Good morning, everyone, and welcome to the Lear Corporation Q4 and Full Year Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Ed Lowenfeld, Vice President of Investor Relations. Sir, please go ahead. Thanks, Jamie. Good morning, everyone. Thank you for joining us for Lear's Q4 and Full Year 2022 Earnings Call. Presenting today are Ray Scott, President and CEO, and Jason Cardew, Senior Vice President and CFO. Other members of Lear's senior management team have also joined us on the call. Following prepared remarks, we will open up the call for Q&A. You can find a copy of the presentation that accompanies these remarks at ir.lear.com. Before Ray begins, I'd like to take this opportunity to remind you that as we conduct this call, we will be making forward-looking statements to assist you in understanding Lear's expectations for the future. As detailed in our safe harbor statement on slide 2, our actual results could differ materially from these forward-looking statements due to many factors discussed in our latest 10-Q and other periodic reports. I also want to remind you that during today's presentation, we will refer to non-GAAP financial metrics. You are directed to the slides in the appendix of our presentation for the reconciliation of non-GAAP items to the most directly comparable GAAP measures. The agenda for today's call is on slide 3. First, Ray will review highlights from the year and provide a business outlook. A business update, excuse me. Jason will then review our Q4 financial results and our full year 2023 outlook. Finally, Ray will offer some concluding comments. Following the formal presentation, we'd be happy to take your questions. I'd like to invite Ray to begin. Thanks, Ed. Please turn to slide 5, which highlights key financial metrics for the Q4 and full year 2022. They're finished the year strong with our best quarterly results since the Q1 of 2021 and our fifth consecutive quarter of improved adjusted operating margins. Sales increased 10% to $5.4 billion, and core operating earnings increased 67% to $265 million. For the full year, sales were $20.9 billion, and core operating earnings were $871 million. Adjusted earnings per share increased 10% in 2022 to $8.72 per share. Operating cash flow increased 52% to over $1,1 billion in 2022, reflecting improved working capital management and higher earnings. Our cash flow performance is already beginning to benefit from the Lear Forward Plan. Slide 6 outlines key business and financial highlights from 2022, as well as a small sample of the many awards Lear received. We made progress on strengthening our product portfolio and business outlook in both business segments. In seating, the Kongsberg acquisition positions Lear as the only seating supplier with in-house capabilities in heating, ventilation, lumbar, and massage. Since the acquisition of Kongsberg, we have been granted sourcing control on programs with seven customers and have won 30 new business awards on 22 platforms. Our leadership position in seating innovation, quality, and operational excellence is being recognized by our customers, who awarded us over $700 million of conquest awards in 2022. In E-Systems, we are selected by General Motors to supply our PACE Award-winning Battery Disconnect Unit on all their full-size battery electric trucks and SUVs through 2030. We also expanded our connection systems product portfolio to add Intercell Connect Boards. We're actively pursuing additional business opportunities for both of these product lines. Sales growth in both business segments continues to exceed market growth, with five points of outperformance in 2022. Financial results improved each quarter in 2022. We expect further improvement this year. Free cash flow conversion improved to 73%. We returned almost $300 million of cash to our shareholders through our dividend and share repurchase programs. We continue to win accolades from various industry publications, including our most recent award yesterday, when Fortune Magazine once again named Lear to its most admired companies. Slide 7 highlights some of our key product launches in seating this year. In addition to the just-in-time assembly for each of these programs, we're also delivering multiple components for these launches, including thermal comfort systems, leather, fabric, structures, cut and sew, seat covers, and foam. We believe that our position as the most vertically integrated seat supplier provides a competitive advantage by improving the quality of our products and offering a better value proposition for our customers. Several conquest programs are launching this year, including the BMW 5 Series and the i5 in Europe, the Chevrolet Colorado and the GMC Canyon in North America, and a major SUV program in North America that was awarded late in 2022 and that we will be launching a new facility in 2023. Lear's best-in-class quality and craftsmanship drives our leading market position in luxury seating, and we also have won significant new business on electric vehicles. Turning to slide 8, I will highlight key upcoming product launches in E-Systems. In 2022, we had another great year of new business wins in E-Systems that will continue to drive growth over market of 6 percentage points, including about $500 million of business for electrification products, including high voltage wiring and connection systems and Battery Disconnect Units. This year, we will be launching the award-winning Battery Disconnect Unit on an additional GM BEV derivatives, including the GMC Hummer EV SUV and the Chevrolet Silverado EV. In early 2024, we will begin to produce the BDU at our new facility in Michigan. This new production facility will generate $500 million in annual electrification sales when it reaches full production. Late this year, we will be launching production on our Intercell Connect Board. Annual sales are estimated to grow to approximately $150 million by 2026. We are pursuing additional opportunities across our customer base for this new product line. The Body Control Module we are launching this year with the MINI Countryman will be the first of many launches across numerous BMW and MINI platforms. We have several other product launches for electric vehicles in North America, Europe and Asia, some of which are highlighted on the slide. On slide 9, I wanna provide an update on the four pillars of our strategy, which we initially shared with you almost two years ago. We assessed our strategic plan during the pandemic with the objective to continue to position both seating and E-Systems to achieve sustainable long-term growth in revenues. Financial returns are free cash flow generation as the industry transitions to electrification and recovers from the effects of the pandemic. We have made significant progress on each pillar of our strategy, and the actions we have taken to date will serve as a foundation of our plan to deliver long-term profitable growth. Over the past 10 years, we have made targeted acquisitions to increase our component capabilities and Seatings. These inorganic investments, coupled with investments in innovation and technology, have resulted in steadily increasing our market share in seating to 25%. Conquest wins have been a major factor driving market share gains. Since 2019, we are approaching $2 billion in conquest awards, which supports our midterm goal of achieving 28% market share. Many of these conquest wins resulted from customers asking Lear to quote business because of our strong reputation for quality, operational excellence and product execution. The recently awarded SUV program in North America that will be launching later this year is a good example. ConfigurE+ is a PACE Award-winning Lear innovation that provides a wireless powered rail system that allows for easy repositioning of the seat in the vehicle. We are launching our second ConfigurE+ program this year on a Ford program. Last month, Stellantis showed our technology in their new Ram 1500 Revolution BEV concept that debuted at the Consumer Electronics Show in Vegas. In E-Systems, we completed a detailed study to prioritize products where we can cut, we can create the most value for our customers by concentrating engineering and capital investments on fewer products. We paved the way to win major new platform awards for Lear's Battery Disconnect Unit and Intercell Connect Board. Later in the presentation, Jason is going to provide more details on how these programs will support sales growth and higher margins in E-Systems. Just last month, we learned that one of our customers in Asia had independently audited all major global seating suppliers, and that Lear's quality was rated the best, especially for luxury seating. To ensure we remain the leader in quality and operational excellence, last year we established our Lear Forward Plan, which will improve operational efficiencies across our business. Over the past two years, we have made substantial progress on our ESG goals. We developed new products such as FlexAir and ReNewKnit in seatings to support our environmental goals. We also have improved energy efficiency in our operations and established aggressive climate goals to reduce carbon emissions and increase the use of renewable energy. These efforts as well as increased communication in our sustainability report have resulted in significant improvement in our ESG ratings and multiple awards from leading industry publications. Now please turn to slide 10, which shows our 2023 to 2025 backlog of approximately $2.85 billion. As a reminder, our sales backlog includes only awarded programs, net of any lost business and programs rolling off, and excludes pursued business and net new business in our non-consolidated joint ventures. We had a tremendous year of new business wins. Our combined backlog for 2023 and 2024 increased by 22% to $2.5 billion. The 2024 backlog is a record for any single year. The seating backlog benefits from $1.2 billion in net conquest awards. Also of note is that over 75% of our seating backlog is for electric vehicles. In E-Systems, the three-year backlog consists of 63% in wiring and connection systems with the balance in electronics. More than half of E-Systems backlog is for electrification products led by Battery Disconnect Units, high voltage wiring and connection systems. Total electrification sales in E-Systems in 2022 were $565 million. We are on track to exceed our prior goal of $1.3 billion in 2025, which implies a 34% compound annual growth rate for the three-year period. Consistent with historical experience, we expect the third year of our backlog to continue to grow as there are numerous programs we are pursuing that will launch in 2025. While not shown on the slide, the 2023 to 2025 sales backlog at our non-consolidated joint ventures is an additional $380 million. I'd like to turn the call over to Jason for a financial review. Thank you, Ray. Slide 12 shows vehicle production and key exchange rates for the Q4. Global production increased 2% compared to the same period last year and was up 6% on a Lear sales weighted basis. Production volumes increased by 8% in North America and by 5% in Europe. Volumes in China were down 5%. The dollar strengthened significantly against the EUR and RMB. Slide 13 highlights Lear's growth over market. For the Q4, total growth over market was 7 percentage points, driven primarily by the impact of new business in both segments. E-Systems grew 8 points above market and Seating grew 7 points above market for the quarter. Growth over market was particularly strong in Europe. In Seating, new programs such as the BMW 7 Series and iX and the Renault Megane E-Tech, as well as higher volumes on the Nissan Qashqai and the Range Rover and Defender contributed to the growth over market. In E-Systems, strong growth over market was driven by new Volvo programs, including the XC40 and XC40 Recharge, and higher volumes on the Ford Kuga and the Land Rover Defender and Range Rover. For the full year, global growth over market of 5 percentage points was driven primarily by our strong new business backlog. Turning to slide 14, I'll highlight our financial results for the Q4 of 2022. Our sales increased 10% year-over-year to $5.4 billion. Excluding the impact of foreign exchange, commodities, and acquisitions, sales were up by 13%, reflecting the addition of new business in both of our business segments and increased production on key Lear platforms. Core operating earnings were $265 million compared to $158 million last year. The increase in earnings resulted primarily from higher production on key Lear platforms, the addition of new business, and favorable operating performance. Adjusted earnings per share improved significantly to $2.81 as compared to $1.22 a year ago. Operating cash flow generated in the quarter was $537 million, a significant increase from the $167 million generated in 2021. The increase in operating cash flow was due to an improvement in working capital and higher earnings. Slide 15 explains the variance in sales and adjusted operating margins in the Seating segment. Sales in the Q4 were $4 billion, an increase of $396 million or 11% from 2021, driven primarily by an increase in volumes on Lear platforms and our strong backlog. Excluding the impact of commodities, foreign exchange, and acquisition, sales were up 14%. Core operating earnings were $275 million, up $76 million or 38% from 2021, with adjusted operating margins of 6.8%. The improvement in margins reflected higher volumes on Lear platforms, our margin accreted backlog, and an improvement in commodity costs, partially offset by the impact of acquisitions. Strong net operating performance in the quarter, which included a $10 million benefit from the commercial settlement of a patent matter, was offset by higher spending on engineering and launch costs that support our strong 2023 new business backlog and recent conquest awards. Slide 16 explains the variance in sales and adjusted operating margins in the E-Systems segment. Sales in the Q4 were $1.3 billion, an increase of 8% from 2021. Excluding the impact of foreign exchange and commodities, sales were up 12%, driven primarily by higher volumes on Lear platforms and our strong backlog. Core operating earnings improved to $64 million or 4.8% of sales, compared to $38 million and 3% of sales in 2021. The improvement in margins reflected higher volumes on Lear platforms and our margin accreted backlog, partially offset by higher component costs net of customer recovery. The positive net performance was driven primarily by an increase in plant productivity and lower premium costs, which resulted from a modest improvement in the stability of customer production schedules. Moving to slide 17, we highlight our strong balance sheet and liquidity profile, a major competitive advantage for Lear in a rising interest rate environment. Our earliest outstanding debt maturity is in 2027. Overall, our low-cost debt structure has a weighted average life of more than 14 years. In addition, we have $3.1 billion of available liquidity. The level of unfunded pension and OPEB liabilities improved significantly over the past few years and is now only $119 million as of the end of 2022. Our focus is on growing and strengthening our core product lines to improve operating margins and cash flow generation. As we have previously stated, we are targeting to get back to an 80% cash conversion ratio. We are committed to return excess cash to our shareholders, having repurchased $100 million of stock in 2022, along with our quarterly dividend. Our current share repurchase authorization has approximately $1.2 billion remaining. Shifting to our 2023 outlook. Slide 18 provides global vehicle production volumes and currency assumptions that form the basis of our full year outlook. IHS latest production forecast assumes global production will increase 4% in 2023, and by 5% on a Lear sales weighted basis. At the midpoint of our guidance range, we assume that global production will be up 1% for the industry or by 2% on a Lear sales weighted basis. At the high end of our guidance range, our global production assumptions are generally aligned with the IHS forecast. We expect production volumes to grow by 5% in North America while remaining flat in both Europe and China. From a currency perspective, our 2023 outlook assumes average exchange rates of $1.05 per EUR and 7 RMB to the dollar. Slide 19 provides the details of our 2023 outlook. Despite modest changes in industry volumes, we are expecting improved financial results. Our revenue outlook is expected to be in the $21.2 billion to $22.2 billion range. Our core operating earnings are expected to be in the range of $875 million to $1.075 billion. At the midpoint, this would imply an increase of 12% over 2022. Adjusted net income is expected to be in the range of $510 million to $670 million. Restructuring costs are expected to decrease to approximately $100 million. Despite expected higher capital investment to support launches in our growing backlog, our free cash flow guidance at the midpoint is expected to increase by over 17% over 2022 to about $450 million. The midpoint of our outlook, free cash flow conversion would improve to 76%. Slide 20 walks our 2022 actual results to the midpoint of our 2023 outlook. Year-over-year, revenue is expected to grow by approximately $800 million and adjusted margins are expected to improve by 30 basis points, due primarily to our margin accretive backlog and a reduction in commodity costs. Engineering and launch costs are expected to increase in 2023, which reflects investment required to support significant new business that will go into production in 2023 and 2024. This includes a roughly $25 million investment to support a newly awarded SUV JIT conquest program launching late in the year. Positive net operating performance reflects the benefits from our Lear Forward Plan and other performance improvements, partially offset by elevated wage and overhead inflation, including a significant increase in hourly wage rates in Mexico. We have included walks to the midpoint of our guidance for seating and E-Systems in the appendix. Our overall guidance range is wide, reflecting the continued uncertainty around the macroeconomic outlook. At the high end of our range, which includes volumes largely aligned with IHS forecast, we would expect seating margins in the high 6% range, E-Systems margins of approximately 5% and total company margins of 4.8%. Turning to slide 21, we revisit the strategic pillars Ray previously discussed. On the next two slides, I will provide additional color on two of our strategic pillars. I'll discuss our growth plan for connection systems and electronics in E-Systems, how the Lear Forward Plan will extend our leadership in operational excellence. Slide 22 provides details on the actions we are taking to drive margin improvements in E-Systems. While there are several factors that will drive margin improvement in the medium term, including further recovery of industry volumes, I wanna highlight two key strategic areas that we have made significant progress on, which will drive a meaningful improvement in operating margins. We have been targeting high volume products in connection systems and electronics that are shared across large electric vehicle platforms. This strategy has resulted in developing new products such as Battery Disconnect Units, Intercell Connect Boards and Battery Plug Boards that customers will share across many vehicles in their product portfolios. With our acquisition of M&N in 2021, we increased our engineered components capabilities in North America. We're expanding these capabilities in Morocco to support our European business with increased vertical integration. By insourcing connection systems and engineered components on programs where we already provide wire harnesses, we'll improve our cost competitiveness and the margin profile of this business. We expect to organically increase revenues in connection systems $750 million by 2025, which will improve E-Systems margins by about 100 basis points. The second driver of margin improvement derives from our electronic strategy. We're focused on products that leverage our core capabilities and strengths in manufacturing and engineering. For example, our PACE Award-winning BDU offers industry-leading thermal management innovations that enable electric vehicles to charge faster and drive farther. With the opportunities we have identified, we are targeting a 20% market share of Lear's addressable market for our BDU business. We've also begun to wind down other parts of the electronics portfolio. We spent the last three years studying the portfolio and the market opportunities to focus our investment on products with higher risk-adjusted returns. For products such as audio and lighting, onboard chargers, inverters, cord sets, and certain other power electronics products, we will continue to support the programs that are in production, but we have ceased all new development work. This strategy allows us to reduce and redirect our engineering investments, lowering near-term spending. This combination of lower near-term investment and higher operating margins on new programs that are launching will improve E-Systems margins by an additional 125 basis points by 2025. These two strategic initiatives, which will improve margins by 225 basis points by 2025, combined with further recovery in industry volumes and stabilization of the production environment will allow us to achieve a medium-term target of 8% by 2025. Please turn to slide 23. On last quarter's earnings call, we introduced the Lear Forward Plan. The plan is focused on driving efficiencies in our plants and across our segments. Our restructuring initiatives are designed to both improve efficiency and provide more long-term flexibility in our manufacturing facilities. We are applying what we learned by co-locating certain seating and E-Systems operations in Brazil to some locations in Mexico and Morocco in order to optimize our manufacturing footprint, capacity utilization, and labor flexibility. We also have expanded our Industry 4.0 capabilities by acquiring Thagora and InTouch. These acquisitions increase our automation of surface material cutting and end-of-line quality checks in our JIT facilities, both of which will significantly reduce our manufacturing costs. To improve cash flow, we continue to focus on driving down inventory levels and improving capacity utilization to reduce capital spending. For example, in Morocco, we were able to consolidate cut-and-sew operations into fewer facilities and repurpose an idle plant to support new business and connection systems. The Lear Forward Plan is already driving results. We estimate cash flow improved by about $50 million in the Q4 due to these initiatives. In 2023, we are estimating operating and administrative cost savings of about $50 million, with incremental improvements in 2024 and 2025 as the initiatives we are taking fully ramp up. I'll turn it back to Ray for some closing thoughts. Thanks, Jason. Please turn to slide 25, which lists our key strategic priorities in 2023. We have made great progress positioning our Seating and E-Systems business for profitable growth. Integration of Kongsberg has exceeded our expectations, and we are developing efficient modular solutions that will improve performance while reducing weight and complexity. Customers are very excited about our products, and we believe our thermal comfort solutions business will support growth and margin improvement in Seating. In E-Systems, we are ramping up production of both the BDU and Intercell Connect Boards. By focusing engineering and capital spending on fewer products across these systems, we are winning larger programs with higher financial return potential. Our backlog is strong, and we have additional opportunities in the pipeline. Looking out past 2023, we expect to benefit from the continued industry volume recovery, stabilization of production, and higher Lear content as EVs continue to displace traditional ICE vehicles. Our Lear Forward Plan is already providing benefits. We have additional actions in store for 2023 to improve our operational efficiencies. We will continue to focus on generating cash to fund investments in our business and returns to shareholders. I wanna thank our employees for driving Lear's many accomplishments in 2022. I can't wait to see what we will accomplish in 2023 and beyond. Now we'd be happy to take your questions. Ladies and gentlemen, we'll now begin the question-and-answer session. To ask a question, you may press star and then one on a touch-tone telephone. If you are using a speakerphone, we do ask that you please pick up your handset before pressing the keys. To withdraw your questions, you may press star and two. Once again, that is star and then one to join the question queue. We'll pause momentarily to assemble the roster. Our first question today comes from Rod Lache from Wolfe Research. Please go ahead with your question. Good morning, everybody. Hello, Rod. Hello. I'm curious about maybe a little bit more insight into the bridge for 2023. You'd previously talked about the H2 of 2022 as being a pretty good indicator of the launch point for margins. Seating's in the mid-6s and E-Systems is in the mid-4s in the back half. When I look at slides 30 and 31, it looks like similar margins into 2023 versus the back half. Can you maybe just give us a little bit more color on why from this point, which reflects some recoveries, the improvement in 2023 would be a little bit more modest? Yeah. I think starting with the, you know, the H2 of 2022, you know, seating margins were 6.7%. That included about 300 basis points of timing benefits. For example, on the commodity recovery negotiations with weather, they typically happen later in the year and have an impact that relates to earlier in the year, as well as the patent matter that was settled. The starting point for seating, and I'll go through seating and then E-Systems, 6.4% is sort of the launching point in the H2 of the year, and then we have margins flat year-over-year from there. Now, the biggest negative driver from the H2 to the full year of 2023 is on launch and engineering costs. You know, one thing we didn't know at the investor conference we spoke at in early December was that we were going to be awarded a new Conquest program that would have a very short development cycle and we take over production at the end of 2023. There's about $25 million of launch and engineering costs in the seating business associated with that. Overall, it's about a 15 basis point impact on margins year-over-year and 10 basis points from the H2 to the full year of 2023. That's offset by, you know, modest net positive performance overall with another 10 basis points or so. Volume and mix backlog is largely neutral in seating from H2 of 2022 to the full year of 2023. In E-Systems, our H2 margins were 4.4%, so we do have a modest increase in operating margins at the midpoint of the guidance to 4.5% for 2023. That's really driven by, you know, volume, mix, and backlog are about 20 basis points. Performance is about 10 basis points. That's partially offset by higher engineering and launch costs sequentially, again, from the H2 of 2022 to the full year of 2023, about 20 basis points. I will point out that, you know, at the high end of our guidance range, you know, there's 40 basis points of additional margin opportunity in seating and 50 basis points in E-Systems if, you know, industry production more closely aligns with the IHS Markit outlook. Okay. That's helpful. Maybe you can also clarify for us. You talked about, I think on your Q3 earnings call, about $340 million of inflation that you had absorbed that maybe a half to 2/3 of it would be recovered over the next two years. Is the $25 million that you're indicating for this year kind of a sign that this is going to be a little bit more challenging, or was that always something that was going to be more lagged? I think our general view on the recovery or offset of commodity cost increases is roughly the same. I think it's roughly half over the next two to three years, is how I would characterize it today. Really, I think at this stage, you know, we kind of shift more from contractual direct recovery to more of a negotiated recovery. So you sort of have to combine our LGA, you know, price down negotiations with all of the claims that we have on our end, which include higher commodity costs, higher wage inflation, the impact of an unstable production environment. So our offset plan is a combination of recovery from the customer and continuing to generate net positive performance in both business segments. I think if you look back over the last two years, you know, just sort of step back and look at the overall math, the commodity impact net of recovery has been about 200 basis points for the company. We've offset about 100 basis points of that through performance improvements in both segments. The net effect on margins of those two categories sort of together is about 100 basis points. I think if you look at 2023, 2024, 2025, I would expect that we will have fully recovered that 100 basis points over that time period. It's a little bit slower to start, I think, in 2023, because in addition to the commodity issue that we've been dealing with and the unstable production environment, now we have sort of additional layer of wage inflation that I would characterize as, you know, well above what was historically experienced. You know, that by itself rides about an $85 million impact just looking at, you know, salary and hourly wage inflation in 2023 compared to 2022. That's the impact that we see in 2023. I think, you know, if the Fed does its job and the other central banks do their jobs, and inflation comes down a little bit, you'll see that wage inflation normalize a bit more if you look at 2024 and 2025, and that will give us a chance to let that net performance really show itself as margin accretion. You know, with all that said, we're still very confident and fully committed to margin expansion in both segments. We see 8% as a reasonable margin target in both Seating and E-Systems in that 2025 time period. We expect to take a meaningful step up from the midpoint of the guidance that we've just issued for this year to 2024. It may not be directly linear, but it's gonna be pretty close, I think, as you look out over the next three years. Okay. Thanks for that. Just to clarify that when you said, you expect to recover half of this over the next two to three years, that's a combination of internal productivity plus external recoveries, or is that just the recovery part of it? Yeah. I would say it's both. Those lines get blurred the longer time goes by here. You know, those are the raw materials and wage inflation become part of that annual basket of goods that you're negotiating with your customers, so it's a little more difficult to delineate between the two baskets. All right. Thank you. Yep. Our next question comes from Mark Delaney from Goldman Sachs. Please go ahead with your question. Yes. Good morning. Thank you very much for taking the questions. First on the backlog. The three-year forward backlog, I believe, is now $2.85 billion. I think last year it was $3.3 billion. If I heard correctly in the prepared remarks, you talked about over 20% growth in backlog over the next couple of years. Is this maybe you can just help us better understand what's going on with the three-year number and how much it's perhaps changes in overall end market assumptions. Let me start with talking about 2023. You know, the 2023 backlog that we issued last year is $1.45 billion. It's now $1 billion, it's down by $450 million. $300 million of that's in seating, $150 million of that is in E-Systems. It's really attributed to two changes in the customer's production plans. Starting with Volvo. Their original production plan for South Carolina had a different mix of vehicles than what they're ultimately going to produce. In seating, we have the EX90 SUV, electric SUV, and the Polestar 3. The ramp-up of those is a little bit later than it was when that was originally awarded. The impact on 2023 backlog is about $165 million, and the impact of the overall change in their production plan is a negative impact of about $100 million to the three-year backlog. The second issue is with GM's ramp-up of the battery electric truck in Factory Zero and the Equinox EV in Mexico. You know, the assumptions that we had used last year compared to now result in about a $150 million reduction to the seating backlog in 2023. No impact to the three-year backlog. In fact, it might be slightly positive overall for those programs. Those two things taken together, about $315 million, that's been partially offset by this new conquest award, which is gonna launch at the very tail end of the year. It's about a $50 million improvement, FX is a negative as well. In E-Systems, over that same time period or in 2023, we're down about $100 million. It's also due to the ramp-up timing on the GM battery electric truck platform. It's about a $40 million impact, to a lesser extent, there's an impact on Volvo, the Volvo production plan in North America as well. If you look out over a three-year time period, the backlog in E-Systems is $25 million higher than it was last year, and it's the second largest three-year backlog that we've ever had in E-Systems. If you look at Seating's backlog for three years at $1,000,000,008, it's higher than the 10-year average that we've had in the seat business. It does support that continued growth over market that we have demonstrated over the last 10 years in the seat business and the continued gains in market share. In addition to that, I will point to 2025 being very light given that there's lots of sourcing activity in both segments that will impact that number. We would expect to see that number considerably higher when we issue a new three-year backlog 12 months from now. Thank you for all those details. With respect to the 8% E-Systems margin target, in 2025, thank you for all the details you gave on that. Could you elaborate a bit more on how much incremental bookings may be needed in order to get there? Also what type of global production environment may be necessary in order to hit that 8% target? Thank you. As we model 2025, we're using IHS at this stage, which is, I think it's 89 million units in 2025. There's really no new business required beyond what's already been booked in E-Systems to achieve that. It's largely gonna come through the improvement plan we outlined for Connection Systems and electronics and the growth in both of those areas, combined with improvements in volume and commodity recovery and performance driven by restructuring and other investments we're making in the wire business. Thank you. You're welcome. Our next question comes from John Murphy from Bank of America. Please go ahead with your question. Good morning, guys. Hey, John. Hey, John. One real quick on the balance sheet first on slide 17, I mean, you're showing you have tons of liquidity and, you know, room to work with. I'm just curious what you think of as sort of your leverage targets, and how much room you might have to either buy back shares or get more aggressive on, you know, creative acquisitions over time? It just seems like you have a lot of room. Yeah. I would agree with that, especially as earnings continue to recover over time. Our target leverage ratio of 1.5x EBITDA, you know, I think is will give us some additional room to lever up if we found it necessary to do so. I would say in the near term, John, our focus is really on free cash flow generation, returning excess cash to shareholders through share repurchases and the dividend. There isn't anything big on the near-term horizon that we see as necessary or really attractive. If we're gonna do anything on the M&A side, I think it's gonna be more along the lines of what you've seen us do over the last couple of years, more, you know, tuck-in. I think just the, you know, the tuck-in acquisitions that, you know, we've done historically and more recently have produced great results. I think when we think about the Industry 4.0 and the acquisitions we made there to really turn our business around and the operational efficiency and really driving our costs within our facilities, exceeded our expectations. The Kongsberg acquisition, it's amazing with our customers, the type of momentum we're getting it within the thermal comfort management system. The IGB, which we still have to close that one out, is gonna only continue to help our position as the leader in vertically integrated components within seats, but more importantly around the technology of the seat as we move forward. The new contracts we've been awarded do give us the sourcing control, so we're organically what we're investing in is the ability to create those modular systems that integrate the components, a bag and a blower that just blows cold and hot air into a trim cover and foam that's very unique to Lear Corporation. Those type of investments are paying dividends. The investment within Connection Systems like we saw with Intercell Connect Boards, the electronic components that we're vertically integrating with M&N, having that busbar capability is very unique. The overmolding capabilities in our Connection Systems is really making the difference on how we can continue to drive down costs in our own product, but also the improvements within manufacturing. We like the position we're in. We like what we've been doing. It's been very successful, there really isn't anything on the horizon that I would say is a major acquisition. I think it's these smaller tuck-in acquisitions that continue to drive our strategy forward and position there for the success that we've seen. I'll tell you another thing too, the investment that we're making with this very unique, I think first ever in the market, changeover on the seat business that we awarded late last year into this year, there's a lot more opportunities we're seeing in front of us. We see investment, we're only gonna invest in products that get us good returns. We're not buying business. This is a very unique program in seating that we're awarded. We're investing in a brand new facility with the top-of-the-line capital to make sure that we're efficient. There's other opportunities that we're looking at, in Europe and in North America that are very similar in nature. Those investments obviously expand our EBIT and our EBITDA and are good investments in our wheelhouse where we're doing a nice job too. Okay. That's very helpful. Quickly, just a second question on EVs here. I mean, you know, we're getting, you know, real price action coming out of the biggest player in the market. It's, you know, people are responding in China now, in the U.S. You know, what could a surge in EV volumes in 2023 mean for you? Are you set up to benefit from that and have the capacity to handle that? Or is that something that might pass you by? I'm just curious if you think about the current, you know, environment, it seems like it could be very advantageous for the E-Systems side, but also, maybe even on the seating side as well. I think on both. I think we've talked about 67% of our new backlog was in electric vehicles and seating, so yeah, that's setting up for seating very well. I think in E-Systems equally, you know, as far as the investments. I think taking a step back when we talked about the strategy and really focusing on what we believe were core components that weren't going to be insourced or, you know, engineered by our customers, and we have a shot at scaling properly. The facilities that we're setting up, like the facility in Michigan, is designed exactly around that. We talked about on an annual basis of $500 million revenue, but we can expand that for additional capacity. The focus that we're getting very granular in our approach and being very efficient at our engineering and capital that we're spending to capitalize on the ability to scale is exactly where we're going. Yeah, as EVs accelerate, we are in a very good position both in E-Systems and in seating based on the backlog that we've seen in seating and the percentage of wins that we've gotten in the EV market. Just to be clear, in the near term, this might be happening, like, as we're speaking. Have you seen anything in schedules as far as the mix change, here in the short run, or are these pricing actions something that are still kind of on the come in releases that you might see in the coming months? Well, we are seeing customers ask for additional capacity. For example, Ford on the Mustang Mach-E, we've increased capacity in the near term to support a ramp-up in volume there. I think selectively certain customers, we are seeing an acceleration of volume potentially that may benefit later this year and into next year. Yeah. We're in those discussions right now as far as expanding our capacity with each one of those customers. That's very helpful. Thanks, guys. You're welcome. Our next question comes from James Picariello from BNP Paribas. Please go ahead with your question. Hi. Good morning, guys. Morning. Morning. Just on the year's growth over market backdrop, you know, on a core basis, if you exclude the commodities impact, you know, in addition to FX and acquisitions, you know, the midpoint is, you know, just under 5% growth over market, something like 4.7%. You know, this, you know, that compares to your weighted global LVP, of course, of, you know, +2%. Can you know, unpack what's driving that, you know, this point or so of lower outgrowth this year? Is it, you know, seating content mix? Is it the push out of certain launches in your backlog? Just, you know, how would you characterize the puts and takes? Thanks. James, the E-Systems growth over market, we would expect this year to continue at 6 points above market, consistent with what we've experienced over the last three or four years. Seating, we have grown at 6 points above market over the last four-year time period, 2019, 2020, 2021, 2022. We do see that moderating in 2023 to about 2 points of growth over market, the company growth over market would moderate to 3 points. Now, the backlog in seating is strong, and that by itself contributes 4 points of growth over market. The offset to that is our assumption around key platforms in North America in particular. We have the North America market up 5%. We have the number of our top platforms down, and on average, our top platforms in North America are down about 2%. That's the biggest factor driving that. The GM full-size pickup trucks and SUVs, for example, you know, We've assumed that that's going to be flat year-over-year. That may turn out to be a conservative assumption. That's what we've assumed coming off a really strong year last year for that platform. We've got the Audi Q5, Jeep Compass, Ford Explorer all down in a market that's up. It's really the mix of production on some of our existing platforms that's driving that. As we look out to 2024, you look again at our backlog, I'll point out that we would expect growth over market could be as much as 7 points, if you just look at the value of the backlog at a billion and a half. With seating at 6 points above market and E-Systems at 10 points of growth above market, just driven by the backlog. Again, it's our core platforms are more closely aligned with the market overall. Okay. No, that's super helpful. Just to size up the net commodities, you know, headwind impact entering 2023. Could you maybe, my apologies if I missed this, but could you just confirm, you know, what is the expectation in terms of that commodity cost recovery for 2023? Is this something where we should be thinking about the cumulative impact over the last couple of years and something that continually gets recovered? Or, you know, by the time we get to 2024, we're, you know, it's a clean slate and, you know, we really shouldn't be thinking about the bridge in that regard. Thanks. James, I did talk about that a little bit earlier, but the two-year impact in 2021 and 2022 we had previously said was $340 million. We ended up a little bit better than that at $335 million. We expect to see about $30 million of that unwind itself in 2023, largely driven by lower steel costs in North America. As we fast-forward to 2024 and 2025, you know, what I would encourage you to do is sort of look at that in conjunction with our ability to deliver margin improvement through net performance, our cost reduction programs, our commercial negotiations more broadly. I would expect to see margin growth in both segments of around 50 basis points each year in 2024 and 2025 as a result of that. It's sort of indirect commodity recovery and other performance taken together. Thank you. You're welcome. Our next question comes from David Kelley from Jefferies. Please go ahead with your question. Hey, good morning, guys. Maybe a follow-up on the earlier EV discussion. You know, with the electrification and sales ramping, and you have the CAQR out there. Can you walk us through impact on E-Systems margins today and maybe how you see that evolving as you continue to aggressively scale the business? The impact on margins is sort of embedded in those two data points that we share with the connection systems and electronics because much of the electronics growth that we outlined through 2025 is in the Battery Disconnect Units. We attributed 125 basis points margin expansion for E-Systems overall to electronics growth. Also on the connection system side, the bulk of that growth is going to come through electric vehicles, the Intercell Connect Board being the most significant growth within that, and then also the Plugboard. You know, those are the two key drivers. Then we have the benefit of volume and wire on electric vehicle platforms. We do see growth there as well. I don't have a specific basis point impact to highlight, for that, David. Okay. Got it. No, that's helpful. Yeah, appreciate the color on the E-Systems margin expansion plan. You know, specifically on the connection systems build-out, how much of that do you see yourself kind of able to do in-house today versus the need to do additional bolt-on acquisitions, whether it be in, you know, terminals or connector-type product areas? Well, you know, I think, we have great capabilities organically. You know, there's, if there's an opportunity for, like I said earlier, for a tuck-in acquisition that would continue to enhance our growth and expand our margin, it makes sense we would do that. To the Hu Lane partnership that we recently established, we've extended our ability to grow our business and grow that partnership. I think with the M&N acquisition, the over molding capabilities and the busbars, these are becoming much more sophisticated. We have in-house capabilities. The Plugboard for Volkswagen was probably one of the most sophisticated connection systems in what would be an EV space. We were awarded that program. That program continues to grow because it gets scaled across multiple platforms. Nothing has limited us from growing in that area with that we don't have in-house. It'd just be if there was an opportunity to expand quicker inorganically where it would fit, it might make sense. We have all the capabilities in-house, and we've done a nice job growing that business. We talked about the growth there. It's, it's been incredible over the last several years. The $750 million revenue target for connection systems in 2025 does not include any inorganic growth. Okay. Got it. That's super helpful. Thanks, guys. Welcome. Yep. Our next question comes from Emmanuel Rosner from Deutsche Bank. Please go ahead with your question. Oh, thank you very much, and good morning. Morning. Morning. Wanted to follow up with you on some of the growth over markets. I appreciate all the detail you gave on the backlog and even sort of the reconciliation towards the 2023 growth over market. What do you feel are now sort of the right normalized growth over market profile for both of your segments, sort of like on an ongoing basis? Then to what extent do you think mix could sort of play an ongoing, you know, headwind or tailwind, you know, for in that? I understand the 2023 dynamics, but just generally speaking, is that, you know, a big factor? Yeah, Emmanuel, I think that the mix factor or mix impact in 2023 is probably the peak negative impact we would see in Seating. If you look out to 2024 and 2025, I would expect that to moderate somewhat. I think that four points of growth over market and Seating over the long term is still the right assumption to model. As Ray alluded to earlier, you know, we are seeing more interest from customers to take over business from competitors, either midstream or in the next generation than we've ever seen before. That's coming on the heels of $2 billion, nearly $2 billion of conquest awards over the last four years. I think, you know, the Seating team has performed at a very high level. They continue to. Customers are recognizing that, the competitive position we put ourselves in through the acquisitions, as Ray mentioned again, with Kongsberg and the thermal comfort capabilities on top of everything else we've got there, certainly supports continued market share gains. You may have noticed the change in tone somewhat on the 28% market share goal. That's a midterm goal. That's not the final goal. We see more runway to grow market share beyond 28% in Seating, and that would also support that 4 points of growth over market. E-Systems, you look at the backlog over the next three years and 6 points of growth over market is probably, you know, maybe a little bit light and maybe a little bit, you know, we may end up a little bit higher than that. I think long term, that's a fair assumption to make as we continue to benefit from the shift to electrification and taking market share elsewhere, in E-Systems. Okay, great. I guess then just drilling a little bit more on the factors in 2023. I think you spoke about some of the key platforms in North America being down. You know, I think the backlog itself for 2023 seems like it was pushed out maybe on the electric vehicle, the electric trucks from GM. Can you just sort of like go over the various, you know, summarize the various headwinds to the mix this year? I think you just described it. Some of the platforms that we're expecting to be lower that are important platforms for us today, they're still high volume. You know, Ford Explorer, we're calling that down 4%. I think IHS has it up, but our guidance assumes it's down 4%. The Jeep Compass, we're assuming that that's gonna be down about 24%. You know, in Audi on the Q5, we're expecting that to be down about 20%. In a North American market that's growing at 5%, you know, that sort of weighs on the growth of the market, in seating in particular. In terms of the backlog shift in 2023, you alluded to the GM program, but there's also a change in Volvo's manufacturing plan. They had originally planned to build, you know, the XC90 in South Carolina when that program was awarded to us, and then later made the decision to shift to only the electric vehicle, so the EX90, and the Polestar 3. The combined effect of that is lower revenue both in 2023 and over the three-year time period associated with that award. Okay, that's super helpful. There's a very quick one. The engineering launch being sort of a, I guess, an earnings and margin headwind in 2023, despite what is essentially a comparable backlog, you know, versus last year. I guess, is this because of this program that's coming in on a, you know, shorter timeframe? Yeah, that is the driver. You know, that's, there's a $25 million investment in engineering and launch associated with that, and it's over a very compressed time period. That is the primary driver of the higher launch engineering and seating as we look out to next year. In addition to that, engineering in general is up a bit more, and that's tied to some other conquest awards that were received that we'll launch in the 2025, 2026 time period, in Europe, in Seating as well. Emmanuel, we'll talk more about the launch, we're working with our customer right now after the Q1 on this launch that will take place later this year, about the specifics. We've, we can't talk about it on this particular call, but hopefully after the Q1, we can give a little bit more detail and clarity on specifically what program we're talking about and where and, volume and those type of things. Understood. Thank you. Yeah. Our next question comes from Adam Jonas from Morgan Stanley. Please go ahead with your question. Hey, everybody. You had a competitor on earlier this morning who guided to a negative 1% global production. While acknowledging that chip supply broadly is getting materially better year-over-year, they did highlight that there are certain systems and chips, specific situations that do remain problematic and are leading to supply disruption. I was curious if that was consistent with your view. Could you specifically tell us what your OEM customers are struggling with right now? What type of chip or module or system is problematic to prevent significant growth on that weak comp? Thanks. It is better. There's no question about it. When we look back from where we were last year to this year, there's no question that our customers are much more sophisticated. I think, you know, what we're seeing now is the over-ordering of all kinds of chips across the board, putting tremendous pressure on supply, has been reduced. There are still issues relative to very specific chips and usage by particular products. I'm not gonna get into specifics of what chips. I do know that we're in a much better situation, but there are situations where we're finding a shortfall of supply relative to chips. I think the communication between The customer and the Tier 1 and the chip manufacturer is significantly improved. Even though the industry as a whole has improved, there are pockets where we're finding shortage of particular chips. I do know that capacity, more capacity is coming online this year. I think our customers are more optimistic about how things are gonna move from the Q1 to the Q2, and the H2 of this year should improve significantly. We are, at this stage right now in the Q1, seeing shutdowns due to shortages of chips, and they're very selective chips. I don't have the specifics of what those chips are, but we are still seeing shortages, and it's more sporadic than we saw last year. That's helpful. I was gonna ask, when did you think that would alleviate? You're suggesting H2. I didn't know if you wanted to develop that a little more based on the schedules and discussions of what you're seeing between your Tier 2s and what you're hearing from the Tier 1s is that kind of the expectation- Yeah. ...in the latter part of the year? There's capacity that comes online. I think that there's alternative designs that are coming online. There's, like I said, a much more sophisticated process now of what's required. The over-ordering in the system that kind of shut down all chips, I think has improved significantly. From the way I'm looking in, from what I'm getting feedback from OEMs and also suppliers, our chip manufacturers, is that the H2 should be better. Thank you very much. Our final question today comes from Colin Langan from Wells Fargo. Please go ahead with your question. Hey, guys. This is [audio distortion], filling in for Colin. Just on the price concessions, you guys have done a really great job at gaining market share. Don't you guys think that this kind of gives you guys more leverage when you go into negotiations with your OEM customers? Yeah. You know what? There's a, like Jason talked about, there's a basket of ways that we can negotiate all kinds of things. I will say this, that, you know, We've been at this for two and a half years with some of the commodity inflationary costs, labor, shortfalls, those things, supply things. The customer is a lot more willing to look at alternatives and ways to negotiate solutions across the board. You know, we have not been in a position where we have to buy business and we're going after business just for the sake of buying business through productivity or paying for it. I think the team's done a remarkable job of having balance between what our productivity deals are and offsetting some of the commodity increases, transportation increases, shutdowns, those type of things. It is used in a very collaborative way with our customers to help offset some of the issues we've been talking about. I think the customers have been receptive to working with us given some of the different situations that we've been able to help them out with, either through supply or through launch or through production. It continues to be a relationship game and making sure you're balancing between productivity and some of the issues that you're confronted with on a cost side. Okay, cool. No, that's helpful. You know, lastly, just on labor, I think you called out $85 million impact in 2023. I think recently in Mexico, there's a minimum wage increase of 20%. Is that baked into that $85 million number? Yes, it's one of the factors baked into that. You know, the minimum wage increase of 20% has sort of an indirect impact on us. For many of our wage groups in Mexico are well above the minimum wage, you know, it creates some compression in the wage scales, but it's not a 20% increase per se in our Mexico labor rates across the board. It's less than that. You call it like 10? Maybe 10%. I'm not gonna get into, a specific, percentage for that market. Sure. Fair. Thank you for taking my questions. You're welcome. I just, I think that's it, and probably the only one left on the phone now is the Lear team, and I just wanna, again, say thank you for your incredible accomplishments last year. It's amazing what the team has done collectively around the world. You know, we're gonna have our challenges this year, but I know this team is absolutely capable of continuing to accomplish some of the great things we did last year. I just wanna say thank you for everything that you're doing. Thanks. Ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for attending today's presentation. You may now disconnect your lines.