Content per vehicle data excludes business conducted through non-consolidated joint ventures. Content per vehicle data for 2008 has been updated to reflect actual production levels. | |
(13) | “European vehicle production” includes car and light truck production in Austria, Belgium, Bosnia, Czech Republic, Finland, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Sweden, Turkey, Ukraine and the United Kingdom as provided by CSM Worldwide. Production data for 2008 has been updated to reflect actual production levels. |
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CONDITION AND RESULTS OF OPERATIONS
• | First Lien Facility —The First Lien Term Facility of $375 million. | |
• | Second Lien Facility— The Second Lien Facility of $550 million. | |
• | Series A Preferred Stock— $450 million, or 10,896,250 shares, of Series A convertible participating preferred stock (the “Series A Preferred Stock”), which does not bear any mandatory dividends. The Series A Preferred Stock is convertible into approximately 24.2% of our new common stock, par value $0.01 per share (“Common Stock”), on a fully diluted basis. As of December 31, 2009, we had 9,881,303 shares of Series A Preferred Stock outstanding. | |
• | Common Stock and Warrants —A single class of Common Stock, including sufficient shares to provide for (i) management equity grants, (ii) the conversion of the Series A Preferred Stock into Common Stock and (iii) warrants to purchase 15%, or 8,157,249 shares, of our Common Stock, on a fully diluted basis (the “Warrants”). On December 21, 2009, the Warrants became exercisable at an exercise price of $0.01 per share of Common Stock. The Warrants expire on November 9, 2014. As of December 31, 2009, we had 36,954,733 shares of Common Stock outstanding and 6,377,068 Warrants outstanding. |
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• | Our pre-petition common stock was extinguished, and no distributions were made to our former shareholders; | |
• | Our pre-petition debt securities were cancelled, and the indentures governing such debt securities were terminated (other than for the purposes of allowing holders of the notes to receive distributions under the Plan and allowing the trustees to exercise certain rights); and | |
• | Our pre-petition primary credit facility was cancelled (other than for the purposes of allowing creditors under that facility to receive distributions under the Plan and allowing the administrative agent to exercise certain rights). |
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Successor | Predecessor | ||||||||||||||||
Ten Month | |||||||||||||||||
Two Month | Period Ended | ||||||||||||||||
Period Ended | November 7, | Year Ended December 31, | |||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||
Goodwill impairment charges | $ | — | $ | 319 | $ | 530 | $ | — | |||||||||
Costs related to divestiture of interior business | — | — | — | 21 | |||||||||||||
Reorganization items and fresh-start accounting adjustments, net | — | (1,475 | ) | — | — | ||||||||||||
Fees and expenses related to capital restructuring and other related matters | 15 | 24 | — | — | |||||||||||||
Costs of restructuring actions, including manufacturing inefficiencies of $1 million in the two month period ended December 31, 2009, $15 million in the ten month period ended November 7, 2009, $17 million in 2008 and $13 million in 2007 | 44 | 116 | 194 | 182 | |||||||||||||
Costs related to merger transaction | — | — | — | 35 | |||||||||||||
U.S. salaried pension plan curtailment gain | — | — | — | (36 | ) | ||||||||||||
Gains on the extinguishment of debt | — | — | (8 | ) | — | ||||||||||||
Impairment of investment in affiliates | — | 42 | 34 | — | |||||||||||||
(Gains) losses related to affiliate transactions | 2 | 10 | (22 | ) | 4 | ||||||||||||
Tax benefits | (28 | ) | (23 | ) | (9 | ) | (25 | ) |
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Successor | Predecessor | ||||||||||||||||||||||||||||||||
Two Month | Ten Month | ||||||||||||||||||||||||||||||||
Period Ended | Period Ended | ||||||||||||||||||||||||||||||||
December 31, | November 7, | Year Ended December 31, | |||||||||||||||||||||||||||||||
2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||
Net sales | |||||||||||||||||||||||||||||||||
Seating | $ | 1,251.1 | 79.1 | % | $ | 6,561.8 | 80.4 | % | $ | 10,726.9 | 79.0 | % | $ | 12,206.1 | 76.3 | % | |||||||||||||||||
Electrical power management | 329.8 | 20.9 | 1,596.9 | 19.6 | 2,843.6 | 21.0 | 3,100.0 | 19.4 | |||||||||||||||||||||||||
Interior | — | — | — | — | — | — | 688.9 | 4.3 | |||||||||||||||||||||||||
Net sales | 1,580.9 | 100.0 | 8,158.7 | 100.0 | 13,570.5 | 100.0 | 15,995.0 | 100.0 | |||||||||||||||||||||||||
Gross profit | 72.8 | 4.6 | 287.4 | 3.5 | 747.6 | 5.5 | 1,151.8 | 7.2 | |||||||||||||||||||||||||
Selling, general and administrative expenses | 71.2 | 4.5 | 376.7 | 4.6 | 511.5 | 3.8 | 572.8 | 3.6 | |||||||||||||||||||||||||
Amortization of intangible assets | 4.5 | 0.3 | 4.1 | — | 5.3 | — | 5.2 | — | |||||||||||||||||||||||||
Goodwill impairment charges | — | — | 319.0 | 3.9 | 530.0 | 3.9 | — | — | |||||||||||||||||||||||||
Divestiture of Interior business | — | — | — | — | — | — | 10.7 | 0.1 | |||||||||||||||||||||||||
Interest expense | 11.1 | 0.7 | 151.4 | 1.9 | 190.3 | 1.4 | 199.2 | 1.2 | |||||||||||||||||||||||||
Other (income) expense, net | 19.8 | 1.2 | (16.6 | ) | (0.2 | ) | 51.9 | 0.4 | 40.7 | 0.3 | |||||||||||||||||||||||
Reorganization items and fresh- start accounting adjustments, net | — | — | (1,474.8 | ) | (18.1 | ) | — | — | — | — | |||||||||||||||||||||||
Provision (benefit) for income taxes | (24.2 | ) | (1.5 | ) | 29.2 | 0.4 | 85.8 | 0.6 | 89.9 | 0.6 | |||||||||||||||||||||||
Equity in net (income) loss of affiliates | (1.9 | ) | (0.1 | ) | 64.0 | 0.8 | 37.2 | 0.3 | (33.8 | ) | (0.2 | ) | |||||||||||||||||||||
Net income (loss) attributable to noncontrolling interests | (3.9 | ) | (0.3 | ) | 16.2 | 0.2 | 25.5 | 0.2 | 25.6 | 0.1 | |||||||||||||||||||||||
Net income (loss) attributable to Lear | (3.8 | ) | (0.2 | ) | 818.2 | 10.0 | (689.9 | ) | (5.1 | ) | 241.5 | 1.5 |
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Successor | Predecessor | ||||||||||||
Two Month | Ten Month | ||||||||||||
Period Ended | Period Ended | Year Ended | |||||||||||
December 31, | November 7, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Net sales | $ | 1,251.1 | $ | 6,561.8 | $ | 10,726.9 | |||||||
Segment earnings(1) | 52.4 | 184.9 | 386.7 | ||||||||||
Margin | 4.2 | % | 2.8 | % | 3.6 | % |
(1) | See definition above. |
Successor | Predecessor | ||||||||||||
Two Month | Ten Month | ||||||||||||
Period Ended | Period Ended | Year Ended | |||||||||||
December 31, | November 7, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Net sales | $ | 329.8 | $ | 1,596.9 | $ | 2,843.6 | |||||||
Segment earnings(1) | (24.5 | ) | (131.3 | ) | 44.7 | ||||||||
Margin | (7.4 | )% | (8.2 | )% | 1.6 | % |
(1) | See definition above. |
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Successor | Predecessor | ||||||||||||
Two Month | Ten Month | ||||||||||||
Period Ended | Period Ended | Year Ended | |||||||||||
December 31, | November 7, | December 31, | |||||||||||
2009 | 2009 | 2008 | |||||||||||
Net sales | $ | — | $ | — | $ | — | |||||||
Segment earnings(1) | (30.8 | ) | (147.0 | ) | (200.6 | ) | |||||||
Margin | N/A | N/A | N/A |
(1) | See definition above. |
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Year Ended | ||||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Net sales | $ | 10,726.9 | $ | 12,206.1 | ||||
Segment earnings(1) | 386.7 | 758.7 | ||||||
Margin | 3.6 | % | 6.2 | % |
(1) | See definition above. |
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Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
Net sales | $ | 2,843.6 | $ | 3,100.0 | ||||
Segment earnings(1) | 44.7 | 40.8 | ||||||
Margin | 1.6 | % | 1.3 | % |
(1) | See definition above. |
Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
Net sales | $ | — | $ | 688.9 | ||||
Segment earnings(1) | — | 8.2 | ||||||
Margin | N/A | 1.2 | % |
(1) | See definition above. |
Year Ended December 31, | ||||||||
2008 | 2007 | |||||||
Net sales | $ | — | $ | — | ||||
Segment earnings(1) | (200.6 | ) | (233.9 | ) | ||||
Margin | N/A | N/A |
(1) | See definition above. |
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• | Indenture dated as of November 24, 2006, by and among Lear, certain subsidiary guarantors party thereto from time to time and The Bank of New York Mellon Trust Company, N.A., as trustee (“BONY”), relating to the 8.5% senior notes due 2013 and the 8.75% senior notes due 2016; | |
• | Indenture dated as of August 3, 2004, by and among Lear, the guarantors party thereto from time to time and BNY Midwest Trust Company, N.A., as trustee, as amended and supplemented by that certain Supplemental Indenture No. 1 and Supplemental Indenture No. 2, relating to the 5.75% senior notes due 2014; and | |
• | Indenture dated as of February 20, 2002, by and among Lear, the guarantors party thereto from time to time and BONY, as amended and supplemented by that certain Supplemental Indenture No. 1, Supplemental Indenture No. 2, Supplemental Indenture No. 3 and Supplemental Indenture No. 4, relating to the zero-coupon convertible senior notes due 2022. |
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2010 | 2011 | 2012 | 2013 | 2014 | Thereafter | Total | ||||||||||||||||||||||
Long-term debt maturities | $ | 8.1 | $ | 6.2 | $ | 555.6 | $ | 4.3 | $ | 360.3 | $ | 0.7 | $ | 935.2 | ||||||||||||||
Scheduled interest payments | 77.5 | 80.9 | 76.0 | 27.2 | 22.4 | — | 284.0 | |||||||||||||||||||||
Lease commitments | 67.0 | 46.5 | 33.0 | 23.8 | 16.7 | 35.7 | 222.7 | |||||||||||||||||||||
Total | $ | 152.6 | $ | 133.6 | $ | 664.6 | $ | 55.3 | $ | 399.4 | $ | 36.4 | $ | 1,441.9 | ||||||||||||||
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Moody’s | Standard & Poor’s | |||
Investors Service | Ratings Services | |||
Corporate rating | B1 | B | ||
Credit rating of First Lien Facility | Ba1 | BB− | ||
Credit rating of Second Lien Facility | Ba2 | BB− | ||
Ratings outlook | Positive | Positive |
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• | First Lien Term Facility— The First Lien Term Facility of $375 million. | |
• | Second Lien Facility— The Second Lien Facility of $550 million. | |
• | Series A Preferred Stock— $450 million, or 10,896,250 shares, of Series A Preferred Stock, which does not bear any mandatory dividends. The Series A Preferred Stock is convertible into approximately 24.2% of our Common Stock, on a fully diluted basis. As of December 31, 2009, we had 9,881,303 shares of Series A Preferred Stock outstanding. | |
• | Common Stock and Warrants —A single class of Common Stock, including sufficient shares to provide for (i) management equity grants, (ii) the conversion of the Series A Preferred Stock into Common Stock and (iii) Warrants to purchase 15%, or 8,157,249 shares, of our Common Stock, on a fully diluted basis. On December 21, 2009, the Warrants became exercisable at an exercise price of $0.01 per share of Common Stock. The Warrants expire on November 9, 2014. As of December 31, 2009, we had 36,954,733 shares of Common Stock outstanding and 6,377,068 Warrants outstanding. |
• | Our pre-petition common stock was extinguished, and no distributions were made to our former shareholders; | |
• | Our pre-petition debt securities were cancelled, and the indentures governing such debt securities were terminated (other than for the purposes of allowing holders of the notes to receive distributions under the Plan and allowing the trustees to exercise certain rights); and |
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• | Our pre-petition primary credit facility was cancelled (other than for the purposes of allowing creditors under that facility to receive distributions under the Plan and allowing the administrative agent to exercise certain rights). |
• | Leverage Global Presence and Expand Low-Cost Footprint. We believe that it is important to have capabilities that are in alignment with our major customers’ global presence and to be well-positioned to leverage our expanding design, engineering and manufacturing footprint in low-cost regions. We are organized into two global business units, seat systems and electrical power management systems, to maximize efficiencies across our worldwide network and to leverage the benefits of our global scale. We are one of the few suppliers in each of our product segments that is able to serve customers with design, development, engineering, integration and production capabilities in all automotive-producing regions of the world and every major market, including North America, South America, Europe and Asia. Our expansion plans are focused on emerging markets. Asia, in particular, continues to present significant growth opportunities, as major global automotive manufacturers implement production expansion plans and local automotive manufacturers aggressively expand their operations to meet long-term demand in this region. We believe that we are well-positioned to take advantage of China’s emerging growth as a result of our extensive network of high-quality manufacturing facilities throughout China, which provide seating and electrical power management products to a variety of global customers for local production. We also have operations in India, Thailand, the Philippines, Malaysia, Vietnam and Korea. We see opportunities for growth in serving local, regional and global markets with our operations in these countries. Our expansion in Asia has been accomplished, in part, through a series of joint ventures with our customersand/or local suppliers. We currently have 16 joint ventures throughout Asia. Our growing presence in Asia, in addition to our continued expansion of operations in other emerging markets, allows us to serve our customers globally and to increase our global competitiveness from a manufacturing, engineering and sourcing standpoint. We currently support our global operations with more than 100 manufacturing and engineering facilities located in 20 low-cost countries. We have aggressively pursued this strategy by selectively increasing our vertical integration |
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capabilities and expanding our component manufacturing capacity in Mexico, Eastern Europe, Africa and Asia. Furthermore, we have expanded our low-cost engineering capabilities in China, India and the Philippines. |
• | Focus on Core Capabilities, Selective Vertical Integration and Investments in Technology. We are focused on seat and electrical power management systems and components where we can provide value to our customers. We are able to provide integrated solutions in these core segments with global capabilities in the design, development, engineering, integration and production of complete system architectures that can be utilized across vehicle platforms at significant cost savings to our customers. The opportunity to strengthen our global leadership position in these segments exists as we develop new capabilities and innovations, as well as offer increased value to our customers through the selective vertical integration of key components. We have complete design, development, engineering, integration and production capabilities in the full complement of critical components in both our seating and electrical power management segments. See “— Products” for further information regarding our two product operating segments. |
• | Enhance and Diversify Strong Customer Relationships through Operational Excellence. We maintain relationships with every major global automotive manufacturer and are rapidly growing relationships with local automotive manufacturers in growth markets, such as China and India. In 2009, |
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approximately 70% of our net sales were generated outside of North America. Our strategy is to continue to enhance these relationships and diversify our net sales on a regional, customer and vehicle segment basis. We believe that the long-standing and strong relationships that we have built with our customers are a significant competitive advantage that allows us to act as integral partners in identifying business opportunities and to anticipate the needs of our customers. |
For The Year Ended December 31, | 2009 | 2008 | 2007 | |||||||||
Seating | 80 | % | 79 | % | 76 | % | ||||||
Electrical power management | 20 | 21 | 20 | |||||||||
Interior | — | — | 4 |
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• | Seating. The seating segment consists of the design, manufacture, assembly and supply of vehicle seating requirements. We produce seat systems for automobiles and light trucks that are fully assembled and ready for installation. In all cases, seat systems are designed and engineered for specific vehicle models or platforms. We have developed modular seat architectures for both front and rear seats, whereby we utilize pre-developed, modular design concepts to build a program-specific seat, incorporating the latest performance requirements and safety technology, in a shorter period of time, thereby assisting our customers in achieving a faster time-to-market. Seat systems are designed to achieve maximum passenger comfort by adding a wide range of manual and power features, such as lumbar supports, cushion and back bolsters and leg supports. We also produce components that comprise the seat assemblies, such as seat structures and mechanisms, seat trim covers, headrests and seat foam. | |
• | As a result of our strong product design and technology capabilities, we are a leader in the design of seats with enhanced safety and convenience features. For example, our ProTec® PLuS Self-Aligning Head Restraint is an advancement in seat safety features. By integrating the head restraint with the lumbar support, the occupant’s head is supported earlier and for a longer period of time in a rear-impact collision, potentially reducing the risk of injury. We also supply ECO and EVO lightweight seat structures which have been designed to accommodate our customers’ needs for all market segments, from emerging to mature, and incorporate our ultra lightweight seat adjustment mechanisms. To address the increasing focus on craftsmanship, we have developed concave seat contours that eliminate wrinkles and provide improved styling. We are also satisfying our customers’ growing demand for reconfigurable and lightweight seats with our thin profile rear seat and our stadium slide seat system. For example, General Motors’ full-size sport utility vehicles and full-size pickups use our reconfigurable seat technology, and General Motors’ full-size sport utility vehicles, as well as the Ford Explorer, use our thin profile rear seat technology for their third row seats. Additionally, our LeanProfiletm seats incorporate the next generation of low-mass, high-function and environmentally friendly features, and our Dynamic Environmental Comfort Systemtm can offer weight reductions of 30% — 40%, as compared to current foam seat designs, and utilizes environmentally friendly materials, which reduce carbon dioxide emissions. Our seating products also reflect our environmental focus. For example, in addition to our Dynamic Environmental Comfort Systemtm, our SoyFoamtm seats, which are used in the Ford Mustang, are up to 24% renewable, as compared to nonrenewable, petroleum-based foam seats. | |
• | Electrical Power Management. The electrical power management segment consists of the manufacture, assembly and supply of traditional electrical power management systems and components, as well as a new generation of high-power and hybrid electrical systems and components. With the increase in the number of electrical and electronically controlled functions and features on the vehicle, there is an increasing focus on the improvement of the functionality of the vehicle’s electrical architecture. We are able to provide our customers with design and engineering solutions and manufactured systems, modules and components that optimally integrate the entire electrical distribution system, consisting of wiring, terminals and connectors, junction boxes and electronic modules, within the overall architecture of the vehicle. This integration can reduce the overall system cost and weight and improve the reliability and packaging by reducing the number of wires and terminals and connectors normally required to manage electrical power and signal distribution within a vehicle. For example, our integrated seat adjuster module has twenty-four fewer cut circuits and five fewer connectors, weighs one-half pound less and costs 20% less than a traditional separated electronic control unit and seat wiring system. In addition, our smart junction box expands the traditional junction box functionality by utilizing printed circuit board technologies, which allows additional function integration. |
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• | Electrical Distribution and Power Management Systems. Electrical distribution and power management systems are comprised primarily of wire harness assemblies, terminals and connectors and control modules, including junction boxes and fuse boxes. Wire harness assemblies consist of a collection of wiring and terminals and connectors that connect all of the various electrical and electronic devices within the vehicle to each otherand/or to a power source. Fuse boxes are centrally located boxes within the vehicle that contain fusesand/or relays for circuit and device protection, as well as for power distribution. Junction boxes serve as a connection point for multiple wire harness assemblies. They may also contain fusesand/or relays for circuit and device protection. |
• | Specialty Electronics. Our lighting control module integrates electronic control logic and diagnostics with the headlamp switch. Entertainment products include radio amplifiers, sound systems, in-vehicle television tuner modules and floor-, seat- or center console-mounted Media Console with aflip-up screen that provides DVD and video game viewing for back-seat passengers. |
• | Seating. Our seat assembly facilities generally usejust-in-time manufacturing techniques, and products are delivered to the automotive manufacturers on ajust-in-time basis, matching our customers’ exact build specifications for a particular day and shift, thereby reducing inventory levels. These facilities are |
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typically located adjacent to or near our customers’ manufacturing and assembly sites. Our seat components, including mechanisms, seat trim covers and seat foam, are manufactured in batches, utilizing facilities in low-cost regions. The principal raw materials used in our seat systems, including steel, foam chemicals and leather hides, are generally available and obtained from multiple suppliers under various types of supply agreements. Fabric, foam, seat frames, mechanisms and certain other components are either manufactured internally or purchased from multiple suppliers under various types of supply agreements. The majority of our steel purchases are comprised of components that are integrated into a seat system, such as seat frames, mechanisms and mechanical components. Therefore, our exposure to changes in steel prices is primarily indirect, through these purchased components. We utilize a combination of short-term and long-term supply contracts to purchase key components. We generally retain the right to terminate these agreements if our supplier does not remain competitive in terms of cost, quality, delivery, technology or customer support. |
• | Electrical Power Management. Electrical power management systems are networks of wiring and associated control devices that route electrical signals and manage electrical power within a vehicle. Wire harness assemblies consist of raw, coiled wire, which is automatically cut to length and terminated. Individual circuits are assembled together on a jig or table, inserted into connectors and wrapped or taped to form wire harness assemblies. Substantially all of our materials are purchased from suppliers, with the exception of a portion of the terminals and connectors that are produced internally. The majority of our copper purchases are comprised of extruded wire that is integrated into electrical wire. Certain materials are available from a limited number of suppliers. Supply agreements typically last for up to one year, and our copper wire contracts are generally subject to price index agreements. The assembly process is labor intensive, and as a result, production is generally performed in low-cost labor sites in Mexico, Honduras, Eastern Europe, Africa, China and the Philippines. |
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• BMW • Daimler • Ford • Honda • Land Rover • Nissan • Saab • Toyota | • ChangAn • Dongfeng • GAZ • Hyundai • Mahindra & Mahindra • Porsche • Subaru • Volkswagen | • Chery • Fiat • Geely • Isuzu • Mazda • PSA • Suzuki • Volvo | • Chrysler • First Autoworks • General Motors • Jaguar • Mitsubishi • Renault • Tata |
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• | High-power charging systems comprised of on/off board chargers, a family of charge cord sets, fast charge stations and charge receptacles and couplers. | |
• | High-power distribution systems including high voltage wire harnesses found throughout the vehicle and battery pack, high-power terminals and connectors (designed to carry high amounts of electric current, to be packaged tightly and to provide proper sealing, high-use reliability and ease of use for the consumer) and battery disconnect units, as well as manual service disconnects. | |
• | Energy management systems including DC-DC converters, battery monitoring systems, dual storage management units and our patent-pending integrated power module, which integrates the functionality of charging and energy management for an efficient solution for the upcoming generation of plug-in hybrid and electric vehicles. |
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• | Seating. We are one of two primary independent suppliers in the global complete seat systems market. Our primary independent competitor globally is Johnson Controls. Faurecia, Toyota Boshoku, TS Tech Co., Ltd. and Magna International Inc. are also significant competitors with varying market presence depending on the region, country or automotive manufacturer. PSA, Toyota and Honda hold equity ownership positions in Faurecia, Toyota Boshoku and TS Tech Co., Ltd., respectively. Other automotive manufacturers, such as Volkswagen and Hyundai, maintain a presence in the seat systems market through wholly owned companies or in-house operations. In seat components, we compete with the aforementioned seat systems suppliers, as well as specialists in particular components with presence primarily in specific regions. | |
• | Electrical Power Management. We are one of the leading independent suppliers of automotive electrical power management systems in North America and Europe. Our major competitors in these markets include Delphi, Yazaki, Sumitomo and Leoni. Our competition in specific electrical distribution and power management component areas includes suppliers of terminals and connectors, such as Tyco Electronics, Molex and FCI, as well as suppliers of automotive electronics, such as Alps, Bosch, Continental, Delphi, Denso, Hella, Kostal, Omron, TRW, Tokai Rika, Valeo and others. |
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Name | Age | Position | ||||
Shari L. Burgess | 51 | Vice President and Treasurer | ||||
Wendy L. Foss | 52 | Vice President and Corporate Controller | ||||
Terrence B. Larkin | 55 | Senior Vice President, General Counsel and Corporate Secretary | ||||
Robert E. Rossiter | 64 | Chairman, Chief Executive Officer and President | ||||
Louis R. Salvatore | 55 | Senior Vice President and President, Global Seating Operations | ||||
Raymond E. Scott | 44 | Senior Vice President and President, Global Electrical Power Management Operations | ||||
Matthew J. Simoncini | 49 | Senior Vice President and Chief Financial Officer | ||||
Melvin L. Stephens | 54 | Senior Vice President, Communications, Corporate Relations and Human Resources | ||||
Thomas P. Capo | 58 | Director | ||||
Curtis J. Clawson | 50 | Director | ||||
Jonathan F. Foster | 49 | Director | ||||
Conrad L. Mallett, Jr. | 56 | Director | ||||
Philip F. Murtaugh | 54 | Director | ||||
Donald L. Runkle | 64 | Director | ||||
Gregory C. Smith | 58 | Director | ||||
Henry D.G. Wallace | 64 | Director |
Shari L. Burgess | Ms. Burgess is the Company’s Vice President and Treasurer, a position she has held since August 2002. Previously, she served as Assistant Treasurer since July 2000 and in various financial positions since November 1992. | |
Wendy L. Foss | Ms. Foss is the Company’s Vice President and Corporate Controller, a position she has held since November 2007. Previously, she served as Vice President and Chief Compliance Officer from January 2007 until February 2009, Vice President, Audit Services since September 2007, Vice President, Finance and Administration and Corporate Secretary since May 2007, Vice President, Finance and Administration and Deputy Corporate Secretary since September 2006, Vice President, Accounting since July 2006, Assistant Corporate Controller since June 2003 and prior to 2003, in various financial management positions for both the Company and UT Automotive, Inc. (“UT Automotive”), which was acquired by Lear in 1999. | |
Terrence B. Larkin | Mr. Larkin is the Company’s Senior Vice President, General Counsel and Corporate Secretary, a position he has held since January 2008. Prior to joining the Company, Mr. Larkin was a partner since 1986 of Bodman LLP, a Detroit-based law firm. Mr. Larkin served on the executive committee of Bodman LLP and was the chairman of its business law practice group. Mr. Larkin’s practice was focused on general corporate, commercial transactions and mergers and acquisitions. |
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Robert E. Rossiter | Mr. Rossiter is the Company’s Chairman, Chief Executive Officer and President, a position he has held since August 2007. Mr. Rossiter has served as Chairman since January 2003, Chief Executive Officer since October 2000, President since August 2007 and from 1984 until December 2002 and Chief Operating Officer from 1988 until April 1997 and from November 1998 until October 2000. Mr. Rossiter also served as Chief Operating Officer — International Operations from April 1997 until November 1998. Mr. Rossiter has been a director of the Company since 1988. | |
Louis R. Salvatore | Mr. Salvatore is the Company’s Senior Vice President and President, Global Seating Operations, a position he has held since February 2008. Previously, he served as Senior Vice President and President — Global Asian Operations/Customers since August 2005, President — Ford, Electrical/Electronics and Interior Divisions since July 2004, President — Global Ford Division since July 2000 and President — DaimlerChrysler Division since December 1998. Prior to joining the Company, Mr. Salvatore worked with Ford Motor Company for fourteen years and held various increasingly senior positions in manufacturing, finance, engineering and purchasing. | |
Raymond E. Scott | Mr. Scott is the Company’s Senior Vice President and President, Global Electrical Power Management Operations, a position he has held since February 2008. Previously, he served as Senior Vice President and President, North American Seating Systems Group since August 2006, Senior Vice President and President, North American Customer Group since June 2005, President, European Customer Focused Division since June 2004 and President, General Motors Division since November 2000. | |
Matthew J. Simoncini | Mr. Simoncini is the Company’s Senior Vice President and Chief Financial Officer, a position he has held since October 2007. Previously, he served as Senior Vice President, Finance and Chief Accounting Officer since August 2006, Vice President, Global Finance since February 2006, Vice President of Operational Finance since June 2004, Vice President of Finance — Europe since 2001 and prior to 2001, in various senior financial management positions for both the Company and UT Automotive. | |
Melvin L. Stephens | Mr. Stephens is the Company’s Senior Vice President, Communications, Corporate Relations and Human Resources, a position he has held since September 2009. Previously, he served as Vice President of Investor Relations and Corporate Communications since January 2002. Prior to joining the Company, Mr. Stephens worked with Ford Motor Company and held various leadership positions in finance, business planning, corporate strategy, communications, marketing and investor relations. |
Thomas P. Capo | Mr. Capo has been a director of Lear since November 2009. Mr. Capo has been Chairman of Dollar Thrifty Automotive Group, Inc. since October 2003. Mr. Capo was a Senior Vice President and the Treasurer of DaimlerChrysler Corporation from November 1998 to August 2000, Vice President and Treasurer of Chrysler Corporation from 1993 to 1998, and Treasurer of Chrysler Corporation from 1991 to 1993. Prior to holding these positions, Mr. Capo served as Vice President and Controller of Chrysler Financial Corporation. Mr. Capo also serves as a director of Cooper Tire & Rubber Company. | |
Curtis J. Clawson | Mr. Clawson has been a director of Lear since November 2009. Mr. Clawson has served as the Chairman, President and Chief Executive Officer of Hayes Lemmerz International, Inc. since 2001. From 1999 until 2000, Mr. Clawson served as the President and Chief Operating Officer of Rexam Beverage Can Americas, Inc. and from 1998 until 1999 he served as the President and Executive Vice President — |
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Beverage Can Americas of American National Can Group, Inc. From 1994 until 1998, Mr. Clawson was employed by AlliedSignal, Inc. as President of the Laminate Systems Group from 1997 to 1998 and President of the Allied Filters and Sparkplug Group from 1994 to 1996. From 1986 until 1994, Mr. Clawson held various management positions at Arvin Industries, Inc. | ||
Jonathan F. Foster | Mr. Foster has been a director of Lear since November 2009. Mr. Foster is Founder and Managing Director of Current Capital LLC, a private equity firm. Previously, from 2007 until 2008, Mr. Foster served as a Managing Director and Co-Head of Diversified Industrials and Services at Wachovia Securities. From 2005 until 2007, he served as Executive Vice President — Finance and Business Development of Revolution LLC. From 2002 until 2004, Mr. Foster was a Managing Director of The Cypress Group, a private equity investment firm and from 2001 until 2002, he served as a Senior Managing Director of Bear Stearns & Co. From 1999 until 2000, Mr. Foster served as the Executive Vice President, Chief Operating Officer and Chief Financial Officer of Toysrus.com, Inc. Previously, Mr. Foster was employed by Lazard Frères & Company LLC for over ten years in various positions, including as a Managing Director. Mr. Foster also serves as a director of Masonite Inc. and Tompkins Holdings Company and as the Vice Chairman of the Board of Trustees of the New York Power Authority. | |
Conrad L. Mallett, Jr. | Justice Mallett, who has been a director of Lear since August 2002, has been the President and CEO of Sinai-Grace Hospital since August 2003. Prior to his current position, Justice Mallett served as the Chief Administrative Officer of the Detroit Medical Center beginning in March 2003. Previously, he served as President and General Counsel of La-Van Hawkins Food Group LLC from April 2002 to March 2003, and Chief Operating Officer for the City of Detroit from January 2002 to April 2002. From August 1999 to April 2002, Justice Mallett was General Counsel and Chief Administrative Officer of the Detroit Medical Center. Justice Mallett was also a Partner in the law firm of Miller, Canfield, Paddock & Stone from January 1999 to August 1999. Justice Mallett was a Justice of the Michigan Supreme Court from December 1990 to January 1999 and served a two-year term as Chief Justice beginning in 1997. | |
Philip F. Murtaugh | Mr. Murtaugh has been a director of Lear since November 2009. From 2007 until 2008, Mr. Murtaugh served as the Chief Executive of Asia Operations of Chrysler Asia Pacific (China). From 2006 until 2007, Mr. Murtaugh served as a Co-Chief Executive and Executive Vice President of Shanghai Automotive Industry Corporation. From 2005 until 2006, Mr. Murtaugh provided consulting services through Murtaugh Consulting Ltd. Previously, Mr. Murtaugh was employed by General Motors Corporation for over 30 years in various management and executive-level positions, most recently as Chairman and Chief Executive Officer of General Motors China from 2000 until 2005 and as Executive Vice President of Shanghai General Motors from 1996 until 2005. | |
Donald L. Runkle | Mr. Runkle has been a director of Lear since November 2009. Mr. Runkle currently serves as Chief Executive Officer of EcoMotors International since 2009 and Chairman of EaglePicher Corporation. Since 2005, Mr. Runkle has provided consulting services in business and technical strategy, and from 2006 to 2007, he also was a consultant for Solectron Corporation. Mr. Runkle also served as an Operating Executive Advisor for Tennenbaum Capital Partners LLC from 2005. From 1999 until 2005, Mr. Runkle held various executive-level positions at Delphi Corporation, including Vice Chairman and Chief Technology Officer from 2003 until 2005, President, Delphi Dynamics and Propulsion Sector, and Executive Vice President from2000-2003 and President, Delphi Energy and Engine Management Systems, and Vice |
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President, Delphi Automotive Systems, from1999-2000. Previously, Mr. Runkle was employed by General Motors Corporation for over 30 years in various management and executive-level positions, most recently Vice President and General Manager of Delphi Energy and Engine Management and Automotive Systems from 1996 until 1999. Mr. Runkle also serves as a director of EaglePicher Corporation, Environmental Systems Products Company, WinCup Corporation, the Lean Enterprise Institute and the Sloan School of Management. | ||
Gregory C. Smith | Mr. Smith has been a director of Lear since November 2009. Mr. Smith, a retired Vice Chairman of Ford Motor Company, currently serves as a Principal of Greg C. Smith LLC, a private management consulting firm, since 2007. Previously, Mr. Smith was employed by Ford Motor Company for over 30 years until 2006. Mr. Smith held various executive-level management positions at Ford Motor Company, most recently serving as Vice Chairman from 2005 until 2006, Executive Vice President and President — Americas from 2004 until 2005, Group Vice President — Ford Motor Company and Chief Executive Officer — Ford Motor Credit Company from 2002 to 2004, Vice President, Ford Motor Company, and President and Chief Operating Officer, Ford Motor Credit Company, from 2001 to 2002. Mr. Smith served as a director of Fannie Mae from 2005 until 2008. Currently, Mr. Smith serves as a director of Penske Corporation and Solutia Inc. | |
Henry D.G. Wallace | Mr. Wallace has been a director of Lear since February 2005. Mr. Wallace worked for 30 years at Ford Motor Company until his retirement in 2001 and held several executive-level operations and financial oversight positions while at Ford, most recently as Group Vice President, Mazda and Asia Pacific Operations in 2001, Chief Financial Officer in 2000 and Group Vice President, Asia Pacific Operations in 1999. Mr. Wallace also serves as a director of AMBAC Financial Group, Inc., Diebold, Inc. and Hayes Lemmerz International, Inc. |
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• | will be unsecured senior obligations of the Company; | |
• | will be senior in right of payment to all future Subordinated Obligations of the Company; | |
• | will be effectively junior to all existing and future Secured Indebtedness of the Company to the extent of the value of the assets securing such Secured Indebtedness, and all Indebtedness, if any, of Subsidiaries that are not Subsidiary Guarantors; and | |
• | will be guaranteed on an unsecured senior basis by each Subsidiary Guarantor. |
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Redemption | ||||
Year | Price | |||
2014 | 103.938 | % | ||
2015 | 101.969 | % | ||
2016 and thereafter | 100.000 | % |
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Redemption | ||||
Year | Price | |||
2015 | 104.063% | |||
2016 | 102.708% | |||
2017 | 101.354% | |||
2018 and thereafter | 100.000% |
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• | the assumption of Indebtedness or other obligations of the Company (other than obligations in respect of Disqualified Stock of the Company) or any Restricted Subsidiary (other than obligations in respect of Disqualified Stock and Preferred Stock of a Restricted Subsidiary that is a Subsidiary Guarantor) and the release of the Company or such Restricted Subsidiary from all liability on such Indebtedness or obligations in connection with such Asset Disposition; | |
• | any Designated Non-Cash Consideration having an aggregate Fair Market Value that, when taken together with all other Designated Non-Cash Consideration received pursuant to this clause and then outstanding, does not exceed at the time of the receipt of such Designated Non-Cash Consideration (with the Fair Market Value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value) the greater of (1) $200.0 million and (2) 3.0% of the Consolidated Total Assets of the Company as shown on the most recent balance sheet of the Company filed with the SEC; | |
• | securities, notes or similar obligations received by the Company or any Restricted Subsidiary from the transferee that are promptly converted by the Company or such Restricted Subsidiary into cash; and | |
• | Temporary Cash Investments. |
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• | annual reports onForm 10-K, or any successor or comparable form, containing the information required to be contained therein, or required in such successor or comparable form; | |
• | quarterly reports onForm 10-Q, containing the information required to be contained therein, or any successor or comparable form; | |
• | from time to time after the occurrence of an event required to be therein reported, such other reports onForm 8-K, or any successor or comparable form; and | |
• | any other information, documents and other reports which the Issuer would be required to file with the SEC if it were subject to Section 13 or 15(d) of the Exchange Act. |
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• | an individual citizen or resident of the United States; | |
• | a corporation (or other entity treated as a corporation) created or organized (or treated as created or organized) in or under the laws of the United States or any State thereof (including the District of Columbia); |
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• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or | |
• | a trust, (i) the administration of which is subject to the primary supervision of a court within the United States and for which one or more U.S. persons have the authority to control all substantial decisions, or (ii) that has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
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• | such interest is not effectively connected with the conduct of a trade or business in the United States by theNon-U.S. Holder; | |
• | suchNon-U.S. Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote; | |
• | suchNon-U.S. Holder is not a controlled foreign corporation directly or indirectly related to us through stock ownership; | |
• | suchNon-U.S. Holder is not a bank whose receipt of interest on the notes is described in Section 881(c)(3)(A) of the U.S. Internal Revenue Code; | |
• | either (A) suchNon-U.S. Holder provides its name and address, and certifies on IRSForm W-8BEN (or a substantially similar form), under penalties of perjury, that it is not a U.S. person or (B) a securities clearing organization or certain other financial institutions holding the note on behalf of theNon-U.S. Holder certifies on IRSForm W-8IMY, under penalties of perjury, that such certification has been received by it and furnishes us or our paying agent with a copy thereof; and | |
• | we or our paying agent do not have actual knowledge or reason to know that the beneficial owner of the note is a U.S. person. |
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Principal Amount | Principal Amount | |||||||
Underwriter | of 2018 Notes | of 2020 Notes | ||||||
Citigroup Global Markets Inc. | $ | 119,000,000 | $ | 119,000,000 | ||||
J.P. Morgan Securities Inc. | 119,000,000 | 119,000,000 | ||||||
Barclays Capital Inc. | 49,000,000 | 49,000,000 | ||||||
UBS Securities LLC | 49,000,000 | 49,000,000 | ||||||
HSBC Securities (USA) Inc. | 14,000,000 | 14,000,000 | ||||||
Total | $ | 350,000,000 | $ | 350,000,000 | ||||
Paid by Lear | ||||
Per note | 1.893 | % |
• | Short sales involve secondary market sales by the underwriters of a greater number of notes than they are required to purchase in the offering. | |
• | Covering transactions involve purchases of notes in the open market after the distribution has been completed in order to cover short positions. | |
• | Stabilizing transactions involve bids to purchase notes so long as the stabilizing bids do not exceed a specified maximum. |
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21557 Telegraph Road
Southfield, Michigan 48033
(248) 447-1500
Attention: Corporate Secretary
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• | common stock; | |
• | preferred stock; | |
• | debt securities; | |
• | warrants to purchase debt securities, common stock or preferred stock; | |
• | subscription rights; and | |
• | stock purchase contracts or stock purchase units. |
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• | general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates; | |
• | the financial condition and restructuring actions of our customers and suppliers; | |
• | changes in actual industry vehicle production levels from our current estimates; | |
• | fluctuations in the production of vehicles for which we are a supplier; | |
• | the loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier; | |
• | disruptions in the relationships with our suppliers; | |
• | labor disputes involving us or our significant customers or suppliers or that otherwise affect us; | |
• | the outcome of customer negotiations; | |
• | the impact and timing of program launch costs; | |
• | the costs, timing and success of restructuring actions; | |
• | increases in our warranty or product liability costs; | |
• | risks associated with conducting business in foreign countries; | |
• | competitive conditions impacting our key customers and suppliers; | |
• | the cost and availability of raw materials and energy; | |
• | our ability to mitigate increases in raw material, energy and commodity costs; | |
• | the outcome of legal or regulatory proceedings to which we are or may become a party; | |
• | unanticipated changes in cash flow, including our ability to align our vendor payment terms with those of our customers; | |
• | our ability to access capital markets on commercially reasonable terms; | |
• | further impairment charges initiated by adverse industry or market developments; | |
• | our anticipated future performance, including, without limitation, our ability to maintain or increase revenue and gross margins, control future operating expenses and make necessary capital expenditures; and | |
• | other risks, described in Part I — Item 1A, “Risk Factors,” in our 2009 Annual Report onForm 10-K and from time to time in our other SEC filings. |
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Successor(1) | Predecessor(1) | |||||||||||||||||||||||
Two Month | Ten Month | |||||||||||||||||||||||
Period | Period | |||||||||||||||||||||||
Ended | Ended | Year Ended | ||||||||||||||||||||||
December 31, | November 7, | December 31, | December 31, | December 31, | December 31, | |||||||||||||||||||
2009 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||
Ratio of Earnings to Fixed Charges(2) | — | 6.3 | x | — | 2.4 | x | — | — |
(1) | Lear adopted fresh-start accounting upon its emergence from Chapter 11 bankruptcy proceedings and became a new entity for financial reporting purposes as of November 7, 2009. Accordingly, the consolidated financial statements for the reporting entity subsequent to emergence from Chapter 11 bankruptcy proceedings (the “Successor”) are not comparable to the consolidated financial statements for the reporting entity prior to emergence from Chapter 11 bankruptcy proceedings (the “Predecessor”). For a discussion of fresh-start accounting, see Notes 1 and 3 to the Consolidated Financial Statements in our 2009 Annual Report onForm 10-K, which is incorporated by reference into the registration statement of which this prospectus forms a part. | |
(2) | “Fixed charges” consist of interest on debt, amortization of deferred financing fees and that portion of rental expenses representative of interest. “Earnings” consist of consolidated income (loss) before provision (benefit) for income taxes and equity in the undistributed net (income) loss of affiliates, fixed charges and cumulative effect of a change in accounting principle. Earnings in the two month period ended December 31, 2009 and in the years ended December 31, 2008, 2006 and 2005 were insufficient to cover fixed charges by $33.2 million, $537.3 million, $651.8 million and $1,123.3 million, respectively. Accordingly, such ratio is not presented for these periods. |
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• | the title and liquidation preference per share of the preferred stock and the number of shares offered; | |
• | the purchase price of the preferred stock; | |
• | the dividend rate (or method of calculation), the dates on which dividends will be payable, whether dividends shall be cumulative and, if so, the date from which dividends will begin to accumulate; | |
• | any redemption or sinking fund provisions of the preferred stock; | |
• | any conversion, redemption or exchange provisions of the preferred stock; | |
• | the voting rights, if any, of the preferred stock; and | |
• | any additional dividend, liquidation, redemption, sinking fund and other rights, preferences, privileges, limitations and restrictions of the preferred stock. |
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• | be general obligations, | |
• | rank equally with all other unsubordinated indebtedness of Lear or any subsidiary guarantor (except to the extent such other indebtedness is secured by collateral that does not also secure the senior debt securities offered by this prospectus), and | |
• | with respect to the assets and earnings of our subsidiaries, effectively rank below all of the liabilities of our subsidiaries (except to the extent that the senior debt securities are guaranteed by our subsidiaries as described below). |
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• | be general obligations, | |
• | rank subordinated and junior in right of payment, to the extent set forth in the subordinated note indenture to all senior debt of Lear and any subsidiary guarantor, and | |
• | with respect to the assets and earnings of our subsidiaries, effectively rank below all of the liabilities of our subsidiaries (except to the extent that the subordinated debt securities are guaranteed by our subsidiaries as described below). |
• | the title of the debt securities, | |
• | whether the debt securities will be senior or subordinated debt, | |
• | whether and the extent to which any subsidiary guarantor will provide a subsidiary guarantee of the debt securities or whether and to the extent the debt securities are entitled to the benefits of any other form of guarantee, | |
• | any limit on the total principal amount of the debt securities, | |
• | the date or dates on which the principal of the debt securities will be payable and whether the stated maturity date can be extended or the method used to determine or extend those dates, | |
• | any interest rate on the debt securities, any date from which interest will accrue, any interest payment dates and regular record dates for interest payments, or the method used to determine any of the foregoing, and the basis for calculating interest if other than a360-day year of twelve30-day months, | |
• | the place or places where payments on the debt securities will be payable, where the debt securities may be presented for registration of transfer, exchange or conversion, and where notices and demands to or upon us relating to the debt securities may be made, if other than the corporate trust office of the Trustee, | |
• | the right, if any, to extend the interest payment periods and the duration of any such deferral period, | |
• | the rate or rates of amortization of the debt securities, if any, | |
• | any provisions for redemption of the debt securities, | |
• | any provisions that would allow or obligate us to redeem or purchase the debt securities prior to their maturity pursuant to any sinking fund or analogous provision or at the option of the holder, | |
• | the purchase price for the debt securities and the denominations in which we will issue the debt securities, if other than a minimum denomination of $2,000 and integral multiple of $1,000, | |
• | any provisions that would determine payments on the debt securities by reference to an index or a formula or other method and the manner of determining the amount of such payments, |
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• | any foreign currency, currencies or currency units in which the debt securities will be denominated and in which principal, any premium and any interest will or may be payable and the manner for determining the equivalent amount in U.S. dollars, | |
• | any provisions for payments on the debt securities in one or more currencies or currency units other than those in which the debt securities are stated to be payable, | |
• | the portion of the principal amount of the debt securities that will be payable if the maturity of the debt securities is accelerated, if other than the entire principal amount, | |
• | any variation of the defeasance and covenant defeasance sections of the indentures and the manner in which our election to defease the debt securities will be evidenced, if other than by a board resolution, | |
• | whether we will issue the debt securities in the form of temporary or permanent global securities, the depositaries for the global securities, and provisions for exchanging or transferring the global securities, | |
• | whether the interest rate on the debt securities may be reset, | |
• | whether the stated maturity of the debt securities may be extended, | |
• | any deletion or addition to or change in the events of default for the debt securities and any change in the rights of the Trustee or the holders or the debt securities arising from an event of default including, among others, the right to declare the principal amount of the debt securities due and payable, | |
• | any addition to or change in the covenants in the indentures, | |
• | any additions or changes to the indentures necessary to issue the debt securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, | |
• | the appointment of any trustees, depositaries, authenticating or paying agents, transfer agents or registrars or other agents with respect to the debt securities, | |
• | the terms of any right to convert or exchange the debt securities into any other securities or property, | |
• | the terms and conditions, if any, pursuant to which the debt securities are secured, | |
• | any restriction or condition on the transferability of the debt securities, | |
• | the person to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered on the record date for such interest, and the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable indenture, | |
• | if the principal amount payable at the stated maturity of any debt will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal shall be determined), | |
• | whether, under what circumstances and the currency in which we will pay any additional amount on the debt securities as contemplated in the applicable indenture in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem the debt securities rather than pay such additional amounts (and the terms of any such option), | |
• | in the case of subordinated debt securities, any subordination provisions and related definitions which may be applicable in addition to, or in lieu of, those contained in the subordinated note indenture, | |
• | the exchanges, if any, on which the debt securities may be listed, and | |
• | any other terms of the debt securities consistent with the indentures. |
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• | remain in full force and effect until either payment in full of all of the applicable debt securities (or such debt securities are otherwise satisfied and discharged in accordance with the provisions of the applicable indenture) or released as described in the following paragraph, | |
• | be binding upon each subsidiary guarantor, and | |
• | inure to the benefit of and be enforceable by the applicable Trustee, the holders and their successors, transferees and assigns. |
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• | designate additional transfer agents, | |
• | rescind the designation of any transfer agent, or | |
• | approve a change in the office of any transfer agent. |
• | to issue, register the transfer of or exchange any debt securities of that series during the period beginning at the opening of business 15 days before the day we mail the notice of redemption for the series and ending at the close of business on the day the notice is mailed, or | |
• | to register the transfer or exchange of any debt security of that series so selected for redemption, except for any portion not to be redeemed. |
• | by check mailed to the address of the person entitled to the payment as it appears in the security register, or | |
• | by wire transfer in immediately available funds to the place and account designated in writing at least fifteen days prior to the interest payment date by the person entitled to the payment as specified in the security register. |
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• | the successor person expressly assumes our obligations with respect to the debt securities and the indentures, | |
• | immediately after giving effect to the transaction, no event of default shall have occurred and be continuing and no event which, after notice or lapse of time or both, would become an event of default, shall have occurred and be continuing, and | |
• | we have delivered to the Trustee the certificates and opinions required under the respective indenture. |
• | our failure to pay principal or premium, if any, on that series of debt securities when such principal or premium, if any, becomes due, | |
• | our failure to pay any interest on that series of debt securities for 30 days after such interest becomes due, | |
• | our failure to deposit any sinking fund payment for 30 days after such payment is due by the terms of that series of debt securities, | |
• | our failure to perform, or our breach, in any material respect, of any other covenant or warranty in the indenture with respect to that series of debt securities, other than a covenant or warranty included in such indenture solely for the benefit of another series of debt securities, for 90 days after either the Trustee has given us or holders of at least 25% in principal amount of the outstanding debt securities of that series have given us and the Trustee written notice of such failure to perform or breach in the manner required by the indentures, | |
• | specified events involving the bankruptcy, insolvency or reorganization of us or, if a subsidiary guarantor has guaranteed the series of debt securities, such subsidiary guarantor, and | |
• | any other event of default we may provide for that series of debt securities, |
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• | the direction is not in conflict with any law or the indentures, | |
• | the Trustee may take any other action it deems proper which is not inconsistent with the direction, and | |
• | the Trustee will generally have the right to decline to follow the direction if an officer of the Trustee determines, in good faith, that the proceeding would involve the Trustee in personal liability or would otherwise be contrary to applicable law. |
• | the holder gives the Trustee written notice of a continuing event of default, | |
• | holders of at least 25% in principal amount of the outstanding debt securities of that series make a written request to the Trustee to institute proceedings with respect to such event of default, | |
• | the holders offer indemnity to the Trustee reasonably satisfactory to it against any loss, liability or expense in complying with such request, | |
• | the Trustee fails to institute proceedings within 60 days after receipt of the notice, request and offer or indemnity, and | |
• | during that60-day period, the holders of a majority in principal amount of the debt securities of that series do not give the Trustee a direction inconsistent with the request. |
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• | provide for the assumption of our obligations to holders of debt securities in the case of a merger or consolidation or sale of substantially all of our assets, | |
• | add to our or any subsidiary guarantor’s covenants for the benefit of the holders of any series of debt securities or to surrender any of our rights or powers, | |
• | add any additional events of default for any series of debt securities for the benefit of the holders of any series of debt securities, | |
• | add to, change or eliminate any provision of the indentures applying to one or more series of debt securities, provided that if such action adversely affects the interests of any holder of any series of debt securities in any material respect, such addition, change or elimination will become effective with respect to that series only when no such security of that series remains outstanding, | |
• | secure the debt securities, | |
• | establish the forms or terms of any series of debt securities, | |
• | provide for uncertificated securities in addition to certificated securities, | |
• | evidence and provide for successor Trustees and to add to or change any provisions of the indentures to the extent necessary to appoint a separate Trustee or Trustees for a specific series of debt securities, | |
• | correct any ambiguity, defect or inconsistency under the indentures, | |
• | add any person as a guarantor, | |
• | make other provisions with respect to matters or questions arising under the indentures, provided that such action does not adversely affect the interests of the holders of any series of debt securities in any material respect, | |
• | supplement any provisions of the indentures necessary to defease and discharge any series of debt securities, provided that such action does not adversely affect the interests of the holders of any series of debt securities in any material respect, | |
• | comply with the rules or regulations of any securities exchange or automated quotation system on which any debt securities are listed or traded, or | |
• | add to, change or eliminate any provisions of the indentures in accordance with any amendments to the Trust Indenture Act of 1939, provided that such action does not adversely affect the rights or interests of any holder of debt securities in any material respect. |
• | except with respect to the reset of the interest rate or extension of maturity pursuant to the terms of a particular series, changes the stated maturity of the principal of, or any installment of principal of or interest on, any debt security, or reduces the principal amount of, or any premium or rate of interest on, any debt security, |
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• | reduces the amount of principal of an original issue discount security or any other debt security payable upon acceleration of the maturity thereof, | |
• | changes the place or currency of payment of principal, premium, if any, or interest, | |
• | impairs the right to institute suit for the enforcement of any payment on or after such payment becomes due for any security, | |
• | except as provided in the applicable indenture, releases the subsidiary guarantee of a subsidiary guarantor, | |
• | reduces the percentage in principal amount of outstanding debt securities of any series, the consent of whose holders is required for modification of the indentures, for waiver of compliance with certain provisions of the indentures or for waiver of certain defaults of the indentures, | |
• | makes certain modifications to the provisions for modification of the indentures and for certain waivers, except to increase the principal amount of debt securities necessary to consent to any such change or to provide that certain other provisions of the indentures cannot be modified or waived without the consent of the holders of each outstanding debt security affected by such change, | |
• | makes any change that adversely affects in any material respect the right to convert or exchange any convertible or exchangeable debt security or decreases the conversion or exchange rate or increases the conversion price of such debt security, unless such decrease or increase is permitted by the terms of such debt securities, or | |
• | changes the terms and conditions pursuant to which any series of debt securities are secured in a manner adverse to the holders of such debt securities in any material respect. |
• | waive any default in the payment of principal, premium, if any, or interest, or | |
• | waive any covenants and provisions of an indenture that may not be amended without the consent of the holder of each outstanding debt security of the series affected. |
• | the principal amount of an “original issue discount security” that will be deemed to be outstanding will be the amount of the principal that would be due and payable as of that date upon acceleration of the maturity to that date, | |
• | if, as of that date, the principal amount payable at the stated maturity of a debt security is not determinable, for example, because it is based on an index, the principal amount of the debt security deemed to be outstanding as of that date will be an amount determined in the manner prescribed for the debt security, | |
• | the principal amount of a debt security denominated in one or more foreign currencies or currency units that will be deemed to be outstanding will be the U.S. dollar equivalent, determined as of that date in the manner prescribed for the debt security, of the principal amount of the debt security or, in the case of a debt security described in the two preceding bullet points, of the amount described above, and | |
• | debt securities owned by us, any subsidiary guarantor or any other obligor upon the debt securities or any of our or their affiliates will be disregarded and deemed not to be outstanding. |
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• | we and any subsidiary guarantor will be discharged from our obligations with respect to the debt securities of that series (“legal defeasance”), or | |
• | we and any subsidiary guarantor will no longer have any obligation to comply with the restrictive covenants under the indentures, and the related events of default will no longer apply to us or any subsidiary guarantor, but some of our and any subsidiary guarantors’ other obligations under the indentures and the debt securities of that series, including the obligation to make payments on those debt securities, will survive (a “covenant defeasance”). |
• | the rights of holders of that series of debt securities to receive, solely from a trust fund, payments in respect of such debt securities when payments are due, | |
• | our obligation to register the transfer or exchange of debt securities, | |
• | our obligation to replace mutilated, destroyed, lost or stolen debt securities, and | |
• | our obligation to maintain paying agencies and hold moneys for payment in trust. |
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• | The Depository is: |
• | The Depository was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants through electronic book entry changes in accounts of its participants, eliminating the need for physical movements of securities certificates. | |
• | The Depository participants include securities brokers and dealers, banks, trust companies, clearing corporations and others, some of whom own the Depository. | |
• | Access to the Depository book-entry system is also available to others that clear through or maintain a custodial relationship with a participant, either directly or indirectly. |
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• | When we issue a Global Note in connection with the sale thereof to an underwriter or underwriters, the Depository will immediately credit the accounts of participants designated by such underwriter or underwriters with the principal amount of the debt securities purchased by such underwriter or underwriters. | |
• | Ownership of beneficial interests in a Global Note and the transfers of ownership will be evidenced only through records maintained by the Depository (with respect to participants), by the participants (with respect to indirect participants and certain beneficial owners) and by the indirect participants (with respect to all other beneficial owners). The laws of some states require that certain purchasers of securities take physical delivery in a definitive form of securities they purchase. These laws may limit your ability to transfer beneficial interests in a Global Note. |
• | if the Depository is at any time unwilling or unable to continue as depositary, defaults in the performance of its duties as depositary, ceases to be a clearing agency registered under the Exchange Act, and, in each case, a successor depositary is not appointed by us within 90 days after notice thereof, or | |
• | if, subject to the rules of the Depository, we choose to issue definitive debt securities. |
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• | liquidation; | |
• | dissolution; | |
• | winding-up; | |
• | receivership; | |
• | reorganization; | |
• | assignment for the benefit of creditors; | |
• | marshaling of assets; or | |
• | bankruptcy, insolvency or similar proceedings of Lear, |
• | there has occurred and is continuing a default in any payment with respect to Senior Debt; or | |
• | there has occurred and is continuing a default with respect to any Senior Debt resulting in the acceleration of the maturity thereof. |
• | all indebtedness of such person for borrowed money; | |
• | all obligations of such person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses; | |
• | all obligations of such person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such person; |
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• | all obligations of such person to pay the deferred purchase price of property or services, but excluding accounts payable or any other indebtedness or monetary obligations to trade creditors arising in the ordinary course of business in connection with the acquisition of goods or services; | |
• | all capital lease obligations of such person; | |
• | all Debt of others secured by a lien on any asset by such person; | |
• | all Debt and dividends of others guaranteed by such person to the extent such Debt and dividends are guaranteed by such person; and | |
• | all obligations for claims in respect of derivative products. |
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• | to or through underwriters or dealers; | |
• | by itself directly; | |
• | through agents; | |
• | through a combination of any of these methods of sale; or | |
• | through any other methods described in a prospectus supplement. |
• | the name or names of any underwriters, dealers or agents; | |
• | the purchase price of the offered securities and the proceeds to us from the sale; |
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• | any underwriting discounts and commissions or agency fees and other items constituting underwriters’ or agents’ compensation; and | |
• | any initial public offering price, any discounts or concessions allowed or reallowed or paid to dealers and any securities exchanges on which such offered securities may be listed. |
• | A stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of a security. | |
• | A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering. | |
• | A penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions. |
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21557 Telegraph Road
Southfield, Michigan 48033
(248) 447-1500
Attention: Secretary
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