AKRON, OHIO -- Automotive interior systems supplier Lear Corp. has reported financial results for the fourth quarter and full year of 2005.

For the fourth quarter of 2005, Lear reported net sales of $4.4 billion and a loss before income taxes of $340.1 million; excluding impairments, restructuring and other special charges, pretax income was $83.6 million. These results compare with net sales of $4.3 billion and pretax income of $159.5 million for the fourth quarter of 2004. A reconciliation of pretax income excluding impairments, restructuring and other special charges to pretax loss as determined by generally accepted accounting principles is provided in the supplemental data pages.

A net loss of $596.6 million, or $8.88 per share, including impairments, restructuring and other special charges, for the fourth quarter of 2005 compares with net income of $123.0 million, or $1.70 per share, for the fourth quarter of 2004.

The company said its increase in net sales from the prior year reflects 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, according to Lear Corp.

Free cash flow was $46 million for the fourth quarter of 2005. (Net cash provided by operating activities was $332 million. A reconciliation of free cash flow to net cash provided by operating activities is provided in the supplemental data pages.) The pretax impairments, restructuring and other special charges referred to above consist of goodwill and fixed asset impairment charges of $351.3 million related to Lear's Interior segment; costs related to restructuring actions of $42.6 million; and a loss related to the capital restructuring of two minority-owned joint ventures of $29.8 million. In total, these items amounted to $423.7 million before taxes.

In addition, during the fourth quarter of 2005, Lear recorded a valuation allowance with respect to its net U.S. deferred tax assets. As a result, a $298.2 million tax charge was recognized.

2005 Full Year Results

For the full year 2005, Lear reported net sales of $17.1 billion and a loss before income taxes of $1,181.2 million; excluding impairments, restructuring and other special charges, pretax income was $102.6 million. These results compare with net sales of $17 billion and pretax income of $550.2 million for the full year 2004. A reconciliation of pretax income excluding impairments, restructuring and other special charges to pretax loss as determined by generally accepted accounting principles is provided in the supplemental data pages.

A net loss of $1,375.5 million, or $20.48 per share, including impairments, restructuring and other special charges, for the full year 2005 compares with net income of $422.2 million, or $5.77 per share, for the full year 2004.

Free cash flow in 2005 was negative $418.7 million, reflecting the one-time net negative impact of changes in customer payment terms, higher investment to support new business and restructuring actions. (Net cash provided by operating activities was $560.8 million. A reconciliation of free cash flow to net cash provided by operating activities is provided in the supplemental data pages.) The pretax impairments, restructuring and other special charges referred to above consist of goodwill and fixed asset impairment charges of $1,095.1 million related to Lear's Interior segment; costs related to restructuring actions of $102.8 million; litigation charges of $39.2 million; and losses resulting from the sale of one and the capital restructuring of two other joint ventures of $46.7 million. In total, these items amounted to $1,283.8 million before taxes.

In addition, in 2005 Lear had a one-time tax benefit of $17.8 million in the first quarter and a tax charge of $298.2 million in the fourth quarter.

To learn more about Lear Corp., go to: www.lear.com .

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