XML 36 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting
 9 Months Ended
Oct. 03, 2020
Segment Reporting [Abstract]  
Segment Reporting

(17) Segment Reporting

The Company has two reportable operating segments: Seating, which includes complete seat systems and all major seat components, including seat covers and surface materials such as leather and fabric, seat structures and mechanisms, seat foam and headrests, and E-Systems, which includes complete electrical distribution systems, as well as sophisticated electronic control modules, electrification products and connectivity products. Key components in the Company's electrical distribution portfolio include wire harnesses, terminals and connectors and junction boxes for both internal combustion engine and electrification architectures that require management of higher voltage and power. Key components in the Company's electronic control module portfolio include body control modules, wireless receiver and transmitter technology and lighting and audio control modules, as well as products specific to electrification and connectivity trends. Electrification products include charging systems (onboard charging modules and cord set charging equipment), battery electronics (battery disconnect units, cell monitoring supervisory systems and integrated total battery control modules) and other power management modules, including converter and inverter systems. Connectivity products include gateway modules and communication modules to manage both wired and wireless networks and data in vehicles. 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, as well as advanced engineering expenses.

Each of the Company’s operating segments reports its results from operations and makes its requests for capital expenditures directly to the chief operating decision maker. The economic performance of each operating segment is driven primarily by automotive production volumes in the geographic regions in which it operates, as well as by the success of the vehicle platforms for which it supplies products. Also, each operating segment operates in the competitive Tier 1 automotive supplier environment and is continually working with its customers to manage costs and improve quality. The Company’s production processes generally make use of hourly labor, dedicated facilities, sequential manufacturing and assembly processes and commodity raw materials.

The Company evaluates the performance of its operating segments based primarily on (i) revenues from external customers, (ii) pretax income (loss) before equity in net income of affiliates, interest expense and other (income) expense ("segment earnings") and (iii) cash flows, being defined as segment earnings less capital expenditures plus depreciation and amortization.

A summary of revenues from external customers and other financial information by reportable operating segment is shown below (in millions):

 

 

Three Months Ended October 3, 2020

 

 

 

Seating

 

 

E-Systems

 

 

Other

 

 

Consolidated

 

Revenues from external customers

 

$

3,691.6

 

 

$

1,208.5

 

 

$

-

 

 

$

4,900.1

 

Segment earnings(1)

 

 

250.7

 

 

 

86.0

 

 

 

(57.9

)

 

 

278.8

 

Depreciation and amortization

 

 

87.8

 

 

 

44.8

 

 

 

3.7

 

 

 

136.3

 

Capital expenditures

 

 

48.8

 

 

 

40.2

 

 

 

1.1

 

 

 

90.1

 

Total assets

 

 

7,574.2

 

 

 

3,232.4

 

 

 

2,088.1

 

 

 

12,894.7

 

 

 

 

Three Months Ended September 28, 2019

 

 

 

Seating

 

 

E-Systems

 

 

Other

 

 

Consolidated

 

Revenues from external customers

 

$

3,715.0

 

 

$

1,110.0

 

 

$

-

 

 

$

4,825.0

 

Segment earnings(1)

 

 

281.5

 

 

 

74.3

 

 

 

(55.1

)

 

 

300.7

 

Depreciation and amortization

 

 

82.1

 

 

 

42.5

 

 

 

3.9

 

 

 

128.5

 

Capital expenditures

 

 

86.0

 

 

 

59.8

 

 

 

5.0

 

 

 

150.8

 

Total assets

 

 

7,575.3

 

 

 

3,078.8

 

 

 

2,099.2

 

 

 

12,753.3

 

 

 

 

Nine Months Ended October 3, 2020

 

 

 

Seating

 

 

E-Systems

 

 

Other

 

 

Consolidated

 

Revenues from external customers

 

$

8,813.1

 

 

$

2,989.2

 

 

$

-

 

 

$

11,802.3

 

Segment earnings(1)

 

 

320.4

 

 

 

5.0

 

 

 

(167.5

)

 

 

157.9

 

Depreciation and amortization

 

 

255.1

 

 

 

130.5

 

 

 

11.5

 

 

 

397.1

 

Capital expenditures

 

 

162.0

 

 

 

119.0

 

 

 

4.3

 

 

 

285.3

 

 

 

 

Nine Months Ended September 28, 2019

 

 

 

Seating

 

 

E-Systems

 

 

Other

 

 

Consolidated

 

Revenues from external customers

 

$

11,468.1

 

 

$

3,524.6

 

 

$

-

 

 

$

14,992.7

 

Segment earnings(1)

 

 

817.0

 

 

 

287.3

 

 

 

(186.2

)

 

 

918.1

 

Depreciation and amortization

 

 

248.4

 

 

 

120.2

 

 

 

11.8

 

 

 

380.4

 

Capital expenditures

 

 

246.2

 

 

 

151.4

 

 

 

12.5

 

 

 

410.1

 

(1)

See definition above

For the three months ended October 3, 2020, segment earnings include restructuring charges of $33.6 million, $5.0 million and $0.3 million in the Seating and E-Systems segments and in the other category, respectively. For the nine months ended October 3, 2020, segment earnings include restructuring charges of $59.3 million, $46.2 million and $0.9 million in the Seating and E-Systems segments and in the other category, respectively. The Company expects to incur approximately $23 million and $7 million of additional restructuring costs in the Seating and E-Systems segments, respectively, related to activities initiated as of October 3, 2020, and expects that the components of such costs will be consistent with its historical experience.

For the three months ended September 28, 2019, segment earnings include restructuring charges of $18.2 million, $9.0 million and $0.7 million in the Seating and E-Systems segments and in the other category, respectively. For the nine months ended September 28, 2019, segment earnings include restructuring charges of $91.7 million, $26.2 million and $1.0 million in the Seating and E-Systems segments and in the other category, respectively.

For further information, see Note 3, "Restructuring."

A reconciliation of segment earnings to consolidated income before provision for income taxes and equity in net income of affiliates is shown below (in millions):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

October 3,

2020

 

 

September 28,

2019

 

 

October 3,

2020

 

 

September 28,

2019

 

Segment earnings

 

$

278.8

 

 

$

300.7

 

 

$

157.9

 

 

$

918.1

 

Interest expense

 

 

26.5

 

 

 

24.0

 

 

 

78.1

 

 

 

69.4

 

Other expense, net

 

 

17.1

 

 

 

9.7

 

 

 

54.4

 

 

 

27.9

 

Consolidated income before provision for income taxes and equity in net income of affiliates

 

$

235.2

 

 

$

267.0

 

 

$

25.4

 

 

$

820.8