<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 27, 1998
OR
| | 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: 1-11311
LEAR CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-3386776
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21557 TELEGRAPH ROAD, SOUTHFIELD, MI 48086-5008
(Address of principal executive offices) (zip code)
(248) 447-1500
(Registrant's telephone number, including area code)
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 the
filing requirements for the past 90 days. Yes |X| No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Approximate number of shares of Common Stock, $0.01 par value per share,
outstanding at July 31, 1998: 67,114,742
<PAGE> 2
LEAR CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 27, 1998
INDEX
Part I - Financial Information: Page No.
- ------------------------------- --------
Item 1 - Consolidated Financial Statements
Introduction to the Consolidated Financial Statements 3
Consolidated Balance Sheets - June 27, 1998 and
December 31, 1997 4
Consolidated Statements of Income - Three and Six
Month Periods ended June 27, 1998 and June 28, 1997 5
Consolidated Statements of Cash Flows - Six Month
Periods ended June 27, 1998 and June 28, 1997 6
Notes to the Consolidated Financial Statements 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 11
Part II - Other Information:
Item 4 - Submission of Matters to a Vote of Security Holders. 16
Item 6 - Exhibits and Reports on Form 8-K 17
Signatures 18
Exhibit Index 19
2
<PAGE> 3
LEAR CORPORATION
PART I - FINANCIAL INFORMATION
ITEM 1 - CONSOLIDATED FINANCIAL STATEMENTS
INTRODUCTION TO THE CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated financial statements of Lear Corporation and
subsidiaries (the "Company") have been prepared by Lear Corporation, without
audit, 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 generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes 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 the Company's Annual Report on Form
10-K as filed with the Securities and Exchange Commission for the period ended
December 31, 1997.
The financial information presented reflects all adjustments (consisting
only of normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results of operations and statements of
financial position for the interim periods presented. These results are not
necessarily indicative of a full year's results of operations.
3
<PAGE> 4
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN MILLIONS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
June 27, Dec. 31,
1998 1997
-------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 28.2 $ 12.9
Accounts receivable, net 1,370.2 1,065.8
Inventories 263.0 231.4
Recoverable customer engineering and tooling 198.8 152.6
Other 169.3 152.2
--------- ---------
2,029.5 1,614.9
--------- ---------
LONG-TERM ASSETS:
Property, plant and equipment, net 1,017.7 939.1
Goodwill, net 1,789.5 1,692.3
Other 279.2 212.8
--------- ---------
3,086.4 2,844.2
--------- ---------
$ 5,115.9 $ 4,459.1
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 52.2 $ 37.9
Accounts payable 1,364.3 1,186.5
Accrued liabilities 752.8 620.5
Current portion of long-term debt 13.0 9.1
--------- ---------
2,182.3 1,854.0
--------- ---------
LONG-TERM LIABILITIES:
Deferred national income taxes 60.3 61.7
Long-term debt 1,277.8 1,063.1
Other 277.3 273.3
--------- ---------
1,615.4 1,398.1
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 150,000,000 authorized;
67,106,362 issued at June 27, 1998 and
66,872,188 issued at December 31, 1997 .7 .7
Additional paid-in capital 854.8 851.9
Notes receivable from sale of common stock (.1) (.1)
Less- Common stock held in treasury, 10,230 shares at cost (.1) (.1)
Retained earnings 514.3 401.3
Minimum pension liability adjustment (.5) (.5)
Cumulative translation adjustment (50.9) (46.2)
--------- ---------
1,318.2 1,207.0
--------- ---------
$ 5,115.9 $ 4,459.1
========= =========
</TABLE>
The accompanying notes are an integral part of these balance sheets.
4
<PAGE> 5
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 2,175.0 $ 1,839.3 $ 4,207.1 $ 3,563.3
Cost of sales 1,943.4 1,625.8 3,775.3 3,171.9
Selling, general and administrative expenses 80.5 67.2 158.5 133.3
Amortization of goodwill 11.5 9.7 23.0 19.4
---------- ---------- ---------- ----------
Operating income 139.6 136.6 250.3 238.7
Interest expense 25.5 26.7 50.2 53.9
Other expense, net 5.5 7.3 13.5 12.8
---------- ---------- ---------- ----------
Income before provision for
national income taxes 108.6 102.6 186.6 172.0
Provision for national income taxes 42.9 41.5 73.6 69.0
---------- ---------- ---------- ----------
Net income $ 65.7 $ 61.1 $ 113.0 $ 103.0
========== ========== ========== ==========
Basic net income per share $ .98 $ .92 $ 1.69 $ 1.56
========== ========== ========== ==========
Diluted net income per share $ .96 $ .90 $ 1.65 $ 1.51
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 27, 1998 June 28, 1997
------------- -------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 113.0 $ 103.0
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 106.5 89.0
Other, net (67.3) (20.1)
Change in working capital items, net (128.3) (48.4)
-------- ---------
Net cash provided by operating activities 23.9 123.5
-------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (125.1) (75.1)
Acquisitions, net (101.1) (59.1)
Other, net - 1.4
-------- ---------
Net cash used in investing activities (226.2) (132.8)
-------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in long-term debt, net 191.8 (56.2)
Increase in cash overdrafts 10.1 38.7
Short-term borrowings, net 13.7 10.8
Other, net 2.9 3.5
-------- ---------
Net cash provided by (used in) financing activities 218.5 (3.2)
-------- ---------
Effect of foreign currency translation (0.9) 3.0
-------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS 15.3 (9.5)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12.9 26.0
-------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 28.2 $ 16.5
======== =========
CHANGES IN WORKING CAPITAL, NET OF IMPACT OF ACQUISITIONS:
Accounts receivable $ (225.4) $ (234.1)
Inventories (16.6) 5.2
Accounts payable 83.3 89.5
Accrued liabilities and other 30.4 91.0
-------- ---------
$( 128.3) $ (48.4)
======== =========
SUPPLEMENTARY DISCLOSURE:
Cash paid for interest $ 49.5 $ 53.2
======== =========
Cash paid for income taxes $ 41.2 $ 41.7
======== =========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Lear
Corporation, a Delaware corporation, and its wholly-owned and majority-owned
subsidiaries. Investments in less than majority-owned businesses are generally
accounted for under the equity method.
(2) 1998 ACQUISITIONS
Delphi Automotive Systems
In February, 1998, the Company signed an agreement to negotiate exclusively
to acquire the seating business of Delphi Automotive Systems ("Delphi Seating"),
a division of General Motors Corporation. Delphi Seating is a leading supplier
of seat systems to General Motors. The acquisition is expected to close in the
third quarter of 1998. However, there can be no assurance that the acquisition
will be consummated.
Chapman
In May, 1998, the Company acquired the A.W. Chapman Ltd. and A.W. Chapman
Belgium NV subsidiaries ("Chapman") of the Rodd Group Limited. Chapman produces
seat tracks, mechanisms and seat height adjusters at plants in Bicester and
Shepperton in the U.K. and in Houthalen, Belgium.
Gruppo Pianfei S.r.L.
In May, 1998, the Company acquired Gruppo Pianfei S.r.L. ("Pianfei").
Pianfei produces door panels, headliners and plastic interior components at six
facilities located throughout Italy.
Strapazzini Resine S.r.L.
In May, 1998, the Company acquired Strapazzini Resine S.r.L.
("Strapazzini"). Strapazzini produces instrument panels, door panels, sunshades,
consoles, and pillar trim at two facilities located in Italy.
7
<PAGE> 8
LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(3) INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined
principally using the first-in, first-out method. Finished goods and
work-in-process inventories include material, labor and manufacturing overhead
costs. Inventories are comprised of the following (in millions):
<TABLE>
<CAPTION>
June 27, Dec. 31,
1998 1997
---- ----
<S> <C> <C>
Raw materials $ 181.1 $ 165.7
Work-in-process 24.8 22.5
Finished goods 57.1 43.2
--------- -------
$ 263.0 $ 231.4
========= =======
</TABLE>
(4) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at cost. 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):
<TABLE>
<CAPTION>
June 27, Dec. 31,
1998 1997
---- ----
<S> <C> <C>
Land $ 64.5 $ 60.5
Buildings and improvements 371.1 345.9
Machinery and equipment 1,099.9 974.2
--------- --------
Total property, plant and equipment 1,535.5 1,380.6
Less accumulated depreciation (517.8) (441.5)
--------- --------
Property, plant and equipment, net $ 1,017.7 $ 939.1
========= ========
</TABLE>
8
<PAGE> 9
LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(5) LONG-TERM DEBT
Long term debt is comprised of the following (in millions):
<TABLE>
<CAPTION>
June 27, Dec. 31,
1998 1997
---- ----
<S> <C> <C>
Credit agreement $ 775.6 $ 647.7
Other 179.2 88.5
--------- ---------
954.8 736.2
Less- Current portion (13.0) (9.1)
--------- ---------
941.8 727.1
--------- ---------
9 1/2% Subordinated Notes 200.0 200.0
8 1/4% Subordinated Notes 136.0 136.0
--------- ---------
336.0 336.0
--------- ---------
$ 1,277.8 $ 1,063.1
========= =========
</TABLE>
(6) FINANCIAL INSTRUMENTS
The company uses derivative financial instruments selectively to offset
exposures to market risks arising from changes in foreign exchange rates and
interest rates. Derivative financial instruments currently utilized by the
Company primarily include forward foreign exchange contracts and interest rate
swaps.
Certain foreign currency contracts entered into by the Company qualify for
hedge accounting as only firm foreign currency commitments are hedged. Gains and
losses from these contracts are deferred and generally recognized in cost of
sales as of the settlement date. Other foreign currency contracts entered into
by the Company, which do not receive hedge accounting treatment, are marked to
market with unrealized gains or losses recognized in other expense in the income
statement. Interest rate swaps are accounted for by recognizing interest expense
and interest income in the amount of anticipated interest payments.
(7) FINANCIAL ACCOUNTING STANDARDS
Earnings per Share
In 1997, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings Per Share," which was effective December 15, 1997.
The statement changes the calculation of earnings per share to be more
consistent with countries outside of the United States. In general, the
statement requires two calculations of earnings per share to be disclosed, basic
EPS and diluted EPS. Basic EPS is computed using only weighted average shares
outstanding. Diluted EPS is computed using the average share price for the
period when
9
<PAGE> 10
LEAR CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
calculating the dilution of stock options. Net income per share information has
been restated for all periods presented. Shares outstanding for the periods
presented were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Weighted Average shares
outstanding 67,089,593 66,073,255 67,028,822 65,925,861
Dilutive effect of stock
options 1,359,323 1,997,018 1,419,690 2,133,419
---------- ---------- ---------- ----------
Diluted shares outstanding 68,448,916 68,070,273 68,448,512 68,059,280
========== ========== ========== ==========
</TABLE>
Comprehensive Income
In the first quarter of 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income," which establishes standards for the reporting and display
of comprehensive income. Comprehensive income is defined as all changes in a
Company's net assets except changes resulting from transactions with
shareholders. It differs from net income in that certain items currently
recorded to equity would be a part of comprehensive income.
Comprehensive income for the periods is as follows (in millions):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 65.7 $ 61.1 $ 113.0 $ 103.0
------ ------ ------- -------
Other comprehensive income
Foreign currency translation adjustment 7.0 (0.9) (4.7) (27.0)
Minimum pension liability adjustment - - - -
------ ------ ------- -------
Other comprehensive income 7.0 (0.9) (4.7) (27.0)
------ ------ ------- -------
Comprehensive income $ 72.7 $ 60.2 $ 108.3 $ 76.0
====== ====== ======= =======
</TABLE>
Reclassification
Certain items in prior year's quarterly financial statements have been
reclassified to conform with the presentation used in the quarter ended June 27,
1998.
10
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 27, 1998 VS. THREE MONTHS ENDED JUNE 28, 1997.
Net sales increased by 18.2% to $2.2 billion in the second quarter of 1998
as compared to $1.8 billion in the second quarter of 1997. Net sales for the
quarter ended June 27, 1998 benefited from acquisitions, which collectively
accounted for $253.6 million of the increase and new business introduced in
North America and Europe. Partially offsetting the increase in sales were
unfavorable exchange rate fluctuations in Europe, North America and South
America and reduced market demand on certain mature programs. As a result of
Lear's global presence, the Company anticipates that foreign exchange
fluctuations will continue to impact net sales. Although sales were impacted by
the General Motors work stoppage in the second quarter of 1998, the overall
impact in comparison to 1997 was minimal due to General Motors and Chrysler work
stoppages in the second quarter of 1997.
Net sales in the United States and Canada of $1.3 billion in the second
quarter of 1998 exceeded the comparable period in the prior year by $102.1
million, or 8.6%. Net sales in the current quarter benefited from new truck and
passenger car programs introduced by domestic automotive manufacturers and $39.6
million in revenues from acquisitions. Partially offsetting the increase in net
sales was a downturn in industry build schedules on mature programs. The 1998
General Motors work stoppages impacted revenues by approximately $70.0 million
in the second quarter of 1998.
Net sales in Europe of $.7 billion increased by $178.1 million, or 36.8%,
in the second quarter of 1998 as compared to the second quarter of 1997. Net
sales in the quarter ended June 27, 1998 benefited from $185.8 million in
revenues from acquisitions and new passenger car programs. Partially offsetting
the increases in net sales were unfavorable exchange rate fluctuations in Italy,
Germany and Sweden.
Net sales of $216.8 million in the Company's remaining geographic regions,
consisting of Mexico, South America, the Asia/Pacific Rim region and South
Africa, increased by $55.5 million as compared to the second quarter of 1997.
Net sales in the second quarter of 1998 benefited from the contribution of $28.5
million in sales from recent acquisitions and incremental volume on existing
Chrysler truck programs in Mexico.
Gross profit and gross margin were $231.6 million and 10.6% for the second
quarter of 1998 as compared to $213.5 million and 11.6% for the second quarter
of 1997. Gross profit in 1998 reflects the contribution of recent acquisitions
and the overall growth in new and established programs. Gross margin in the
second quarter of 1998 declined in relation to prior year due to a shift in
product mix in the United States and Canada and to new program and facility
costs in Europe, the Asia/Pacific Rim region, the United States and South
America.
11
<PAGE> 12
Selling, general and administrative expenses, including research and
development, as a percentage of net sales, remained unchanged at 3.7% in the
second quarter of 1998 as compared to the same period in the prior year. Actual
expenditures in the current quarter increased in comparison to the prior year
period due to the integration of engineering and administrative expenses
incurred as a result of acquisitions and research, development and
administrative expenses required to support existing and potential new business
opportunities.
For the quarter ended June 27, 1998, interest expense decreased by $1.2
million to $25.5 million as compared to the prior year due to debt reduction
from cash generation, savings due to the redemption of the Company's 11 1/4%
Senior Subordinated Notes and lower borrowing rates under the Company's
multi-currency revolving credit facility (the "Credit Agreement") due to the
achievement of certain financial ratios. Partially offsetting the above was
interest incurred on borrowings to finance acquisitions.
Other expenses for the second quarter of 1998, which include state and
local taxes, foreign exchange, minority interests in consolidated subsidiaries,
equity in net income of affiliates and other non-operating expenses, decreased
$1.8 million to $5.5 million due primarily to reduced state and local taxes.
Net income for the second quarter of 1998 was $65.7 million, or $.96 per
share, as compared to $61.1 million, or $.90 per share in the previous year.
Earnings per share for the second quarter of 1998 were adversely affected by
approximately $.14 per share due to the General Motors work stoppage. The
provision for income taxes in the current quarter was $42.9 million, or an
effective tax rate of 39.5% as compared to $41.5 million, or an effective tax
rate of 40.4% in the prior year.
SIX MONTHS ENDED JUNE 27, 1998 VS. SIX MONTHS ENDED JUNE 28, 1997.
Net sales of $4.2 billion for the first six months of 1998 increased by
$643.8 million or 18.1%, as compared to the first six months of 1997.
Sales as compared to the prior year benefited from acquisitions, which accounted
for $519.4 million of the increase, and new business introduced globally within
the past twelve months. Partially offsetting the increase in sales were
unfavorable exchange rate fluctuations in Europe and North America and a modest
downturn on certain existing programs.
Gross profit and gross margin were $431.8 million and 10.3% for the first
half of 1998 as compared to $391.4 million and 11.0% a year earlier. Gross
profit for the current six months reflects the contribution of acquisitions
coupled with the benefits derived from the overall growth in sales. Partially
offsetting the increase in gross profit was the impact of new program and
facility costs in Europe, South America and the Asia/Pacific Rim region.
Selling, general and administrative expenses, including research and
development, for the six month period ended June 27, 1998, increased as a
percentage of net sales to 3.8% from 3.7% in the prior year. Actual expenditures
increased in comparison to the prior year period due to the inclusion of
operating expenses of acquired businesses and increased engineering and
12
<PAGE> 13
administrative expenses required to support the expansion of existing domestic
and international business.
For the six months ended June 27, 1998, interest expense decreased by $3.7
million to $50.2 million over the comparable period in 1997 largely as a result
of debt reduction from cash generation, savings due to the redemption of the
Company's 11 1/4% Senior Subordinated Notes and lower borrowing rates under the
Credit Agreement due to the achievement of certain financial ratios. Partially
offsetting the above was interest incurred on borrowings to finance
acquisitions.
Other expenses for the first half of 1998, which include state and local
taxes, foreign exchange, minority interests in consolidated subsidiaries, equity
in net income of affiliates and other non-operating expenses, increased to $13.5
million from $12.8 million for the first half of 1997, primarily due to foreign
exchange losses and increased minority interest expense partially offset by
reduced state and local taxes.
Net income for the first six months of 1998 was $113.0 million, or $1.65
per share, as compared to $103.0 million, or $1.51 per share, for the first six
months of 1997. Earnings per share in the current six month period increased by
9.3% over the same period in 1997 despite an increase in the weighted average
number of shares outstanding of approximately four hundred thousand shares.
Earnings per share for the first six months of 1998 were adversely affected by
approximately $.14 per share due to the General Motors work stoppage. The
provision for income taxes in the current period was $73.6 million, or an
effective tax rate of 39.4%, as compared to $69.0 million, or an effective tax
rate of 40.1%, in the previous year period.
LIQUIDITY AND FINANCIAL CONDITION
The Company's financial position remained strong during the first half of
1998 despite the General Motors work stoppages and the additional debt incurred
to finance acquisitions. Net cash provided by operating activities was $24
million during the first six months of 1998 as compared to $124 million for the
same period in 1997. Net income included non-cash depreciation and goodwill
amortization charges of $107 million in 1998 and $89 million in 1997, with the
increase primarily due to the acquisitions of Keiper Car Seating GmbH & Co. and
certain of its subsidiaries and affiliates (collectively, "Keiper Seating"),
Dunlop Cox Limited ("Dunlop Cox"), ITT Automotive's Seat Sub-Systems Unit and
Chapman.
The change in working capital resulted in a use of $128 million and $48
million for the six months ended June 27, 1998 and June 28, 1997, respectively.
The use of working capital resulted primarily from an increase in reimbursable
customer tooling on new programs and timing on the collection of receivables at
quarter end.
Net cash used in investing activities increased to $226 million in the
first six months of 1998 versus $133 million in the first six months of 1997.
The 1998 Chapman, Pianfei and Strapazzini acquisitions resulted in a net use of
funds of $101 million, while the 1997 Dunlop Cox and Empetek acquisitions
resulted in an aggregate net use of $59 million. Capital expenditures for the
six months ended June 27, 1998 increased to $125 million from $75 million for
the same period in 1997 primarily due to capital expenditures at acquired
companies and to support future
13
<PAGE> 14
programs. The Company currently anticipates approximately $175 million in
additional capital expenditures for the remaining six months of 1998.
On May 26, 1998 the Company entered into an amendment to its Credit
Agreement which, among other things, increased total borrowing availability from
$1.8 billion to $2.1 billion and eliminated the pledge of subsidiary stock which
secured the facility. As of June 28, 1998, the Company had $776 million
outstanding under the Credit Agreement and $53 million committed under
outstanding letters of credit, resulting in approximately $1.3 billion unused
and available credit. The Credit Agreement matures on September 30, 2001 and may
be used for general corporate purposes.
In addition to debt outstanding under the Credit Agreement, the Company had
$515 million of long-term debt outstanding as of June 28, 1998, consisting
primarily of $336 million of subordinated notes due between 2002 and 2006.
The Company believes that cash flows from operations and available credit
facilities will be sufficient to meet its debt service obligations, projected
capital expenditures and working capital requirements.
ACCOUNTING POLICIES
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities. The Statement establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate, and assess the effectiveness of transactions
that receive hedge accounting. Statement 133 is effective for fiscal years
beginning after June 15, 1999. The Company anticipates adopting this standard in
1998 and does not anticipate a material impact on the Company's financial
position or results of operations when adopted.
Segment Information
On June 30, 1997, the FASB issued SFAS No. 131, "Disclosures About Segments
of an Enterprise and Related Information," which requires disclosures for each
segment that are similar to those required under current standards with the
addition of quarterly disclosure requirements and a finer partitioning of
geographic disclosures. It requires limited segment data on a quarterly basis.
It also requires geographic data by country. This statement must be adopted by
the Company in its December 31, 1998 consolidated financial statements.
14
<PAGE> 15
YEAR 2000
The Company is currently working to resolve the potential impact of the
year 2000 on the processing of date-sensitive information by the Company's
computerized information systems. The year 2000 problem is the result of
computer programs being written using two digits (rather than four) to define
the applicable year. Any of the Company's programs that have time-sensitive
software may recognize a date using "00" as the year 1900 rather than the year
2000, which could result in miscalculations or system failures. The Company has
completed an evaluation of the impact of the year 2000 issue and management
believes that the costs of addressing this issue will not have a material impact
on the Company's financial position, results of operations or cash flows in
future periods. The Company will expense any maintenance or modification costs
incurred to resolve this issue while the costs of new software will be
capitalized and amortized over the software's useful life.
FORWARD LOOKING STATEMENTS
This Report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Investors are cautioned that
any forward-looking statements, including statements regarding the intent,
belief, or current expectations of the Company or its management, are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those in the forward-looking
statements as a result of various factors including, but not limited to, (i)
general economic conditions in the markets in which the Company operates, (ii)
fluctuations in worldwide or regional automobile and light truck production,
(iii) labor disputes involving the Company or its significant customers, (iv)
changes in practices and/or policies of the Company's significant customers
towards outsourcing automotive components and systems, and (v) fluctuations in
currency exchange rates and (vi) other risks detailed from time to time in the
Company's Securities and Exchange Commission filings. The Company does not
intend to update these forward-looking statements.
15
<PAGE> 16
LEAR CORPORATION
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual Meeting of Stockholders of Lear Corporation was held on May
14, 1998. At the meeting, the following matters were submitted to a vote of the
stockholders of Lear Corporation. Pursuant to the rules of the New York Stock
Exchange, there were no broker non-votes in any of the matters described below.
(1) The election of three directors to hold office until the
2001 Annual Meeting of Stockholders. The vote with respect
to each nominee was as follows:
Nominee For Withheld
------- --- --------
Larry W. McCurdy 53,853,801 2,836,739
Roy E. Parrott 53,849,215 2,841,325
Kenneth L. Way 53,848,881 2,841,659
(2) The appointment of the firm of Arthur Andersen LLP as
independent auditors of Lear Corporation for the year
ending December 31, 1998.
For Against Abstain
--- ------- -------
56,613,918 61,663 14,959
16
<PAGE> 17
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
10.1 Second Amendment and Release, dated as of May 26, 1998, to the
Amended and Restated Credit and Guarantee Agreement, filed
herewith.
27.1 Financial Data Schedule for the Quarter Ended June 27, 1998.
(b) Reports on Form 8-K.
No exhibits or reports on Form 8-K were filed during the quarter ended
June, 27, 1998.
17
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.
LEAR CORPORATION
Dated: August 11, 1998 By: /s/ Donald J. Stebbins
---------------------------------
Donald J. Stebbins
Senior Vice President, and
Chief Financial Officer
18
<PAGE> 19
LEAR CORPORATION
FORM 10-Q
EXHIBIT INDEX
FOR THE QUARTER ENDED JUNE 27, 1998
EXHIBIT
NUMBER
10.1 Second Amendment and Release, dated as of May 26, 1998, to the
Amended and Restated Credit and Guarantee Agreement, filed
herewith.
27.1 Financial Data Schedule for the Quarter Ended June 27, 1998.
19
<PAGE> 1
EXHIBIT 10.1
SECOND AMENDMENT AND RELEASE
SECOND AMENDMENT AND RELEASE, dated as of May 26, 1998 (this
"Amendment"), to the Amended and Restated Credit and Guarantee Agreement, dated
as of December 20, 1996 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among LEAR CORPORATION, a Delaware
corporation (the "U.S. Borrower"), LEAR CORPORATION CANADA LTD., a company
organized under the laws of the province of Ontario, Canada (the "Canadian
Borrower"), the FOREIGN SUBSIDIARY BORROWERS parties thereto (together with the
U.S. Borrower and the Canadian Borrower, the "Borrowers"), the several banks and
other financial institutions from time to time parties thereto (the "Lenders"),
the Managing Agents named therein (the "Managing Agents"), the Co-Agents named
therein (the "Co-Agents"), the Lead Managers named therein (the "Lead
Managers"), and THE BANK OF NOVA SCOTIA, a Canadian chartered bank (as
hereinafter defined, the "Canadian Administrative Agent"), and THE CHASE
MANHATTAN BANK, a New York banking corporation (as hereinafter defined, the
"General Administrative Agent"), as administrative agents for the Lenders
thereunder (collectively, the "Administrative Agents").
W I T N E S S E T H :
---------------------
WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make, and have made, extensions of credit to the Borrowers; and
WHEREAS, the Borrowers have requested that certain provisions
of the Credit Agreement and the other Loan Documents (as defined in the Credit
Agreement) be modified in the manner provided for in this Amendment, and the
Lenders are willing to agree to such modifications as provided for in this
Amendment;
NOW, THEREFORE, in consideration of the premises and mutual
agreements contained herein, and for other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Defined Terms. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
2. Amendments to Credit Agreement. (a) Subsection 13.8 of the
Credit Agreement is hereby amended by deleting such subsection in its entirety
and substituting in lieu thereof the following:
"13.8 [RESERVED]"
<PAGE> 2
(b) Subsection 13.10 of the Credit Agreement is hereby amended
by deleting such subsection in its entirety and substituting in lieu thereof the
following:
"13.10 [RESERVED]"
(c) Schedule I of the Credit Agreement is hereby amended by
deleting such Schedule in its entirety and substituting in lieu thereof Schedule
I attached hereto.
3. Releases. The Lenders and the General Administrative Agent
hereby (a) release the guarantors under the Subsidiary Guarantee and the
Additional Subsidiary Guarantee from all their respective obligations under such
Guarantees, (b) release the security interest in all collateral held by the
General Administrative Agent under the Pledge Agreements and (c) release the
pledgors under the Pledge Agreements from all their respective obligations under
the Pledge Agreements. The Lenders hereby authorize and direct the General
Administrative Agent to take such actions as it shall deem appropriate to effect
such release, including the execution and delivery of such release instruments
as it shall deem appropriate. The parties to the Credit Agreement agree that,
notwithstanding any provision contained in the Credit Agreement or the other
Loan Documents to the contrary, (i) all obligations of the Loan Parties
contained in the Credit Agreement and the other Loan Documents with respect to
(A) the Subsidiary Guarantee, (B) the Additional Subsidiary Guarantee and (C)
the Pledge Agreements (collectively, the "Released Documents") are hereby
released and (ii) all references in the Credit Agreement and the other Loan
Documents to the Released Documents shall have no force or effect.
4. Conditions to Effectiveness. This Amendment shall become
effective on the date (the "Amendment Effective Date") that the following
conditions precedent have been satisfied:
(a) the General Administrative Agent shall have received
counterparts hereof, duly executed and delivered by the Borrowers, the
Swing Line Lender and all the Lenders;
(b) the General Administrative Agent shall have received, with
a copy for each Lender, a certificate of the Secretary or Assistant
Secretary of the U.S. Borrower, dated the Amendment Effective Date, as
to the incumbency and signature of its officers executing this
Amendment, together with satisfactory evidence of the incumbency of
such Secretary or Assistant Secretary;
(c) the General Administrative Agent shall have received, with
a copy for each Lender, a copy of the resolutions in form and substance
satisfactory to the General Administrative Agent, of the Board of
Directors (or the executive committee thereof) of the U.S. Borrower
authorizing the execution, delivery and performance of the U.S.
Borrower of this Amendment, which certificate shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded as of the Amendment Effective Date; and
(d) the General Administrative Agent shall have received, with
a copy for each Lender, an opinion, dated the Amendment Effective Date,
of Winston & Strawn, special counsel to the U.S. Borrower, in form and
substance satisfactory to the General Administrative Agent.
5. Representations and Warranties. The Borrowers represent and
warrant that
<PAGE> 3
the representations and warranties made by the Borrowers in the Loan Documents
are true and correct in all material respects on and as of the Amendment
Effective Date, before and after giving effect to the effectiveness of this
Amendment, as if made on and as of the Amendment Effective Date, except to the
extent such representations and warranties expressly relate to an earlier date.
6. Payment of Expenses. The Borrowers agree to pay or
reimburse the General Administrative Agent for all of its out-of-pocket costs
and reasonable expenses incurred in connection with this Amendment and any other
documents prepared in connection herewith and the transactions contemplated
hereby, including, without limitation, the reasonable fees and disbursements of
counsel to the General Administrative Agent.
7. No Other Amendments; Confirmation. Except as expressly
amended, modified and supplemented hereby, the provisions of the Credit
Agreement, the Notes and the other Loan Documents are and shall remain in full
force and effect.
8. Governing Law; Counterparts. (a) This Amendment and the
rights and obligations of the parties hereto shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York.
(b) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Amendment signed by all the parties
shall be lodged with the U.S. Borrower and the General Administrative Agent.
This Amendment may be delivered by facsimile transmission of the relevant
signature pages hereof.
9. Exiting Lenders. Each Lender which after the Amendment
Effective Date no longer holds a Commitment (an "Exiting Lender") is executing
this Amendment solely for the purpose of acknowledging that its Commitment will
terminate on the Amendment Effective Date upon repayment in full of all amounts
owing to it under the Credit Agreement on the Amendment Effective Date. The
modifications to the Credit Agreement and the other Loan Documents, effected by
this Amendment are being approved by Lenders holding 100% of the Commitments
after giving effect to termination of the Commitments of the Lenders on the
Amendment Effective Date. On the Amendment Effective Date, the Borrowers shall
effect such borrowings and repayments among the Lenders (which need not be pro
rata among the Lenders) so that, after giving effect thereto, (a) the respective
principal amounts of the Canadian Revolving Credit Loans to the Canadian
Borrower held by the Canadian Lenders shall be pro rata according to their
respective Canadian Revolving Credit Commitment Percentages, as amended hereby,
(b) the respective principal amounts of Multicurrency Loans to any Borrower held
by the Multicurrency Lenders shall be pro rata according to their respective
Multicurrency Commitment Percentages, as amended hereby and (c) the Committed
Outstandings Percentage of each U.S. Lender will equal (as nearly as possible)
its U.S. Revolving Credit Commitment Percentage, as amended hereby. The
Borrowers shall remain obligated to pay any amounts due pursuant to subsection
10.11 of Credit Agreement in connection with such prepayments.
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
LEAR CORPORATION
By:___________________________
Title:
LEAR CORPORATION CANADA LTD.
By:___________________________
Title:
LEAR CORPORATION SWEDEN AB
By:___________________________
Title:
LEAR FRANCE SARL
By:___________________________
Title:
LEAR CORPORATION GMBH & CO. KG
By:
Title:________________________
NS BETEILIGUNG GMBH
By:
Title:________________________
<PAGE> 5
THE CHASE MANHATTAN BANK, as General
Administrative Agent, as a Lender and as
Swing Line Lender
By:__________________________
Title:
BANCA COMMERCIALE ITALIANA
By:__________________________
Title:
THE BANK OF NOVA SCOTIA
By:__________________________
Title:
CHASE MANHATTAN BANK DELAWARE
By:___________________________
Title:
ABN AMRO BANK N.V. CHICAGO BRANCH
By:___________________________
Title:
By:___________________________
Title:
THE ASAHI BANK, LTD.
By:___________________________
Title:
<PAGE> 6
BANCA NAZIONALE DEL LAVORO S.P.A.
NEW YORK BRANCH
By:___________________________
Title:
By:___________________________
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT
By:___________________________
Title:
By:___________________________
Title:
BANK OF AMERICA NT & SA
By:___________________________
Title:
THE BANK OF NEW YORK
By:___________________________
Title:
THE BANK OF TOKYO-MITSUBISHI
TRUST COMPANY
By:___________________________
Title:
BANKERS TRUST COMPANY
By:___________________________
Title:
<PAGE> 7
BANQUE NATIONALE DE PARIS
By:___________________________
Title:
BANQUE PARIBAS
By:___________________________
Title:
By:___________________________
Title:
CARIPLO CASSA DI RISPARMIO DELLE PROVINCIE
LOMBARDE SPA
By:__________________________
Title:
CREDIT AGRICOLE INDOSUEZ
By:__________________________
Title:
By:__________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
By:__________________________
Title:
<PAGE> 8
CITICORP USA, INC.
By:___________________________
Title:
COMERICA BANK
By:___________________________
Title:
CREDITO ITALIANO S.P.A.
By:___________________________
Title:
By:___________________________
Title:
CREDIT LYONNAIS CHICAGO BRANCH
By:___________________________
Title:
CREDIT SUISSE FIRST BOSTON
By:___________________________
Title:
By:___________________________
Title:
DAI-ICHI KANGYO BANK, LTD.,
CHICAGO BRANCH
By:___________________________
Title:
<PAGE> 9
DEN DANSKE BANK
By:___________________________
Title:
DEUTSCHE BANK AG
By:___________________________
Title:
DG BANK
By:___________________________
Title:
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN
BRANCHES
By:___________________________
Title:
By:___________________________
Title:
FIFTH THIRD BANK
By:___________________________
Title:
FIRST AMERICAN NATIONAL BANK
By:___________________________
Title:
<PAGE> 10
BANKBOSTON N.A.
By:___________________________
Title:
NBD BANK
By:___________________________
Title:
FIRST UNION NATIONAL BANK
By:___________________________
Title:
FLEET NATIONAL BANK
By:___________________________
Title:
THE FUJI BANK, LIMITED
By:___________________________
Title:
GULF INTERNATIONAL BANK B.S.C.
By:___________________________
Title:
By:___________________________
Title:
<PAGE> 11
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:___________________________
Title:
ISTITUTO BANCARIO SAN PAOLO DI TORINO SPA
By:___________________________
Title:
By:___________________________
Title:
KEYBANK NATIONAL ASSOCIATION
By:___________________________
Title:
KREDIETBANK N.V.
By:___________________________
Title:
By:___________________________
Title:
<PAGE> 12
LEHMAN COMMERCIAL PAPER INC.
By:___________________________
Title:
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By:___________________________
Title:
MICHIGAN NATIONAL BANK
By:___________________________
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:___________________________
Title:
NATIONAL CITY BANK
By:___________________________
Title:
NATIONSBANK N.A.
By:___________________________
Title:
<PAGE> 13
THE NORTHERN TRUST COMPANY
By:___________________________
Title:
ROYAL BANK OF CANADA
By:___________________________
Title:
THE SAKURA BANK, LTD.
By:___________________________
Title:
THE SANWA BANK, LIMITED,
CHICAGO BRANCH
By:___________________________
Title:
SOCIETE GENERALE
By:___________________________
Title:
THE SUMITOMO BANK, CHICAGO BRANCH
By:___________________________
Title:
<PAGE> 14
SUNTRUST BANK, ATLANTA
By:___________________________
Title:
SVENSKA HANDELSBANKEN
By:___________________________
Title:
THE TORONTO DOMINION BANK (TEXAS), INC.
By:___________________________
Title:
U.S. BANK NATIONAL ASSOCIATION
By:___________________________
Title:
WACHOVIA BANK
By:___________________________
Title:
EXITING BANKS
BANK OF MONTREAL
By:___________________________
Title:
<PAGE> 15
THE MITSUBISHI TRUST AND BANKING
CORPORATION, CHICAGO BRANCH
By:___________________________
Title:
By:___________________________
Title:
THE MITSUI TRUST AND BANKING COMPANY,
LIMITED
By:___________________________
Title:
THE TOKAI BANK, LTD., CHICAGO BRANCH
By:___________________________
Title:
THE TOYO TRUST AND BANKING CO., LTD.
By:___________________________
Title:
COOPERATIVE CENTRALE
RAIFFEISENBOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:___________________________
Title:
THE SUMITOMO TRUST AND BANKING CO., LTD.,
NEW YORK BRANCH
By:___________________________
Title:
<PAGE> 16
SCHEDULE I
----------
COMMITMENTS; ADDRESSES
A. U.S. Revolving Credit Commitment and Multicurrency Commitment Amounts
(U.S. Dollars)
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
U.S. Revolving Credit Multicurrency
U.S. Lender Commitment Counterpart Lender Commitment
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
<S> <C> <C> <C>
ABN AMRO Bank N.V., Chicago
Branch $50,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Asahi Bank, Ltd. $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Banca Commerciale Italiana $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Banca Nazionale del Lavoro
S.p.A., New York Branch $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Bank Austria Aktiengesellschaft $20,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Bank of America NT & SA $75,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Bank of New York $50,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Bank of Nova Scotia $75,000,000 The Bank of Nova Scotia
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Bank of Tokyo-Mitsubushi
Ltd., New York Branch $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Bankers Trust Company $87,500,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Banque Nationale de Paris $50,000,000 $30,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Banque Paribas $35,000,000 $15,000,000
</TABLE>
<PAGE> 17
2
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
U.S. Revolving Credit Multicurrency
U.S. Lender Commitment Counterpart Lender Commitment
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
<S> <C> <C> <C>
CARIPLO Cassa di Risparmio delle Provincie Lombarde SPA $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Credit Agricole Indosuez $35,000,000 $10,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Chase Manhattan Bank $95,000,000 $85,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Canadian Imperial Bank of
CIBC, Inc. $50,000,000 Commerce
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Citicorp USA, Inc. $87,500,000 $40,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Comerica Bank $60,000,000 $10,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Credito Italiano S.p.A. $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Credit Lyonnais Chicago Branch $45,000,000 $10,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
CS First Boston Group, Inc. $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Dai-Ichi Kangyo Bank, Ltd.,
Chicago Branch $30,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Den Danske Bank $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
DG Bank $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Deutsche Bank AG $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Dresdner Bank AG New York and Grand Cayman Branches $35,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
First American National Bank $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
BankBoston N.A. $35,000,000 $30,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
NBD Bank $50,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Fifth Third Bank $20,000,000
</TABLE>
<PAGE> 18
3
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
U.S. Revolving Credit Multicurrency
U.S. Lender Commitment Counterpart Lender Commitment
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
<S> <C> <C> <C>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
First Union National Bank of
North Carolina $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Fleet National Bank $45,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Fuji Bank, Limited $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Gulf International Bank B.S.C. $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Industrial Bank of Japan,
Limited $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Istituto Bancario Sao Paolo Di
Torino SpA $20,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
KeyBank National Association $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Kredietbank N.V. $25,000,000 $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Lehman Commercial Paper Inc. $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Long-Term Credit Bank of Japan,
Ltd. $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Michigan National Bank of Detroit $20,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Morgan Guaranty Trust Company of New York $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
National City Bank $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
NationsBank, N.A. $75,000,000 $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Northern Trust Company $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Royal Bank of Canada $35,000,000 Royal Bank of Canada
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Sakura Bank, Ltd. $10,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Sanwa Bank, Limited,
Chicago Branch $50,000,000
</TABLE>
<PAGE> 19
4
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
U.S. Revolving Credit Multicurrency
U.S. Lender Commitment Counterpart Lender Commitment
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
<S> <C> <C> <C>
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Societe Generale $30,000,000 $10,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Sumitomo Bank, Chicago Branch $35,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Suntrust Bank, Atlanta $30,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Svenska Handelsbanken $20,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
The Toronto-Dominion Bank $50,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
Wachovia Bank $25,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
U.S. Bank National Association $25,000,000 $15,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
TOTAL $2,100,000,000 $500,000,000
- ---------------------------------------------------------- -------------------------------- ---------------------------- -----------
</TABLE>
<PAGE> 20
5
B. Canadian Commitment Amounts (U.S. Dollars)
<TABLE>
<CAPTION>
- ----------------------------------------------- ----------------------------------- --------------------------------
Canadian Revolving Credit
Canadian Lender Commitment Counterpart Lender
- ----------------------------------------------- ----------------------------------- --------------------------------
<S> <C> <C>
The Bank of Nova Scotia $20,000,000 The Bank of Nova Scotia
- ----------------------------------------------- ----------------------------------- --------------------------------
Canadian Imperial Bank of Commerce $20,000,000 CIBC, Inc.
- ----------------------------------------------- ----------------------------------- --------------------------------
Royal Bank of Canada $10,000,000 Royal Bank of Canada
- ----------------------------------------------- ----------------------------------- --------------------------------
TOTAL $50,000,000
- ----------------------------------------------- ----------------------------------- --------------------------------
</TABLE>
<PAGE> 21
6
C. ADDRESSES FOR NOTICES
ABN AMRO BANK N.V., CHICAGO BRANCH
135 South LaSalle Street, Suite 625
Chicago, IL 60674
Attn: David Sagers
Tel: (312) 904-2854
Fax: (312) 606-8425
THE ASAHI BANK, LTD.
One World Trade Center, Suite 6011
New York, NY 10048-0476
Attn: James P. Surless
Tel: (212) 912-7041
Fax: (212) 432-1135
BANCA COMMERCIALE ITALIANA (CHICAGO)
150 North Michigan Avenue, Suite 1500
Chicago, IL 60601
Attn: Mark Mooney
Tel: (312) 346-1112
Fax: (312) 346-5769
BANCA NAZIONALE DEL LAVORO S.P.A., NEW YORK BRANCH
25 West 51st Street
New York, NY 10019
Attn: Giulio Giovine
Tel: (212) 581-0710
Fax: (212) 765-2978
BANK AUSTRIA AKTIENGESELLSCHAFT
565 Fifth Avenue, 26th Floor
New York, NY 10017
Attn: Jeanine B. Long
Tel: (212) 880-1075
Fax: (212) 880-1080
BANK OF AMERICA NT & SA
231 South LaSalle Street
Chicago, IL 60693
Attn: Steve Ahrenholz
Tel: (312) 828-1291
Fax: (312) 987-7384
<PAGE> 22
7
THE BANK OF NEW YORK
One Wall Street, 22nd Floor
New York, NY 10286
Attn: William M. Barnum
Tel: (212) 635-1066
Fax: (212) 635-6434
BANK OF NOVA SCOTIA
181 West Madison Street, Suite 3700
Chicago, IL 60602
Attn: Brian Hewett
Tel: (312) 201-4145
Fax: (312) 201-4108
THE BANK OF TOKYO-MITSUBUSHI LTD., NEW YORK BRANCH
1251 Avenue of the Americas, 12th Floor
New York, NY 10020-1104
Attn: Friedrich N. Wilms
Tel: (212) 782-4341
Fax: (212) 782-6445
BANKERS TRUST COMPANY
233 South Wacker Drive, Suite 8400
Chicago, IL 60606
Attn: Tom Cole
Tel: (312) 993-8051
Fax: (312) 993-8162
BANQUE NATIONALE DE PARIS
209 South LaSalle Street, 5th Floor
Chicago, IL 60604
Attn: Christine L. Howatt
Tel: (312) 977-1383
Fax: (312) 977-1380
BANQUE PARIBAS
227 West Monroe, Suite 3300
Chicago, IL 60606
Attn: Nicholas C. Mast
Tel: (312) 853-6038
Fax: (312) 853-6020
CARIPLO BANK
10 East 53 St., 36th Floor
<PAGE> 23
8
New York, NY 10022
Attn: Anthony Giobbi
Tel: (212) 527-8737
Fax: (212) 527-8777
CREDIT AGRICOLE INDOSUEZ
55 East Monroe Street, Suite 4700
Chicago, IL 60603-5702
Attn: Richard Drennan
Tel: (312) 917-7441
Fax: (312) 372-3724
CIBC INC.
200 West Madison Street, Suite 2300
Chicago, IL 60606
Attn: Ken Davis
Tel: (312) 750-8733
Fax: (312) 750-0927
CIBC INC. (U.S. BORROWINGS)
Atlanta Agency
Two Paces West
Atlanta, GA 30339
Attn: Ken Auchter
Tel: (770) 319-4814
Fax: (770) 319-4950
CANADIAN IMPERIAL BANK OF COMMERCE (CANADIAN BORROWINGS)
COMMERCE COURT WEST - 50TH FLOOR
Toronto, Ontario M5L 1A2
Attn: Rick DeGrys
Tel: (416) 214-8411
Fax: (416) 980-5855
CITICORP USA, INC.
399 Park Avenue
New York, NY 10043
Attn: Elizabeth Palermo
Tel: (212) 559-3533
Fax: (212) 826-3375
COMERICA BANK
Comerica Tower at Detroit Center
500 Woodward Avenue, MC 3265
Detroit, MI 48226
<PAGE> 24
9
Attn: Michael Shea
Tel: (313) 222-2977
Fax: (313) 222-3776
CREDITO ITALIANO S.P.A.
375 Park Avenue
New York, NY 10152
Attn: Harmon P. Butler
Tel: (212) 546-9611
Fax: (212) 546-9675
CREDIT LYONNAIS, CHICAGO BRANCH
227 West Monroe Street, Suite 3800
Chicago, IL 60606
Attn: Joce Cote
Tel: (312) 220-7303
Fax: (312) 641-0527
CREDIT SUISSE BOSTON
11 Madison Avenue
New York, New York 10010-3829
Attn: Kristin Lepri
Tel: (212) 325-9058
Fax: (212) 325-8309
THE CHASE MANHATTAN BANK (DELAWARE)
1201 Market Street
Wilmington, Delawar 19801
Attn: Micheal Handago
Tel: (302) 428-3311
Fax: (302) 428-3390
THE DAI-ICHI KANGYO BANK, LTD., CHICAGO BRANCH
10 South Wacker Drive, 26th Floor
Chicago, IL 60606
Attn: Michael D. Pleasants
Tel: (312) 715-6361
Fax: (312) 876-2011
BANK AG NEW YORK BRANCH
31 West 52nd Street
New York, New York 10019
Attn: Hans-Josef Thiele
Tel: (212) 474-8649
Fax: (212) 474-8212
<PAGE> 25
10
DEN DANSKE BANK (NEW YORK)
280 Park Avenue
New York, New York 10017-1216
Attn: Peter Hargrave
Tel: (212) 984-8433
Fax: (212) 370-9239
DG BANK
609 Fifth Avenue
New York, New York 10017-1021
Attn: Robert Herber
Tel: (212) 745-1581
Fax: (212) 745-1556
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES
190 South LaSalle St., Suite 2700
Chicago, IL 60603
Attn: Jeffrey Mumm
Tel: (312) 444-1336
Fax: (312) 444-1305
FIRST AMERICAN NATIONAL BANK
Fourth & Union Street., NA-0310
Nashville, TN 37238
Attn: Andrew Zimberg
Tel: (615) 748-1401
Fax: (615) 748-6072
BANKBOSTON N.A.
100 Federal Street, MS-01-09-05
Boston, MA 02110
Attn: Christopher M. Holtz
Tel: (617) 434-7690
Fax: (617) 434-6685
NBD BANK
611 Woodward Avenue
Detroit, MI 48226
Attn: Thomas Lakocy
Tel: (313) 225-2884
Fax: (313) 225-2290
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
<PAGE> 26
11
One First Union Center, DC-5
Charlotte, NC 28288-0745
Attn: Glenn Edwards
Tel: (704) 383-3810
Fax: (704) 314-2802
FLEET NATIONAL BANK
One Federal Street
Boston, MA 02211
Attn: Robert J. Lord
Tel: (617) 346-0597
Fax: (617) 346-0145
THE FUJI BANK, LIMITED
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Attn: Takeyuki Kuroki
Tel: (312) 621-3381
Fax: (312) 621-0539
GULF INTERNATIONAL BANK B.S.C.
380 Madison Avenue, 21st Floor
New York, NY 10017
Attn: Abdel-Fattah Tahoun
Tel: (212) 922-2325
Fax: (212) 922-2309
THE INDUSTRIAL BANK OF JAPAN, LIMITED
227 West Monroe Street, Suite 2600
Chicago, IL 60606
Attn: David Geddy
Tel: (312) 855-8482
Fax: (312) 855-8200
ISTITUTO BANCARIO SAO PAOLO DI TORINO SPA
245 Park Avenue
New York, NY 10167
Attn: Luca Sergio
Tel: (212) 692-3180
Fax: (212) 599-5303
JP MORGAN (NEW YORK)
50 Wall Street
New York, New York 10260
<PAGE> 27
12
Attn: Stephen Worth
Tel: (212) 648-4114
Fax: (212) 648-5043
KEYBANK NATIONAL ASSOCIATION
Large Corporate Group
127 Public Square
Cleveland, OH 44114
Attn: Thomas A. Crandell
Tel: (216) 689-3589
Fax: (216) 689-4981
KREDIETBANK N.V.
125 West 55th Street, 10th Floor
New York, NY 10019
Attn: John E. Thierfelder
Tel: (212) 541-0727
Fax: (212) 956-5580
LEHMAN BROTHERS
3 World Financial Center
New York, New York 10285
Attn: Peter Wexler
Tel: (212) 526-3055
Fax: (212) 526-3738
THE LONG TERM CREDIT BANK OF JAPAN, LTD.
190 South LaSalle Street, Suite 800
Chicago, IL 60603
Attn: Robert Orenstein
Tel: (312) 704-5478
Fax: (312) 704-8505
MICHIGAN NATIONAL BANK
27777 Inkster Road
Farmington Hills, MI 48333
Attn: Christopher Mayone
Tel: (248) 473-4357
Fax: (248) 615-5910
The MITSUI TRUST & BANKING COMPANY
1251 Avenue of the Americas
New York, NY
Attn: Maureen Lehocky
Tel: (212) 790-5418
Fax: (212) 768-9044
NATIONSBANK, N.A.
<PAGE> 28
13
233 South Wacker Drive, Suite 2800
Chicago, IL 60606
Attn: Wallace W. Harris, Jr.
Tel: (312) 234-5626
Fax: (312) 234-5601
NATIONAL CITY BANK (CLEVELAND)
979 Westwood Drive
Birmingham, MI 48009
Attn: Mary Beth Howe
Tel: (248) 644-0502
Fax: (248) 644-0432
NORTHERN TRUST COMPANY (CHICAGO)
50 South LaSalle Street
Chicago, IL 60675
Attn: Tracy Toulouse
Tel: (312) 557-1356
Fax: (312) 630-6082
ROYAL BANK OF CANADA
One North Franklin Street, Suite 700
Chicago, IL 60606
Attn: Patrick K. Shields
Tel: (312) 551-1629
Fax: (312) 551-0805
THE SAKURA BANK, LTD.
277 Park Avenue
New York, NY 10172
Attn: Patricia L. Walsh
Tel: (212) 756-6788
Fax: (212) 756-6781
THE SANWA BANK, LIMITED, CHICAGO BRANCH
10 South Wacker Drive, 31st Floor
Chicago, IL 60606
Attn: Richard H. Ault
Tel: (312) 368-3011
Fax: (312) 346-6677
SOCIETE GENERALE
181 West Madison Street, Suite 3400
Chicago, IL 60602
Attn: Eric Bellaiche
Tel: (312) 578-5056
Fax: (312) 578-5099
<PAGE> 29
14
THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH
233 South Wacker Drive, Suite 4800
Chicago, IL 60606-6448
Attn: James C. Beckett
Tel: (312) 876-7794
Fax: (312) 876-6436
and
277 Park Avenue
New York, NY 10172
Attn: Paul Kane
Tel: (212) 224-4152
Fax: (212) 224-4079
SUNTRUST BANK, ATLANTA
25 Park Place
Mailcode 118
Atlanta, GA 30303
Attn: Shelly Browne
Tel: 404-230-5224
Fax: 404-588-8505/658-4905
SUNTRUST BANK ATLANTA
25 Park Place
Mailcode 118
Atlanta, GA 30303
Attn: Jennifer Harrelson
Tel: (404) 588-7461
Fax: (404) 588-8505/658-4905
SVENSKA HANDELSBANKEN (NEW YORK)
153 East 53rd Street, 37th Floor
New York, New York 10022
Attn: Karl Forsman
Tel: (212) 326-5144
Fax: (212) 326-5151
SVENSKA HANDELSBANKAN (NEW YORK)
153 East 53rd Street
New York, New York 10022
Attn: David Caceres
Tel: (212) 326-5171
Fax: (212) 326-5151
<PAGE> 30
15
TD SECURITIES (USA) INC.
70 W. Madison, Suite 5430
Chicago, IL 60602
Attn: Mario da Ponte
Tel: (312) 977-2127
Fax: (312) 782-6332
U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, MN 55402-4302
Attn: Tom Cherry
Tel: (612) 973-0555
Fax: (612) 973-0825
CHEMICAL SECURITIES INC.
270 Park Avenue
New York, New York 10017
Attn: Rosemary Bradley
Tel: (212) 270-7853
Fax: (212) 270-5127
LEAR SEATING CORPORATION
21557 Telegraph Road
Southfield, MI 48034
Attn: Shari Burgess
Tel: (248) 746-1580
Fax: (248) 746-1593
WACHOVIA CORPORATE SERVICES, INC.
191 Peachtree Street, N.E.
Atlanta, GA 30303
Attn: Katie Trocron
Tel: (404)
Fax: (404) 332-6898
FIFTH THIRD BANK
606 Madison Avenue
Toledo, OH 43604
Attn: Chris Prisby
Tel: (419) 259-7141
Fax: (419) 259-7134
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