Comprehensive Income and Equity

3 Months Ended

Apr. 01, 2023

Equity [Abstract]

Comprehensive Income and Equity

Comprehensive Income and Equity

Comprehensive Income

Comprehensive income is defined as all changes in the Company's net assets except changes resulting from transactions with stockholders. It differs from net income in that certain items recorded in equity are included in comprehensive income.

Accumulated Other Comprehensive Loss

A summary of changes, net of tax, in accumulated other comprehensive loss for the three months ended April 1, 2023, is shown below (in millions):

	Three Months Ended April 1, 2023
Defined benefit plans:
Balance at beginning of period	$	(95.7)
Reclassification adjustments	(0.3)
Other comprehensive income recognized during the period	0.3
Balance at end of period	$	(95.7)
Derivative instruments and hedging:
Balance at beginning of period	$	33.4
Reclassification adjustments (net of tax benefit of $4.6 million)	(17.8)
Other comprehensive income recognized during the period (net of tax expense of $19.5 million)	76.2
Balance at end of period	$	91.8
Foreign currency translation:
Balance at beginning of period	$	(742.8)
Other comprehensive income recognized during the period (net of tax benefit of $0.2 million)	41.9
Balance at end of period	$	(700.9)
Total accumulated other comprehensive loss	$	(704.8)

In the three months ended April 1, 2023, foreign currency translation adjustments are primarily related to the strengthening of the Euro, and to a lesser extent the Brazilian real, relative to the U.S. dollar, and include pretax gains of $0.1 million related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future.

In the three months ended April 1, 2023, foreign currency translation adjustments also include derivative net investment hedge losses of $0.8 million.

A summary of changes, net of tax, in accumulated other comprehensive loss for the three months ended April 2, 2022, is shown below (in millions):

	Three Months Ended April 2, 2022
Defined benefit plans:
Balance at beginning of period	$	(199.4)
Reclassification adjustments (net of tax expense of $0.3 million)	1.4
Other comprehensive loss recognized during the period	(0.5)
Balance at end of period	$	(198.5)
Derivative instruments and hedging:
Balance at beginning of period	$	(18.6)
Reclassification adjustments (net of tax benefit of $1.4 million)	(6.6)
Other comprehensive income recognized during the period (net of tax expense of $7.9 million)	31.6
Balance at end of period	$	6.4
Foreign currency translation:
Balance at beginning of period	$	(552.2)
Other comprehensive loss recognized during the period (net of tax expense of $0.4 million)	(18.3)
Balance at end of period	$	(570.5)
Total accumulated other comprehensive loss	$	(762.6)

In the three months ended April 2, 2022, foreign currency translation adjustments are primarily related to the weakening of the Euro, offset by the strengthening of the Brazilian real, relative to the U.S. dollar, and include pretax losses of $0.5 million related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future.

In the three months ended April 2, 2022, foreign currency translation adjustments also include derivative net investment hedge gains of $0.3 million.

For further information regarding reclassification adjustments related to the Company's defined benefit plans, see Note 11, "Pension and Other Postretirement Benefit Plans." For further information regarding reclassification adjustments related to the Company's derivative and hedging activities, see Note 19, "Financial Instruments."

Lear Corporation Stockholders' Equity

Common Stock Share Repurchase Program

The Company may implement share repurchases through a variety of methods, including, but not limited to, open market purchases, accelerated stock repurchase programs and structured repurchase transactions. The extent to which the Company may repurchase its outstanding common stock and the timing of such repurchases will depend upon its financial condition, results of operations, capital requirements, prevailing market conditions, alternative uses of capital and other factors.

The Company has a common stock share repurchase program (the "Repurchase Program") which permits the discretionary repurchase of its common stock. Since its inception in the first quarter of 2011, the Company's Board of Directors (the "Board") has authorized $6.1 billion in share repurchases under the Repurchase Program, and the Company has repurchased, in aggregate, $4.9 billion of its outstanding common stock, at an average price of $91.71 per share, excluding commissions and related fees. As of April 1, 2023, the Company had a remaining purchase authorization of $1.2 billion under the Repurchase Program, which expires on December 31, 2024.

Share repurchases in the first three months of 2023 and the remaining purchase authorization as of April 1, 2023, are shown below (in millions, except for share and per share amounts):

Three Months Ended April 1, 2023							As of April 1, 2023
Aggregate Repurchases		Cash Paid for Repurchases		Number of Shares	Average Price per Share (1)		Remaining Purchase Authorization
$	25.1	$	25.1	182,902	$	137.24	$	1,204.3

(1) Excludes commissions

In addition to shares repurchased under the Repurchase Program described above, the Company classifies shares withheld from the settlement of the Company's restricted stock unit and performance share awards to cover tax withholding requirements as common stock held in treasury in the condensed consolidated balance sheets.

Quarterly Dividend

The Board declared quarterly cash dividends of $0.77 per share of common stock in the first three months of 2023 and 2022.

Dividends declared and paid are shown below (in millions):

	Three Months Ended
	April 1, 2023		April 2, 2022
Dividends declared	$	46.7	$	46.8
Dividends paid	46.8		47.4

Dividends payable on common shares to be distributed under the Company's stock-based compensation program will be paid when such common shares are distributed.