For the fourth quarter of 2005, interiors and seating specialist Lear Corporation reported net sales of US$4.4bn and a loss before income taxes of $340.1m.
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Excluding impairments, restructuring and other special charges, pretax income was $83.6m. These results compare with net sales of $4.3bn and pretax income of $159.5m for the fourth quarter of 2004.
A net loss of $596.6m, or $8.88 per share, including impairments, restructuring and other special charges, for the fourth quarter of 2005 compared with net income of $123.0m, or $1.70 per share, for the fourth quarter of 2004.
The increase in net sales reflected the addition of new business globally, largely offset by lower production on high-content Lear platforms in North America. Operating performance was down, reflecting the adverse platform mix in North America, higher raw material and energy prices, as well as continuing cost pressures throughout the entire supply chain.
The pretax impairments, restructuring and other special charges consist of goodwill and fixed asset impairment charges of $351.3m related to Lear’s interior segment; costs related to restructuring actions of $42.6m; and a loss related to the capital restructuring of two minority-owned joint ventures of $29.8m. In total, these items amounted to $423.7m before taxes.
In addition, during the fourth quarter of 2005, Lear recorded a valuation allowance with respect to its net US deferred tax assets. As a result, a $298.2m tax charge was recognised.
For full year 2005, Lear reported net sales of $17.1bn and a loss before income taxes of $1,181.2m.
Excluding impairments, restructuring and other special charges, pretax income was $102.6m. These results compare with net sales of $17.0bn and pretax income of $550.2m for the full year 2004.
A net loss of $1,375.5m, or $20.48 per share, including impairments, restructuring and other special charges, for the full year 2005 compared with net income of $422.2m, or $5.77 per share, for full year 2004.
The pretax impairments, restructuring and other special charges consist of goodwill and fixed asset impairment charges of $1,095.1m related to Lear’s interior segment; costs related to restructuring actions of $102.8m; litigation charges of $39.2m; and losses resulting from the sale of one and the capital restructuring of two other joint ventures of $46.7m. In total, these items amounted to $1,283.8m before taxes.
In addition, in 2005 Lear had a one-time tax benefit of $17.8m in the first quarter and a tax charge of $298.2m in the fourth quarter.
