LEA 10-K & 10-Q changes, risk factors and insider trading

•Our industry is cyclical and a decline or significant fluctuation in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of or operational disruptions to one or more of our major customers could adversely affect our financial performance.

Our sales are driven by the number of vehicles produced by our automotive manufacturer customers and our content per vehicle. The automotive industry is cyclical and sensitive to general economic conditions, including interest rates, inflation, consumer demand and spending levels, and geopolitical issues. Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, unforeseen operational disruptions, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers, the availability and cost of credit,raw materials and critical components, logistics issues, cybersecurity incidents, and the availability and cost of raw materials and critical components, and logistics issues,credit, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding hybridelectric and electrichybrid vehicles), size, configuration and features, among other factors. Our sales and production may be further affected by new entrants to the industry, including domestic automakers in certain regions and non-traditional automakers, and the restructuring actions, including facility closures, of our customers and suppliers.

An economic downturn or other adverse industry conditions that result in a decline or significant fluctuation in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of or operational disruptions to one or more of our major customers could reduce our salessales, increase our costs or otherwise adversely affect our financial condition, operating results and cash flows. Further, our ability to reduce the risks inherent in certain concentrations of business, and thereby maintain our financial performance in the future, will depend, in part, on our ability to continue to diversify our sales on a customer, product, platform and geographic basis to reflect the market overall. We may not be successful in such diversification.

Raw material, energy, commodity, product component and labor costs can be volatile. Although we have developed and implemented strategies to mitigate the impact of increases inany such costs,cost increases, these strategies, together with commercial negotiations with our customers and suppliers,suppliers doand improved manufacturing productivity through automation and other advanced technologies, may not typically offset all of the adverse impact. Certain of these strategies also may limit our opportunities in a declining price environment. In addition, the availability of raw materials, energy, commodities, product components and labor fluctuates from time to time due to factors outside of our control, including regulatorygovernmental requirementspolicies and restrictions,regulations, natural disasters and other supply chain disruptions, which may impact our ability to meet the production demands of our customers. Increases in the costs of raw materials, energy, commodities, product components and labor, or restrictions on the availability thereof, could adversely affect our financial condition, operating results and cash flows.

Downward pricing pressure by automotive manufacturers is a characteristic of the automotive industry. Our customer contracts generally provide for annual price reductions over the production life of the vehicle, while requiring us to assume significant responsibility for the design, development and engineering of our products. Prices may also be adjusted on an ongoing basis to reflect changes in product content/costs and other commercial factors. Our financial performance is largely dependent on our ability to achieve product cost reductions through product design enhancements, supply chain management, manufacturing efficiencies and restructuring actions. We also seek to enhance our financial performance by investing in product development, design capabilities and new product initiatives that respond to and anticipate the needs of our customers and consumers. We continually evaluate operational and strategic alternatives and enhancements, including in the areas of digitization, automation and the use of artificial intelligence ("AI"), to improve our business structure and align our business with the changing needs of our customers and major industry trends affecting our business. Our inability to achieve product cost reductions that offset customer-imposed price reductions could adversely affect our financial condition, operating results and cash flows.

•International trade policies, including protectionist trade policies, such as tariffstariffs, sanctions, export controls and sanctions,other trade restrictions, could adversely affect our financial performance.

Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material adverse impact on markets around the world. Changes in international trade policies, including: (i) changes to existing trade agreements; (ii) greater restrictions on free trade generally; and (iii) significant increases in customs duties and tariffs onimposed goodsby importedany intocountry, including those already imposed by the United States and reciprocalretaliatory and other actions by other countries, can adversely affect our financial condition and operating results.

In addition to potential increases in customs duties and tariffs in the United States and other countries, the United States-Mexico-Canada Agreement ("USMCA") is subject to trilateral review and renewal in 2026. There can be no assuranceassurances that the USMCA will be renewed or, if renewed, any newly negotiated terms in the USMCA will not adversely affect our business. Also, China presents unique risks to U.S. automotive manufacturers due to the strain in U.S.-China relations and the level of integration with key components in our global supply chain. It remains unclear what specificadditional actions the current U.S. administration may take with respect to resolve trade-relatedtrade issues withinvolving China and other countries.

Further, the U.S. and other governments could impose additional sanctions orsanctions, export controls or other trade restrictions that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include affiliates.affiliates (e.g., China has imposed tariffs and taken other retaliatory actions). The current trade environment could impact the status of other trade agreements between the United States and countries other than Canada and Mexico, including, without limitation, the Dominican Republic-Central America-United States Free Trade Agreement. Any of the above factors could impact our supply chain, as well as our operations, and adversely affect our financial condition and operating results.

We obtain components and other products and services from numerous automotive suppliers and other vendors throughout the world. We are responsible for managing our supply chain, including suppliers that may be the sole sources of products that we require, that our customers direct us to use or that have unique capabilities that would make it difficult and/or expensive to re-source. In certain instances, entire industries may experience short-term capacity constraints. Additionally, our production capacity and costs, and thatthose of our customers and suppliers, may be adversely affected by force majeure events, such as natural disasters, as well as tariffs, sanctions or other significant events. Any such significant event could adversely affect our financial performance. Furthermore, unfavorable economic or industry conditions in one or more of the regions in which we operate could result in financial distress within our supply base, which could cause a supply disruption and thereby adversely affect our financial condition, operating results and cash flows.

A substantial number of our employees and the employees of our largest customers and suppliers are members of industrial trade unions and are employed under the terms of various labor agreements. We have labor agreements covering approximately 81,50075,000 employees globally. In the United States and Canada, each of our unionized facilities has a separate collective bargaining agreement with the union that represents the workers at such facility, with each such agreement having an expiration date that is independent of the other agreements. Labor agreements covering approximately 84%67% of our global unionized work force, including labor agreements in the United States and Canada covering approximately 5% of our global unionized workforce,force are scheduled to expire in 2025.2026. There can be no assurances that these upcoming negotiations or any other future negotiations with the unions will be resolved favorably or that we will not experience a work stoppage or disruption that could adversely affect our financial condition, operating results and cash flows. A labor dispute involving us, any of our customers or suppliers or any other suppliers to our customers or that otherwise affects our operations, or the inability by us, any of our customers or suppliers or any other suppliers to our customers to negotiate, upon the expiration of a labor agreement, an extension of such agreement or a new agreement on satisfactory terms could adversely affect our financial condition, operating results and cash flows. In addition, if any of our significant customers experience a material work stoppage, the customer may halt or limit the purchase of our products. This could require us to shut down or significantly reduce production at facilities relating to such products, which could adversely affect our financial condition and operating results.

–political, economic and civil instability and uncertainty (including acts of terrorism, civil unrest, drug cartel-related and other forms of violence, and outbreaks of warviolence);

–currency exchange rate fluctuations, discrepancies in commodity pricing between different exchanges, currency controls and the ability to economically hedge currencies;

–trade wars, tariffstariffs, sanctions, export controls or sanctionsother trade restrictions;

Expanding our sales and operations in lower-cost regions areis an important elementselement of our strategy. As a result, our exposure to the risks described above is substantial. The likelihood of such occurrences and their potential effect on us vary from country to country and are unpredictable. However, any such occurrences could adversely affect our financial condition, operating results and cash flows.

Certain of our operations, particularly in Asia, are conducted through joint ventures. With respect to our joint ventures, we may share ownership and management responsibilities with one or more partners that may not share our goals and objectives. Operating a joint venture requires us to operate the business pursuant to the terms of the agreement that we entered into with our partners, which may require additional organizational formalities, as well as the sharing of information and decision making. Additional risks associated with joint ventures include one or more partners failing to satisfy contractual obligations, the ability to enforce such obligations, conflicts arising between us and any of our partners, a change in the ownership of any of our partners and less of an ability to control compliance with applicable rules and regulations, including the Foreign Corrupt Practices Act and similar or related rules and regulations. Additionally, our ability to sell our interest in a joint venture may be subject to contractual and other limitations. Accordingly, any such occurrences could adversely affect our financial condition, operating results and cash flows.

In connection with the award of new business, we obligate ourselves to deliver new products and services that are subject to our customers' timing, performance and quality standards. Additionally, as a Tier 1 supplier, we must effectively coordinate the activities of numerous suppliers in order for the program launches of our products to be successful. Given the complexity of new program launches, we may experience difficulties managing product quality, timeliness and associated costs. In addition, new program launches require a significant ramp up of costs; however, our sales related to these new programs generally are dependent upon the timing and success of our customers' introduction of new vehicles. Customer decisions on program launch timing may be impacted by various factors, including industry conditions, government regulations and consumer preferences, and therefore, the timing of such launches may also be subject to change. Our inability to effectively anticipate and manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows.

We operate in a highly competitive industry. We and most of our competitors are seeking to expand market share with new and existing customers, including in high growth regions. Our customers award business based on, among other things, price, quality, service and technology. Our competitors' efforts to grow market share could exert downward pressure on our product pricing and margins. In addition, the automotive industry has attracted, and will continue to attract, new entrants, including domestic automakers in certain regions and non-traditional automakersentrants as a result of the evolving nature of the automotive vehicle market, including the increasing adoption of hybridelectric and electrichybrid vehicles. Certain of these automakers and suppliers are also expanding their operations into regions in which they previously did not have a presence. Traditional automakers are experiencing increased competitive pressures as Chinese domestic automakers continue to expand their market share both in and beyond China. Chinese domestic suppliers that may have lower financial return expectations are also challenging traditional automotive suppliers for market share. Further, the global automotive industry is experiencing a period of significant technological change, including ain focusthe onareas of electrification and digitization. If we are unable to differentiate our products, maintain a low-cost footprint or compete effectively to win business with newnewer/emerging domestic automakers and other new entrants,automakers, we may lose market share or be forced to reduce prices, thereby lowering our margins. Any such occurrences could adversely affect our financial condition, operating results and cash flows.

We rely on the accuracy, capacity, availability and security of our information technology networks. Despite the security and business continuity measures that we have implemented, including those measures related to cybersecurity, our operational systems (including business, financial, accounting, human resources, product development and manufacturing processes), as well as those of our customers, suppliers and other service providers, and certain of our connected vehicle systems and components that may collect and store sensitive end-user data (which could include personal information) could be breached, disabled or damaged by, without limitation, internal or external threat actors, computer viruses, malware, phishing attacks, denial-of-service attacks, supply chain attacks, human error, ransomware attacks, software bugs, server malfunctions, software or hardware failures, natural or man-made incidents or disasters, or unauthorized physical or electronic access. These types of incidents have become more prevalent and pervasive across industries, including our industry, and are expected to continue, if not increase, in the future. In particular, ransomware or other attacks that are intended to disrupt our and our customers' business operations are becoming increasingly prevalent, particularly for manufacturing companies, and can lead to significant interruptions in operations and the ability to provide products or services, loss of sensitive data and income, reputational harm and diversion of funds. Extortion payments may alleviate the negative impact of a disruptive event, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. Additionally, in 2025, a cybersecurity incident affecting one of our major customers disrupted its production systems, which in turn reduced demand for our components and impacted our operating results. Similar attacks on our customers, suppliers or other third parties in our supply chain could likewise adversely affect our financial performance.

We are incorporated into the supply chain of a large number of companies globally. As a result, if our products or services are compromised, unavailable or unable to be manufactured or delivered, a significant number or, in some instances, all of our customers' operations and their data could be simultaneously affected. Our contracts with customers and others may not contain limitations of liability, and even where they do, there can be no assuranceassurances that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our security obligations. The potential liability and associated consequences we could suffer as a result of such a large-scale event impacting multiple customers could be catastrophic and result in irreparable harm.

Moreover, because the techniques used to gain access to or adversely impact systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks, and we cannot predict the extent, frequency or impact these attacks may have on us. It may also be difficult and/or costly to detect, investigate, mitigate, contain and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain and remediate a security incident could result in outages, data losses and disruptions of our business. In addition, the information technology systems and software that we and our vendors use are vulnerable to outages, breakdowns, software vulnerabilities, coding errors and other damage from service interruptions, system malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failures. For example, our business operations suffered temporary interruptions and impacts from the global CrowdStrike Holdings, Inc. event in July 2024. To the extent that our business is interrupted, including the vehicle systems and components that we supply to our customers or our plant operations, or data is lost, destroyed or inappropriately accessed, used or disclosed, such disruptions could adversely affect our competitive position, operating capacity, ability to provide our goods and services, relationships with our customers, financial condition, operating results and cash flows and/or subject us to regulatory actions, including those contemplated by data privacy laws and regulations such as European Union General Data Privacy Regulation, China Cyber Security Laws including the China Personal Information Protection Law, India's Information Technology Act and supplementary rules, and the California Consumer Privacy Act, or litigation. In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.

Pandemics, epidemics or disease outbreaks in the United States or globally have disrupted, and may disrupt in the future, our business, which could materially affect our financial condition including liquidity, operating results and future expectations. Any such events may adversely impact our global supply chain and global manufacturing operations and cause us to again suspend our operations. In particular, we could experience among other things: (1) continued or additional global supply disruptions, including component and material shortages; (2) labor disruptions; (3) an inability to manufacture; (4) a decline in consumer demand; and (5) an impaired ability to access credit and capital markets. Any future public health crises,crises could adversely affect our business, financial condition, operating results and cash flows going forward.

We regularly monitor our goodwill and long-lived assets for impairment indicators. In conducting our goodwill impairment testing, we 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 we elect not to perform a qualitative assessment of a reporting unit, we then compare 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 measured and recognized. In conducting our impairment analysis of long-lived assets, we compare 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. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived assets. Changes in economic or operating conditions impacting our estimates and assumptions could result in the impairment of our goodwill or long-lived assets. In the event that we determine that our goodwill or long-lived assets are impaired, we may be required to record a significant charge to earnings that could adversely affect our financial condition and operating results.

The Organization for Economic Cooperation and Development ("OECD") issued newguidelines guidelines,on the Global Anti-Base Erosion Model Rules, known as "Pillar Two," to implement a 15% global corporate minimum tax to address gaps in current tax laws and ensure that large multinational enterprises pay a minimum level of tax in the countries in which they operate. Countries may implement the OECD Pillar Two model rules as issued, in a modified form or not at all. A number of countries have passed legislation enacting certain parts of the OECD's Pillar Two framework effective in 2024. AsOn aJanuary result5, 2026, the OECD released new guidelines introducing the side-by-side system as part of the uncertainty,Pillar OECDTwo Global Minimum Tax framework. This system is intended to coordinate the application of Pillar Two couldrules in jurisdictions that already operate minimum tax regimes. Under the OECD's guidelines, the United States is treated as a qualifying jurisdiction, allowing U.S.-parented multinational enterprises ("MNEs") to opt out of the global Pillar Two income inclusion rule and undertaxed profits rule beginning January 1, 2026. The adoption of the side-by-side system reduces uncertainty regarding the impact of the Pillar Two Global Minimum Tax on U.S.-parented MNEs. While many countries have not yet enacted Pillar Two legislation, it is not expected to have a material impact on ourthe effectiveCompany's taxconsolidated ratefinancial and result in higher cash tax liabilities depending on which countries enact minimum tax legislation and in what manner.statements.

In the event that our products fail to, or are alleged to fail to, perform as expected, regardless of fault, and such failure or alleged failure results in, or is alleged to result in, bodily injury and/or property damage or other losses, we may be subject to product liability lawsuits and other claims. Our customers may also pursue claims against us for contribution of all or a portion of the amounts sought in connection with product liability, warranty and recall claims related to our products. We carry insurance for certain product liability claims, but such coverage may be limited. We do not maintain insurance for warranty or recall matters. In addition, we may not be successful in recovering amounts from third parties, including sub-suppliers, in connection with these claims. These types of claims could adversely affect our financial condition, operating results and cash flows.

We are involved in various legal and regulatory proceedings and claims that, from time to time, are significant. These areclaims typically claims that arise in the normal course of business, including, without limitation, commercial or contractual disputes, including disputes with our customers, suppliers or competitors, intellectual property matters, personal injury claims, environmental matters, tax matters, employment matters and antitrust matters. No assurances can be given that such proceedings and claims will not adversely affect our financial condition, operating results and cash flows.

•The continuing focus on human rights and environmental laws and regulations,regulations globally, as well as related customer requirements, globally could cause us to incur significant costs.

Concerns over human rights, environmental pollution and climate change have produced significant legislative and regulatory efforts globally. In addition, our customers have imposed various requirements on their suppliers, including us, in response to these concerns. We expect that theseThese regulatory and customer requirements willmay continue to increase in number and breadth of scope forgoing the foreseeable future, thereby affecting our business.forward. Complying with these requirements will likelymay require us toto, incuramong costs,other things, make investments in new innovations, change product and production processes and/or modify product supply chains, certain of which actions could be significant. Significant challenges may exist to comply with new legislative efforts and increasing customer requirements around supply chain transparency due to the inherent complexity of global automotive supply chains. If we fail to comply with these requirements, we could be subject to lost business opportunities and/or future liabilities, which could adversely affect our reputation, business, financial condition, operating results and cash flows.

We and the automotive industry are subject to a variety of federal, state, local and foreign laws and regulations, including those related to health, safety and, increasingly,and sustainability matters. Governmental regulations also affect taxes and levies, capital markets, healthcare costs, energy usage, data privacy, international trade, including tariffs and sanctions, human rights, immigrationand employment and other labor issues (including labor costs),issues, all of which may have a direct or indirect effect on our business and the businesses of our customers and suppliers. We cannot predict the substance or impact of pending or future legislation or regulations, or the application thereof. The introduction of new laws or regulations or changes in existing laws or regulations, including those in connection with the new U.S. administration, or the interpretation thereof, could increase the costs of doing business for us or our customers or suppliers or restrict our actions and adversely affect our financial condition, operating results and cash flows.

Our manufacturing facilities are subject to numerous laws and regulations designed to protect the environment, and we expect that additional requirements with respect to environmental matters willmay continue to be imposed on us and our customers in the future. Material future expenditures may be necessary if compliance standards change or material unknown conditions that require remediation are discovered. Environmental laws could also restrict our ability to expand our facilities or could require us to acquire costly equipment or to incur other significant expenses in connection with our business. If we fail to comply with present and future environmental laws and regulations, we could be subject to future liabilities, which could adversely affect our financial condition, operating results and cash flows.

Lear Corporation is a global automotive technology leader in Seating and E-Systems, enabling superior in-vehicle experiences for consumers around the world. We supply complete seat systems, key seat components, complete electrical distribution and connection systems, high-voltage power distribution products, including battery disconnect units ("BDUs"), and low-voltage power distribution products and electronic controllers to all of the world's major automotive manufacturers.

Lear is built on a foundation and strong culture of innovation, operational excellence, and engineering and program management capabilities. We use our product and process design and technological expertise, as well as our global reach and competitive manufacturing footprint, to achieve our financial goals and objectives. These include continuing to deliver profitable growth while balancing risks and returns, investing in product and process innovations to drive business growth and profitability, maintaining a strong balance sheet with investment grade credit metrics, and consistentlygenerating strong cash flow and returning capitalexcess cash to our shareholders. Further, we have aligned our strategy with key trends affecting our business. At Lear, we are Making every drive betterTM by providing technology for safer, smarter and more comfortable journeys, while adhering to our values — Be Inclusive. Be Inventive. Get Results the Right Way.

Our Seating business consists of the design, development, engineering and manufacture of complete seat systems and key seat components. Our capabilities in operations and supply chain management enable synchronized assembly and just-in-time delivery of complex complete seat systems at high volumes to our customers. As the most vertically integrated global seat supplier, our key seat component product offerings include seat trim covers; surface materials such as leather and fabric; seat mechanisms; seat foamcushioning; headrests; and thermal comfort systems such as seat heating, ventilation, active cooling, pneumatic lumbar and massage products. All of these products are compatible with traditional internal combustion engine ("ICE") architectures and electrified powertrains, including the full range of hybrid, plug-in hybrid and battery electric architectures. Our thermal comfort systems are facilitated by our seat system, component and integration capabilities, together with our competencies in electronics, sensors, software and algorithms.

•Electrical distribution and connection systems utilize low-voltage and high-voltage wire,wire and high-speed data cables and flat wiring to connect networks andnetworks' electrical signals and manage electrical power within the vehicle for all types of powertrains – from traditional ICE architectures to the full range of electrified powertrains that require management of higher voltage and power. Key components of our electrical distribution and connection systems portfolio include wire harnesses, terminals and connectors, high-voltage battery connection systems and engineered components. High-voltage battery connection systems include intercell connect boards, bus bars and main battery interface connection systems.

•High-voltage battery connection systems include intercell connect boards, bus bars and main battery connection systems. High-voltage power distribution products control the flow and distribution of high-voltage power throughout electrifiedelectric and hybrid vehicles and include BDUsBDUs, which control all electrical energy flowing into and out of high-voltage batteries in electrified vehicles.

•Low-voltage power distribution products and electronic controllers facilitate signal, data and/or power management within the vehicle and include the associated software required to facilitate these functions. Key components of this portfolio include zonal controllers, body domain control modulesmodules, and low-voltagesmart and high-voltagepassive power distribution modules. Our software offerings include embedded control, cybersecurity software and software to control hardware devices. Our customers traditionally have sourced our electronic hardware together with the software that we integrate and embed in it.

Our businesses benefit globally from leveraging common operating standards and disciplines, including world-class product development and manufacturing processes, as well as common customer support and regional infrastructures, all of which contribute to our reputation for operational excellence. Our core capabilities are shared across component categories and include high-precision manufacturing and assembly with short lead times, complex, global supply chain management, global engineering and program management, the agility to establish and/or transfer production between facilities quickly,facilities, and a unique, customer-focused culture. In select instances, we are able to manufacture both Seating and E-Systems components in the same facility. Our businesses also utilize proprietary, industry-specific processes and standards, leverage common low-cost engineering centers and share centralized operating support functions. These functions include health and safety, logistics, quality,as supplywell chain management andas all major administrative functions, such as corporate finance, executive administration, health and safety, human resources, information technology and legal. We continue to build on our reputation for operational excellence through organic and inorganic investments in automation and other advanced manufacturing technologies and the digital transformation of both our operations and administrative functions. It involves the integration of new technologies, such as Industrial Internet of Things (IIoT), cloud computing, artificial intelligence (AI), machine learning and advanced automation, into production facilities and business operations. These technologies enable smart and automated machines and smart factories to communicate, analyze and optimize products and processes, resulting in higher efficiency, quality and responsiveness to customers.

•Build on our reputation for operational excellence through organic and inorganic investmentsinvestments, including partnerships, in automation and digital technologies; and

•Prioritize peopleour employee and the planet through our sustainability initiatives tothat drive business growth, cost reductions and improved employeeworkforce retention.

For further information related to our strategy, see Part 1 — Item 1, "Business — Industry" and "— Strategy.Strategy," included in this Report.

We supply all vehicle segments of the automotive light vehicle original equipment market in every major automotive producing region in the world. Our sales are driven by the number of vehicles produced by the automotive manufacturers and our content per vehicle. Although 2023 industry production returned to pre-pandemic levels, 2024 industry production remained approximately 6% below 2017 peak levels (based on January 2025 S&P Global Mobility projections), and 2024 industry production in North America and Europe, our two largest markets, remained approximately 9% and 24%, respectively, below prior peak levels (based on January 2025 S&P Global Mobility projections). Since 2020, the global economy, as well as the automotive industry, have been influenced directly and indirectly by macroeconomic events resulting in unfavorable conditions, including increases in tariffs, a customer cybersecurity incident, shortages of semiconductor chips and other components, elevated inflation levels on commodities and labor, higher interest rates, and labor and energy shortages in certain markets. Certain of these factors, among others, continue to impact consumer demand. Our strategy to mitigate these impacts encompasses our comprehensive cost management process, including cost technology optimization, actions to further align our manufacturing capacity to the current industry production environment and investments in automation and other advanced manufacturing technologies, as well as commercial recovery mechanisms. This will allow us to enhance operational efficiencies, improve the utilization of existing facilities and equipment to reduce future expenditures, and streamline administrative functions. For a description of risks related to macroeconomic events, see Item 1A, "Risk Factors."

Global automotive industry production volumes in 2024,certain key regions for 2025, as compared to 2023,2024, are shown below (in thousands of units):

Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), the availability and cost of credit,raw materials and critical components, logistics issues, cybersecurity incidents, and the availability and cost of raw materials and critical components, and logistics issues,credit, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding hybridelectric and electrichybrid vehicles), size, configuration and features, among other factors. The impact of potential tariffs on our business and financial condition, if any, is subject to a number of factors that are not yet known,known or are subject to change, including the effective date and duration of such tariffs, the scope and nature of any tariffs, the amount of any tariffs, any countermeasures that the target countries may take in response to such tariffs. In light of these uncertainties, we can provide no assuranceassurances that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will continue to be successful. Our sales and production may be further affected by new entrants to the industry, includingas domesticwell as various automakers and suppliers entering or expanding in certain regions and non-traditional automakers,regions, and the restructuring actions, including facility closures, of our customers and suppliers. Our operating results are also significantly impacted by the overall commercial success of the vehicle platforms for which we supply particular products, as well as the profitability of the products that we supply for these platforms, which is determined, in part, by the level of vertical integration. The loss of business with respect to any vehicle model for which we are a significant supplier, or a decrease in the production levels of any such models, could adversely affect our operating results. In addition, larger cars and light trucks, as well as vehicle platforms that offer more features and functionality, such as luxury, sport utility and crossover vehicles, typically have more content and, therefore, tend to have a more significant impact on our operating results.

Our percentage of consolidated net sales by region infor 20242025 and 20232024 is shown below:

The automotive industry, and our business, continue to be shaped by the broad trend of electrification. Although theThe adoption of electrified vehicles has been slower than anticipatedanticipated, particularly in certainthe regions,United demandStates. Demand for, and regulatory developments related to, improved energy efficiency and sustainability (e.g., government mandates related to fuel economy and carbon emissions) remainhave also had a significant driversimpact ofon this trend.

Our material cost as a percentage of net sales was 64.2%64.1% in 2024,2025, as compared to 64.2% in 2024 and 65.2% in 2023 and 66.1% in 2022.2023. Raw material, energy, commodity and product component costs can be volatile, reflecting, among other things, changes in supply and demand, logistics issues, global trade and tariff policies (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), and geopolitical issues. Our primary commodity cost exposures relate to steel, copper and leather. Our exposure to changes in steel prices is primarily indirect, through purchased components, and a significant portion of our copper, leather and direct steel purchases are subject to price index agreements with our customers and suppliers. We have developed and implemented additional strategies to mitigate the impact of increases inany such costscost throughincreases, including the selective in-sourcing of components, the continued consolidation of our supply base, longer-term purchase commitments, commercial recovery mechanisms and the selective expansion of low-cost country sourcing and engineering, as well as value engineering and product benchmarking. Further, our exposure to changes in steel prices is primarily indirect, through purchased components, and a significant portion of our copper, leather and direct steel purchases are subject to price index agreements with our customers and suppliers. Certain of these strategies also may limit our opportunities in a declining price environment. In the current environment of elevated raw material, energy, commodity and product component costs, these strategies, together with commercial negotiations with our customers and suppliers,suppliers and improved manufacturing productivity through automation and other advanced technologies, have more than offset a significant portion of the adverse impact. In addition, the availability of raw materials, energy, commodities and product components fluctuates from time to time due to factors outside of our control. If these costs increase further or availability is restricted, it could have an adverse impact on our operating results in the foreseeable future. See Part I — Item 1A, "Risk Factors — Increases in the costs and restrictions on the availability of raw materials, energy, commodities, product components and labor could adversely affect our financial performance" and "Risk Factors — International trade policies, including protectionist trade policies, such as tariffstariffs, sanctions, export controls and sanctions,other trade restrictions, could adversely affect our financial performance," included in this Report, as well as "— Forward-Looking Statements" below.

In evaluating our financial condition and operating performance, we focus primarily on earnings, operating margins, cash flows and return on invested capital. Our strategy includes expanding our business with new and existing customers globally through new products,products includingand thoseour alignedreputation withfor theoperational trendexcellence towardand electrification.cost competitiveness. We have also have increased our vertical integration capabilities globally, as well as expanded our component manufacturing capacity in Asia, Central America, Eastern Europe, Mexico and Northern Africa and our low-cost engineering capabilities in Asia, Eastern Europe and Northern Africa.

Our success in generating cash flow will depend, in part, on our ability to manage working capital effectively. Working capital can be significantly impacted by the timing of cash flows from salessales, purchases, and purchases.tariff costs and recoveries. Historically, we generally have been successful in aligning our supplier payment terms with our customer payment terms. However, our ability to continue to do so may be impacted by adverse automotive industry conditions, including inconsistent production schedules due to supply shortages and lower consumer demand, changes to our customers' payment terms and the financial condition of our suppliers. In addition, our cash flow is impacted by our ability to manage our inventory and capital spending effectively. We utilize return on invested capital as a measure of the efficiency with which our assets generate earnings. Improvements in our return on invested capital will depend on our ability to maintain an appropriate asset base for our business and to increase productivity and operating efficiency.

For further information related to our acquisitionCredit ofAgreement IGB, see Note 3, "Acquisition," to the consolidated financial statements included in this Report. For further information related to ourand Term Loan and our revolving credit facility,Loan, see "— Liquidity and Capital Resources — Capitalization — Credit Agreement" and "— Term Loan" below and Note 6,5, "Debt," to the consolidated financial statements included in this Report.

Since the first quarter of 2011, our Board of Directors (the "Board") has authorized $6.7 billion in share repurchases under our common stock share repurchase program,program including(the an"Repurchase increase in our share repurchase authorization to $1.5 billion on February 16, 2024. In 2024, we repurchased $400 million of shares.Program"). As of December 31, 2024,2025, we have repurchased, in aggregate, $5.9 billion of our outstanding common stock, at an average price of $95.01 per share, excluding commissions and related fees, and have a remaining repurchase authorization of $1.1$775 billion,million, which expires on December 31, 2026. In 2025, we repurchased $325 million of our outstanding common stock.

For further information related to our commonRepurchase stock share repurchase programProgram and our quarterly cash dividends, see Item 5, "Market for the Company's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities," included in this Report, "— Liquidity and Capital Resources — Capitalization" below and Note 11,10, "Capital Stock, Accumulated Other Comprehensive Loss and Equity," to the consolidated financial statements included in this Report.

In 2025 and 2024, we recognized net tax benefits of $34 million and $25 millionmillion, respectively, related to restructuring charges, the release of tax reserves and audit settlements at foreign subsidiaries, the establishment of a valuation allowance on deferred tax assets of a foreign subsidiary and various other items.

For further information regarding these items, see Note 2, "Summary of Significant Accounting Policies," Note 3, "Acquisition,Restructuring," Note 4,5, "Restructuring,Debt," Note 7, "Leases," Note 8, "Income Taxes," Note 9,8, Pension and Other Postretirement Benefit Plans," Note 13,12, "Legal and Other Contingencies," and Note 15,14, "Financial Instruments," to the consolidated financial statements included in this Report. This section includes forward-looking statements that are subject to risks and uncertainties. For further information regarding these and other factors that have had, or may have in the future, a significant impact on our business, financial condition or results of operations, see Part I — Item 1A, "Risk Factors," included in this Report and "— Forward-Looking Statements" below.

Net sales for the year ended December 31, 2024 were $23.3 billion, as compared to $23.5 billion forin theboth year2025 endedand December 31, 2023.2024. Lower production volumes on Lear platforms in Europe/Africa, North America, Europe and Africa,America and Asia negatively(including impactedthe JLR production disruption) and the winddown and divestiture of certain businesses reduced net sales by $1.1$923 billion.million Thisand decrease$302 wasmillion, respectively. These decreases were partially offset by new business in everyAsia region,and the impact of foreign exchange rate fluctuations, which increased net sales by $0.9$417 billion.million and $223 million, respectively. Commercial recoveries were partially offset by the impact of selling price reductions and foreign exchange rate fluctuations.reductions.

Gross profit and gross margin were $1.5 billion and 6.5% of net sales in 2025, as compared to $1.6 billion and 7.0% of net sales in 2024, as compared to $1.7 billion and 7.3% of net sales in 2023.2024. Lower production volumes on Lear platforms,platforms (including the JLR production disruption), net of new business, reduced gross profit by $106 million. Higher restructuring costs and impairment charges related to Fisker also reduced gross profit by $23$191 million. The impact of favorable operating performance, including the benefit of restructuring actions, was partiallylargely offset by selling price reductionsreductions, higher restructuring costs, and foreignthe exchangewinddown rateand fluctuations.divestiture of certain businesses. These factors had a corresponding impact on gross margin. Although customer recoveries largely offset the impact of tariff costs on gross profit, gross margin was negatively impacted by the dilutive effect of tariff recoveries, which increased net sales without a corresponding increase in gross profit.

Selling, general and administrative expenses, including engineering and development expenses, were $708 million for the year ended December 31, 2025, as compared to $703 million for the year ended December 31, 2024, as compared to $715 million for the year ended December 31, 2023, primarily reflecting lower compensation-related expenses.2024. As a percentage of net sales, selling, general and administrative expenses were 3.0% in 2024both 2025 and 2023.2024.

Amortization of intangible assets was $20 million in 2025, as compared to $49 million in 2024, as compared to $63 million in 2023, as certain of our intangible assets became fully amortized in 2024. Amortization of intangible assets also includes an impairment charge of $2 million in 2023.

Other expense, net, which includes non-income related taxes, foreign exchange gains and losses, gains and losses related to certain derivative instruments and hedging activities, gains and losses on certain disposals of assets, the non-service cost components of net periodic benefit cost and other miscellaneous income and expense, was $49$51 million in 2024,2025, as compared to $55$49 million in 2023.2024. In 2024,2025, we recognized foreign exchange losses of $40 million, including $10 million related to the hyper-inflationary environment and significant currency devaluation in Argentina, a non-cash loss of $24$3 million onrelated to the pending disposal of a non-core business,business and a non-cash settlement loss of $7$3 million related to ourthe pensionimpairment lump-sumof payoutan andaffiliate. In 2024, we recognized foreign exchange losses of $21 million, including $16 million related to the hyper-inflationary environment and significant currency devaluation in Argentina.Argentina, a loss of $24 million related to the disposal of a non-core business and a settlement loss of $7 million related to a pension lump-sum payout. In 2024, we also recognized a gain of $17 million related to sales of fixed assets. In 2023, we recognized foreign exchange losses of $53 million, including $31 million related to the hyper-inflationary environment and significant currency devaluation in Argentina, and losses of $7 million related to impairments of affiliates. In 2023, we also recognized a gain of $17 million related to the sales of fixed assets and a gain of $4 million related to insurance recoveries.

In 20242025 and 2023,2024, the provision for income taxes was primarily impacted by the level and mix of earnings among tax jurisdictions. In 2025 and 2024, we recognized net tax benefits of $34 million and $25 millionmillion, respectively, related to restructuring charges, the release of tax reserves and audit settlements at foreign subsidiaries, the establishment of a valuation allowance on deferred tax assets of a foreign subsidiary and various other items. In 2023, we recognized net tax benefits of $35 million related to restructuring charges, the release of valuation allowances on deferred tax assets of foreign subsidiaries, the release of tax reserves at several foreign subsidiaries and various other items.

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

Seating net sales were $17.3 billion for the year ended December 31, 2025, as compared to $17.2 billion for the year ended December 31, 2024, asan comparedincrease toof $17.5$61 billionmillion. forNew business and the year ended December 31, 2023, a decreaseimpact of $327foreign exchange rate fluctuations increased net sales by $274 million orand 2%.$157 Lowermillion, respectively. These increases were offset by lower production volumes on Lear platforms (including the JLR production disruption) and the divestiture of certain businesses, which negatively impacted net sales by $922$553 million.million Thisand decrease$106 wasmillion, offset by new business, which increased net sales by $544 million.respectively. Commercial recoveries were partially offset by the impact of selling price reductions and foreign exchange rate fluctuations.reductions.

Segment earnings, including restructuring costs, and the related margin on net sales were $1.0$949 billionmillion and 5.5% in 2025, as compared to $989 million and 5.7% in 2024, as compared to $1.1 billion and 6.1% in 2023.2024. Lower production volumes on Lear platforms,platforms (including the JLR production disruption), net of new business, reduced segment earnings by $114$127 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, was partially offset by selling price reductions and foreignhigher exchangerestructuring rate fluctuations.costs.

Segment earnings, including restructuring costs, and the related margin on net sales were $186 million and 3.1% in 2025, as compared to $247 million and 4.1% in 2024,2024. as compared to $229 million and 3.9% in 2023. New business, net of lowerLower production volumes on Lear platforms,platforms increased(including the JLR production disruption), net of new business, reduced segment earnings by $8$64 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, was largely offset by selling price reductionsreductions, higher restructuring costs, and impairmentthe chargeswinddown relatedand todivestiture Fisker.of certain businesses.

Lear is built on a strong foundation and strong culture of innovation, operational excellence, and engineering and program management capabilities. We use our product and process design and technological expertise, as well as our global reach and competitive manufacturing footprint, to achieve our financial goals and objectives. These financial goals and objectives include continuing to deliver profitable growth while balancing risks and returns, investing in product and process innovations to drive business growth and profitability, maintaining a strong balance sheet with investment grade credit metrics, and generating strong cash flow and returning excess cash to shareholders. Further, we have aligned our strategy with key trends affecting our business. At Lear, we are Making every drive betterTM by providing technology for safer, smarter and more comfortable journeys, while adhering to our values — Be Inclusive. Be Inventive. Get Results the Right Way.

We serve all of the world's major automotive manufacturers through both our Seating and E-Systems businesses, and we have automotive content on more than 500 vehicle nameplates worldwide.worldwide as of December 31, 2025. It is common for us to have both seating and electrical and/or electronic content on the same vehicle platform.

IDEA by LearTM - Innovative. Digital. Engineered. Automated. - reflects our commitment to continue to strengthen our competitive position in both of our business segments and to enhance the efficiency of our administrative functions. IDEA by LearTM supports our strategy to drive growth and improve profitability through the development of innovative products and the utilization of advanced technologies and process automation that increase efficiency and extend our leadership position in operational excellence. We are leveraging our internal capabilities through strategic partnerships (e.g., Palantir Technologies, Inc.) and acquisitions to rapidly develop and deploy automation and AI solutions. Our strategic acquisitions of ASI Automation, InTouch Automation, StoneShield Engineering, Thagora Technology SRL and WIP Industrial Automation are further enhancing our automation system integration expertise. Our newadvanced facilitymanufacturing integration center in Rochester Hills, Michigan isshowcases anour industryindustry-leading firstcapabilities site,in capableautomation ofand digital tools, including fully automated manufacturing of ComfortFlex by LearTM andLearTM, ComfortMax Seat by LearTM seatingand systems.FlexAir® assembly lines, as well as automated end-of-line testing, sewing and wire taping capabilities. These strategic initiatives further advance our leadership in automotive technology and enable greater efficiency, superior quality and faster execution.

Since 2020, the global economy, as well as the automotive industry, have been influenced directly and indirectly by macroeconomic events resulting in unfavorable conditions, including the imposition of or increases in tariffs, shortages of semiconductor chips and other components, elevated inflation levels on commodities and labor, higher interest rates, and laborrates and energy shortages in certain markets. Certain of these factors, among others, continue to impact consumer demand. Our strategy to mitigate these impacts encompasses our comprehensive cost management process, including cost technology optimization, actions to further align our manufacturing capacity to the current industry production environment and investments in automation and other advanced manufacturing technologies, as well as commercial recovery mechanisms. This willis designed to allow us to enhance operational efficiencies, improve the utilization of existing facilities and equipment to reduce future expenditures, and streamline administrative functions.

Due to the interconnectedness of the global economy, policy changes in one area of the world can have an immediate and material impact on markets around the world. Since his inauguration in January 2025, U.S. President Donald J. Trump has announced various tariffs that impact industries around the world, including the automotive industry. As of the date of this Report, many of the tariffs announced, implemented or threatened by the current U.S. administration apply to (a) the countries in which we do business or from which we purchase, either directly or indirectly, materials or components, including Mexico, Canada and China, and (b) the materials or components that we purchase, either directly or indirectly, or produce, including steel, aluminum and automobile parts, among others, and therefore could adversely impact our business by increasing our operating costs, requiring us to incur significant costs to transition to alternative suppliers if our mitigation efforts are unsuccessful, or negatively impacting our customers' production. In addition to tariffs, the U.S. and foreign governments have implemented sanctions, export controls and other trade restrictions that impact industries around the world, including the automotive industry.

In addition to tariffstariffs, induring the Unitedmandatory Statesjoint andreview otheron countries,the six-year anniversary of the United States-Mexico-Canada Agreement ("USMCA") ison subjectJuly 1, 2026, the United States declined to trilateralextend reviewthe andUSMCA renewalfor another 16-year term in 2026.its Therecurrent canform. beThis decision triggered rolling annual reviews that could lead to the agreement's expiration in 2036 if extensions are not ultimately agreed upon. While the USMCA currently remains in force, there are no assurances that the USMCA will continue to be renewed or, if renewed, any newly negotiated terms in the USMCA will not adversely affect our business. Also, Chinathe strain in U.S.-China relations presents unique risks to U.S. automotive manufacturers due to the strain in U.S.-China relations and the level of integration with key components in our global supply chain. It remains unclear what additional actions the current U.S. administration may take with respect to trade issues involving China and other countries.

Further, the U.S. and other governments could impose additional sanctions, export controls or other trade restrictions that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include affiliates (e.g., China has imposed tariffs and taken other retaliatory actions). The current trade environment could impact the status of other trade agreements between the United States and countries other than Mexico, Canada andor Mexico.China.

In addition to the above, the ongoing conflictwar in Iran and geopolitical tensions in the region could lead to significant disruption of global energy supplies and increases in global energy prices, adversely affect global supply chains, and heighten inflationary pressures on our costs and supply chain. We are continuing to evaluate the evolving macroeconomic environment; however, at this time, these factors have not had a material impact on our operations, our financial condition or our operating results. Any of the above factors could impact our supply chain, as well as our operations, and adversely affect our financial condition and operating results.

Although industry production returned to pre-pandemic levels in 2023, industry production in 2025 remained approximately 2% below 2017 peak levels, and 2025 industry production levels in North America and Europe, our two largest markets, remained approximately 11% and 24%, respectively, below prior peak levels. Industry production in 2026 is expected to decrease approximately 2% as compared to 2025 (based on AprilJuly 2026 S&PMobility Global Mobility projections). On a Lear sales-weighted basis(1), industry production in 2026 is expected to decrease approximately 2% as compared to 2025.

Global automotive industry production volumes in certain key regions in the first threesix months of 2026, as compared to the first threesix months of 2025, are shown below (in thousands of units):

(1) Production data based on S&PMobility Global Mobility.Global.

(2) Production data for 2025 has been updated from our firstsecond quarter 2025 Quarterly Report on Form 10-Q to reflect actual production levels.

Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, labor shortages, fuel prices, regulatory requirements, government initiatives and incentives, trade agreements, tariffs and other non-tariff trade barriers (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries), the availability and cost of raw materials and critical components, logistics issues, cybersecurity incidents, and the availability and cost of credit, as well as vehicle affordability and consumer preferences regarding vehicle powertrains (including preferences regarding electric and hybrid vehicles), size, configuration and features, among other factors. The impact of potential tariffs on our business and financial condition, if any, is subject to a number of factors that are not yet known or are subject to change, including the effective date and duration of such tariffs, the scope and nature of any tariffs, the amount of any tariffs, any countermeasures that the target countries may take in response to such tariffs. In light of these uncertainties, we can provide no assurances that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will continue to be successful.us. Our sales and production may be further affected by new entrants to the industry, as well as various automakers and suppliers entering or expanding in certain regions, and the restructuring actions, including facility closures, of our customers and suppliers. Our operating results are also significantly impacted by the overall commercial success of the vehicle platforms for which we supply particular products, as well as the profitability of the products that we supply for these platforms, which is determined, in part, by the level of vertical integration. The loss of business with respect to any vehicle model for which we are a significant supplier, or a decrease in the production levels of any such models, could adversely affect our operating results. In addition, larger cars and light trucks, as well as vehicle platforms that offer more features and functionality, such as luxury, sport utility and crossover vehicles, typically have more content and, therefore, tend to have a more significant impact on our operating results.

Our percentage of consolidated net sales by region in the first threesix months of 2026 and 2025 is shown below:

The automotive industry, and our business, continue to be shaped by the broad trend of electrification. The adoption of electrified vehicles has been slower than anticipated, particularly in the United States. Demand for, and regulatory developments related to, improved energy efficiency and sustainability (e.g., government mandates related to fuel economy and carbon emissions) have also had a significant impact on this trend.

Our material cost as a percentage of net sales was 62.8%63.4% in the first threesix months of 2026, as compared to 63.5%63.7% in the first threesix months of 2025. Raw material, energy, commodity and product component costs can be volatile, reflecting, among other things, changes in supply and demand, logistics issues, global trade and tariff policies (including recent U.S. tariffs imposed or threatened to be imposed on Mexico, Canada and China, as well as other countries and any retaliatory actions taken by such countries),policies, and geopolitical issues. We have commodity price risk with respect to purchases of certain raw materials, including steel, copper, diesel fuel, chemicals, resins and leather. Our primary commodity cost exposures relate to steel, copper and leather. Our exposure to changes in steel prices is primarily indirect, through purchased components, and a significant portion of our copper, leather and direct steel purchases are subject to price index agreements with our customers and suppliers. We have developed and implemented additional strategies to mitigate the impact of any such cost increases, including the selective in-sourcing of components, the continued consolidation of our supply base, longer-term purchase commitments, commercial recovery mechanisms and the selective expansion of low-cost country sourcing and engineering, as well as value engineering and product benchmarking. Certain of these strategies may limit our opportunities in a declining commodity price environment. In the current environment of elevated raw material, energy, commodity and product component costs, these strategies, together with commercial negotiations with our customers and suppliers and improved manufacturing productivity through automation and other advanced technologies, have more than offset the adverse impact. In addition, the availability of raw materials, energy, commodities and product components fluctuates from time to time due to factors outside of our control. If these costs increase further or availability is restricted, it could have an adverse impact on our operating results in the foreseeable future. See "— Forward-Looking Statements" below and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025.

In the first threesix months of 2026, we incurred pretax restructuring costs of $42 million and related manufacturing inefficiency and other charges of approximately $1 million, as compared to pretax restructuring costs of $84$69 million and related manufacturing inefficiency and other charges of approximately $4 million, as compared to pretax restructuring costs of $118 million and related manufacturing inefficiency and other charges of approximately $2 million in the first threesix months of 2025. None of the individual restructuring actions initiated in the first threesix months of 2026 were material. Further, there have been no changes in previously initiated restructuring actions that have resulted (or will result) in a material change to our restructuring costs.

Our restructuring actions include plant closures and workforce reductions and are initiated to maintain our competitive footprint or are in response to customer initiatives or changes in global and regional automotive markets. Our restructuring actions are designed to maintain or improve our operating results and profitability throughout the automotive industry cycles. Restructuring actions are generally funded within twelve months of initiation and are funded by cash flows from operating activities and existing cash balances. We expect to incur approximately $45$36 million of additional restructuring costs related to activities initiated as of AprilJuly 4, 2026, all of which are expected to be incurred in the next twelve months. We plan to implement additional restructuring actions in order to align our manufacturing capacity and other costs with prevailing regional automotive production levels. Such future restructuring actions are dependent on market conditions, customer actions and other factors.

Since the first quarter of 2011, our Board of Directors (the "Board") has authorized $6.7 billion in share repurchases under our common stock share repurchase program (the "Repurchase Program"). As of AprilJuly 4, 2026, we have repurchased, in aggregate, $6.0$6.1 billion of our outstanding common stock, at an average price of $95.25$95.72 per share, excluding commissions and related fees, and have a remaining repurchase authorization of $700$600 million, which expires on December 31, 2026. In the first threesix months of 2026, we repurchased $75$175 million of our outstanding common stock.

Our Board declared a quarterly cash dividend of $0.77 per share of common stock in the first quarterand second quarters of 2026.

In the three months ended April 4, 2026 and March 29, 2025, weWe recognized net tax benefits of $17$10 million and $9$27 million, respectively, in the three and six months ended July 4, 2026, and $16 million and $24 million, respectively, in the three and six months ended June 28, 2025, related to the release of tax reserves at foreign subsidiaries, restructuring charges and various other items.

Our results for the three and six months ended AprilJuly 4, 2026 and MarchJune 29,28, 2025, reflect the following items (in millions):

Three Months Ended AprilJuly 4, 2026 vs. Three Months Ended MarchJune 29,28, 2025

Net sales in the firstsecond quarter of 2026 were $5.8$6.2 billion, as compared to $5.6$6.0 billion in the firstsecond quarter of 2025, an increase of $263$179 million or 5%.3%. The impact of foreign exchange rate fluctuations and highernew production volumes on Lear platformsbusiness in North America andAsia, Europe/Africa and South America increased net sales by $274$106 million and $250$94 million, respectively. These increases were partially offset by thelower reversalproduction ofvolumes certainon 2025Lear tariffplatforms in Asia and North America, which reduced net sales by $171 million. Commercial recoveries andwere partially offset by the impact of selling price reductions.

Cost of sales was $5.4$5.7 billion in the firstsecond quarter of 2026, as compared to $5.2$5.6 billion in the firstsecond quarter of 2025. The impact of foreign exchange rate fluctuations and highernew production volumes on Lear platformsbusiness increased costs of sales. These increases were partially offset by thelower reversalproduction ofvolumes certainon 2025Lear tariff costs,platforms, which reduced cost of sales.

Selling, general and administrative expenses, including engineering and development expenses, were $190$198 million in the firstsecond quarter of 2026, as compared to $172$186 million in the firstsecond quarter of 2025. As a percentage of net sales, selling, general and administrative expenses were 3.3%3.2% in the firstsecond quarter of 2026,2026 as compared toand 3.1% in the firstsecond quarter of 2025.

Amortization of intangible assets was $5 million in the firstsecond quarters of 2026 and 2025.

EquityInterest inexpense, net income of affiliates was $14$24 million in the firstsecond quarter of 2026, as compared to $12$25 million in the firstsecond quarter of 2025.

NetEquity in net income attributableof to Learaffiliates was $172$19 million, or $3.34 per diluted share,million in the firstsecond quarter of 2026, as compared to $81$16 million, or $1.49 per diluted share,million in the firstsecond quarter of 2025. Net income and diluted net income per share increased for the reasons described above.

Seating net sales were $4.4$4.6 billion in the firstsecond quarter of 2026, as compared to $4.2$4.5 billion in the firstsecond quarter of 2025, an increase of $253$150 million or 6%.3%. TheNew business and the impact of foreign exchange rate fluctuations, higher production volumes on Lear platforms and new businessfluctuations increased net sales by $194 million, $128$107 million and $59$77 million, respectively. These increases were partially offset by thelower reversalproduction ofvolumes certainon 2025Lear tariffplatforms, which reduced net sales by $83 million. Commercial recoveries andwere partially offset by the impact of selling price reductions.

Segment earnings, including restructuring costs, and the related margin on net sales were $277$286 million and 6.3%6.2% in the firstsecond quarter of 2026, as compared to $216$285 million and 5.2%6.4% in the firstsecond quarter of 2025. Higher production volumes on Lear platforms and the impact of foreign exchange rate fluctuations increased segment earnings by $24 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, net of selling price reductions and lowerhigher restructuring costscosts, wasincreased partiallysegment earnings by $11 million. Segment earnings also benefited from the impact of foreign exchange rate fluctuations by $3 million. These increases were offset by sellinglower priceproduction reductions.volumes on Lear platforms, net of new business, which reduced segment earnings by $12 million.

E-Systems net sales in the firstsecond quarter of both 2026 and 2025 were $1.4$1.6 billion, an increase of $9$29 million or 1%.2%. The impact of foreign exchange rate fluctuations,fluctuations higherincreased net sales by $29 million. This increase was offset by lower production volumes on Lear platforms increasedand the winddown of certain businesses, which reduced net sales by $80$31 million and $61$25 million, respectively. TheseCommercial increasesrecoveries were largelypartially offset by the reversal of certain 2025 tariff recoveries and the impact of selling price reductions.

Segment earnings, including restructuring costs, and the related margin on net sales were $73$85 million and 5.2%5.4% in the firstsecond quarter of 2026, as compared to $56$55 million and 3.9%3.5% in the firstsecond quarter of 2025. Higher production volumes on Lear platforms and the impact of foreign exchange rate fluctuations increased segment earnings by $18 million. The impact of favorable operating performance, including the benefit of operational restructuring actions, and lower restructuring costscosts, net of selling price reductions, increased segment earnings by $40 million. This increase was partially offset by sellinglower priceproduction reductions.volumes on Lear platforms and the winddown of certain businesses, which reduced segment earnings by $9 million.

Segment earnings related to our other category were ($96$103) million in the firstsecond quarter of 2026, as compared to ($90$92) million in the firstsecond quarter of 2025.2025, primarily reflecting higher compensation-related costs.