LEAR CORP
For the period ended Apr 4, 2026. Filed May 1, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 4, 2026 · Filed May 1, 2026
LEA$110.28-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-27; filed 2025-10-31.
0000842162-25-000076
Item 2. – Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-04; filed 2026-05-01.
0000842162-26-000038
Item 2. – Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 202 previous paragraphs and 164 current paragraphs.
91 unchanged; 59 reworded; 12 added; 46 removed; 6 previous and 2 current paragraphs rearranged.
Tables are not compared: 13 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
•Extend our market leadership position in Seating through differentiated product offerings and industry-leading vertical integration capabilities;
Current report
•Expand margins in E-Systems through a focused portfolio that leverages our strong operating capabilities and customer relationships;
Current report
Although U.S. tariffs did not have a material impact on our gross profit in the first quarter of 2026, the tariff and trade landscape continues to evolve, including with respect to the type of tariff or export control, the tariff rates, the countries, components and materials to which such tariffs apply, and the existence and applicability of any exemptions, refunds or credits.
Current report
On February 20, 2026, the U.S. Supreme Court issued an opinion invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). After the U.S. Supreme Court opinion, the Court of International Trade ordered U.S. Customs and Border Protection to develop a process to refund tariffs imposed under IEEPA. In 2025, we paid approximately $80 million of IEEPA tariffs, nearly all of which were recovered from our customers. Following the U.S. Supreme Court opinion, the U.S. administration imposed a temporary 10% general tariff under Section 122 of the Trade Act of 1974 to replace the IEEPA tariffs, though the scope and duration of future tariffs remain uncertain. Further, in April 2025, and revised in October 2025, the U.S. administration implemented a policy allowing U.S. automotive manufacturers to offset a portion of the cost related to tariffs imposed under Section 232 of the Trade Expansion Act of 1962 ("Section 232") through government-provided import adjustment offset amounts ("tariff offset credits"). In the first quarter of 2026, certain of our customers allocated a portion of their Section 232 tariff offset credits to us, allowing us to recover a portion of our 2025 and 2026 Section 232 tariff costs from the government (for those tariff costs already paid) and avoid a portion of our Section 232 tariff costs going forward. In 2025, we paid approximately $100 million of Section 232 tariffs, for which we were allocated Section 232 tariff offset credits by our customers in the first quarter of 2026. As a result of the U.S. Supreme Court opinion and the allocation of Section 232 tariff offset credits by our customers, certain 2025 tariff amounts are now recoverable from the government and no longer due from our customers, which resulted in lower first quarter 2026 sales and cost of sales corresponding to our 2025 IEEPA and certain Section 232 tariff costs.
Current report
In addition to tariffs in the United States and other countries, the United States-Mexico-Canada Agreement ("USMCA") is subject to trilateral review and renewal in 2026. There can be no assurances that the USMCA will be renewed or, if renewed, any newly negotiated terms in the USMCA will not adversely affect our business. Also, China presents unique risks to U.S. automotive manufacturers due to the strain in U.S.-China relations and the level of integration with key components in our global supply chain. It remains unclear what additional actions the current U.S. administration may take with respect to trade issues involving China and other countries.
Current report
Further, the U.S. and other governments could impose additional sanctions, export controls or other trade restrictions that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include affiliates (e.g., China has imposed tariffs and taken other retaliatory actions). The current trade environment could impact the status of other trade agreements between the United States and countries other than Canada and Mexico.
Current report
In addition to the above, the ongoing conflict in Iran and geopolitical tensions in the region could lead to significant disruption of global energy supplies and increases in global energy prices, adversely affect global supply chains, and heighten inflationary pressures on our costs and supply chain. We are continuing to evaluate the evolving macroeconomic environment; however, at this time, these factors have not had a material impact on our operations, our financial condition or our operating results. Any of the above factors could impact our supply chain, as well as our operations, and adversely affect our financial condition and operating results.
Current report
In the three months ended April 4, 2026 and March 29, 2025, we recognized net tax benefits of $17 million and $9 million, respectively, related to restructuring charges and various other items.
Current report
Interest expense, net was $26 million in the first quarters of 2026 and 2025.
Current report
Segment earnings, including restructuring costs, and the related margin on net sales were $277 million and 6.3% in the first quarter of 2026, as compared to $216 million and 5.2% in the first quarter of 2025. Higher production volumes on Lear platforms and the impact of foreign exchange rate fluctuations increased segment earnings by $24 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, and lower restructuring costs was partially offset by selling price reductions.
Current report
E-Systems net sales in the first quarter of both 2026 and 2025 were $1.4 billion, an increase of $9 million or 1%. The impact of foreign exchange rate fluctuations, higher production volumes on Lear platforms increased net sales by $80 million and $61 million, respectively. These increases were largely offset by the reversal of certain 2025 tariff recoveries and the impact of selling price reductions.
Current report
Segment earnings, including restructuring costs, and the related margin on net sales were $73 million and 5.2% in the first quarter of 2026, as compared to $56 million and 3.9% in the first quarter of 2025. Higher production volumes on Lear platforms and the impact of foreign exchange rate fluctuations increased segment earnings by $18 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, and lower restructuring costs was offset by selling price reductions.
Removed paragraphs (46)
Previous report
•Extend our market leadership position in Seating with priceable features, including modularity and thermal comfort systems;
Previous report
•Transform our E-Systems business through accelerated growth in connection systems and vehicle architecture evolution and electrification;
Previous report
•25% tariff on imports of automobiles and certain automobile parts into the United States from all countries (with respect to automotive parts, the "Automobile Parts Tariff"). Automobile parts that meet specific rules of origin under the United States-Mexico-Canada Agreement ("USMCA" and "USMCA-qualifying") are currently exempt from the Automobile Parts Tariff; however, this exemption could be modified in the future to include only the U.S. content of USMCA-qualifying automobile parts. The U.S. administration has been negotiating agreements with several countries. It has reached agreements with the United Kingdom, the European Union, Japan and South Korea that include reductions in the Automobile Parts Tariff to 10% (inclusive of existing duties) for the United Kingdom and 15% (inclusive of existing duties) for the European Union, Japan and South Korea.
Previous report
•50% tariff on all steel and aluminum imports into the United States from all countries (the "Steel/Aluminum Tariff"). The Steel/Aluminum Tariff does not apply to goods subject to the Automobile Parts Tariff. This tariff was increased from 25% to 50%, except for imports from the United Kingdom (which remained at 25%), effective June 4, 2025.
Previous report
•25% tariff on all imports into the United States from Mexico and Canada except for USMCA-qualifying goods (the "Mexico/Canada Tariff"). The Mexico/Canada Tariff does not apply to goods subject to the Automobile Parts Tariff or the Steel/Aluminum Tariff. On July 10, 2025, President Trump announced a 35% tariff on all imports into the United States from Canada effective August 1, 2025, and on July 12, 2025, announced a 30% tariff on all imports into the United States from Mexico effective August 1, 2025, implementation of which was suspended on July 31, 2025. Although the exception for USMCA-qualifying goods is expected to remain in place, this has not yet been confirmed by the current U.S. administration.
Previous report
•Incremental 20% tariff on all imports into the United States from China (the "China Tariff"). On October 30, 2025, President Trump announced a 10% reduction in the China Tariff.
Previous report
•10% tariff on all imports into the United States from all countries that are not subject to the Automobile Parts, Mexico/Canada or Steel/Aluminum Tariffs. Certain country-specific tariffs replaced the 10% tariffs effective August 7, 2025 (the "Reciprocal Tariffs"). The China Reciprocal Tariff of 125% was reduced to 10% effective May 14, 2025 through November 10, 2025, and is additive to the China Tariff discussed above. In addition, various country-specific proposals and agreements have been or are being negotiated directly with the affected countries.
Previous report
•50% tariff on copper imports into the United States effective August 1, 2025 (the "Copper Tariff"). The scope of this tariff includes all imports of semi-finished copper and intensive copper derivative products. The tariff does not apply to raw forms of copper, anode or cathode material, or copper scrap.
Previous report
Although U.S. tariffs did not have a material impact on our operating performance in the first nine months of 2025, the impact of the tariffs noted above could adversely affect our future financial condition and operating results absent recovery of such costs from our customers or the success of other mitigating actions.
Previous report
The vast majority of products in both our Seating and E-Systems businesses are USMCA-qualifying and therefore are currently exempt from the Mexico/Canada Tariff. Further, the vast majority of products in our Seating business are not currently subject to the Automobile Parts Tariff. However, the Automobile Parts Tariff does apply to the wire harnesses we assemble in our E-Systems business and import into the United States. While the wire harnesses we import from Mexico are USMCA-qualifying and currently exempt from the Automobile Parts Tariff, the wire harnesses we import from Honduras are subject to such tariff, which materially impacts cost of sales in our E-Systems business. Moreover, if the exemption under the Automobile Parts Tariff is modified to include only the U.S. content of USMCA-qualifying goods, this tariff also could materially impact cost of sales in our E-Systems business with respect to wire harnesses we import from Mexico. Although a less substantial impact than the Automobile Parts Tariff, the Mexico/Canada, Steel/Aluminum, China, Reciprocal and Copper Tariffs could impact our cost of sales relating to certain non-USMCA-qualifying goods imported from Mexico, small steel and aluminum parts imported globally, goods imported from China, goods subject to Reciprocal Tariffs and copper imports subject to the Copper Tariff. In addition to these impacts on our cost of sales, the aforementioned tariffs, separately or in the aggregate, could materially impact our net sales and other aspects of our financial performance, if they negatively impact vehicle production volumes or result in disruptions in the supply chain, including disruptions with respect to our customers or suppliers.
Previous report
In addition to tariffs, the U.S. and foreign governments have implemented sanctions, export controls and other restrictions on trade that impact industries around the world, including the automotive industry. For example, China recently implemented restrictions on the export of rare earth materials originating in China (some of which have since been paused for one year), as well as restrictions on the export of certain semiconductors and other electronic components that are used by us and throughout the automotive industry. We are monitoring the potential disruption to automotive industry supply chains as a result of these actions.
Previous report
For a description of related risks, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous report
Acquisition
Previous report
In February 2025, we completed the acquisition of StoneShield Engineering ("StoneShield"), a privately held system integrator based in Castelo Branco, Portugal. StoneShield specializes in the design and development of automation technology for the wire harness industry with expertise in robotics, automated taping applications and high voltage harness assembly. Our acquisition of StoneShield will accelerate the automation of our production processes in our E-Systems business, further improving our efficiency and operational excellence.
Previous report
Financial Transaction
Previous report
In June 2025, we amended our unsecured delayed-draw term loan facility (the "Term Loan") to extend the maturity date to September 30, 2027, and reduce the pricing across the grid. As of September 27, 2025, we had $100 million outstanding under the Term Loan.
Previous report
In July 2025, we amended and restated our $2.0 billion unsecured revolving credit agreement ("the Credit Agreement") to extend the maturity date to July 24, 2030.
Previous report
In the three and nine months ended September 27, 2025, we recognized net tax benefits of $2 million and $26 million, respectively, related to the release of tax reserves at foreign subsidiaries, restructuring charges and various other items.
Previous report
In the three and nine months ended September 28, 2024, we recognized net tax benefits of $5 million and $28 million, respectively, related to the release of tax reserves and audit settlements at foreign subsidiaries, restructuring charges and various other items.
Previous report
Interest expense, net was $25 million in the third quarter of 2025, as compared to $27 million in the third quarter of 2024.
Previous report
Segment earnings, including restructuring costs, and the related margin on net sales were $238 million and 5.6% in the third quarter of 2025, as compared to $242 million and 5.9% in the third quarter of 2024. Lower production volumes on Lear platforms (including the JLR production disruption), net of new business, reduced segment earnings by $27 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, was partially offset by selling price reductions and higher restructuring costs.
Previous report
E-Systems net sales were $1.4 billion in the third quarter of 2025, as compared to $1.5 billion in the third quarter of 2024, a decrease of $42 million or 3%. Lower production volumes on Lear platforms (including the JLR production disruption) and the winddown and divestiture of certain businesses reduced net sales by $88 million and $47 million, respectively. These decreases were partially offset by the impact of foreign exchange rate fluctuations and new business, which favorably impacted net sales by $31 million and $27 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions.
Previous report
Segment earnings, including restructuring costs, and the related margin on net sales were $41 million and 2.9% in the third quarter of 2025, as compared to $65 million and 4.4% in the third quarter of 2024. Lower production volumes on Lear platforms (including the JLR production disruption), net of new business, reduced segment earnings by $22 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, was offset by selling price reductions and higher restructuring costs.
Previous report
Nine Months Ended September 27, 2025 vs. Nine Months Ended September 28, 2024
Previous report
Net sales for the nine months ended September 27, 2025 were $17.3 billion, as compared to $17.6 billion for the nine months ended September 28, 2024, a decrease of $321 million or 2%. Lower production volumes on Lear platforms in Europe/Africa, North America and Asia (including the JLR production disruption) reduced net sales by $773 million. The winddown and divestiture of certain businesses also reduced net sales by $270 million. These decreases were offset by new business in Asia and North and South Americas and the impact of foreign exchange rate fluctuations, which favorably impacted net sales by $335 million and $64 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions.
Previous report
Cost of sales was $16.1 billion in the first nine months of 2025, as compared to $16.3 billion in the first nine months of 2024. Lower production volumes on Lear platforms (including the JLR production disruption) and the winddown and divestiture of certain businesses reduced cost of sales. These decreases were partially offset by new business and the impact of foreign exchange rate fluctuations, which increased cost of sales.
Previous report
Gross profit and gross margin were $1,162 million and 6.7% of net sales, respectively, in the nine months ended September 27, 2025, as compared to $1,252 million and 7.1% of net sales, respectively, in the nine months ended September 28, 2024. Lower production volumes on Lear platforms (including the JLR production disruption), net of new business, reduced gross profit by $166 million. The impact of favorable operating performance, including the benefit of restructuring actions, was partially offset by selling price reductions, higher restructuring costs and the winddown and divestiture of certain businesses. These factors had a corresponding impact on gross margin.
Previous report
Selling, general and administrative expenses, including engineering and development expenses, were $525 million in the first nine months of 2025, as compared to $536 million in the first nine months of 2024, reflecting lower program development costs. As a percentage of net sales, selling, general and administrative expenses were 3.0% in the first nine months of 2025 and 2024.
Previous report
Amortization of intangible assets was $15 million in the first nine months of 2025, as compared to $39 million in the first nine months of 2024, as certain of our intangible assets became fully amortized in 2024.
Previous report
Interest expense, net was $76 million in the first nine months of 2025, as compared to $80 million in the first nine months of 2024.
Previous report
For the nine months ended September 27, 2025, the provision for income taxes was $132 million, representing an effective tax rate of 25.7% on pretax income before equity in net income of affiliates of $512 million. For the nine months ended September 28, 2024, the provision for income taxes was $134 million, representing an effective tax rate of 23.3% on pretax income before equity in net income of affiliates of $574 million, for reasons described below. For further information, see Note 12, "Income Taxes," to the condensed consolidated financial statements included in this Report.
Previous report
In the first nine months of 2025 and 2024, the provision for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In the first nine months of 2025, we recognized net tax benefits of $26 million related to the release of tax reserves at foreign subsidiaries, restructuring charges and various other items. In the first nine months of 2024, we recognized net tax benefits of $28 million related to the release of tax reserves and audit settlements at foreign subsidiaries, restructuring charges and various other items.
Previous report
Equity in net income of affiliates was $40 million in the first nine months of 2025, as compared to $37 million in the first nine months of 2024.
Previous report
Net income attributable to Lear was $354 million, or $6.56 per diluted share, in the nine months ended September 27, 2025, as compared to $419 million, or $7.33 per diluted share, in the nine months ended September 28, 2024. Net income and diluted net income per share decreased for the reasons described above.
Previous report
Reportable Operating Segments
Previous report
Seating
Previous report
Seating net sales were $12.9 billion for the nine months ended September 27, 2025, as compared to $13.0 billion for the nine months ended September 28, 2024, a decrease of $162 million or 1%. Lower production volumes on Lear platforms (including the JLR production disruption) and the divestiture of certain businesses reduced net sales by $515 million and $84 million, respectively. These decreases were offset by new business and the impact of foreign exchange rate fluctuations, which favorably impacted net sales by $132 million and $47 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions.
Previous report
Segment earnings, including restructuring costs, and the related margin on net sales were $738 million and 5.7% in the nine months ended September 27, 2025, as compared to $760 million and 5.8% in the nine months ended September 28, 2024. Lower production volumes on Lear platforms (including the JLR production disruption), net of new business, reduced segment earnings by $121 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, was partially offset by selling price reductions and higher restructuring costs.
Previous report
E-Systems
Previous report
E-Systems net sales were $4.4 billion in the nine months ended September 27, 2025, as compared to $4.6 billion in the nine months ended September 28, 2024, a decrease of $159 million or 3%. Lower production volumes on Lear platforms (including the JLR production disruption) and the winddown and divestiture of certain businesses reduced net sales by $228 million and $186 million, respectively. These decreases were partially offset by new business and the impact of foreign exchange rate fluctuations, which favorably impacted net sales by $106 million and $17 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions.
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Reworded paragraphs (59)
Previous wording
Lear Corporation is a global automotive technology leader in Seating and E-Systems, enabling superior in-vehicle experiences for consumers around the world. We supply complete seat systems, key seat components, complete electrical distribution and connection systems, high-voltage power distribution products, including battery disconnect units ("BDUs"), low-voltage power distribution products and electronic controllers to all of the world's major automotive manufacturers.
Current wording
Lear Corporation is a global automotive technology leader in Seating and E-Systems, enabling superior in-vehicle experiences for consumers around the world. We supply complete seat systems, key seat components, complete electrical distribution and connection systems, high-voltage power distribution products, including battery disconnect units ("BDUs"), and low-voltage power distribution products and electronic controllers to all of the world's major automotive manufacturers.
Previous wording
Lear is built on a foundation and strong culture of innovation, operational excellence, and engineering and program management capabilities. We use our product and process design and technological expertise, as well as our global reach and competitive manufacturing footprint, to achieve our financial goals and objectives. These include continuing to deliver profitable growth while balancing risks and returns, investing in product and process innovations to drive business growth and profitability, maintaining a strong balance sheet with investment grade credit metrics, and consistently returning capital to our shareholders. Further, we have aligned our strategy with key trends affecting our business. At Lear, we are Making every drive better TM by providing technology for safer, smarter and more comfortable journeys, while adhering to our values —Be Inclusive. Be Inventive. Get Results the Right Way.
Current wording
Lear is built on a foundation and strong culture of innovation, operational excellence, and engineering and program management capabilities. We use our product and process design and technological expertise, as well as our global reach and competitive manufacturing footprint, to achieve our financial goals and objectives. These financial goals and objectives include continuing to deliver profitable growth while balancing risks and returns, investing in product and process innovations to drive business growth and profitability, maintaining a strong balance sheet with investment grade credit metrics, and generating strong cash flow and returning excess cash to shareholders. Further, we have aligned our strategy with key trends affecting our business. At Lear, we are Making every drive better TM by providing technology for safer, smarter and more comfortable journeys, while adhering to our values —Be Inclusive. Be Inventive. Get Results the Right Way.
Previous wording
Our Seating business consists of the design, development, engineering and manufacture of complete seat systems and key seat components. Our capabilities in operations and supply chain management enable synchronized assembly and just-in-time delivery of complex complete seat systems at high volumes to our customers. As the most vertically integrated global seat supplier, our key seat component product offerings include seat trim covers; surface materials such as leather and fabric; seat mechanisms; seat foam; headrests; and thermal comfort systems such as seat heating, ventilation, active cooling, pneumatic lumbar and massage products. All of these products are compatible with traditional internal combustion engine ("ICE") architectures and electrified powertrains, including the full range of hybrid, plug-in hybrid and battery electric architectures. Our thermal comfort systems are facilitated by our seat system, component and integration capabilities, together with our competencies in electronics, sensors, software and algorithms.
Current wording
Our Seating business consists of the design, development, engineering and manufacture of complete seat systems and key seat components. Our capabilities in operations and supply chain management enable synchronized assembly and just-in-time delivery of complex complete seat systems at high volumes to our customers. As the most vertically integrated global seat supplier, our key seat component product offerings include seat trim covers; surface materials such as leather and fabric; seat mechanisms; seat cushioning; headrests; and thermal comfort systems such as seat heating, ventilation, active cooling, pneumatic lumbar and massage products. All of these products are compatible with traditional internal combustion engine ("ICE") architectures and electrified powertrains, including the full range of hybrid, plug-in hybrid and battery electric architectures. Our thermal comfort systems are facilitated by our seat system, component and integration capabilities, together with our competencies in electronics, sensors, software and algorithms.
Previous wording
•Electrical distribution and connection systems utilize low-voltage and high-voltage wire, high-speed data cables and flat wiring to connect networks and electrical signals and manage electrical power within the vehicle for all types of powertrains – from traditional ICE architectures to the full range of electrified powertrains that require management of higher voltage and power. Key components of our electrical distribution and connection systems portfolio include wire harnesses, terminals and connectors, high-voltage battery connection systems and engineered components.
Current wording
•Electrical distribution and connection systems utilize low-voltage and high-voltage wire and high-speed data cables to connect networks' electrical signals and manage electrical power within the vehicle for all types of powertrains – from traditional ICE architectures to the full range of electrified powertrains that require management of higher voltage and power. Key components of our electrical distribution and connection systems portfolio include wire harnesses, terminals and connectors, high-voltage battery connection systems and engineered components. High-voltage battery connection systems include intercell connect boards, bus bars and main battery interface connection systems.
Previous wording
•High-voltage battery connection systems include intercell connect boards, bus bars and main battery connection systems. High-voltage power distribution products control the flow and distribution of high-voltage power throughout electrified vehicles and include BDUs which control all electrical energy flowing into and out of high-voltage batteries in electrified vehicles.
Current wording
•High-voltage power distribution products control the flow and distribution of high-voltage power throughout electric and hybrid vehicles and include BDUs, which control all electrical energy flowing into and out of high-voltage batteries in electrified vehicles.
Previous wording
•Low-voltage power distribution products and electronic controllers facilitate signal, data and/or power management within the vehicle and include the associated software required to facilitate these functions. Key components of this portfolio include zonal controllers, body domain control modules and low-voltage and high-voltage power distribution modules. Our software offerings include embedded control, cybersecurity software and software to control hardware devices. Our customers traditionally have sourced our electronic hardware together with the software that we integrate and embed in it.
Current wording
•Low-voltage power distribution products and electronic controllers facilitate signal, data and/or power management within the vehicle and include the associated software required to facilitate these functions. Key components of this portfolio include zonal controllers, body domain control modules, and smart and passive power distribution modules. Our software offerings include embedded control, cybersecurity software and software to control hardware devices. Our customers traditionally have sourced our electronic hardware together with the software that we integrate and embed in it.
Previous wording
We serve all of the world's major automotive manufacturers through both our Seating and E-Systems businesses, and we have automotive content on more than 480 vehicle nameplates worldwide. It is common for us to have both seating and electrical and/or electronic content on the same vehicle platform.
Current wording
We serve all of the world's major automotive manufacturers through both our Seating and E-Systems businesses, and we have automotive content on more than 500 vehicle nameplates worldwide. It is common for us to have both seating and electrical and/or electronic content on the same vehicle platform.
Previous wording
Our businesses benefit globally from leveraging common operating standards and disciplines, including world-class product development and manufacturing processes, as well as common customer support and regional infrastructures, all of which contribute to our reputation for operational excellence. Our core capabilities are shared across component categories and include high-precision manufacturing and assembly with short lead times, complex, global supply chain management, global engineering and program management, the agility to establish and/or transfer production between facilities quickly, and a unique, customer-focused culture. In select instances, we are able to manufacture both Seating and E-Systems components in the same facility. Our businesses also utilize proprietary, industry-specific processes and standards, leverage common low-cost engineering centers and share centralized operating support functions. These functions include health and safety, logistics, quality, supply chain management and all major administrative functions, such as corporate finance, executive administration, human resources, information technology and legal. We continue to build on our reputation for operational excellence through organic and inorganic investments in automation and other advanced manufacturing technologies and the digital transformation of both our operations and administrative functions. These investments and this transformation involve the integration of new technologies, such as Industrial Internet of Things (IIoT), cloud computing, artificial intelligence (AI), machine learning and advanced automation, into production facilities and business operations. These technologies enable smart and automated machines and smart factories to communicate, analyze and optimize products and processes, resulting in higher efficiency, quality and responsiveness to customers.
Current wording
Our businesses benefit globally from leveraging common operating standards and disciplines, including world-class product development and manufacturing processes, as well as common customer support and regional infrastructures, all of which contribute to our reputation for operational excellence. Our core capabilities are shared across component categories and include high-precision manufacturing and assembly with short lead times, complex, global supply chain management, global engineering and program management, the agility to establish and/or transfer production between facilities, and a unique, customer-focused culture. In select instances, we are able to manufacture both Seating and E-Systems components in the same facility. Our businesses also utilize proprietary, industry-specific processes and standards, leverage common low-cost engineering centers and share centralized operating support functions. These functions include logistics, as well as all major administrative functions, such as corporate finance, executive administration, health and safety, human resources, information technology and legal.
Previous wording
IDEA by Lear - Innovative. Digital. Engineered. Automated. - supports our strategy to drive growth and improve profitability. IDEA reflects our commitment to continue to strengthen our competitive position in both of our business segments through the development of innovative products and the utilization of advanced technologies and process automation that improve our profitability through increased efficiency and extend our leadership position in operational excellence. Our investments in these technologies and the digital transformation of both our operations and administrative functions aim to improve profitability through process improvements and further efficiency gains.
Current wording
IDEA by Lear TM - Innovative. Digital. Engineered. Automated. - reflects our commitment to continue to strengthen our competitive position in both of our business segments and to enhance the efficiency of our administrative functions. IDEA by Lear TM supports our strategy to drive growth and improve profitability through the development of innovative products and the utilization of advanced technologies and process automation that increase efficiency and extend our leadership position in operational excellence. We are leveraging our internal capabilities through strategic partnerships (e.g., Palantir Technologies, Inc.) and acquisitions to rapidly develop and deploy automation and AI solutions. Our strategic acquisitions of ASI Automation, InTouch Automation, StoneShield Engineering, Thagora Technology SRL and WIP Industrial Automation are further enhancing our automation system integration expertise. Our new facility in Rochester Hills, Michigan is an industry first site, capable of fully automated manufacturing of ComfortFlex by Lear TM and ComfortMax Seat by Lear TMseating systems. These strategic initiatives further advance our leadership in automotive technology and enable greater efficiency, superior quality and faster execution.
Previous wording
•Build on our reputation for operational excellence through organic and inorganic investments in automation and digital technologies; and
Current wording
•Build on our reputation for operational excellence through organic and inorganic investments, including partnerships, in automation and digital technologies; and
Previous wording
•Prioritize people and the planet through our sustainability initiatives to drive business growth, cost reductions and improved employee retention.
Current wording
•Prioritize our employee and sustainability initiatives that drive business growth, cost reductions and improved workforce retention.
Previous wording
We supply all vehicle segments of the automotive light vehicle original equipment market in every major automotive producing region in the world. Our sales are driven by the number of vehicles produced by the automotive manufacturers and our content per vehicle. Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material impact on markets around the world.
Current wording
We supply all vehicle segments of the automotive light vehicle original equipment market in every major automotive producing region in the world. Our sales are driven by the number of vehicles produced by the automotive manufacturers and our content per vehicle.
Previous wording
Although industry production returned to pre-pandemic levels in 2023, industry production in 2024 remained approximately 5% below 2017 peak levels, and 2024 industry production levels in North America and Europe, our two largest markets, remained approximately 9% and 23%, respectively, below prior peak levels. In the third quarter of 2025, industry production was impacted by production disruptions at Jaguar Land Rover due to a cybersecurity incident (the "JLR production disruption"). Industry production in 2025 is expected to increase 2% as compared to 2024 (based on October 2025 S&P Global Mobility projections). On a Lear sales-weighted basis(1), industry production in 2025 is expected to be flat as compared to 2024. Since 2020, the global economy, as well as the automotive industry, have been influenced directly and indirectly by macroeconomic events resulting in unfavorable conditions, including increases in tariffs, shortages of semiconductor chips and other components, elevated inflation levels on commodities and labor, higher interest rates, and labor and energy shortages in certain markets. Certain of these factors, among others, continue to impact consumer demand. Our strategy to mitigate these impacts encompasses our comprehensive cost management process, including cost technology optimization, actions to further align our manufacturing capacity to the current industry production environment and investments in automation and other advanced manufacturing technologies, as well as commercial recovery mechanisms. This will allow us to enhance operational efficiencies, improve the utilization of existing facilities and equipment to reduce future expenditures, and streamline administrative functions.
Current wording
Since 2020, the global economy, as well as the automotive industry, have been influenced directly and indirectly by macroeconomic events resulting in unfavorable conditions, including the imposition of or increases in tariffs, shortages of semiconductor chips and other components, elevated inflation levels on commodities and labor, higher interest rates, and labor and energy shortages in certain markets. Certain of these factors, among others, continue to impact consumer demand. Our strategy to mitigate these impacts encompasses our comprehensive cost management process, including cost technology optimization, actions to further align our manufacturing capacity to the current industry production environment and investments in automation and other advanced manufacturing technologies, as well as commercial recovery mechanisms. This will allow us to enhance operational efficiencies, improve the utilization of existing facilities and equipment to reduce future expenditures, and streamline administrative functions.
Previous wording
Since his inauguration in January 2025, U.S. President Donald J. Trump has announced various tariffs that impact industries around the world, including the automotive industry. As of the date of this Report, the tariffs announced or implemented by the current U.S. administration that could adversely impact our business include:
Current wording
Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material impact on markets around the world. Since his inauguration in January 2025, U.S. President Donald J. Trump has announced various tariffs that impact industries around the world, including the automotive industry. As of the date of this Report, many of the tariffs announced, implemented or threatened by the current U.S. administration apply to (a) the countries in which we do business or from which we purchase, either directly or indirectly, materials or components, including Mexico, Canada and China, and (b) the materials or components that we purchase, either directly or indirectly, or produce, including steel, aluminum and automobile parts, among others, and therefore could adversely impact our business by increasing our operating costs, requiring us to incur significant costs to transition to alternative suppliers if our mitigation efforts are unsuccessful, or negatively impacting our customers' production. In addition to tariffs, the U.S. and foreign governments have implemented sanctions, export controls and other trade restrictions that impact industries around the world, including the automotive industry.
Previous wording
The actual impacts of these tariffs and other trade restrictions on our business, financial condition and results of operations are subject to a number of factors that are not yet known or are subject to change, including the effect such tariffs and restrictions may have on consumer demand and global automotive production volumes, the effective dates and duration of such tariffs and restrictions, future changes in the amounts and scope of tariffs, the potential withdrawal of such tariffs and restrictions in whole or in part, the scope and effective date of any exemptions to such tariffs or restrictions, any modification to existing exemptions to the tariffs or restrictions, countermeasures that the target countries may take in response to such tariffs and restrictions, and the impact such tariffs and restrictions may have on our customers and our supply chain. We have entered into contractual agreements with our customers to recover substantially all tariff costs incurred to date and are implementing certain actions, and considering others, to counter the potential impact of such tariffs on our business, financial condition and results of operations, including, without limitation, participating in efforts to inform the U.S. and certain foreign administrations and legislatures of the impact of current trade and tariff policies on the automotive industry and evaluating our production footprint and alternatives in our supply chain. However, we can provide no assurance that we will continue to be successful in recovering such costs from our customers or that any of these mitigating actions will be successful or will not disrupt and deteriorate our business, operations and financial performance. We also can provide no assurance that, despite the success of our mitigation efforts, our customers' production will not be adversely impacted by these government actions, or that any decreases in our customers' production as a result of such actions will not in turn adversely impact our business, financial condition and results of operations.
Current wording
We are monitoring the evolving trade landscape, as the actual impacts of tariffs and other trade restrictions on our business, financial condition and results of operations continue to be subject to a number of factors that are not yet known or are subject to change, including the effect such tariffs or restrictions may have on consumer demand and global automotive production volumes, the duration of such tariffs or trade restrictions, future changes in the amounts and scope of tariffs, the potential withdrawal of such tariffs or restrictions, in whole or in part, the scope and effective date of any exemptions or credits with respect to such tariffs, countermeasures that target countries may take in response to such tariffs, the impact such tariffs may have on our customers and our supply chain, and whether and to what extent such tariffs are impacted by judicial review. To mitigate the impact of tariffs, we have entered into contractual agreements with our customers to recover substantially all tariff costs incurred to date; however, no assurance can be provided that our customers will continue to provide such recovery. In addition, we have implemented certain actions, and continue to consider others, to counter the potential impact of such tariffs on our business, financial condition and results of operations, including, without limitation, participating in efforts to inform the U.S. and certain foreign administrations and legislatures of the impact of current trade and tariff policies on the automotive industry and evaluating our production footprint and alternatives in our supply chain. To date, our mitigation efforts have been successful; however, no assurance can be given that future government actions will not adversely impact our customers' production or undermine our mitigation efforts, which could in turn adversely impact our business, financial condition and results of operations.
Previous wording
For risks related to tariffs and other trade restrictions, see Part II — Item 1A, "Risk Factors," included in this Report and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
For a description of risks related to tariffs and other trade restrictions, see Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
Global automotive industry production volumes in the first nine months of 2025, as compared to the first nine months of 2024, are shown below (in thousands of units):
Current wording
Global automotive industry production volumes in certain key regions in the first three months of 2026, as compared to the first three months of 2025, are shown below (in thousands of units):
Previous wording
(2)Production data based on S&P Global Mobility
Current wording
(1)Production data based on S&P Global Mobility.
Previous wording
(3)Production data for 2024 has been updated from our third quarter 2024 Quarterly Report on Form 10-Q to reflect actual production levels
Current wording
(2)Production data for 2025 has been updated from our first quarter 2025 Quarterly Report on Form 10-Q to reflect actual production levels.
Previous wording
Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), the availability and cost of credit, the availability and cost of raw materials and critical components, and logistics issues, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding hybrid and electric vehicles), size, configuration and features, among other factors. The impact of potential tariffs on our business and financial condition, if any, is subject to a number of factors that are not yet known, including the effective date and duration of such tariffs, the scope and nature of any tariffs, the amount of any tariffs, any countermeasures that the target countries may take in response to such tariffs. In light of these uncertainties, we can provide no assurance that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will continue to be successful. Our sales and production may be further affected by new entrants to the industry, including Chinese domestic automakers and non-traditional automakers in certain regions, and the restructuring actions, including facility closures, of our customers and suppliers. Our operating results are also significantly impacted by the overall commercial success of the vehicle platforms for which we supply particular products, as well as the profitability of the products that we supply for these platforms, which is determined, in part, by the level of vertical integration. The loss of business with respect to any vehicle model for which we are a significant supplier, or a decrease in the production levels of any such models, could adversely affect our operating results. In addition, larger cars and light trucks, as well as vehicle platforms that offer more features and functionality, such as luxury, sport utility and crossover vehicles, typically have more content and, therefore, tend to have a more significant impact on our operating results.
Current wording
Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), the availability and cost of raw materials and critical components, logistics issues, cybersecurity incidents, and the availability and cost of credit, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding electric and hybrid vehicles), size, configuration and features, among other factors. The impact of potential tariffs on our business and financial condition, if any, is subject to a number of factors that are not yet known or are subject to change, including the effective date and duration of such tariffs, the scope and nature of any tariffs, the amount of any tariffs, any countermeasures that the target countries may take in response to such tariffs. In light of these uncertainties, we can provide no assurances that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will continue to be successful. Our sales and production may be further affected by new entrants to the industry, as well as various automakers and suppliers entering or expanding in certain regions, and the restructuring actions, including facility closures, of our customers and suppliers. Our operating results are also significantly impacted by the overall commercial success of the vehicle platforms for which we supply particular products, as well as the profitability of the products that we supply for these platforms, which is determined, in part, by the level of vertical integration. The loss of business with respect to any vehicle model for which we are a significant supplier, or a decrease in the production levels of any such models, could adversely affect our operating results. In addition, larger cars and light trucks, as well as vehicle platforms that offer more features and functionality, such as luxury, sport utility and crossover vehicles, typically have more content and, therefore, tend to have a more significant impact on our operating results.
Previous wording
Our percentage of consolidated net sales by region in the first nine months of 2025 and 2024 is shown below:
Current wording
Our percentage of consolidated net sales by region in the first three months of 2026 and 2025 is shown below:
Previous wording
The automotive industry, and our business, continue to be shaped by the broad trend of electrification. The adoption of electrified vehicles has been slower than anticipated in certain regions. Demand for, and regulatory developments related to, improved energy efficiency and sustainability (e.g., government mandates related to fuel economy and carbon emissions) could also have a significant impact on this trend.
Current wording
The automotive industry, and our business, continue to be shaped by the broad trend of electrification. The adoption of electrified vehicles has been slower than anticipated, particularly in the United States. Demand for, and regulatory developments related to, improved energy efficiency and sustainability (e.g., government mandates related to fuel economy and carbon emissions) have also had a significant impact on this trend.
Previous wording
Our material cost as a percentage of net sales was 63.5% in the first nine months of 2025, as compared to 64.2% in the first nine months of 2024. Raw material, energy, commodity and product component costs can be volatile, reflecting, among other things, changes in supply and demand, logistics issues, global trade and tariff policies (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), and geopolitical issues. Our primary commodity cost exposures relate to steel, copper and leather. We have developed and implemented strategies to mitigate the impact of increases in such costs through the selective in-sourcing of components, the continued consolidation of our supply base, longer-term purchase commitments, commercial recovery mechanisms and the selective expansion of low-cost country sourcing and engineering, as well as value engineering and product benchmarking. Further, our exposure to changes in steel prices is primarily indirect, through purchased components, and a significant portion of our copper, leather and direct steel purchases are subject to price index agreements with our customers and suppliers. Certain of these strategies also may limit our opportunities in a declining price environment. In the current environment of elevated raw material, energy, commodity and product component costs, these strategies, together with commercial negotiations with our customers and suppliers, have offset a significant portion of the adverse impact. In addition, the availability of raw materials, energy, commodities and product components fluctuates from time to time due to factors outside of our control. If these costs increase or availability is restricted, it could have an adverse impact on our operating results in the foreseeable future. See "— Forward-Looking Statements" below and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
Our material cost as a percentage of net sales was 62.8% in the first three months of 2026, as compared to 63.5% in the first three months of 2025. Raw material, energy, commodity and product component costs can be volatile, reflecting, among other things, changes in supply and demand, logistics issues, global trade and tariff policies (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), and geopolitical issues. We have commodity price risk with respect to purchases of certain raw materials, including steel, copper, diesel fuel, chemicals, resins and leather. Our primary commodity cost exposures relate to steel, copper and leather. Our exposure to changes in steel prices is primarily indirect, through purchased components, and a significant portion of our copper, leather and direct steel purchases are subject to price index agreements with our customers and suppliers. We have developed and implemented additional strategies to mitigate the impact of any such cost increases, including the selective in-sourcing of components, the continued consolidation of our supply base, longer-term purchase commitments, commercial recovery mechanisms and the selective expansion of low-cost country sourcing and engineering, as well as value engineering and product benchmarking. Certain of these strategies may limit our opportunities in a declining commodity price environment. In the current environment of elevated raw material, energy, commodity and product component costs, these strategies, together with commercial negotiations with our customers and suppliers and improved manufacturing productivity through automation and other advanced technologies, have more than offset the adverse impact. In addition, the availability of raw materials, energy, commodities and product components fluctuates from time to time due to factors outside of our control. If these costs increase further or availability is restricted, it could have an adverse impact on our operating results in the foreseeable future. See "— Forward-Looking Statements" below and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
In evaluating our financial condition and operating performance, we focus primarily on earnings, operating margins, cash flows and return on invested capital. Our strategy includes expanding our business with new and existing customers globally through new products.
Current wording
In evaluating our financial condition and operating performance, we focus primarily on earnings, operating margins, cash flows and return on invested capital. Our strategy includes expanding our business with new and existing customers globally through new products and our reputation for operational excellence and cost competitiveness. We have also increased our vertical integration capabilities globally, as well as expanded our component manufacturing capacity in Asia, Central America, Eastern Europe, Mexico and Northern Africa and our low-cost engineering capabilities in Asia, Eastern Europe and Northern Africa.
Previous wording
Our success in generating cash flow will depend, in part, on our ability to manage working capital effectively. Working capital can be significantly impacted by the timing of cash flows from sales, purchases, and tariffs costs and recoveries. Historically, we generally have been successful in aligning our supplier payment terms with our customer payment terms. However, our ability to continue to do so may be impacted by adverse automotive industry conditions, including inconsistent production schedules due to supply shortages and lower consumer demand, changes to our customers' payment terms and the financial condition of our suppliers. In addition, our cash flow is impacted by our ability to manage our inventory and capital spending effectively. We utilize return on invested capital as a measure of the efficiency with which our assets generate earnings. Improvements in our return on invested capital will depend on our ability to maintain an appropriate asset base for our business and to increase productivity and operating efficiency.
Current wording
Our success in generating cash flow will depend, in part, on our ability to manage working capital effectively. Working capital can be significantly impacted by the timing of cash flows from sales, purchases, and tariff costs and recoveries. Historically, we generally have been successful in aligning our supplier payment terms with our customer payment terms. However, our ability to continue to do so may be impacted by adverse automotive industry conditions, including inconsistent production schedules due to supply shortages and lower consumer demand, changes to our customers' payment terms and the financial condition of our suppliers. In addition, our cash flow is impacted by our ability to manage our inventory and capital spending effectively. We utilize return on invested capital as a measure of the efficiency with which our assets generate earnings. Improvements in our return on invested capital will depend on our ability to maintain an appropriate asset base for our business and to increase productivity and operating efficiency.
Previous wording
In the first nine months of 2025, we incurred pretax restructuring costs of $156 million and related manufacturing inefficiency charges of approximately $3 million, as compared to pretax restructuring costs of $108 million and related manufacturing inefficiency charges of approximately $4 million in the first nine months of 2024. None of the individual restructuring actions initiated in the first nine months of 2025 were material. Further, there have been no changes in previously initiated restructuring actions that have resulted (or will result) in a material change to our restructuring costs.
Current wording
In the first three months of 2026, we incurred pretax restructuring costs of $42 million and related manufacturing inefficiency and other charges of approximately $1 million, as compared to pretax restructuring costs of $84 million and related manufacturing inefficiency and other charges of approximately $4 million in the first three months of 2025. None of the individual restructuring actions initiated in the first three months of 2026 were material. Further, there have been no changes in previously initiated restructuring actions that have resulted (or will result) in a material change to our restructuring costs.
Previous wording
Our restructuring actions include plant closures and workforce reductions and are initiated to maintain our competitive footprint or are in response to customer initiatives or changes in global and regional automotive markets. Our restructuring actions are designed to maintain or improve our operating results and profitability throughout the automotive industry cycles. Restructuring actions are generally funded within twelve months of initiation and are funded by cash flows from operating activities and existing cash balances. We expect to incur approximately $31 million of additional restructuring costs related to activities initiated as of September 27, 2025, all of which are expected to be incurred in the next twelve months. We plan to implement additional restructuring actions in order to align our manufacturing capacity and other costs with prevailing regional automotive production levels. Such future restructuring actions are dependent on market conditions, customer actions and other factors.
Current wording
Our restructuring actions include plant closures and workforce reductions and are initiated to maintain our competitive footprint or are in response to customer initiatives or changes in global and regional automotive markets. Our restructuring actions are designed to maintain or improve our operating results and profitability throughout the automotive industry cycles. Restructuring actions are generally funded within twelve months of initiation and are funded by cash flows from operating activities and existing cash balances. We expect to incur approximately $45 million of additional restructuring costs related to activities initiated as of April 4, 2026, all of which are expected to be incurred in the next twelve months. We plan to implement additional restructuring actions in order to align our manufacturing capacity and other costs with prevailing regional automotive production levels. Such future restructuring actions are dependent on market conditions, customer actions and other factors.
Previous wording
Since the first quarter of 2011, our Board of Directors (the "Board") has authorized $6.7 billion in share repurchases under our common stock share repurchase program (the "Repurchase Program"). As of September 27, 2025, we have repurchased, in aggregate, $5.7 billion of our outstanding common stock, at an average price of $94.68 per share, excluding commissions and related fees, and have a remaining repurchase authorization of $0.9 billion, which expires on December 31, 2026. In the first nine months of 2025, we repurchased $150 million of our outstanding common stock.
Current wording
Since the first quarter of 2011, our Board of Directors (the "Board") has authorized $6.7 billion in share repurchases under our common stock share repurchase program (the "Repurchase Program"). As of April 4, 2026, we have repurchased, in aggregate, $6.0 billion of our outstanding common stock, at an average price of $95.25 per share, excluding commissions and related fees, and have a remaining repurchase authorization of $700 million, which expires on December 31, 2026. In the first three months of 2026, we repurchased $75 million of our outstanding common stock.
Previous wording
Our Board declared a quarterly cash dividend of $0.77 per share of common stock in the first, second and third quarters of 2025.
Current wording
Our Board declared a quarterly cash dividend of $0.77 per share of common stock in the first quarter of 2026.
Previous wording
Our results for the three and nine months ended September 27, 2025 and September 28, 2024, reflect the following items (in millions):
Current wording
Our results for the three months ended April 4, 2026 and March 29, 2025, reflect the following items (in millions):
Previous wording
For further information regarding these items, see Note 2, "Restructuring," Note 5, "Long-Lived Assets," Note 7, "Debt," and Note 12, "Income Taxes," to the condensed consolidated financial statements included in this Report.
Current wording
For further information regarding these items, see Note 2, "Restructuring," Note 11, "Other Expense, Net," and Note 12, "Income Taxes," to the condensed consolidated financial statements included in this Report.
Previous wording
This Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements that are subject to risks and uncertainties. For further information regarding these and other factors that have had, or may have in the future, a significant impact on our business, financial condition or results of operations, see "— Forward-Looking Statements" below, Part II — Item 1A, "Risk Factors," included in this Report and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024.
Current wording
This Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," includes forward-looking statements that are subject to risks and uncertainties. For further information regarding these and other factors that have had, or may have in the future, a significant impact on our business, financial condition or results of operations, see "— Forward-Looking Statements" below and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
Net sales in the third quarter of 2025 were $5.7 billion, as compared to $5.6 billion in the third quarter of 2024, an increase of $95 million or 2%. The impact of foreign exchange rate fluctuations increased net sales by $101 million. Higher production volumes on Lear platforms in North America and new business in Asia and South America also increased net sales by $99 million and $93 million, respectively. These increases were offset by lower production volumes on Lear platforms in Europe/Africa and Asia (including the JLR production disruption) and the winddown and divestiture of certain businesses, which negatively impacted net sales by $234 million and $70 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions.
Current wording
Net sales in the first quarter of 2026 were $5.8 billion, as compared to $5.6 billion in the first quarter of 2025, an increase of $263 million or 5%. The impact of foreign exchange rate fluctuations and higher production volumes on Lear platforms in North America and Europe/Africa increased net sales by $274 million and $250 million, respectively. These increases were partially offset by the reversal of certain 2025 tariff recoveries and the impact of selling price reductions.
Previous wording
Cost of sales was $5.3 billion in the third quarter of 2025, as compared to $5.2 billion in the third quarter of 2024. The impact of foreign exchange rate fluctuations and new business increased cost of sales. These increases were partially offset by lower production volumes on Lear platforms (including the JLR production disruption) and the winddown and divestiture of certain businesses, which reduced cost of sales.
Current wording
Cost of sales was $5.4 billion in the first quarter of 2026, as compared to $5.2 billion in the first quarter of 2025. The impact of foreign exchange rate fluctuations and higher production volumes on Lear platforms increased costs of sales. These increases were partially offset by the reversal of certain 2025 tariff costs, which reduced cost of sales.
Previous wording
Gross profit and gross margin were $364 million and 6.4% of net sales, respectively, in the third quarter of 2025, as compared to $405 million and 7.3% of net sales, respectively, in the third quarter of 2024. Lower production volumes on Lear platforms (including the JLR production disruption), net of new business, reduced gross profit by $49 million. The impact of favorable operating performance, including the benefit of restructuring actions, was offset by selling price reductions, higher restructuring costs, and the winddown and divestiture of certain businesses. These factors had a corresponding impact on gross margin.
Current wording
Gross profit and gross margin were $450 million and 7.7% of net sales, respectively, in the first quarter of 2026, as compared to $359 million and 6.5% of net sales, respectively, in the first quarter of 2025. Higher production volumes on Lear platforms in North America and Europe/Africa and the impact of foreign exchange rate fluctuations increased gross profit by $41 million and $16 million, respectively. The impact of favorable operating performance, including the benefit of restructuring actions, and lower restructuring costs was partially offset by selling price reductions. These factors had a corresponding impact on gross margin. Although the reversal of certain 2025 tariff recoveries and tariff costs did not have a significant impact on gross profit, gross margin was positively impacted, as net sales decreased without a corresponding decrease in gross profit.
Previous wording
Selling, general and administrative expenses, including engineering and development expenses, were $166 million in the third quarter of 2025, as compared to $174 million in the third quarter of 2024, primarily reflecting lower program development costs. As a percentage of net sales, selling, general and administrative expenses were 2.9% in the third quarter of 2025, as compared to 3.1% in the third quarter of 2024.
Current wording
Selling, general and administrative expenses, including engineering and development expenses, were $190 million in the first quarter of 2026, as compared to $172 million in the first quarter of 2025. As a percentage of net sales, selling, general and administrative expenses were 3.3% in the first quarter of 2026, as compared to 3.1% in the first quarter of 2025.
Previous wording
Amortization of intangible assets was $5 million in the third quarter of 2025, as compared to $11 million in the third quarter of 2024, as certain of our intangible assets became fully amortized in 2024.
Current wording
Amortization of intangible assets was $5 million in the first quarters of 2026 and 2025.
Previous wording
Other expense, net, which includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on certain disposals of assets, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense, was $34 million in the nine months ended September 27, 2025, as compared to $24 million in the nine months ended September 28, 2024. In the first nine months of 2025, we recognized a loss of $3 million on the disposal of a non-core business. In the first nine months of 2025 and 2024, we recognized foreign exchange losses of $26 million and $24 million, respectively, including losses of $9 million and $14 million, respectively, related to the hyper-inflationary environment and significant currency devaluation in Argentina.
Current wording
Other expense, net, which includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on certain disposals of assets, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense, was $13 million in the first quarter of 2026, as compared to $20 million in the first quarter of 2025. In the first quarters of 2026 and 2025, we recognized foreign exchange losses of $5 million and $10 million, respectively, including losses of $2 million in the first quarter of 2025 related to the hyper-inflationary environment and significant currency devaluation in Argentina. In the first quarter of 2025, we also recognized a loss of $3 million on the disposal of a non-core business.
Previous wording
In the third quarter of 2025, the provision for income taxes was $45 million, representing an effective tax rate of 28.3% on pretax income before equity in net income of affiliates of $159 million. In the third quarter of 2024, the provision for income taxes was $47 million, representing an effective tax rate of 24.7% on pretax income before equity in net income of affiliates of $191 million, for the reasons described below. For further information, see Note 12, "Income Taxes," to the condensed consolidated financial statements included in this Report.
Current wording
In the first quarter of 2026, the provision for income taxes was $38 million, representing an effective tax rate of 17.7% on pretax income before equity in net income of affiliates of $217 million. In the first quarter of 2025, the provision for income taxes was $45 million, representing an effective tax rate of 33.4% on pretax income before equity in net income of affiliates of $135 million, for the reasons described below. For further information, see Note 12, "Income Taxes," to the condensed consolidated financial statements included in this Report.
Previous wording
In the third quarters of 2025 and 2024, the provision for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In the third quarter of 2025 and 2024, we recognized net tax benefits of $2 million and $5 million, respectively, related to restructuring charges and various other items.
Current wording
In the first quarters of 2026 and 2025, the provision for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In the first quarters of 2026 and 2025, we recognized net tax benefits of $17 million and $9 million, respectively, related to restructuring charges and various other items.
Showing the first 40 of 59 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We continue to build on our reputation for operational excellence through organic and inorganic investments in automation and other advanced manufacturing technologies and the digital transformation of both our operations and administrative functions. These investments and transformation involve the integration of new technologies, such as artificial intelligence ("AI"), machine learning and advanced automation, into production facilities and business operations. These technologies enable smart and automated machines and smart factories to communicate, analyze and optimize products and processes, resulting in higher efficiency, quality and responsiveness to customers.
Current report — wording carried from elsewhere
Although industry production returned to pre-pandemic levels in 2023, industry production in 2025 remained approximately 2% below 2017 peak levels, and 2025 industry production levels in North America and Europe, our two largest markets, remained approximately 11% and 24%, respectively, below prior peak levels. Industry production in 2026 is expected to decrease approximately 2% as compared to 2025 (based on April 2026 S&P Global Mobility projections). On a Lear sales-weighted basis(1), industry production in 2026 is expected to decrease approximately 2% as compared to 2025.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Other expense, net, which includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on certain disposals of assets, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense, was $9 million in the third quarter of 2025, as compared to $3 million in the third quarter of 2024. In the third quarter of 2025 and 2024, we recognized foreign exchange losses of $9 million and $6 million, respectively, including losses of $4 million in each quarter related to the hyper-inflationary environment and significant currency devaluation in Argentina.
Previous report — wording carried elsewhere
Excluding these items, the effective tax rate for the first nine months of 2025 and 2024 approximated the U.S. federal statutory income tax rate of 21%, adjusted for income taxes on foreign earnings, losses and remittances, valuation allowances, tax credits, income tax incentives and other permanent items.
Previous report — wording carried elsewhere
We have two reportable operating segments: Seating and E-Systems. For a description of our reportable operating segments, see "Executive Overview" and "Three Months Ended September 27, 2025 vs. Three Months Ended September 28, 2024 — Reportable Operating Segments" above.
Previous report — wording carried elsewhere
A summary of the financial measures for our Seating segment is shown below (dollar amounts in millions):
Previous report — wording carried elsewhere
A summary of financial measures for our E-Systems segment is shown below (dollar amounts in millions):
Previous report — wording carried elsewhere
A summary of financial measures for our other category, which is not an operating segment, is shown below (dollar amounts in millions):