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Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________ 
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 2021.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     .
Commission file number: 001-11311
 https://cdn.kscope.io/2d13d04c09d8173659df1838de80b031-lear-20210403_g1.jpg
(Exact name of registrant as specified in its charter) 
_______________________________________
Delaware 13-3386776
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
21557 Telegraph Road, Southfield, MI 48033
(Address of principal executive offices)
(248) 447-1500
(Registrant’s telephone number, including area code)
_______________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 LEANew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  x
As of May 4, 2021, the number of shares outstanding of the registrant’s common stock was 60,136,546 shares.


Table of Contents
LEAR CORPORATION
FORM 10-Q

FOR THE QUARTER ENDED APRIL 3, 2021

INDEX
 Page No.
Item 3 – Quantitative and Qualitative Disclosures about Market Risk (included in Item 2)

2

Table of Contents
LEAR CORPORATION AND SUBSIDIARIES
PART I — FINANCIAL INFORMATION
ITEM 1 — CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
We have prepared the unaudited condensed consolidated financial statements of Lear Corporation and subsidiaries pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States ("GAAP") have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures are adequate to make the information presented not misleading when read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, for the year ended December 31, 2020.
The financial information presented reflects all adjustments (consisting of normal recurring adjustments) which are, in our opinion, necessary for a fair presentation of the results of operations, cash flows and financial position for the interim periods presented. These results are not necessarily indicative of a full year’s results of operations.

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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
April 3,
 2021(1)
December 31,
2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$1,375.4 $1,306.7 
Accounts receivable3,441.3 3,269.2 
Inventories1,464.8 1,401.1 
Other759.3 799.7 
Total current assets7,040.8 6,776.7 
LONG-TERM ASSETS:
Property, plant and equipment, net2,681.1 2,736.2 
Goodwill1,657.7 1,655.8 
Other2,042.9 2,029.9 
Total long-term assets6,381.7 6,421.9 
Total assets$13,422.5 $13,198.6 
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and drafts$3,132.7 $3,141.6 
Accrued liabilities2,031.1 1,920.9 
Current portion of long-term debt9.5 14.2 
Total current liabilities5,173.3 5,076.7 
LONG-TERM LIABILITIES:
Long-term debt2,300.8 2,300.3 
Other1,199.7 1,206.7 
Total long-term liabilities3,500.5 3,507.0 
EQUITY:
Preferred stock, 100,000,000 shares authorized (including 10,896,250 Series A convertible preferred stock authorized); no shares outstanding
  
Common stock, $0.01 par value, 300,000,000 shares authorized; 64,571,405 shares issued as of April 3, 2021 and December 31, 2020
0.6 0.6 
Additional paid-in capital964.3 963.6 
Common stock held in treasury, 4,441,720 and 4,519,891 shares as of April 3, 2021 and December 31, 2020, respectively, at cost
(589.6)(598.6)
Retained earnings4,995.2 4,806.8 
Accumulated other comprehensive loss(790.4)(705.1)
Lear Corporation stockholders’ equity4,580.1 4,467.3 
Noncontrolling interests168.6 147.6 
Equity4,748.7 4,614.9 
Total liabilities and equity$13,422.5 $13,198.6 
 (1)     Unaudited.
The accompanying notes are an integral part of these condensed consolidated balance sheets.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited; in millions, except share and per share data)
 Three Months Ended
 April 3,
2021
April 4,
2020
Net sales$5,354.4 $4,457.7 
Cost of sales4,861.6 4,123.5 
Selling, general and administrative expenses168.9 143.7 
Amortization of intangible assets16.5 17.1 
Interest expense22.3 24.4 
Other expense, net6.3 40.5 
Consolidated income before provision for income taxes and equity in net income of affiliates278.8 108.5 
Provision for income taxes58.9 26.5 
Equity in net income of affiliates(5.9)(1.6)
Consolidated net income225.8 83.6 
Less: Net income attributable to noncontrolling interests22.1 7.2 
Net income attributable to Lear$203.7 $76.4 
Basic net income per share available to Lear common stockholders (Note 14)
$3.38 $1.26 
Diluted net income per share available to Lear common stockholders (Note 14)
$3.36 $1.26 
Cash dividends declared per share$0.25 $0.77 
Average common shares outstanding60,312,573 60,509,450 
Average diluted shares outstanding60,560,859 60,678,590 
Consolidated comprehensive income (loss) (Condensed Consolidated Statements of Equity)$139.4 $(197.8)
Less: Comprehensive income attributable to noncontrolling interests21.0 2.4 
Comprehensive income (loss) attributable to Lear$118.4 $(200.2)
The accompanying notes are an integral part of these condensed consolidated statements.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in millions, except share and per share data)
Three Months Ended April 3, 2021
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2021$0.6 $963.6 $(598.6)$4,806.8 $(705.1)$4,467.3 
Comprehensive income (loss):
Net income— — — 203.7 — 203.7 
Other comprehensive loss— — — — (85.3)(85.3)
Total comprehensive income (loss)— — — 203.7 (85.3)118.4 
Stock-based compensation— 17.7 — — — 17.7 
Net issuance of 78,171 shares held in treasury in settlement of stock-based compensation
— (17.0)9.0 — — (8.0)
Dividends declared to Lear Corporation stockholders— — — (15.3)— (15.3)
Balance at April 3, 2021$0.6 $964.3 $(589.6)$4,995.2 $(790.4)$4,580.1 
The accompanying notes are an integral part of these condensed consolidated statements.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended April 3, 2021
Lear Corporation Stockholders' EquityNon-controlling InterestsEquity
Balance at January 1, 2021$4,467.3 $147.6 $4,614.9 
Comprehensive income (loss):
Net income203.7 22.1 225.8 
Other comprehensive loss(85.3)(1.1)(86.4)
Total comprehensive income (loss)118.4 21.0 139.4 
Stock-based compensation17.7 — 17.7 
Net issuance of 78,171 shares held in treasury in settlement of stock-based compensation
(8.0)— (8.0)
Dividends declared to Lear Corporation stockholders(15.3)— (15.3)
Balance at April 3, 2021$4,580.1 $168.6 $4,748.7 
The accompanying notes are an integral part of these condensed consolidated statements.
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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended April 4, 2020
Common StockAdditional Paid-In CapitalCommon Stock Held in TreasuryRetained EarningsAccumulated Other Comprehensive Loss, Net of TaxLear Corporation Stockholders' Equity
Balance at January 1, 2020$0.6 $969.1 $(563.1)$4,715.8 $(772.7)$4,349.7 
Comprehensive income (loss):
Net income (loss)— — — 76.4 — 76.4 
Other comprehensive loss— — — — (276.6)(276.6)
Total comprehensive income (loss)— — — 76.4 (276.6)(200.2)
Adoption of ASU 2016-13— — — (0.8)— (0.8)
Stock-based compensation— 3.9 — — — 3.9 
Net issuance of 123,831 shares held in treasury in settlement of stock-based compensation
— (27.0)17.5 (1.7)— (11.2)
Repurchase of 641,149 shares of common stock at average price of $109.22 per share
— — (70.0)— — (70.0)
Dividends declared to Lear Corporation stockholders— — — (46.8)— (46.8)
Redeemable noncontrolling interest adjustment— — — (1.1)— (1.1)
Balance at April 4, 2020$0.6 $946.0 $(615.6)$4,741.8 $(1,049.3)$4,023.5 
The accompanying notes are an integral part of these condensed consolidated statements.



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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (continued)
(Unaudited; in millions, except share and per share data)
Three Months Ended April 4, 2020
Lear Corporation Stockholders' EquityNon-controlling InterestsEquityRedeemable Non-controlling Interests
Balance at January 1, 2020$4,349.7 $151.4 $4,501.1 $118.4 
Comprehensive income (loss):
Net income (loss)76.4 11.1 87.5 (3.9)
Other comprehensive loss(276.6)(2.7)(279.3)(2.1)
Total comprehensive income (loss)(200.2)8.4 (191.8)(6.0)
Adoption of ASU 2016-13(0.8)— (0.8)— 
Stock-based compensation3.9 — 3.9 — 
Net issuance of 123,831 shares held in treasury in settlement of stock-based compensation
(11.2)— (11.2)— 
Repurchase of 641,149 shares of common stock at average price of $109.22 per share
(70.0)— (70.0)— 
Dividends declared to Lear Corporation stockholders(46.8)— (46.8)— 
Redeemable noncontrolling interest adjustment(1.1)— (1.1)1.1 
Balance at April 4, 2020$4,023.5 $159.8 $4,183.3 $113.5 
The accompanying notes are an integral part of these condensed consolidated statements.

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LEAR CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Three Months Ended
April 3,
2021
April 4,
2020
Cash Flows from Operating Activities:
Consolidated net income$225.8 $83.6 
Adjustments to reconcile consolidated net income to net cash provided by operating activities:
Depreciation and amortization140.8 130.5 
Net change in recoverable customer engineering, development and tooling(24.1)(45.5)
Net change in working capital items (see below)(102.4)(23.2)
Loss on extinguishment of debt 21.1 
Other, net7.4 55.8 
Net cash provided by operating activities247.5 222.3 
Cash Flows from Investing Activities:
Additions to property, plant and equipment(112.9)(109.1)
Other, net(30.0)19.0 
Net cash used in investing activities(142.9)(90.1)
Cash Flows from Financing Activities:
Revolving credit facility borrowings 1,000.0 
Proceeds from the issuance of senior notes 669.1 
Redemption of senior notes (667.1)
Term loan repayments(4.7)(3.1)
Short-term repayments, net (9.5)
Payment of debt issuance and other financing costs (6.9)
Repurchase of common stock (70.0)
Dividends paid to Lear Corporation stockholders(15.7)(47.8)
Other, net(9.3)(14.1)
Net cash provided by (used in) financing activities(29.7)850.6 
Effect of foreign currency translation(10.9)(31.3)
Net Change in Cash, Cash Equivalents and Restricted Cash64.0 951.5 
Cash, Cash Equivalents and Restricted Cash as of Beginning of Period1,314.5 1,510.4 
Cash, Cash Equivalents and Restricted Cash as of End of Period$1,378.5 $2,461.9 
Changes in Working Capital Items:
Accounts receivable$(227.3)$415.6 
Inventories(87.4)(113.8)
Accounts payable42.6 (247.6)
Accrued liabilities and other169.7 (77.4)
Net change in working capital items$(102.4)$(23.2)
Supplementary Disclosure:
Cash paid for interest$14.6 $34.5 
Cash paid for income taxes, net of refunds received$31.0 $35.8 
The accompanying notes are an integral part of these condensed consolidated statements.
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LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation
Lear Corporation ("Lear," and together with its consolidated subsidiaries, the "Company") and its affiliates design and manufacture automotive seating and electrical distribution systems and related components. The Company’s main customers are automotive original equipment manufacturers. The Company operates facilities worldwide.
The accompanying condensed consolidated financial statements include the accounts of Lear, a Delaware corporation, and the wholly owned and less than wholly owned subsidiaries controlled by Lear. In addition, Lear consolidates all entities, including variable interest entities, in which it has a controlling financial interest. Investments in affiliates in which Lear does not have control, but does have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method.
The Company’s annual financial results are reported on a calendar year basis, and quarterly interim results are reported using a thirteen week reporting calendar.
(2) Impact of COVID-19 Pandemic
Although industry production has improved relative to 2020, production remains below recent historic levels. It is likely that, for a period of time, the global automotive industry will continue to be impacted by the COVID-19 pandemic, particularly through supply shortages, ongoing costs related to personal protective equipment and higher labor costs reflecting an increase in absenteeism. In particular, a global semiconductor chip shortage is impacting industry production, resulting in cancellations of planned production and higher costs associated with labor inefficiencies and freight. Further, a resurgence of the virus, particularly with corresponding "stay at home" or similar government orders impacting industry production, could impact the Company's financial results.
The accompanying condensed consolidated financial statements reflect estimates and assumptions made by management as of April 3, 2021, and for the three months then ended. Such estimates and assumptions affect, among other things, the Company's goodwill; long-lived asset and indefinite-lived intangible asset valuations; inventory valuations; valuations of deferred income taxes and income tax contingencies; and credit losses related to the Company's financial instruments. Events and circumstances arising after April 3, 3021, including those resulting from the impact of the COVID-19 pandemic, will be reflected in management's estimates and assumptions in future periods.
(3) Restructuring
Restructuring costs include employee termination benefits, asset impairment charges and contract termination costs, as well as other incremental costs resulting from the restructuring actions. Employee termination benefits are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Other incremental costs principally include equipment and personnel relocation costs. In addition to restructuring costs, the Company incurs incremental manufacturing inefficiency costs at the operating locations impacted by the restructuring actions during the related restructuring implementation period. Restructuring costs are recognized in the Company’s condensed consolidated financial statements in accordance with GAAP. Generally, charges are recorded when restructuring actions are approved and/or implemented.
In the first three months of 2021, the Company recorded charges of $21.7 million in connection with its restructuring actions. These charges consist of $18.2 million recorded as cost of sales and $3.5 million recorded as selling, general and administrative expenses. The restructuring charges consist of employee termination costs of $19.1 million, asset impairment charges of $0.2 million and contract termination credits of $1.0 million, as well as other related costs of $3.4 million. Employee termination benefits were recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy. Asset impairment charges relate to the disposal of buildings, leasehold improvements and/or machinery and equipment with carrying values of $0.2 million in excess of related estimated fair values.
The Company expects to incur approximately $39 million of additional restructuring costs related to activities initiated as of April 3, 2021, and expects that the components of such costs will be consistent with its historical experience. Any future restructuring actions will depend upon market conditions, customer actions and other factors.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A summary of 2021 activity is shown below (in millions):
 Accrual at January 1, 20212021UtilizationAccrual at April 3, 2021
ChargesCashNon-cash
Employee termination benefits$134.8 $19.1 $(16.0)$ $137.9 
Asset impairment charges 0.2  (0.2) 
Contract termination costs4.2 (1.0)(0.8) 2.4 
Other related costs 3.4 (3.4)  
Total$139.0 $21.7 $(20.2)$(0.2)$140.3 

(4) Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs.
A summary of inventories is shown below (in millions):
April 3,
2021
December 31,
2020
Raw materials$1,081.0 $1,051.6 
Work-in-process109.9 109.8 
Finished goods431.2 396.9 
Reserves(157.3)(157.2)
Inventories$1,464.8 $1,401.1 

(5) Pre-Production Costs Related to Long-Term Supply Agreements
The Company incurs pre-production engineering and development ("E&D") and tooling costs related to the products produced for its customers under long-term supply agreements. The Company expenses all pre-production E&D costs for which reimbursement is not contractually guaranteed by the customer. In addition, the Company expenses all pre-production tooling costs related to customer-owned tools for which reimbursement is not contractually guaranteed by the customer or for which the Company does not have a non-cancelable right to use the tooling.
During the first three months of 2021 and 2020, the Company capitalized $66.7 million and $50.4 million, respectively, of pre-production E&D costs for which reimbursement is contractually guaranteed by the customer. During the first three months of 2021 and 2020, the Company also capitalized $31.4 million and $54.1 million, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the Company has a non-cancelable right to use the tooling. These amounts are included in other current and long-term assets in the accompanying condensed consolidated balance sheets.
During the first three months of 2021 and 2020, the Company collected $77.0 million and $66.8 million, respectively, of cash related to E&D and tooling costs.
The classification of recoverable customer E&D and tooling costs related to long-term supply agreements is shown below (in millions):
April 3,
2021
December 31,
2020
Current$225.0 $212.0 
Long-term126.8 121.4 
Recoverable customer E&D and tooling$351.8 $333.4 

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(6) Long-Lived Assets
Property, plant and equipment is stated at cost. Costs associated with the repair and maintenance of the Company’s property, plant and equipment are expensed as incurred. Costs associated with improvements which extend the life, increase the capacity or improve the efficiency or safety of the Company’s property, plant and equipment are capitalized and depreciated over the remaining useful life of the related asset. Depreciable property is depreciated over the estimated useful lives of the assets, using principally the straight-line method.
A summary of property, plant and equipment is shown below (in millions):
April 3,
2021
December 31,
2020
Land$111.6 $114.1 
Buildings and improvements866.5 880.7 
Machinery and equipment4,344.2 4,339.2 
Construction in progress306.7 311.1 
Total property, plant and equipment5,629.0 5,645.1 
Less – accumulated depreciation(2,947.9)(2,908.9)
Property, plant and equipment, net$2,681.1 $2,736.2 
Depreciation expense was $124.3 million and $113.4 million in the three months ended April 3, 2021 and April 4, 2020.
The Company monitors its long-lived assets for impairment indicators on an ongoing basis in accordance with GAAP. If impairment indicators exist, the Company performs the required impairment analysis by comparing the undiscounted cash flows expected to be generated from the long-lived assets to the related net book values. If the net book value exceeds the undiscounted cash flows, an impairment loss is measured and recognized.
In the first three months of 2021 and 2020, the Company recognized asset impairment charges of $0.2 million and $10.4 million, respectively, in conjunction with its restructuring actions (Note 3, "Restructuring"). The Company will continue to assess the impact of significant industry and other events on the realization of its long-lived assets.
(7) Goodwill
A summary of the changes in the carrying amount of goodwill, by operating segment, in the three months ended April 3, 2021, is shown below (in millions):
SeatingE-SystemsTotal
Balance at January 1, 2021$1,268.8 $387.0 $1,655.8 
Foreign currency translation and other(15.2)17.1 1.9 
Balance at April 3, 2021$1,253.6 $404.1 $1,657.7 
Goodwill is not amortized but is tested for impairment on at least an annual basis. Impairment testing is required more often than annually if an event or circumstance indicates that an impairment is more likely than not to have occurred. In conducting its annual impairment testing, the Company may first perform a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If not, no further goodwill impairment testing is required. If it is more likely than not that a reporting unit’s fair value is less than its carrying amount, or if the Company elects not to perform a qualitative assessment of a reporting unit, the Company then compares the fair value of the reporting unit to the related net book value. If the net book value of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill recorded. The Company conducts its annual impairment testing as of the first day of its fourth quarter.
During the first quarter of 2021, an interim goodwill impairment analysis related to one of the Company’s reporting units within its Seating operating segment was performed. The results of the quantitative analysis indicated that the fair value of the reporting unit exceeded the related carrying value. The quantitative analysis reflected the Company’s best estimates of the COVID-19 pandemic’s ultimate impact on industry conditions, including consumer demand and economic recovery. The reporting unit is at risk of failing a future quantitative assessment if the impact of the COVID-19 pandemic is more severe or if
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
economic recovery is slower or weaker than anticipated. As of April 3, 2021, the goodwill of the reporting unit represents approximately 1% of the Company’s total goodwill. The Company does not believe that any other reporting units are at risk for impairment.
There was no impairment of goodwill in the first three months of 2021 and 2020. The Company will, however, continue to assess the impact of significant industry and other events on its recorded goodwill.
(8) Debt
A summary of long-term debt, net of unamortized debt issuance costs and unamortized original issue premium (discount), and the related weighted average interest rates is shown below (in millions):
April 3, 2021
Debt InstrumentLong-Term DebtUnamortized Debt Issuance CostsUnamortized Original Issue Premium (Discount)Long-Term
Debt, Net
Weighted
Average
Interest
Rate
Credit Agreement — Term Loan Facility$215.6 $(0.5)$ $215.1 1.340%
3.8% Senior Notes due 2027 (the "2027 Notes")
750.0 (3.9)(3.4)742.7 3.885%
4.25% Senior Notes due 2029 (the "2029 Notes")
375.0 (2.6)(0.9)371.5 4.288%
3.5% Senior Notes due 2030 (the "2030 Notes")
350.0 (2.5)(0.7)346.8 3.525%
5.25% Senior Notes due 2049 (the "2049 Notes")
625.0 (6.2)14.0 632.8 5.103%
Other1.4 — — 1.4 N/A
$2,317.0 $(15.7)$9.0 $2,310.3 
Less — Current portion(9.5)
Long-term debt$2,300.8 
December 31, 2020
Debt InstrumentLong-Term DebtUnamortized Debt Issuance CostsUnamortized Original Issue Premium (Discount)Long-Term
Debt, Net
Weighted
Average
Interest
Rate
Credit Agreement — Term Loan Facility$220.3 $(0.6)$ $219.7 1.360%
2027 Notes750.0 (4.1)(3.5)742.4 3.885%
2029 Notes375.0 (2.6)(1.0)371.4 4.288%
2030 Notes350.0 (2.6)(0.7)346.7 3.525%
2049 Notes625.0 (6.3)14.2 632.9 5.103%
Other1.4 — — 1.4 N/A
$2,321.7 $(16.2)$9.0 2,314.5 
Less — Current portion(14.2)
Long-term debt$2,300.3 
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Senior Notes
The issuance, maturity and interest payment dates of the Company's senior unsecured 2027 Notes, 2029 Notes, 2030 Notes and 2049 Notes (collectively, the "Notes") are shown below:
NoteIssuance Date(s)Maturity DateInterest Payment Dates
2027 NotesAugust 2017September 15, 2027March 15 and September 15
2029 NotesMay 2019May 15, 2029May 15 and November 15
2030 NotesFebruary 2020May 30, 2030May 30 and November 30
2049 NotesMay 2019 and February 2020May 15, 2049May 15 and November 15
In February 2020, the Company issued $350.0 million in aggregate principal amount at maturity of 2030 Notes and an additional $300.0 million in aggregate principal amount at maturity of 2049 Notes. The 2030 Notes have a stated coupon rate of 3.5% and were issued at 99.774% of par, resulting in a yield to maturity of 3.525%. The 2049 Notes have a stated coupon rate of 5.25% and were issued at 106.626% of par, resulting in a yield to maturity of 4.821%.
The net proceeds from the offering were $669.1 million after original issue discount. The proceeds were used to redeem $650.0 million in aggregate principal amount of outstanding 5.25% senior notes due 2025 (the "2025 Notes") at a redemption price equal to 102.625% of the principal amount of such 2025 Notes, plus accrued interest.
In connection with these transactions, the Company recognized a loss of $21.1 million on the extinguishment of debt and paid related issuance costs of $5.9 million in the three months ended April 4, 2020.
Covenants
Subject to certain exceptions, the indentures governing the Notes contain certain restrictive covenants that, among other things, limit the ability of the Company to: (i) create or permit certain liens and (ii) consolidate, merge or sell all or substantially all of the Company’s assets. The indentures governing the Notes also provide for customary events of default.
As of April 3, 2021, the Company was in compliance with all covenants under the indentures governing the Notes.
Credit Agreement
The Company's unsecured credit agreement (the "Credit Agreement"), dated August 8, 2017, consists of a $1.75 billion revolving credit facility (the "Revolving Credit Facility") and a $250.0 million term loan facility (the "Term Loan Facility"). In February 2020, the Company entered into an agreement to extend the maturity date of the Revolving Credit Facility by one year to August 8, 2024. The maturity date of the Term Loan Facility is August 8, 2022.
In connection with the extension agreement, the Company paid related issuance costs of $1.0 million.
As of April 3, 2021 and December 31, 2020, there were $215.6 million and $220.3 million, respectively, of borrowings outstanding under the Term Loan Facility.
In March 2020, as a proactive measure in response to the COVID-19 pandemic, the Company borrowed $1.0 billion under the Revolving Credit Facility, which was repaid in full in September 2020. As of April 3, 2021 and December 31, 2020, there were no borrowings outstanding under the Revolving Credit Facility.
In the first three months of 2021, the Company made required principal payments of $4.7 million under the Term Loan Facility.
Advances under the Revolving Credit Facility and the Term Loan Facility generally bear interest based on (i) the Eurocurrency Rate (as defined in the Credit Agreement) or (ii) the Base Rate (as defined in the Credit Agreement) plus a margin, determined in accordance with a pricing grid. The ranges and rates as of April 3, 2021, are shown below (in percentages):
Eurocurrency RateBase Rate
Rate as ofRate as of
MinimumMaximumApril 3, 2021MinimumMaximumApril 3, 2021
Revolving Credit Facility1.00 %1.60 %1.10 %0.00 %0.60 %0.10 %
Term Loan Facility1.125 %1.90 %1.25 %0.125 %0.90 %0.25 %
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
A facility fee, which ranges from 0.125% to 0.30% of the total amount committed under the Revolving Credit Facility, is payable quarterly.
Covenants
The Credit Agreement contains various customary representations, warranties and covenants by the Company, including, without limitation, (i) covenants regarding maximum leverage, (ii) limitations on fundamental changes involving the Company or its subsidiaries and (iii) limitations on indebtedness and liens.
As of April 3, 2021, the Company was in compliance with all covenants under the Credit Agreement.
Other
As of April 3, 2021, other long-term debt consists of amounts outstanding under a finance lease agreement.
For further information related to the Company's debt, see Note 7, "Debt," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
(9) Leases
The Company has operating leases for production, office and warehouse facilities, manufacturing and office equipment and vehicles. Operating lease assets and obligations included in the accompanying condensed consolidated balance sheets are shown below (in millions):
April 3,
2021
December 31, 2020
Right-of-use assets under operating leases:
Other long-term assets$563.3 $540.3 
Lease obligations under operating leases:
Accrued liabilities$124.7 $116.3 
Other long-term liabilities452.7 438.9 
$577.4 $555.2 
Maturities of lease obligations as of April 3, 2021, are shown below (in millions):
April 3, 2021
2021 (1)
$110.7 
2022121.9 
202394.0 
202478.3 
202565.1 
Thereafter185.2 
Total undiscounted cash flows655.2 
Less: Imputed interest(77.8)
Lease obligations under operating leases$577.4 
(1) For the remaining nine months
The Company entered into a lease agreement which is expected to commence in the third quarter of 2021 with a lease term of approximately ten years. The aggregate right-of-use asset and related lease obligation are expected to be approximately $52 million.

16

LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Cash flow information related to operating leases is shown below (in millions):
Three Months Ended
April 3,
2021
April 4,
2020
Non-cash activity:
Right-of-use assets obtained in exchange for operating lease obligations$63.8 $37.4 
Operating cash flows:
Cash paid related to operating lease obligations$40.4 $35.7 
Lease expense included in the accompanying condensed consolidated statements of comprehensive income (loss) is shown below (in millions):
Three Months Ended
April 3,
2021
April 4,
2020
Operating lease expense$39.0 $36.3 
Short-term lease expense4.2 4.1 
Variable lease expense2.2 1.9 
Total lease expense$45.4 $42.3 
The weighted average lease term and discount rate for operating leases are shown below:
April 3,
2021
Weighted average remaining lease termSeven years
Weighted average discount rate3.5 %
The Company is party to a finance lease agreement, which is not material to the condensed consolidated financial statements (Note 8, "Debt").
For further information related to the Company's leases, see Note 8, "Leases," to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
(10) Pension and Other Postretirement Benefit Plans
The Company sponsors defined benefit pension plans covering certain eligible employees in the United States and certain foreign countries. The Company also sponsors postretirement benefit plans (primarily for the continuation of medical benefits) covering certain eligible retirees in the United States and Canada.
Net Periodic Pension and Other Postretirement Benefit (Credit) Cost
The components of the Company’s net periodic pension benefit (credit) cost are shown below (in millions):
 Three Months Ended
 April 3, 2021April 4, 2020
 U.S.ForeignU.S.Foreign
Service cost$ $1.3 $ $1.2 
Interest cost3.6 2.6 4.1 3.1 
Expected return on plan assets(5.9)(4.8)(5.3)(5.0)
Amortization of actuarial loss1.0 1.5 0.6 1.1 
Settlement loss0.4  0.3  
Net periodic benefit (credit) cost$(0.9)$0.6 $(0.3)$0.4 
17

LEAR CORPORATION AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
The components of the Company’s net periodic other postretirement benefit cost are shown below (in millions):
Three Months Ended
 April 3, 2021April 4, 2020
 U.S.ForeignU.S.Foreign
Interest cost$0.3 $0.2 $0.4 $0.2 
Amortization of actuarial gain(0.3) (0.4) 
Net periodic benefit cost$ $0.2 $ $0.2 
Contributions
In the three months ended April 3, 2021, employer contributions to the Company’s domestic and foreign defined benefit pension plans were $3.8 million. The Company expects contributions to its domestic and foreign defined benefit pension plans to be $5 million to $10 million in 2021.
(11) Revenue Recognition
The Company enters into contracts with its customers to provide production parts generally at the beginning of a vehicle’s life cycle. Typically, these contracts do not provide for a specified quantity of products, but once entered into, the Company is often expected to fulfill its customers’ purchasing requirements for the production life of the vehicle. Many of these contracts may be terminated by the Company’s customers at any time. Historically, terminations of these contracts have been infrequent. The Company receives purchase orders from its customers, which provide the commercial terms for a particular production part, including price (but not quantities). Contracts may also provide for annual price reductions over the production life of the vehicle, and prices may be adjusted on an ongoing basis to reflect changes in product content/cost and other commercial factors.
Revenue is recognized at a point in time when control of the product is transferred to the customer under standard commercial terms, as the Company does not have an enforceable right to payment prior to such transfer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for those products based on the annual purchase orders, annual price reductions and ongoing price adjustments. In the first three months of 2021, revenue recognized related to prior years represented less than 1% of consolidated net sales. The Company's customers pay for products received in accordance with payment terms that are customary within the industry. The Company's contracts with its customers do not have significant financing components.
The Company records a contract liability for advances received from its customers. As of April 3, 2021 and December 31, 2020, there were no significant contract liabilities recorded. Further, there were no significant contract liabilities recognized in revenue during the first three months of 2021.
Amounts billed to customers related to shipping and handling costs are included in net sales in the condensed consolidated statements of comprehensive income (loss). Shipping and handling costs are accounted for as fulfillment costs and are included in cost of sales in the condensed consolidated statements of comprehensive income (loss).
Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction that are collected by the Company from a customer are excluded from revenue.
A summary of the Company’s revenue by reportable operating segment and geography is shown below (in millions):
Three Months Ended
April 3, 2021April 4, 2020
SeatingE-SystemsTotalSeatingE-SystemsTotal
North America$1,668.6 $342.6 $2,011.2 $1,573.7 $307.5 $1,881.2 
Europe and Africa1,474.7 602.3 2,077.0 1,236.0 516.6 1,752.6 
Asia716.7 368.8 1,085.5 457.4 218.9 676.3 
South America136.0 44.7