XML 34 R22.htm IDEA: XBRL DOCUMENT v3.21.2
Comprehensive Income (Loss) and Equity
 9 Months Ended
Oct. 02, 2021
Equity [Abstract]  
Comprehensive Income (Loss) and Equity Comprehensive Income (Loss) and Equity
Comprehensive Income (Loss)
Comprehensive income (loss) is defined as all changes in the Company’s net assets except changes resulting from transactions with stockholders. It differs from net income in that certain items recorded in equity are included in comprehensive income (loss).
Accumulated Other Comprehensive Loss
A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended October 2, 2021, is shown below (in millions):
Three Months Ended October 2, 2021Nine Months Ended October 2, 2021
Defined benefit plans:
Balance at beginning of period$(276.3)$(276.9)
Reclassification adjustments (net of tax expense of $0.3 million and $1.0 million in the three and nine months ended October 2, 2021, respectively)
2.0 6.0 
Other comprehensive income (loss) recognized during the period (net of tax impact of $— million in the three and nine months ended October 2, 2021)
2.5 (0.9)
Balance at end of period$(271.8)$(271.8)
Derivative instruments and hedging:
Balance at beginning of period$20.2 $12.6 
Reclassification adjustments (net of tax benefit of $3.6 million and $6.9 million in the three and nine months ended October 2, 2021, respectively)
(13.9)(27.3)
Other comprehensive income (loss) recognized during the period (net of tax benefit (expense) of $3.5 million and ($1.7) million in the three and nine months ended October 2, 2021, respectively)
(14.3)6.7 
Balance at end of period$(8.0)$(8.0)
Foreign currency translation:
Balance at beginning of period$(471.7)$(440.8)
Other comprehensive loss recognized during the period (net of tax expense of $1.4 million and $2.9 million in the three and nine months ended October 2, 2021, respectively)
(51.1)(82.0)
Balance at end of period$(522.8)$(522.8)
Total accumulated other comprehensive loss$(802.6)$(802.6)
In the three months ended October 2, 2021, foreign currency translation adjustments are primarily related to the weakening of the Euro and the Brazilian real relative to the U.S. dollar. In the nine months ended October 2, 2021, foreign currency translation adjustments are primarily related to the weakening of the Euro, and to a lesser extent, the Brazilian real, partially offset by the strengthening of the Chinese renminbi, relative to the U.S. dollar.
In the three and nine months ended October 2, 2021, foreign currency translation adjustments include pretax gains (losses) of $0.2 million and ($0.4) million, respectively, related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future.
A summary of changes, net of tax, in accumulated other comprehensive loss for the three and nine months ended October 3, 2020, is shown below (in millions):
Three Months Ended October 3, 2020Nine Months Ended October 3, 2020
Defined benefit plans:
Balance at beginning of period$(211.7)$(217.6)
Reclassification adjustments (net of tax expense of $0.6 million and $1.3 million in the three and nine months ended October 3, 2020, respectively)
11.0 13.1 
Other comprehensive loss recognized during the period (net of tax benefit of $5.4 million in the three and nine months ended October 3, 2020)
(29.7)(25.9)
Balance at end of period$(230.4)$(230.4)
Derivative instruments and hedging:
Balance at beginning of period$(50.4)$9.8 
Reclassification adjustments (net of tax expense of $0.1 million and $1.8 million in the three and nine months ended October 3, 2020, respectively)
3.9 9.2 
Other comprehensive income (loss) recognized during the period (net of tax benefit (expense) of ($6.3) million and $9.6 million in the three and nine months ended October 3, 2020, respectively)
14.8 (50.7)
Balance at end of period$(31.7)$(31.7)
Foreign currency translation:
Balance at beginning of period$(660.9)$(564.9)
Other comprehensive income (loss) recognized during the period (net of tax benefit of $2.9 million and $0.7 million in the three and nine months ended October 3, 2020, respectively)
83.3 (12.7)
Balance at end of period$(577.6)$(577.6)
Total accumulated other comprehensive loss$(839.7)$(839.7)
In the three months ended October 3, 2020, foreign currency translation adjustments are primarily related to the strengthening of the Euro and Chinese renminbi, partially offset by the weakening of the Brazilian real, relative to the U.S. dollar. In the nine months ended October 3, 2020, foreign currency translation adjustments are primarily related to the weakening of the Brazilian real, largely offset by the strengthening of the Euro and the Chinese renminbi, relative to the U.S. dollar.
In the three and nine months ended October 3, 2020, foreign currency translation adjustments include pretax gains (losses) of $0.5 million and ($0.5) million, respectively, related to intercompany transactions for which settlement is not planned or anticipated in the foreseeable future.
For further information regarding reclassification adjustments related to the Company's defined benefit plans, see Note 10, "Pension and Other Postretirement Benefit Plans." For further information regarding reclassification adjustments related to the Company's derivative and hedging activities, see Note 18, "Financial Instruments."
Lear Corporation Stockholders’ Equity
Common Stock Share Repurchase Program
The Company may implement share repurchases through a variety of methods, including, but not limited to, open market purchases, accelerated stock repurchase programs and structured repurchase transactions. The extent to which the Company may repurchase its outstanding common stock and the timing of such repurchases will depend upon its financial condition, prevailing market conditions, alternative uses of capital and other factors.
The Company has a common stock share repurchase program (the "Repurchase Program") which permits the discretionary repurchase of its common stock. Since its inception in the first quarter of 2011, the Company's Board of Directors has authorized $6.1 billion in share repurchases under the Repurchase Program. The current authorization expires on December 31, 2022.
In March 2020, as a proactive measure in response to the COVID-19 pandemic, the Company suspended share repurchases under the Repurchase Program. Share repurchases were reinstated in the second quarter of 2021. Share repurchases since the reinstatement through October 2, 2021, are shown below (in millions except for shares and per share amounts):
Nine Months EndedAs of October 2, 2021
October 2, 2021 (1)
Aggregate RepurchasesCash Paid for RepurchasesNumber of Shares
Average Price per Share (2)
Remaining Purchase Authorization
$100.3 $99.3 589,717 $170.03 $1,329.7 
(1) From reinstatement through October 2, 2021
(2) Excludes commissions
Since the inception of the Repurchase Program, the Company repurchased, in aggregate, $4.8 billion of its outstanding common stock, at an average price of $90.97 per share, excluding commissions and related fees.
In addition to shares repurchased under the Repurchase Program described above, the Company classifies shares withheld from the settlement of the Company’s restricted stock unit and performance share awards to cover tax withholding requirements as common stock held in treasury in the condensed consolidated balance sheets.
Quarterly Dividend
In March 2020, as a proactive measure in response to the COVID-19 pandemic, the Company suspended its quarterly cash dividend. Prior to the suspension, the Company’s Board of Directors declared a quarterly cash dividend of $0.77 per share of common stock. In the fourth quarter of 2020, the Company reinstated a quarterly cash dividend of $0.25 per share of common stock. The Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share of common stock in the first and second quarters of 2021 and a quarterly cash dividend of $0.50 per share of common stock in the third quarter of 2021.
Dividends declared and paid are shown below (in millions):
Nine Months Ended
October 2,
2021
October 3,
2020 (1)
Dividends declared$61.1 $46.8 
Dividends paid60.7 52.0 
(1) Prior to March 2020 suspension
Dividends payable on common shares to be distributed under the Company’s stock-based compensation program will be paid when such common shares are distributed.
Noncontrolling Interest
On September 6, 2021, the Company sold a 49% equity interest in its wholly owned consolidated subsidiary, Shenyang Lear Automotive Seating and Interior Systems Co., Ltd. ("Shenyang Lear"), for $36.2 million. The Company continues to control Shenyang Lear, and as a result, the operating results and cash flows of Shenyang Lear continue to be included in the Company's condensed consolidated financial statements.
Noncontrolling interest of $7.6 million was recorded in conjunction with the transaction. The difference between the consideration paid and the carrying value of the noncontrolling interest recorded is reflected in additional paid-in capital in the accompanying condensed consolidated balance sheet as of October 2, 2021.
The proceeds from the sale are classified within cash flows used in financing activities in the accompanying condensed consolidated statement of cash flows for the nine months ended October 2, 2021.
Redeemable Noncontrolling InterestAs of October 3, 2020, the accompanying condensed consolidated statements of equity include the Company's redeemable noncontrolling interest in Shanghai Lear STEC Automotive Parts Co., Ltd. ("STEC"). In accordance with GAAP, the Company records redeemable noncontrolling interests at the greater of (1) the initial carrying amount adjusted for the noncontrolling interest holder’s share of total comprehensive income or loss and dividends ("noncontrolling interest carrying value") or (2) the redemption value as of and based on conditions existing as of the reporting date. Required redeemable noncontrolling interest adjustments are recorded as an increase to redeemable noncontrolling interests, with an offsetting adjustment to retained earnings. In 2020, the noncontrolling interest holder in STEC exercised its option requiring the Company to purchase its redeemable noncontrolling interest. The transaction was completed in the fourth quarter of 2020