SOUTHFIELD, MI -- Lear Corp. has reported its financial results for the second quarter of 2006. For the second quarter, Lear posted record net sales of $4.8 billion and pretax income of $31.5 million, which included costs related to restructuring actions, impairments and other special items of $24 million. The results for the second quarter compare to year-earlier net sales of $4.4 billion and a pretax loss of $50.4 million, including costs related to restructuring actions and other special items of $79.5 million. Net loss for the second quarter was $6.4 million or 10 cents per share. This compares with a net loss of $44.4 million or 66 cents per share, for the second quarter of 2005.

Net sales were up from the prior year, primarily reflecting the addition of new business globally, offset in part by lower production on several Lear platforms in North America and Europe. Operating performance improved from the year earlier results primarily due to the increase in net sales as well as benefits from cost and operating efficiencies in our core businesses. These improvements were offset in part by higher raw material costs. Free cash flow was positive $0.8 million for the second quarter of 2006.

For the full year of 2006, Lear expects record worldwide net sales of approximately $18 billion, reflecting primarily the addition of new business globally, partially offset by unfavorable platform mix. Net sales guidance is up about $300 million from the prior guidance reflecting primarily the forecast for a stronger Euro ($1.25/Euro vs. $1.20/Euro).

Lear anticipates 2006 income before interest, other expense, income taxes, impairments, restructuring costs and other special items (core operating earnings) to be in the range of $400 to $440 million, unchanged from the prior guidance. This compares with $325 million a year ago. Restructuring costs for 2006 are estimated to be in the range of $120 to $150 million.

Interest expense is estimated to be in the range of $220 to $230 million in 2006, compared with $183 million last year. Pretax income before impairments, restructuring costs and other special items is estimated to be in the range of $120 to $160 million. This compares with $97 million last year. A reconciliation of pretax income before impairments, restructuring costs and other special items to pretax loss for 2005 as determined by generally accepted accounting principles is provided in the attached supplemental data pages. Cash taxes are estimated to be within a range of $80 to $100 million, compared with $113 million last year.

Free cash flow is expected to be in the range of positive $50 to $100 million, compared with negative $419 million a year ago. This reflects improved earnings, lower capital spending, reduced tooling and engineering costs and improved net working capital, offset in part by higher cash costs for restructuring.

Capital spending in 2006 is estimated at approximately $400 million, down from last year's peak level due primarily to lower launch activity. Depreciation and amortization are expected to be in the range of $410 to $420 million, compared with $393 million last year.

Industry production assumptions underlying Lear's financial outlook include 15.7 million units in North America, which is down slightly from a year ago, and 19 million units in Europe, roughly flat with a year ago. The financial outlook includes all existing Lear operations for the full year (including the European Interiors business, with annual net sales of about $750 million).

For more information about Lear, go to: www.lear.com .

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