LEAR CORP MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)


EXECUTIVE OVERVIEW

We are a global automotive technology leader in Seating and E-Systems, enabling
superior in-vehicle experiences for consumers around the world. We supply
seating, electrical distribution and connection systems and electronic systems
to all of the world's major automotive manufacturers.

Lear is built on a foundation and strong culture of innovation, operational
excellence, and engineering and program management capabilities. We use our
product, 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 (balancing
risks and returns); investing in innovation to drive business growth and
profitability; maintaining a strong balance sheet with investment grade credit
metrics; and consistently returning capital to our stockholders. Further, we
have aligned our strategy with the key trends affecting our business -
electrification, connectivity, autonomy and shared mobility. At Lear, we are
Making every drive betterTM by providing technology for safer, smarter and more
comfortable journeys, while adhering to our values - Be Inclusive. Be Inventive.
Get Results the Right Way.

Our business is organized under two reporting segments: Seating and E-Systems.
Each of these segments has a varied product and technology range across a number
of component categories.

Our Seating business consists of the design, development, engineering and
manufacture of complete seat systems, seat subsystems and key seat components.
Our capabilities in operations and supply chain management enable synchronized
(just-in-time) assembly and delivery of high volumes of complex complete seat
systems to our customers. Included in our complete seat system and subsystem
solutions are advanced comfort, wellness and safety offerings, as well as
configurable seating product technologies. Our advanced comfort, wellness and
safety offerings are facilitated by our system, component and integration
capabilities, together with our in-house electronics, sensor, software and
algorithm competencies. Our comfort offerings have been enhanced by our first
quarter 2022 acquisition of substantially all of Kongsberg Automotive's Interior
Comfort Systems business unit ("Kongsberg ICS"), which specializes in comfort
seating solutions, including massage, lumbar, seat heat and ventilation. 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 and headrests, as well as advanced comfort
offerings of massage, lumbar, seat heat and ventilation. All of these products
are compatible with traditional internal combustion engine ("ICE") architectures
and the full range of hybrid, plug-in hybrid and battery electric architectures
(collectively, "electrified powertrains").

Our E-Systems business consists of the design, development, engineering and
manufacture of complete electrical distribution and connection systems and
electronic systems. The combination of these capabilities enables us to provide
our customers with customizable solutions with optimized designs at a
competitive cost. Electrical distribution and connection systems utilize low
voltage wire, 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. Key components in our electrical
distribution and connection systems portfolio include wire harnesses, terminals
and connectors and engineered components for both ICE architectures and
electrified powertrains that require management of higher voltage and power.
Electronic systems facilitate signal, data and power management within the
vehicle and include the associated software required to facilitate these
functions. Key components in our electronic systems portfolio include body
domain and zone control modules and products specific to electrification and
connectivity. Electrification products include integrated power modules and
battery disconnect units, as well as on-board battery chargers, power conversion
modules, high voltage battery management systems and high voltage power
distribution boxes. Connectivity products include telematics control units
("TCU") and gateway modules to manage both wired and wireless networks and data
in vehicles. In addition to electronic modules, we offer software that includes
cybersecurity and full capabilities in both dedicated short-range communication
and cellular protocols for vehicle connectivity. Our software offerings include
embedded control software and cloud and mobile device-based software and
services. Our customers traditionally have sourced our electronic hardware
together with the software that we embed in it.

We serve all of the world's major automotive manufacturers across both our
Seating and E-Systems businesses, and we have automotive content on more than
450 vehicle nameplates worldwide. It is common for us to have both seating and
electrical and/or electronic content on the same vehicle platform.

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; management of complex supply
chains; global engineering and program management skills; the agility to
establish and/or transfer production between facilities quickly; and a
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unique customer-focused culture. Our businesses utilize proprietary,
industry-specific processes and standards, leverage common low-cost engineering
centers and share centralized operating support functions. These functions
include logistics, supply chain management, quality, health and safety, and all
major administrative functions.

Industry Overview

Our sales are driven by the number of vehicles produced by the automotive
manufacturers, which is ultimately dependent on the availability of raw
materials and components and consumer demand for automotive vehicles, and our
content per vehicle. Due to the overall global economic conditions in 2020,
largely as a result of the COVID-19 pandemic, the automotive industry
experienced a decline in global customer sales and production volumes. Although
industry production increased 3% in 2021 over 2020 and is expected to increase
7% in 2022 over 2021 (based on October 2022 S&P Global Mobility, formerly IHS
Markit, projections), production remains well below recent historic levels and
consumer demand. This is largely due to the continuing impact of the COVID-19
pandemic, particularly through supply shortages and, to a lesser extent, the
resurgence of the virus in China with corresponding "stay at home" government
orders, as well as the Russia-Ukraine conflict. The most significant supply
shortage relates to semiconductor chips, which is impacting global vehicle
production and resulting in reductions and cancellations of planned production.
In addition, we are experiencing increased costs related to labor inefficiencies
and shortages, which are likely to continue. Increases in certain commodity
costs, as well as transportation, logistics and utility costs, are also
impacting, and will continue to impact, our operating results for the
foreseeable future. Further resurgences of the COVID-19 virus or its variants in
other regions, including corresponding "stay at home" or similar government
orders impacting industry production, could also impact our financial results.
For risks related to the COVID-19 pandemic, including supply shortages, see Item
1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended
December 31, 2021, as supplemented and updated by Part II - Item 1A, "Risk
Factors," in this Report.

In March 2022, as our customers began to suspend their Russian operations as a
result of Russia's invasion of Ukraine, we similarly began to suspend our
Russian operations. Since the first quarter of 2022, we have suspended all
production in Russia (but for certain de minimis operations) and significantly
decreased our workforce in the country. Given the continued uncertainty
regarding our Russian operations and the military escalation announced by the
Russian government in September 2022, we recorded charges of approximately
$20 million in the third quarter of 2022 related to impairments of substantially
all of our operating assets, including inventory, property, plant and equipment
and right-of-use assets. Although our net sales and total assets in Russia
represent less than 1% of our consolidated net sales and total assets, the
Russia-Ukraine conflict and sanctions imposed on Russia globally have resulted
in economic and supply chain disruptions affecting the overall automotive
industry, the ultimate financial impact of which cannot be reasonably estimated.
Further, although we do not have operations in Ukraine, the Ukrainian operations
of certain of our suppliers and suppliers of our customers have been and will
likely continue to be disrupted by the Russia-Ukraine conflict. For further
information, see Note 2, "Current Operating Environment," Note 7, "Long-Lived
Assets," Note 10, "Leases," and Note 19, "Financial Instruments," to the
condensed consolidated financial statements included in this Report.

Global automotive industry production volumes in the first nine months of 2022,
as compared to the first nine months of 2021, are shown below (in thousands of
units):

                                            Nine Months Ended
                                    October 1,             October 2,
                                     2022 (1)             2021 (1) (2)      % Change
North America                          10,790.4                 9,753.7         11  %
Europe and Africa                      11,767.4                12,205.9         (4) %
Asia                                   33,080.5                29,660.2         12  %
South America                           2,012.1                 1,829.0         10  %
Other                                   1,435.3                 1,128.6         27  %
Global light vehicle production        59,085.7                54,577.4     

8%

(1) Production data based on S&P Global Mobility (2) Production data for 2021 has been updated from our Third Quarter 2021 Quarterly Report on Form 10-Q to reflect actual production levels

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In addition to the factors noted above, automotive sales and production can be
affected by the age of the vehicle fleet and related scrappage rates, labor
relations issues, fuel prices, regulatory requirements, government initiatives,
trade agreements, the availability and cost of credit, the availability of
critical components needed to complete the production of vehicles, restructuring
actions of our customers and suppliers, facility closures, changing consumer
attitudes toward vehicle ownership and usage and other factors. 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 level
of vertical integration and profitability of the products that we supply for
these platforms. 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.

Our percentage of consolidated net sales by region in the first nine months of 2022 and 2021 is shown below:

                            Nine Months Ended
                        October 1,         October 2,
                           2022               2021
North America                    43  %           39  %
Europe and Africa                33  %           36  %
Asia                             20  %           21  %
South America                     4  %            4  %
Total                           100  %          100  %

Our ability to reduce the risks inherent in certain concentrations of our business, and thereby maintain our financial performance in the future, will depend, in part, on our ability to continue to diversify our sales by customer, product, platform and region. geographic to reflect the overall market.

The automotive industry, and our business, continue to be shaped by the broad
trends of electrification, connectivity, autonomy, and shared mobility. We also
consider demand and regulatory requirements related to improved energy
efficiency, sustainability, enhanced safety and communications (e.g., government
mandates related to fuel economy, carbon emissions and safety equipment) to be
significant drivers of these trends, each of which is likely to be at the
forefront of our industry for the foreseeable future.

In addition to key foundational attributes imperative for success as an
automotive supplier (quality, service and cost), our strategic initiatives focus
on furthering our competitive differentiation through vertical integration,
disruptive innovation and advanced manufacturing technology. We have expanded
key component capabilities through organic investment and acquisitions to ensure
a full complement of the best solutions for our customers. We have restructured,
and continue to align, our manufacturing and engineering footprint to attain a
leading competitive cost position globally. We have established or expanded
activities in new and growing markets, in support of our customers' growth
initiatives and in pursuit of opportunities with new customers. These
initiatives have helped us achieve our financial goals overall, as well as more
regional, customer and vehicle segment diversification in our business.

For further information related to these trends and our strategy, see Item 1,
"Business - Industry and Strategy," in our Annual Report on Form 10-K for the
year ended December 31, 2021.

Our customers typically require us to reduce our prices over the life of a
vehicle model and, at the same time, assume significant responsibility for the
design, development and engineering of our products. Our financial performance
is largely dependent on our ability to offset these price reductions with
product cost reductions through product design enhancement, supply chain
management, manufacturing efficiencies and restructuring actions. We also seek
to enhance our financial performance by investing in product development, design
capabilities and new product initiatives that respond to and anticipate the
needs of our customers and consumers. We continually evaluate operational and
strategic alternatives to improve our business structure and align our business
with the changing needs of our customers and major industry trends affecting our
business.

Our material cost as a percentage of net sales was 66.4% in the first nine
months of 2022, as compared to 65.0% in the first nine months of 2021,
reflecting increases in certain commodity costs. Raw material, energy and
commodity costs can be volatile, reflecting, among other things, changes in
supply and demand, logistics issues, global trade and tariff policies, 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 higher raw material, energy and commodity costs, such as the selective
in-sourcing of components, the continued consolidation of our supply base,
longer-term purchase commitments, contractual recovery mechanisms and the
selective expansion of low-cost country sourcing and engineering, as well as
value engineering and
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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 commodity price environment. In the
current environment of escalating raw material, energy and commodity costs,
these strategies, together with commercial negotiations with our customers and
suppliers, have only offset a portion of the adverse impact. In addition, the
availability of raw materials, 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, 2021, as supplemented and updated by Part II - Item 1A, "Risk
Factors," in this Report.

Financial measures

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, including electrification. We also have
selectively increased our vertical integration capabilities globally, as well as
expanded our component manufacturing capacity in Asia, Eastern Europe, Mexico
and Northern Africa and our low-cost engineering capabilities in Asia, Eastern
Europe and Northern Africa.

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 and purchases. 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, changes to our customers' payment
terms and the financial condition of our suppliers, as well as our financial
condition. 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.

Acquisitions

On February 28, 2022, we completed the acquisition of Kongsberg ICS, which
specializes in comfort seating solutions. With almost 50 years of experience in
comfort seating solutions, Kongsberg ICS has leading technology, a well-balanced
customer portfolio built on longstanding relationships with leading premium
automotive manufacturers, and an experienced team. The Kongsberg ICS acquisition
is expected to further advance our seat component capabilities into specialized
comfort seating solutions that further differentiate our product offerings and
improve vehicle performance and packaging - important features across various
vehicle segments. The transaction is valued at approximately $189 million, on a
cash and debt free basis.

On May 19, 2022we completed the acquisition of Thagora Technology SRL (“Thagora”), a private company specializing in materials utilization hardware and software technologies based in Iasi, Romania. We expect Thagora’s innovative technologies to complement our sustainable manufacturing processes by reducing scrap and reducing energy consumption during production.

On May 20, 2022, we entered into a definitive agreement to acquire I.G. Bauerhin
("IGB"), a privately held supplier of automotive seat heating, ventilation,
active cooling, steering wheel heating, seat sensors and electronic control
modules, headquartered in Gruendau-Rothenbergen, Germany. IGB has more than
4,000 employees at nine manufacturing plants in seven countries. The acquisition
of IGB is expected to further our vertical integration strategy and advance our
vision of being the leading provider of innovative thermal comfort solutions.
The transaction is valued at approximately €140 million, on a cash and debt free
basis. The acquisition, subject to regulatory approvals and customary closing
conditions and adjustments, is expected to close by the first quarter of 2023.

Operational restructuring

In the first nine months of 2022, we incurred pretax restructuring costs of $89
million and related manufacturing inefficiency charges of approximately $5
million, as compared to pretax restructuring costs of $78 million and related
manufacturing inefficiency charges of approximately $10 million in the first
nine months of 2021. None of the individual restructuring actions initiated in
the first nine months of 2022 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.

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
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existing cash balances. We expect to incur approximately $50 million of
additional restructuring costs related to activities initiated as of October 1,
2022, 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.

For more information, see Note 4, “Restructuring”, and Note 18, “Segment information”, to the summary consolidated financial statements included in this Report.

Share buyback program and quarterly cash dividends

We 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 we may repurchase our
outstanding common stock and the timing of such repurchases will depend upon our
financial condition, results of operations, capital requirements, prevailing
market conditions, alternative uses of capital and other factors (see "-
Forward-Looking Statements" below).

Since the first quarter of 2011, our Board of Directors (the “Board”) has authorized $6.1 billion in share buybacks under our common share buyback program. In the first nine months of 2022, we acquired $75 million
of shares. At the end of the third quarter of 2022, we have a remaining repurchase authorization of $1.3 billionwhich expires on December 31, 2024.

Our board declared a quarterly cash dividend of $0.77 per common share in the first, second and third quarters of 2022.

For further information related to our common stock share repurchase program and
our quarterly cash dividends, see "- Liquidity and Capital Resources -
Capitalization" below and Note 16, "Comprehensive Income (Loss) and Equity," to
the condensed consolidated financial statements included in this Report.

Other topics

In the three months ended October 1, 2022, we recognized tax expense of $3
million related to the establishment of a valuation allowance on deferred tax
assets of a foreign subsidiary and net tax benefits of $6 million related to
restructuring charges and various other items. In the nine months ended
October 1, 2022, we recognized net tax benefits of $5 million related to the
release of tax reserves at several foreign subsidiaries, net tax expense of $3
million related to changes in valuation allowances on deferred tax assets of
foreign subsidiaries and net tax benefits of $26 million related to
restructuring charges and various other items.

In the three months ended October 2, 2021, we recognized tax expense of $20
million related to the establishment of valuation allowances on deferred tax
assets of foreign subsidiaries, net tax benefits of $7 million related to a
favorable indirect tax ruling and net tax benefits of $7 million related to
restructuring charges and various other items. In the nine months ended October
2, 2021, we recognized net tax expense of $13 million related to changes in
valuation allowances on deferred tax assets of foreign subsidiaries, tax expense
of $9 million on a $46 million gain related to a favorable indirect tax ruling
in a foreign jurisdiction and net tax benefits of $26 million related to the net
release of tax reserves at several foreign subsidiaries, restructuring charges
and various other items.
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                                LEAR CORPORATION

Our results for the three and nine months ended October 1, 2022 and October 2, 2021reflect the following (in millions):

                                                                        Three Months Ended                       Nine Months Ended
                                                                 October 1,           October 2,          October 1,           October 2,
                                                                    2022                 2021                2022                 2021

Costs related to restructuring actions, including manufacturing inefficiencies of $1 million and $5 million in the three and nine months ended October 1, 2022respectively, and $3 million
and $10 million in the three and nine months ended October 2, 2021respectively

                                              $       19  

$49 $94 $88
Acquisition costs

                                                        -                    -                  10                    -
Acquisition-related inventory fair value adjustment                      -                    -                   1                    -
Other acquisition-related costs                                         11                    -                  11                    -
Impairments related to Russian operations                               20                    -                  20                    -
Intangible asset impairment                                              -                    -                   9                    9

Costs (insurance recoveries) related to the typhoon in The Philippinesreport

                                                        (1)                   -                   4                    -

Foreign exchange losses due to exchange rate volatility related to Russia

                                                        1                    -                  15                    -
Favorable indirect tax ruling in a foreign jurisdiction                  -                    1                   -                  (46)
Loss related to affiliate                                                -                    -                   -                    1
Tax (benefit) expense, net                                              (3)                   6                 (28)                  (4)


For further information regarding these items, see Note 3, "Acquisition of
Kongsberg ICS," Note 4, "Restructuring," Note 7, "Long-Lived Assets," Note 8,
"Goodwill and Indefinite-Lived Intangible Assets," Note 10, "Leases," Note 13,
"Other (Income) Expense, Net," and Note 14, "Income Taxes," to the condensed
consolidated financial statements included in this Report.

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 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, 2021, as supplemented and updated by Part II - Item 1A,
"Risk Factors," in this Report.

RESULTS OF OPERATIONS

A summary of our operating results in millions of dollars and as a percentage of
net sales is shown below:

                                                               Three Months Ended                                                                  Nine Months Ended
                                            October 1, 2022                          October 2, 2021                           October 1, 2022                           October 2, 2021
Net sales
Seating                            $      3,887.8             74.2  %       $      3,166.2             74.2  %       $      11,674.4             75.2  %       $      10,770.4             74.9  %
E-Systems                                 1,353.4             25.8                 1,102.0             25.8                  3,846.2             24.8                  3,612.9             25.1
Net sales                                 5,241.2            100.0                 4,268.2            100.0                 15,520.6            100.0                 14,383.3            100.0
Cost of sales                             4,864.3             92.8                 4,041.5             94.7                 14,482.3             93.3                 13,262.4             92.2
Gross profit                                376.9              7.2                   226.7              5.3                  1,038.3              6.7                  1,120.9              7.8
Selling, general and
administrative expenses                     163.9              3.1                   163.3              3.8                    512.4              3.3                    503.0              3.5
Amortization of intangible assets            15.2              0.3                    15.8              0.4                     55.5              0.3                     57.4              0.4
Interest expense                             24.8              0.5                    22.6              0.5                     74.6              0.5                     67.2              0.5
Other (income) expense, net                  18.1              0.3                    11.1              0.3                     59.8              0.4                    (28.7)            (0.2)
Provision for income taxes                   41.7              0.8                    20.9              0.5                     85.6              0.5                    119.1              0.8
Equity in net (income) loss of
affiliates                                   (6.0)            (0.1)                    1.7                -                    (21.0)            (0.1)                    (9.1)            (0.1)
Net income attributable to
noncontrolling interests                     26.9              0.5                    17.8              0.4                     61.2              0.4                     59.6              0.4
Net income (loss) attributable to
Lear                               $         92.3              1.8  %       $        (26.5)            (0.6) %       $         210.2              1.4  %       $         352.4              2.5  %


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Three months completed October 1, 2022 compared to the three months ended October 2, 2021

Net sales in the third quarter of 2022 were $5.2 billion, as compared to $4.3
billion in the third quarter of 2021, an increase of $1.0 billion or 23%. Higher
production volumes on Lear platforms globally and new business globally
favorably impacted net sales by $760 million and $321 million, respectively. Net
sales also benefited by $148 million and $59 million due to commodity recoveries
and our Kongsberg ICS acquisition, respectively. These increases were partially
offset by the impact of foreign exchange fluctuations, which reduced net sales
by $361 million.

(in millions)            Cost of Sales
Third quarter 2021      $      4,041.5
Material cost                    672.7
Labor and other                  151.3
Depreciation                      (1.2)
Third quarter 2022      $      4,864.3


Cost of sales was $4.9 billion in the third quarter of 2022, as compared to $4.0
billion in the third quarter of 2021. Higher production volumes on Lear
platforms globally and new business globally increased cost of sales. Cost of
sales also increased as a result of higher commodity costs and our Kongsberg ICS
acquisition. These increases were partially offset by the impact of foreign
exchange fluctuations.

Gross profit and gross margin were $377 million and 7.2% of net sales,
respectively, in the third quarter of 2022, as compared to $227 million and 5.3%
of net sales, respectively, in the third quarter of 2021. Higher production
volumes on Lear platforms and new business positively impacted gross profit by
$183 million. The impact of selling price reductions and foreign exchange
fluctuations was partially offset by favorable operating performance, including
the benefit of restructuring actions. These factors had a corresponding impact
on gross margin.

Selling, general and administrative expenses, including engineering and
development expenses, were $164 million in the third quarter of 2022, as
compared to $163 million in the third quarter of 2021. As a percentage of net
sales, selling, general and administrative expenses were 3.1% in the third
quarter of 2022, as compared to 3.8% in the third quarter of 2021, reflecting
higher restructuring costs in the third quarter of 2021.

The amortization of intangible assets has been $15 million in the third quarter of 2022, compared to $16 million in the third quarter of 2021.

Interest charges were $25 million in the third quarter of 2022, compared to
$23 million in the third quarter of 2021.

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 the disposal of fixed assets, the
non-service cost components of net periodic benefit cost and other miscellaneous
income and expense, was $18 million in the third quarter of 2022, as compared to
$11 million in the third quarter of 2021. In the third quarter of 2022, we
recognized foreign exchange losses of $11 million related to foreign currency
contracts of the €140 million IGB purchase price to be paid pending closing of
such transaction.

In the third quarter of 2022, the provision for income taxes was $42 million,
representing an effective tax rate of 26.9% on pretax income before equity in
net income of affiliates of $155 million. In the third quarter of 2021, the
provision for income taxes was $21 million, representing an effective tax rate
of 150.4% on pretax income before equity in net loss of affiliates of $14
million, for the reasons described below. For further information, see Note 14,
"Income Taxes," to the condensed consolidated financial statements included in
this Report.

In the third quarters of 2022 and 2021, the provision for income taxes was
primarily impacted by the level and mix of earnings among tax jurisdictions. In
the third quarter of 2022, we recognized tax expense of $3 million related to
the establishment of a valuation allowance on deferred tax assets of a foreign
subsidiary and net tax benefits of $6 million related to restructuring charges
and various other items. In the third quarter of 2021, we recognized tax expense
of $20 million related to the establishment of valuation allowances on deferred
tax assets of foreign subsidiaries, net tax benefits of $7 million related to a
favorable indirect tax ruling and net tax benefits of $7 million related to
restructuring charges and various other items.

Excluding these items, the effective tax rate for the third quarters of 2022 and
2021 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.

Equity in net (income) loss of affiliates was income of $6 million in the third
quarter of 2022, as compared to a loss of $2 million in the third quarter of
2021, primarily reflecting the earnings of our Shenyang Jinbei Lear Automotive
Seating joint venture established in the third quarter of 2021.
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Net income (loss) attributable to Lear was $92 million, or $1.54 per diluted
share, in the third quarter of 2022, as compared to ($27) million, or ($0.44)
per diluted share, in the third quarter of 2021. Net income (loss) and diluted
net income (loss) per share increased for the reasons described above.

Reportable operating segments

We have two operating segments to report: Headquarters and Electronic systems. For a description of our reportable operating segments, see “Overview” above.

The financial information presented below is for our two reportable operating
segments and our other category for the periods presented. The other category
includes unallocated costs related to corporate headquarters, regional
headquarters and the elimination of intercompany activities, none of which meets
the requirements for being classified as an operating segment. Corporate and
regional headquarters costs include various support functions, such as
information technology, advanced research and development, corporate finance,
legal, executive administration and human resources. Financial measures
regarding each segment's pretax income (loss) before equity in net income (loss)
of affiliates, interest expense and other (income) expense, net ("segment
earnings") and segment earnings divided by net sales ("margin") are not measures
of performance under accounting principles generally accepted in the United
States ("GAAP"). Segment earnings and the related margin are used by management
to evaluate the performance of our reportable operating segments. Segment
earnings should not be considered in isolation or as a substitute for net income
attributable to Lear, net cash provided by operating activities or other income
statement or cash flow statement data prepared in accordance with GAAP or as
measures of profitability or liquidity. In addition, segment earnings, as we
determine it, may not be comparable to related or similarly titled measures
reported by other companies.

For a reconciliation of consolidated segment earnings to consolidated income
before provision for income taxes and equity in net income of affiliates, see
Note 18, "Segment Reporting," to the condensed consolidated financial statements
included in this Report.

Seating

A summary of our Seating segment financial metrics is shown below (amounts in millions of dollars):

                            Three Months Ended
                        October 1,      October 2,
                           2022            2021
Net sales              $ 3,887.8       $ 3,166.2
Segment earnings (1)       222.6           126.7
Margin                       5.7  %          4.0  %


(1) See definition above

Seating net sales were $3.9 billion in the third quarter of 2022, as compared to
$3.2 billion in the third quarter of 2021, reflecting an increase of $722
million or 23%. Higher production volumes on Lear platforms and new business
favorably impacted net sales by $554 million and $211 million, respectively. Net
sales also benefited by $86 million and $59 million due to commodity recoveries
and our Kongsberg ICS acquisition, respectively. These increases were partially
offset by foreign exchange fluctuations, which reduced net sales by $237
million.

Segment earnings, including restructuring costs, and the related margin on net
sales were $223 million and 5.7% in the third quarter of 2022, as compared to
$127 million and 4.0% in the third quarter of 2021. Higher production volumes on
Lear platforms and new business positively impacted segment earnings by $131
million. The impact of selling price reductions, impairment charges related to
our Russian operations and foreign exchange fluctuations was partially offset by
favorable operating performance, including the benefit of operational
restructuring actions, and commodity recoveries.

Electronic systems

A summary of the financial measures for our Electronic systems segment is presented below (amounts in millions of dollars):

                           Three Months Ended
                       October 1,      October 2,
                          2022            2021
Net sales             $ 1,353.4       $ 1,102.0
Segment earnings(1)        46.8            (7.5)
Margin                      3.5  %         (0.7) %


(1) See definition above
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E-Systems net sales were $1.4 billion in the third quarter of 2022, as compared
to $1.1 billion in the third quarter of 2021, reflecting an increase of $251
million or 23%. Higher production volumes on Lear platforms and new business
favorably impacted net sales by $206 million and $110 million, respectively. Net
sales also benefited by $62 million due to commodity recoveries. These increases
were partially offset by foreign exchange fluctuations, which reduced net sales
by $124 million.

Segment earnings, including restructuring costs, and the related margin on net
sales were $47 million and 3.5% in the third quarter of 2022, as compared to
($8) million and (0.7)% in the third quarter of 2021. Higher production volumes
on Lear platforms and new business positively impacted segment earnings by $52
million. Favorable operating performance, including the benefit of operational
restructuring actions, and lower restructuring costs was offset by the impact of
selling price reductions, increased commodity costs and foreign exchange
fluctuations.

Other

A summary of financial measures for our other category, which is not an operating segment, is shown below (amounts in millions of dollars):

                                  Three Months Ended
                             October 1,            October 2,
                                2022                  2021
Net sales              $       -                  $         -
Segment earnings (1)       (71.6)                       (71.6)
Margin                                     N/A              N/A


(1) See definition above

Segment earnings related to our other category were (72) million dollars in the third quarters of 2022 and 2021.

Nine month period ended October 1, 2022 vs nine months ended October 2, 2021

Net sales for the nine months ended October 1, 2022 were $15.5 billion, as
compared to $14.4 billion for the nine months ended October 2, 2021, an increase
of $1.1 billion or 8%. New business globally and higher production volumes on
Lear platforms in North America, South America and Europe favorably impacted net
sales by $773 million and $456 million, respectively. Net sales also benefited
by $431 million and $141 million due to commodity recoveries and our Kongsberg
ICS acquisition, respectively. These increases were partially offset by the
impact of foreign exchange rate fluctuations, which reduced net sales by $747
million.

(in millions)                     Cost of Sales
First nine months of 2021        $     13,262.4
Material cost                             937.6
Labor and other                           277.9
Depreciation                                4.4
First nine months of 2022        $     14,482.3


Cost of sales in the first nine months of 2022 was $14.5 billion, as compared to
$13.3 billion in the first nine months of 2021. New business globally and higher
production volumes on Lear platforms in North America, South America and Europe
increased cost of sales. Cost of sales also increased as a result of higher
commodity costs and our Kongsberg ICS acquisition. These increases were
partially offset by the impact of foreign exchange fluctuations, which reduced
cost of sales.

Gross profit and gross margin were $1.0 billion and 6.7% of net sales,
respectively, for the nine months ended October 1, 2022, as compared to $1.1
billion and 7.8% of net sales, respectively, for the nine months ended
October 2, 2021. The impact of selling price reductions, increased commodity
costs and foreign exchange fluctuations was partially offset by favorable
operating performance, including the benefit of restructuring actions. New
business and higher production volumes on Lear platforms positively impacted
gross profit by $156 million. These factors had a corresponding impact on gross
margin.

Selling, general and administrative expenses, including engineering and
development expenses, were $512 million in the first nine months of 2022, as
compared to $503 million in the first nine months of 2021, primarily reflecting
transaction costs of $10 million related to our Kongsberg ICS acquisition in
2022. As a percentage of net sales, selling, general and administrative expenses
were 3.3% in the first nine months of 2022, as compared to 3.5% in the first
nine months of 2021.

Amortization of intangible assets was $56 million in the first nine months of
2022, as compared to $57 million in the first nine months of 2021. An impairment
charge of $9 million was recognized in the first nine months of 2022 and 2021.
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Interest charges were $75 million in the first nine months of 2022, compared to $67 million in the first nine months of 2021, reflecting financing costs related to our acquisition of Kongsberg ICS in 2022.

Other (income) 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 the disposal of fixed
assets, the non-service cost components of net periodic benefit cost and other
miscellaneous income and expense, was expense of $60 million in the nine months
ended October 1, 2022, as compared to income of $29 million in the nine months
ended October 2, 2021. In the first nine months of 2022, we recognized foreign
exchange losses of $15 million related to foreign exchange rate volatility in
Russia following the invasion of Ukraine and $11 million related to foreign
currency contracts of the €140 million IGB purchase price to be paid pending
closing of such transaction. In the first nine months of 2021, we recognized a
gain of $46 million related to a favorable indirect tax ruling in a foreign
jurisdiction and a loss of $1 million related to the impairment of an affiliate.

For the nine months ended October 1, 2022, the provision for income taxes was
$86 million, representing an effective tax rate of 25.5% on pretax income before
equity in net income of affiliates of $336 million. For the nine months ended
October 2, 2021, the provision for income taxes was $119 million, representing
an effective tax rate of 22.8% on pretax income before equity in net income of
affiliates of $522 million, for reasons described below. For further
information, see Note 14, "Income Taxes," to the condensed consolidated
financial statements included in this Report.

In the first nine months of 2022 and 2021, the provision for income taxes was
primarily impacted by the level and mix of earnings among tax jurisdictions. In
the first nine months of 2022, we recognized net tax benefits of $5 million
related to the release of tax reserves at several foreign subsidiaries, net tax
expense of $3 million related to changes in valuation allowances on deferred tax
assets of foreign subsidiaries and net tax benefits of $26 million related to
restructuring charges and various other items. In the first nine months of 2021,
we recognized net tax expense of $13 million related to changes in valuation
allowances on deferred tax assets of foreign subsidiaries, tax expense of $9
million on a $46 million gain related to a favorable indirect tax ruling in a
foreign jurisdiction and net tax benefits of $26 million related to the net
release of tax reserves at several foreign subsidiaries, restructuring charges
and various other items. Excluding these items, the effective tax rate for the
first nine months of 2022 and 2021 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.

Equity in net income of affiliates was $21 million in the first nine months of
2022, as compared to $9 million in the first nine months of 2021, primarily
reflecting the earnings of our Shenyang Jinbei Lear Automotive Seating joint
venture established in the third quarter of 2021.

Net income attributable to Lear was $210 million, or $3.50 per diluted share,
for the nine months ended October 1, 2022, as compared to $352 million, or $5.83
per diluted share, for the nine months ended October 2, 2021. Net income and
diluted net income per share decreased for the reasons described above.

Reportable operating segments

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 October 1, 2022 vs. Three Months Ended October 2, 2021 -
Reportable Operating Segments" above.

Seats

A summary of our Seating segment financial metrics is shown below (amounts in millions of dollars):

                                  Nine Months Ended
                        October 1, 2022       October 2, 2021
Net sales              $      11,674.4       $      10,770.4
Segment earnings (1)             636.6                 670.9
Margin                             5.5  %                6.2  %


(1) See definition above

Seating net sales were $11.7 billion for the nine months ended October 1, 2022,
as compared to $10.8 billion for the nine months ended October 2, 2021, an
increase of $904 million or 8%. New business and higher production volumes on
Lear platforms favorably impacted net sales by $569 million and $344 million,
respectively. Net sales also benefited by $231 million and $141 million due to
commodity recoveries and our Kongsberg ICS acquisition, respectively. These
increases were partially offset by the impact of foreign exchange fluctuations,
which reduced net sales by $501 million.
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Segment earnings, including restructuring costs, and the related margin on net
sales were $637 million and 5.5% for the nine months ended October 1, 2022, as
compared to $671 million and 6.2% for the nine months ended October 2, 2021. The
impact of selling price reductions, increased commodity costs, foreign exchange
fluctuations and impairment charges related to our Russian operations was
partially offset by favorable operating performance, including the benefit of
operational restructuring actions. New business and higher production volumes on
Lear platforms positively impacted segment earnings by $124 million.

Electronic systems

A summary of the financial measures for our Electronic systems segment is presented below (amounts in millions of dollars):

                                 Nine Months Ended
                        October 1, 2022      October 2, 2021
Net sales              $      3,846.2       $      3,612.9
Segment earnings (1)             64.7                108.4
Margin                            1.7  %               3.0  %


(1) See definition above

E-Systems net sales were $3.8 billion for the nine months ended October 1, 2022,
as compared to $3.6 billion for the nine months ended October 2, 2021, an
increase of $233 million or 6%. New business and higher production volumes on
Lear platforms favorably impacted net sales by $204 million and $112 million,
respectively. Net sales also benefited by $200 million due to commodity
recoveries. These increases were partially offset by foreign exchange
fluctuations, which reduced net sales by $246 million.

Segment earnings, including restructuring costs, and the related margin on net
sales were $65 million and 1.7% for the nine months ended October 1, 2022, as
compared to $108 million and 3.0% for the nine months ended October 2, 2021. The
impact of selling price reductions, increased commodity costs and foreign
exchange fluctuations was partially offset by favorable operating performance,
including the benefit of operational restructuring actions. New business and
higher production volumes on Lear platforms positively impacted segment earnings
by $32 million.

Other

A summary of financial measures for our other category, which is not an operating segment, is shown below (amounts in millions of dollars):

                                   Nine Months Ended
                         October 1, 2022         October 2, 2021
Net sales             $       -                 $             -
Segment earnings(1)      (230.9)                         (218.8)
Margin                                   N/A                  N/A


(1) See definition above

Segment earnings related to our other category were ($231) million in the first
nine months of 2022, as compared to ($219) million in the first nine months of
2021, primarily reflecting transactions costs of $10 million related to our
Kongsberg ICS acquisition.

CASH AND CAPITAL RESOURCES

Our primary liquidity needs are to fund general business requirements, including
working capital requirements, capital expenditures, operational restructuring
actions and debt service requirements. Our principal sources of liquidity are
cash flows from operating activities, borrowings under available credit
facilities and our existing cash balance.

Cash provided by subsidiaries

A substantial portion of our operating income is generated by our subsidiaries.
As a result, we are dependent on the earnings and cash flows of and the
combination of dividends, royalties, intercompany loan repayments and other
distributions and advances from our subsidiaries to provide the funds necessary
to meet our obligations.
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As of October 1, 2022 and December 31, 2021, cash and cash equivalents of $529
million and $661 million, respectively, were held in foreign subsidiaries and
can be repatriated, primarily through the repayment of intercompany loans and
the payment of dividends. There are no significant restrictions on the ability
of our subsidiaries to pay dividends or make other distributions to Lear.

For more information on the potential dividends of our companies notWE
subsidiaries, see Note 9, “Income Taxes”, to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended
December 31, 2021.

Adequacy of sources of liquidity

As of October 1, 2022, we had $0.8 billion of cash and cash equivalents on hand
and $2.0 billion in available borrowing capacity under our revolving credit
facility. Together with cash provided by operating activities, we believe that
this will enable us to meet our liquidity needs for the foreseeable future and
to satisfy ordinary course business obligations. In addition, we expect to
continue to pay quarterly cash dividends and repurchase shares of our common
stock pursuant to our authorized common stock share repurchase program, although
such actions are at the discretion of the Board and will depend upon our
financial condition, results of operations, capital requirements, prevailing
market conditions, alternative uses of capital and other factors that our Board
may consider at its discretion.

Our future financial results and our ability to continue to meet our liquidity
needs are subject to, and will be affected by, cash flows from operations,
including the continuing effects of the COVID-19 pandemic, as well as
restructuring activities, automotive industry conditions, the financial
condition of our customers and suppliers, supply chain disruptions and other
related factors. Additionally, an economic downturn or further reduction in
production levels could negatively impact our financial condition.

For further discussion of the risks and uncertainties affecting our cash flows
from operations and our overall liquidity, see "- Executive Overview" above, "-
Forward-Looking Statements" below and Item 1A, "Risk Factors," in our Annual
Report on Form 10-K for the year ended December 31, 2021, as supplemented and
updated by Part II - Item 1A, "Risk Factors," in this Report.

Cash flow

A summary of net cash provided by operating activities is shown below (in
millions):

                                                                               Nine Months Ended
                                                                                                         Increase
                                                             October 1,           October 2,          (Decrease) in
                                                                2022                 2021               Cash Flow

Consolidated net income and depreciation charges $706

     $       843          $        (137)
Net change in working capital items:
Accounts receivable                                               (797)                 356                 (1,153)
Inventory                                                         (112)                (393)                   281
Accounts payable                                                   571                 (225)                   796
Accrued liabilities and other                                      123                  (68)                   191
Net change in working capital items                               (215)                (330)                   115
Other                                                               (7)                 (10)                     3
Net cash provided by operating activities                  $       484      

$503 $ (19)

Net cash used in investing activities                      $      (617)     

($478) ($139)

Net cash used in financing activities                      $      (313)         $      (232)         $         (81)


Operating Activities

In the first nine months of 2022 and 2021, net cash provided by operating
activities was $484 million and $503 million, respectively. The impact of lower
earnings in 2022 was largely offset by a smaller increase in working capital
during the first nine months of 2022, as compared to the first nine months of
2021.
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                                LEAR CORPORATION

Investing Activities

Net cash used in investing activities was $617 million in the first nine months
of 2022, as compared to $478 million in the first nine months of 2021. In the
first nine months of 2022, we paid $184 million for our Kongsberg ICS
acquisition and $10 million related to investments in affiliates. In the first
nine months of 2021, we paid $49 million related to investments in affiliates.
Capital spending was $443 million in the first nine months of 2022, as compared
to $406 million in the first nine months of 2021. Capital spending is estimated
to be $675 million to $700 million in 2022.

Fundraising activities

Net cash used in financing activities was $313 million in the first nine months
of 2022, as compared to $232 million in the first nine months of 2021. In the
first nine months of 2022, we paid $75 million for repurchases of our common
stock, $139 million of dividends to Lear stockholders and $85 million of
dividends to noncontrolling interest holders. In the first nine months of 2021,
we paid $99 million for repurchases of our common stock, $61 million of
dividends to Lear stockholders and $81 million of dividends to noncontrolling
interest holders.

Capitalization

Short-Term Borrowings

We utilize uncommitted lines of credit as needed for our short-term working
capital fluctuations. As of October 1, 2022 and December 31, 2021, we had lines
of credit from banks totaling $259 million and $96 million, respectively. As of
October 1, 2022, we had short-term debt balances outstanding related to draws on
our lines of credit of $4 million. As of December 31, 2021, there were no
short-term debt balances outstanding related to draws on our lines of credit.

Senior Notes and Credit Agreement

For information related to our senior notes and credit agreement, see Note 9,
"Debt," to the condensed consolidated financial statements included in this
Report and Note 7, "Debt," to the consolidated financial statements included in
our Annual Report on Form 10-K for the year ended December 31, 2021.

Common share buyback program

For information related to our common stock share repurchase program and
dividends, see "- Executive Overview - Share Repurchase Program and Quarterly
Cash Dividends" above, Note 16, "Comprehensive Income (Loss) and Equity," to the
condensed consolidated financial statements included in this Report and Note 12,
"Capital Stock, Accumulated Other Comprehensive Loss and Equity," to the
consolidated financial statements included in our Annual Report on Form 10-K for
the year ended December 31, 2021.

Product prices and availability

Raw material, energy and commodity costs can be volatile, reflecting, among
other things, changes in supply and demand, logistics issues, global trade and
tariff policies, 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. We have developed and implemented strategies to
mitigate the impact of higher raw material, energy and commodity costs, such as
the selective in-sourcing of components, the continued consolidation of our
supply base, longer-term purchase commitments, contractual recovery mechanisms
and the selective expansion of low-cost country sourcing and engineering, as
well as value engineering and product benchmarking. Further, the majority of the
steel used in our products is comprised of fabricated components that are
integrated into a seat system, such as seat frames, recliner mechanisms, seat
tracks and other mechanical components. Therefore, our exposure to changes in
steel prices is primarily indirect, through purchased components. Additionally,
approximately 89% of our copper purchases and a significant portion of our
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 commodity price environment. In the current
environment of escalating raw material, energy and commodity costs, these
strategies, together with commercial negotiations with our customers and
suppliers, have only offset a portion of the adverse impact. If these costs
increase, it could have an adverse impact on our operating results in the
foreseeable future. See "- Forward-Looking Statements" below and Item 1A, "Risk
Factors - Increases in the costs and restrictions on the availability of raw
materials, energy, commodities and product components could adversely affect our
financial performance," in our Annual Report on Form 10-K for the year ended
December 31, 2021, as supplemented and updated by Part II - Item 1A, "Risk
Factors," in this Report.

For further information related to the financial instruments described above,
see Note 19, "Financial Instruments," to the condensed consolidated financial
statements included in this Report.
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                                LEAR CORPORATION

OTHER MATTERS

Legal and environmental issues

We are involved from time to time in various legal proceedings and claims,
including, without limitation, commercial and contractual disputes, product
liability claims and environmental and other matters. As of October 1, 2022, we
have recorded reserves for pending legal disputes, including commercial
disputes, product liability claims and other legal matters of $16 million. In
addition, as of October 1, 2022, we have recorded reserves for product warranty
and recall claims and environmental matters of $36 million and $8 million,
respectively. Although these reserves were determined in accordance with GAAP,
the ultimate outcomes of these matters are inherently uncertain, and actual
results may differ significantly from current estimates. For a description of
risks related to various legal proceedings and claims, see Item 1A, "Risk
Factors," in our Annual Report on Form 10-K for the year ended December 31,
2021. For a more complete description of our outstanding material legal
proceedings, see Note 17, "Legal and Other Contingencies," to the condensed
consolidated financial statements included in this Report.

Significant Accounting Policies and Critical Accounting Estimates

Certain of our accounting policies require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of the
date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. These estimates and
assumptions are based on our historical experience, the terms of existing
contracts, our evaluation of trends in the industry, information provided by our
customers and suppliers and information available from other outside sources, as
appropriate. However, these estimates and assumptions are subject to an inherent
degree of uncertainty. As a result, actual results in these areas may differ
significantly from our estimates. For a discussion of our significant accounting
policies and critical accounting estimates, see Item 7, "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Significant
Accounting Policies and Critical Accounting Estimates," and Note 2, "Summary of
Significant Accounting Policies," to the consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2021.
There have been no significant changes in our significant accounting policies or
critical accounting estimates during the first nine months of 2022.

Recently issued accounting pronouncements

For information on the impact of recently issued accounting pronouncements, see
Note 20, "Accounting Pronouncements," to the condensed consolidated financial
statements included in this Report.

Forward-looking statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements made by us or on our behalf. The words "will," "may,"
"designed to," "outlook," "believes," "should," "anticipates," "plans,"
"expects," "intends," "estimates," "forecasts" and similar expressions identify
certain of these forward-looking statements. We also may provide forward-looking
statements in oral statements or other written materials released to the public.
All such forward-looking statements contained or incorporated in this Report or
in any other public statements which address operating performance, events or
developments that we expect or anticipate may occur in the future, including,
without limitation, statements related to business opportunities, awarded sales
contracts, sales backlog and ongoing commercial arrangements, or statements
expressing views about future operating results, are forward-looking statements.
Actual results may differ materially from any or all forward-looking statements
made by us. Important factors, risks and uncertainties that may cause actual
results to differ materially from anticipated results include, but are not
limited to:

•general economic conditions in the markets in which we operate, including changes in interest rates or currency exchange rates;

•the impact of the COVID-19 pandemic on our business and the global economy;

•changes in actual industry vehicle production levels from our current estimates;

•fluctuations in the production of vehicles or the loss of business with respect
to, or the lack of commercial success of, a vehicle model for which we are a
significant supplier;

•the outcome of negotiations with customers and the impact of price reductions imposed by customers;

•increasing costs and restrictions on the availability of raw materials, energy, raw materials and product components and our ability to mitigate such costs and insufficient availability;

•disruptions in relations with our suppliers;

•the financial situation and adverse developments affecting our customers and suppliers;

•risks associated with conducting business in foreign countries, including the risk of war or other armed conflict;

•exchange control and the ability to economically hedge currencies;

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•global sovereign fiscal matters and creditworthiness, including potential
defaults and the related impacts on economic activity, including the possible
effects on credit markets, currency values, monetary unions, international
treaties and fiscal policies;

•competitive conditions that affect us and our principal customers and suppliers;

• labor disputes involving us or our significant customers or suppliers or otherwise affecting us;

•the operational and financial success of our joint ventures;

•our ability to attract, develop, engage and retain qualified employees;

•our ability to respond to changes in the global transportation industry;

•the result of increased stakeholder focus on global climate change and other ESG issues;

•the impact of global climate change;

•the impact and timing of program launch costs and our management of new program launches;

•changes in discount rates and the effective return on pension assets;

•impairment charges initiated by unfavorable developments in the sector or the market;

•our ability to execute our strategic objectives;

•the limits imposed by our existing indebtedness and our ability to access financial markets on commercially reasonable terms;

•disruptions to our IT systems, or those of our customers or suppliers, including those related to cybersecurity;

• increase in our warranty, product liability or recall costs;

• the outcome of legal or regulatory proceedings to which we are or may become a party;

• the impact of pending laws and regulations or changes to existing federal, state, local or foreign laws or regulations;

•the impact of regulations on our foreign operations;

•costs associated with compliance with environmental laws and regulations;

• developments or assertions by or against us regarding intellectual property rights;

•the impact of potential changes in tax and trade policies United States
and related actions by the countries in which we operate; and

•other risks described in Item 1A, "Risk Factors," in our Annual Report on Form
10-K for the year ended December 31, 2021, as supplemented and updated by Part
II - Item 1A, "Risk Factors," in this Report, and in our other Securities and
Exchange Commission filings.

The forward-looking statements in this Report are made as of the date hereof,
and we do not assume any obligation to update, amend or clarify them to reflect
events, new information or circumstances occurring after the date hereof.

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