Supplemental Guarantor Condensed Consolidating Financial Statements

9 Months Ended

Sep. 29, 2012

Supplemental Guarantor Condensed Consolidating Financial Statements

(18) Supplemental Guarantor Condensed Consolidating Financial Statements

	September 29, 2012
	Lear			Guarantors		Non- guarantors		Eliminations			Consolidated
	(Unaudited; in millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	402.1		$	0.5	$	867.0	$	—		$	1,269.6
Accounts receivable		62.9			393.8		1,736.1		—			2,192.8
Inventories		5.8			271.3		486.3		—			763.4
Other		112.0			40.7		465.5		—			618.2
Total current assets		582.8			706.3		3,554.9		—			4,844.0
LONG-TERM ASSETS:
Property, plant and equipment, net		88.5			247.1		964.0		—			1,299.6
Goodwill		23.5			370.8		334.3		—			728.6
Investments in subsidiaries		1,169.0			1,235.7		—		(2,404.7	)		—
Other		108.2			57.3		424.6		—			590.1
Total long-term assets		1,389.2			1,910.9		1,722.9		(2,404.7	)		2,618.3
Total assets	$	1,972.0		$	2,617.2	$	5,277.8	$	(2,404.7	)	$	7,462.3
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and drafts	$	107.7		$	582.4	$	1,574.5	$	—		$	2,264.6
Accrued liabilities		99.4			169.7		764.0		—			1,033.1
Total current liabilities		207.1			752.1		2,338.5		—			3,297.7
LONG-TERM LIABILITIES:
Long-term debt		626.2			—		—		—			626.2
Intercompany accounts, net		(1,731.4	)		665.1		1,066.3		—			—
Other		202.7			181.1		352.4		—			736.2
Total long-term liabilities		(902.5	)		846.2		1,418.7		—			1,362.4
EQUITY:
Lear Corporation stockholders’ equity		2,667.4			1,018.9		1,385.8		(2,404.7	)		2,667.4
Noncontrolling interests		—			—		134.8		—			134.8
Equity		2,667.4			1,018.9		1,520.6		(2,404.7	)		2,802.2
Total liabilities and equity	$	1,972.0		$	2,617.2	$	5,277.8	$	(2,404.7	)	$	7,462.3

	December 31, 2011
	Lear			Guarantors		Non- guarantors		Eliminations			Consolidated
	(In millions)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	820.3		$	1.4	$	932.6	$	—		$	1,754.3
Accounts receivable		56.4			299.1		1,524.6		—			1,880.1
Inventories		7.7			234.1		396.0		—			637.8
Other		99.4			18.4		371.5		—			489.3
Total current assets		983.8			553.0		3,224.7		—			4,761.5
LONG-TERM ASSETS:
Property, plant and equipment, net		90.2			164.5		817.3		—			1,072.0
Goodwill		23.5			303.9		301.2		—			628.6
Investments in subsidiaries		594.2			945.3		—		(1,539.5	)		—
Other		115.2			30.9		402.7		—			548.8
Total long-term assets		823.1			1,444.6		1,521.2		(1,539.5	)		2,249.4
Total assets	$	1,806.9		$	1,997.6	$	4,745.9	$	(1,539.5	)	$	7,010.9
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and drafts	$	92.2		$	473.7	$	1,448.4	$	—		$	2,014.3
Accrued liabilities		135.5			171.0		742.7		—			1,049.2
Total current liabilities		227.7			644.7		2,191.1		—			3,063.5
LONG-TERM LIABILITIES:
Long-term debt		695.4			—		—		—			695.4
Intercompany accounts, net		(1,754.6	)		675.2		1,079.4		—			—
Other		202.0			149.0		339.9		—			690.9
Total long-term liabilities		(857.2	)		824.2		1,419.3		—			1,386.3
EQUITY:
Lear Corporation stockholders’ equity		2,436.4			528.7		1,010.8		(1,539.5	)		2,436.4
Noncontrolling interests		—			—		124.7		—			124.7
Equity		2,436.4			528.7		1,135.5		(1,539.5	)		2,561.1
Total liabilities and equity	$	1,806.9		$	1,997.6	$	4,745.9	$	(1,539.5	)	$	7,010.9

	For the Three Months Ended September 29, 2012
	Lear			Guarantors			Non- guarantors			Eliminations			Consolidated
	(Unaudited; in millions)
Net sales	$	119.1		$	1,412.3		$	3,011.8		$	(1,004.6	)	$	3,538.6
Cost of sales		137.2			1,258.1			2,856.6			(1,004.6	)		3,247.3
Selling, general and administrative expenses		33.6			41.0			38.8			—			113.4
Amortization of intangible assets		0.3			0.9			7.1			—			8.3
Intercompany charges		0.5			0.3			(0.8	)		—			—
Interest expense		0.8			4.1			8.8			—			13.7
Other intercompany (income) expense, net		(74.6	)		52.1			22.5			—			—
Other expense, net		3.6			0.1			(2.2	)		—			1.5
Consolidated income before income taxes and equity in net income of affiliates and subsidiaries		17.7			55.7			81.0			—			154.4
Provision for income taxes		2.5			(1.2	)		28.0			—			29.3
Equity in net income of affiliates		4.5			(0.6	)		(6.9	)		—			(3.0	)
Equity in net income of subsidiaries		(110.7	)		(32.2	)		—			142.9			—
Consolidated net income		121.4			89.7			59.9			(142.9	)		128.1
Less: Net income attributable to noncontrolling interests		—			—			6.7			—			6.7
Net income attributable to Lear	$	121.4		$	89.7		$	53.2		$	(142.9	)	$	121.4
Consolidated comprehensive income	$	166.4		$	104.8		$	91.9		$	(188.8	)	$	174.3
Less: Comprehensive income attributable to noncontrolling interests		—			—			7.9			—			7.9
Comprehensive income attributable to Lear	$	166.4		$	104.8		$	84.0		$	(188.8	)	$	166.4

	For the Three Months Ended October 1, 2011
	Lear			Guarantors			Non- guarantors			Eliminations			Consolidated
	(Unaudited; in millions)
Net sales	$	93.1		$	1,340.2		$	3,058.9		$	(1,032.2	)	$	3,460.0
Cost of sales		112.1			1,227.9			2,871.7			(1,032.2	)		3,179.5
Selling, general and administrative expenses		36.7			12.5			65.7			—			114.9
Amortization of intangible assets		0.3			0.1			6.7			—			7.1
Intercompany charges		0.5			0.3			(0.8	)		—			—
Interest expense		0.5			6.4			4.0			—			10.9
Other intercompany (income) expense, net		(78.3	)		46.9			31.4			—			—
Other expense, net		5.7			10.9			(6.5	)		—			10.1
Consolidated income before income taxes and equity in net income of affiliates and subsidiaries		15.6			35.2			86.7			—			137.5
Provision for income taxes		4.1			(0.2	)		27.1			—			31.0
Equity in net income of affiliates		5.1			0.7			(7.4	)		—			(1.6	)
Equity in net income of subsidiaries		(94.3	)		(15.7	)		—			110.0			—
Consolidated net income		100.7			50.4			67.0			(110.0	)		108.1
Less: Net income attributable to noncontrolling interests		—			—			7.4			—			7.4
Net income attributable to Lear	$	100.7		$	50.4		$	59.6		$	(110.0	)	$	100.7
Consolidated comprehensive income	$	(69.1	)	$	5.5		$	(57.6	)	$	59.9		$	(61.3	)
Less: Comprehensive income attributable to noncontrolling interests		—			—			7.8			—			7.8
Comprehensive income attributable to Lear	$	(69.1	)	$	5.5		$	(65.4	)	$	59.9		$	(69.1	)

	For the Nine Months Ended September 29, 2012
	Lear			Guarantors			Non- guarantors			Eliminations			Consolidated
	(Unaudited; in millions)
Net sales	$	379.9		$	4,294.9		$	9,365.9		$	(3,193.1	)	$	10,847.6
Cost of sales		434.5			3,899.2			8,791.3			(3,193.1	)		9,931.9
Selling, general and administrative expenses		102.8			70.3			173.7			—			346.8
Amortization of intangible assets		0.9			1.4			20.2			—			22.5
Intercompany charges		3.6			1.3			(4.9	)		—			—
Interest expense		3.0			15.9			21.3			—			40.2
Other intercompany (income) expense, net		(255.3	)		168.9			86.4			—			—
Other expense, net		2.6			0.4			9.0			—			12.0
Consolidated income before income taxes and equity in net income of affiliates and subsidiaries		87.8			137.5			268.9			—			494.2
Provision for income taxes		8.4			0.3			91.7			—			100.4
Equity in net income of affiliates		(13.1	)		(2.0	)		(18.2	)		—			(33.3	)
Equity in net income of subsidiaries		(308.4	)		(143.3	)		—			451.7			—
Consolidated net income		400.9			282.5			195.4			(451.7	)		427.1
Less: Net income attributable to noncontrolling interests		—			—			26.2			—			26.2
Net income attributable to Lear	$	400.9		$	282.5		$	169.2		$	(451.7	)	$	400.9
Consolidated comprehensive income	$	434.6		$	324.6		$	186.7		$	(484.8	)	$	461.1
Less: Comprehensive income attributable to noncontrolling interests		—			—			26.5			—			26.5
Comprehensive income attributable to Lear	$	434.6		$	324.6		$	160.2		$	(484.8	)	$	434.6

	For the Nine Months Ended October 1, 2011
	Lear			Guarantors			Non- guarantors			Eliminations			Consolidated
	(Unaudited; in millions)
Net sales	$	272.1		$	3,918.1		$	9,546.8		$	(3,089.0	)	$	10,648.0
Cost of sales		342.0			3,572.1			8,872.4			(3,089.0	)		9,697.5
Selling, general and administrative expenses		116.6			35.9			199.1			—			351.6
Amortization of intangible assets		0.9			0.3			19.9			—			21.1
Intercompany charges		3.2			1.2			(4.4	)		—			—
Interest expense		(0.5	)		18.0			7.4			—			24.9
Other intercompany (income) expense, net		(252.9	)		137.3			115.6			—			—
Other expense, net		(2.8	)		14.2			3.9			—			15.3
Consolidated income before income taxes and equity in net income of affiliates and subsidiaries		65.6			139.1			332.9			—			537.6
Provision for income taxes		12.6			2.4			75.7			—			90.7
Equity in net income of affiliates		8.3			(0.8	)		(17.1	)		—			(9.6	)
Equity in net income of subsidiaries		(389.5	)		(184.1	)		—			573.6			—
Consolidated net income		434.2			321.6			274.3			(573.6	)		456.5
Less: Net income attributable to noncontrolling interests		—			—			22.3			—			22.3
Net income attributable to Lear	$	434.2		$	321.6		$	252.0		$	(573.6	)	$	434.2
Consolidated comprehensive income	$	374.7		$	284.2		$	254.1		$	(514.1	)	$	398.9
Less: Comprehensive income attributable to noncontrolling interests		—			—			24.2			—			24.2
Comprehensive income attributable to Lear	$	374.7		$	284.2		$	229.9		$	(514.1	)	$	374.7

	For the Nine Months Ended September 29, 2012
	Lear			Guarantors			Non- guarantors			Eliminations		Consolidated
	(Unaudited; in millions)
Net cash provided by operating activities	$	91.6		$	180.2		$	88.9		$	—	$	360.7
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(7.6	)		(74.5	)		(218.4	)		—		(300.5	)
Insurance proceeds		—			—			11.4			—		11.4
Cash paid for acquisitions, net of cash acquired		(246.1	)		—			—			—		(246.1	)
Other, net		0.5			3.8			(5.2	)		—		(0.9	)
Net cash used in investing activities		(253.2	)		(70.7	)		(212.2	)		—		(536.1	)
Cash Flows from Financing Activities:
Repurchase of senior notes		(72.1	)		—			—			—		(72.1	)
Repurchase of common stock		(172.6	)		—			—			—		(172.6	)
Dividends paid to Lear Corporation stockholders		(40.9	)		—			—			—		(40.9	)
Dividends paid to noncontrolling interests		—			—			(4.3	)		—		(4.3	)
Other		2.2			—			(17.6	)		—		(15.4	)
Change in intercompany accounts		26.8			(110.4	)		83.6			—		—
Net cash used in financing activities		(256.6	)		(110.4	)		61.7			—		(305.3	)
Effect of foreign currency translation		—			—			(4.0	)		—		(4.0	)
Net Change in Cash and Cash Equivalents		(418.2	)		(0.9	)		(65.6	)		—		(484.7	)
Cash and Cash Equivalents as of Beginning of Period		820.3			1.4			932.6			—		1,754.3
Cash and Cash Equivalents as of End of Period	$	402.1		$	0.5		$	867.0		$	—	$	1,269.6

	For the Nine Months Ended October 1, 2011
	Lear			Guarantors			Non- guarantors			Eliminations		Consolidated
	(Unaudited; in millions)
Net cash provided by operating activities	$	132.7		$	115.6		$	268.2		$	—	$	516.5
Cash Flows from Investing Activities:
Additions to property, plant and equipment		(7.5	)		(48.5	)		(191.7	)		—		(247.7	)
Cash paid for acquisitions, net of cash acquired		—			—			(8.4	)				(8.4	)
Other, net		23.6			2.2			5.5			—		31.3
Net cash used in investing activities		16.1			(46.3	)		(194.6	)		—		(224.8	)
Cash Flows from Financing Activities:
Other long-term debt repayments, net		—			—			(1.1	)		—		(1.1	)
Short-term debt repayments, net		—			—			(4.2	)		—		(4.2	)
Payment of debt issuance costs		(4.8	)		—			—			—		(4.8	)
Repurchase of common stock		(194.2	)		—			—			—		(194.2	)
Dividends paid to Lear Corporation stockholders		(38.3	)		—			—			—		(38.3	)
Dividends paid to noncontrolling interests		—			—			(18.5	)		—		(18.5	)
Other		(3.5	)		—			0.1			—		(3.4	)
Change in intercompany accounts		84.0			(69.5	)		(14.5	)		—		—
Net cash used in financing activities		(156.8	)		(69.5	)		(38.2	)		—		(264.5	)
Effect of foreign currency translation		—			—			(4.8	)		—		(4.8	)
Net Change in Cash and Cash Equivalents		(8.0	)		(0.2	)		30.6			—		22.4
Cash and Cash Equivalents as of Beginning of Period		808.8			0.4			844.9			—		1,654.1
Cash and Cash Equivalents as of End of Period	$	800.8		$	0.2		$	875.5		$	—	$	1,676.5

Basis of Presentation — Certain of Lear’s domestic 100% owned subsidiaries (the “Guarantors”) have jointly and severally unconditionally guaranteed, on a senior unsecured basis, the performance and the full and punctual payment when due, whether at stated maturity, by acceleration or otherwise, of the Company’s obligations under its revolving credit facility and the indenture governing the Notes, including the Company’s obligations to pay principal, premium, if any, and interest with respect to the Notes. The Notes consist of $315 million in aggregate principal amount at maturity of 7.875% senior unsecured notes due 2018 and $315 million in aggregate principal amount at maturity of 8.125% senior unsecured notes due 2020. The Guarantors include Lear Corporation EEDS and Interiors, Lear European Operations Corporation, Lear Mexican Seating Corporation and Lear Operations Corporation. In addition, Guilford Mills, Inc. and GMI Holding Corporation were added as guarantors in August 2012. In lieu of providing separate financial statements for the Guarantors, the Company has included the supplemental guarantor condensed consolidating financial statements above. These financial statements reflect the Guarantors listed above for all periods presented. Management does not believe that separate financial statements of the Guarantors are material to investors. Therefore, separate financial statements and other disclosures concerning the Guarantors are not presented.

The 2011 supplemental guarantor condensed consolidating financial statements have been restated to reflect certain changes to the equity investments of the Guarantors.

Distributions — There are no significant restrictions on the ability of the Guarantors to make distributions to the Company.

Selling, General and Administrative Expenses — Corporate and division selling, general and administrative expenses are allocated to the operating subsidiaries based on various factors, which estimate usage of particular corporate and division functions, and in certain instances, other relevant factors, such as the revenues or the number of employees of the Company’s subsidiaries. During the three months ended September 29, 2012 and October 1, 2011, $11.1 million and $5.4 million, respectively, of selling, general and administrative expenses were allocated from Lear. During the nine months ended September 29, 2012 and October 1, 2011, $30.9 million and $15.6 million, respectively, of selling, general and administrative expenses were allocated from Lear.

Long-Term Debt of Lear and the Guarantors — A summary of long-term debt of Lear and the Guarantors on a combined basis is shown below (in millions):

	September 29, 2012		December 31, 2011
Senior notes	$	626.2	$	695.4