Global automotive seating and electrical systems supplier Lear Corp. has reported record results for the fourth quarter and full year 2017.

Sales in the fourth quarter increased 16 percent to $5.4 billion. Excluding the impact of foreign exchange, sales were up 11 percent. This increase reflects the addition of new business in both of the company’s product segments and the acquisition of Grupo Antolin’s seating business.

Core operating earnings in the fourth quarter were up $56 million to $441 million, or 8.2 percent of sales, primarily reflecting the increase in sales. In the Seating segment, margins and adjusted margins were 7.5 percent and 8.1 percent of sales, respectively. In the E-Systems segment, margins and adjusted margins were 13.2 percent and 14.3 percent of sales, respectively.

Earnings per share were $5.80. In the fourth quarter, Lear recognized one-time net tax benefits of $146 million, comprised of $290 million of foreign tax credit benefits from the repatriation of certain foreign earnings and $30 million of other discrete tax benefits, offset by a $131 million one-time transition tax on accumulated foreign earnings and $43 million of tax expense to reflect the new U.S. corporate tax rate of 21 percent and other tax reform changes to our deferred tax accounts. Adjusted earnings per share were up 15 percent to $4.38 per share, reflecting improved operating earnings and a reduced share count.

Sales for the full year increased 10 percent to $20.5 billion. Excluding the impact of foreign exchange, sales were up 9 percent. This increase reflects the addition of new business in both of our product segments and the acquisition of Grupo Antolin’s seating business.

“In 2017, we continued to deliver superior results, as the investments that we have made in our business are paying off,” said Matt Simoncini, Lear’s president and CEO. “We achieved record performance in all key financial metrics, and we further strengthened our product capabilities in both business segments. Today, we are in the strongest overall competitive position in our history. Our total return to shareholders last year was 35 percent. Over the past five years, we have delivered a total return to our shareholders of approximately 300 percent, almost three times the return of the S&P 500. Going forward, our unique product capabilities and industry-leading cost structure will allow Lear to continue to deliver profitable sales growth and superior value to our customers and shareholders.”

Core operating earnings for the full year were up $184 million to $1,719 million, or 8.4 percent of sales, primarily reflecting the increase in sales. In the Seating segment, margins and adjusted margins were 7.9 percent and 8.3 percent of sales, respectively. In the E-Systems segment, margins and adjusted margins were 14 percent and 14.6 percent of sales, respectively.

Earnings per share were $18.59. During the year, Lear recognized one-time net tax benefits of $215 million, comprised of $290 million of foreign tax credit benefits from the repatriation of certain foreign earnings and $99 million of other discrete tax benefits, offset by a $131 million one-time transition tax on accumulated foreign earnings and $43 million of tax expense to reflect the new U.S. corporate tax rate of 21 percent and other tax reform changes to our deferred tax accounts. Adjusted earnings per share were up 21 percent to $17, reflecting the improved operating earnings, a reduced share count and a lower effective tax rate.

For the full year of 2017, net cash provided by operating activities was $1,783 million, and free cash flow was $1,189 million.

Strategic Acquisitions

During 2017, Lear made strategic acquisitions in both of its product segments. In Seating, the company completed the acquisition and integration of Grupo Antolin’s seating business, further strengthening its market share with key European customers and expanding its seat component capabilities. In E-Systems, Lear announced the signing of a definitive agreement to acquire EXO Technologies, a developer of differentiated GPS technology providing high-accuracy positioning solutions without the need for terrestrial base-station networks to support autonomous and connected vehicle applications. The acquisition of EXO Technologies closed in early January.

Share Repurchase Program

During the fourth quarter of 2017, Lear repurchased approximately 700,000 shares of our common stock for a total of $122 million. As of the end of the fourth quarter, the company had a remaining share repurchase authorization of $546 million, which expires on Dec. 31, 2019, and reflects approximately 4 percent of our total market capitalization at current market prices.

Since initiating the share repurchase program in early 2011, Lear has repurchased 44.1 million shares of its common stock for a total of $3.5 billion at an average price of $79.73 per share. This represents a reduction of approximately 42 percent of its shares outstanding at the time that Lear began the program.

Full Year 2018 Financial Outlook

Our 2018 financial outlook is based on a global industry production assumption of 95.1 million vehicles, up 2 percent from 2017. On a regional basis, vehicle production is forecasted to be 17.4 million units in North America, up 2 percent, 23.4 million units in Europe and Africa, up 2 percent, and 26.5 million units in China, up 1 percent. Lear’s financial outlook also is based on an average exchange rate of $1.18/Euro for the year.

Sales in 2018 are expected to be in the range of $21.4 billion to $21.6 billion, and core operating earnings are expected to be in the range of $1,750 million to $1,775 million.