Okay, we're live as we continue day two of the Barclays Industrial Select Conference, the auto track here. I'm Dan Levy. I lead U.S. autos and mobility coverage at Barclays, and very pleased to have with us Lear, a leader in heating and electrical architecture products. Pleased to have with us Jason Cardew, the company's CFO, and Erik Elie, VP in thermal comfort systems, really a critical part of the seating strategy going forward. So we're going to kick off with a series of audience response questions. Sorry, you guys don't get clickers to get to vote. For us, you guys have clickers, so you can vote. So we're going to kick it off. Maybe we can start with question one. We're just going to quickly go through these questions, and I'll pull a response. Are you overweight the stock? Do you currently own the stock? Okay, so a lot of opportunity to convert some of those no's. All right, question two, please. General bias? I think there's probably some opportunity here. General bias is mixed, okay? Hopefully, I think the broader supplier space needs a bit of an uplift. So question three, through-cycle EPS growth. And I think this is very fitting, actually, because this is a key part of your growth strategy versus the rest of the auto supplier peer set. Okay, so mixed there, although it says you have, I think, some opportunity to show that there's more growth here, which there is. Question four, excess cash, which is very topical, and we're going to touch on that a little later. I'll elicit your response later in the conversation. I think we know this is probably going to skew now to number three, share repurchases. That's what people want you to do with your cash. Ooh, very clear. All right. right. Question five, multiple? The right multiple? Again, I think there's some opportunity here. Okay, which I think is going to be in line with the part suppliers. Again, some opportunity. And then if we can just question six, the most significant investment issue here. I won't say my opinion, but I think you probably know what this is. Skew two. Okay, growth and margin, which just makes sense. So I want to just start broadly. Generally, you're hitting the autos conference circuit. This is a little different, okay? So people may not. This is a broader industrial conference. People may not be as familiar with Lear. So help us understand, what part of the Lear narrative do you really think is underappreciated? What may not be maybe as well understood by the broader industrial investor set beyond the typical? Because I think most of the auto investors know the value proposition, the opportunity, but for the broader industrial set, help frame the opportunity. Thanks, Dan. And thanks for the opportunity to participate today. I think for those that aren't familiar with Lear Corporation, we're one of the largest global Tier 1 suppliers to the automotive industry, and revenue is expected to be $24 billion this year, a little bit higher than that. Two businesses, Seating and E-Systems. Our seat business is 75% of revenue. E-Systems is the other 25%. And I think what may be underappreciated about the kind of Lear story in general is just the significant competitive advantage we've built within the seat business and the consistent track record of growth and margin performance and financial return performance, free cash flow generation performance of our seat business. The Seating business over the last four years has grown four points faster than the market, pretty consistent margin performance despite numerous headwinds from COVID and chip shortage, inflation, etc. Throughout the last 10 or 15 years, we're really the only global seat maker that has consistently invested in that business. Those investments are organic and inorganic. They're product and process. Most recently, IGB and Kongsberg gave us thermal comfort capabilities, which Eric will talk more about in a few minutes. But it went all the way back to 2013, 2014, 2015. The acquisitions of Guilford and Fabric and Eagle Ottawa really built the most vertically integrated, highest quality, best performing seat maker in the industry, and I think that's undisputed right now. So I think that's underappreciated. I think that the growth potential of E-Systems and the recent track record of growth in that business is underappreciated. We've grown that business at six points above market over the last four years. We have begun to repair the margin profile of that business. We've had six consecutive quarters of margin expansion in E-Systems over the last six quarters, year and a half, and we expect that to continue this year. In both businesses, they're relatively low capital intensity. Our CapEx, the percentage of sales, is less than 3% last year and again this year. So we generate significant free cash flow. As one of your questions there on capital deployment suggests, shareholders are looking for a buyback stock that did that last year. We do appreciate the need to return excess cash to shareholders, and we've done that consistently over the last 10-12 years since we started that share repurchase program. I think those are the key points that are sort of underappreciated in the Lear narrative. Okay. Let's talk a little bit about some of the sort of underlying industry dynamics, because I think what we're seeing in the industry, both from a cyclical and secular perspective, is some shift, right? From a cyclical perspective, we're seeing maybe a pivot from supply constraints to demand constraints, slightly different there. And then on the secular side, we're facing whatever you want to call it, an EV winter. Maybe there was a little too much euphoria the last couple of years about mega trends, broadly AV, some of the software-defined vehicle features. And clearly, we're seeing some challenges on uptake on a variety of these stuff. So from both a cyclical and especially a secular perspective, how does all of this impact your approach? How does this change the way that you run the business? Yeah, I think if you look at what we did last year in response to that kind of push out of the EV transition, lower volumes, maybe slower ramp-up of certain programs, we responded very quickly to that, both in terms of our relationship and collaboration with our customers to delay investment so that we didn't have vital capacity put in place, as well as steps that we could take internally to ensure that we were not getting too far ahead of that adoption curve on EVs. So we really cut our capital spending. At the end of last year, just looking at what we guided through the third quarter earnings call to where we ended up the year, we reduced our capital spending by $50 million. So we were very aggressive in terms of how we responded to that, and that will really benefit us this year in terms of not having this excess capacity weighing on the business. From a technical standpoint, I think that we are positioned to grow margins despite a relatively low volume increase expected globally this year. I think our guidance assumes on a Lear sales-weighted basis that the industry volumes will be flat. Despite that, we're growing 4%, and we're converting on that growth at margins that are above the segment average in both businesses. So that's going to be the near-term driver of margin expansion. In addition to that, we've had significant improvements in the performance of our E-Systems business over the last, again, over the last six quarters. And so we see that as a driver of growth in operating margins for this year. So we can continue to grow the top line through our backlog, and we can grow margins through a combination of our backlog and performance in the business. The backlog was impacted by lower electric vehicle volumes. We know a little bit this year. But our three-year backlog is roughly the same as what it was prior to the change in volumes with electric vehicles. And if you look at a non-consolidated backlog, it grew significantly from the prior year. So on an overall basis, our business has grown even faster despite that. Right. Eric, why don't we ask some questions about the seating business? I think generally, people are generally familiar with the JIT business, but I think what's interesting here is you made a couple of key acquisitions in IGB in Kongsberg that really take your level of vertical integration to a level that we've seen beyond your competitors. So help us understand, how does this approach on vertical integration, which is beyond what you've been doing in the past where you had leather and some of the fabric and foam capabilities, really going into thermal comfort, some of the massage, heating capabilities, how does this really change the way that you approach the business and help us contrast where you are now competitively versus others? Sure. Thanks, Dan. The thermal comfort business is a great business. Things like you mentioned, the products that change the temperature, heating and cooling, adjust comfort, lumbar adjustments, massage, all that business is growing at 4% above the market. So customers love these products. They can price for them the vehicles. They can put it on the sticker or in option packages. So it's a great growing business. Like you mentioned, being vertically integrated in the Seating, we've been working with these products and designing with them for 10 years now. We've been working on this. We identified Kongsberg Automotive and IGB as very key acquisitions with great technology to vertically integrate these capabilities, and we purchased them over the past couple of years. That gives us a top three market share position for all of the thermal comfort components. With our plans and integrating them into the Lear portfolio, we'll have a number one or two position within five years for all components. It's a good business that we're excited about. What really changes it for Lear and gives us our unique competitive advantage is that when it comes to comfort, the entire seat system is used to deliver the experience to the occupant of the vehicle. You can heat or provide massage, but without understanding how the cushioning system works and also the surface material and the trim cover, all those products interface together to deliver the experience that you want. What we've been working on and why we targeted Kongsberg and IGB is our strategy is to deliver full seat thermal comfort modules to our customers. When I say that, it means we combine the surface materials, the trim cover, the cushioning materials, along with the components to deliver one piece to the JIT assembly plant. Now, this thermal comfort module, which is one piece, it combines parts. So it eliminates parts because we can now duplicate functionality in common parts. We can leverage our expertise in cushioning and surface material to enhance performance, and we can significantly reduce mass. So we end up with a one-piece solution that goes to an assembly plant that has significantly reduced costs. We're able to eliminate parts, which reduces costs, also the typical value add that a higher-cost JIT assembly plant would have to deploy to put all the components together. Because we built a module, typically that's done in a lower-cost region, so that higher-cost assembly labor has been pushed to a lower-cost area. The complexity of the supply chain is greatly reduced. Most importantly, we see great performance. Because we can leverage our complete seat expertise, we see massage intensities that go up 150%. We see almost doubling the time to sensation to heat or cool the seat. We see greater airflow in the vent. Overall, we can deliver to our customers now a full seat module with much better performance, much better cost, mass savings, complexity reduction. And we are the only company in the space that has the technical and vertical integration capabilities to view the module in the context of a complete seat application. Just to double-click, maybe you could just remind us because I think you outlined some of this at your Seating product day last June. What are the cost benefits that you outlined? And I suppose the point here is that underlying increased customer uptake is you get some of the saves, and you pass some of that to the customers. That's broadly the value proposition? Yeah, that's essentially the model. The savings come in the form of a reduction in the component costs themselves, but also in the JIT labor time and JIT labor costs, shifting that labor to a lower-cost location. And we share the savings with the customers to incentivize them to use our system and retain the balance of the benefit. And that benefit is reflected in our projected improvement in profitability in that segment. That business was $600 million on a pro forma basis last year, roughly break even, a little bit less than that. We're projecting $100 million of operating income and $1 billion of revenue in 2027. Those are the numbers we released at the seating product day last year, and we're on track to meet or exceed that as we sit here today. Even looking at this year, we expect to see the first $25 million of that improvement in earnings take place this year. That's a key driver of the Seating performance overall. I think you actually may have just addressed some of the follow-up, but it sounds like the integration is going well. Maybe you could just give us a sense of the customer response on this strategy? Yeah, the integration is going very well. We've released in our seating product day, but we have a three-phase product roadmap. Phase one is our business integration, and that's right. We've integrated Kongsberg and IGB into the Lear system. We're realizing the scale there in the logistics networks and also the purchasing of the supply base. We've been able to leverage the Lear commercial network with our customers and the Kongsberg and IGB component products, and we're seeing award rates for new business that are 25% above pre-acquisition award rates for the company. So we've had a lot of success in growing the business, leveraging the Lear footprint, which is fantastic. It's also given us a chance with these products to talk about other innovations as well as part of the comfort portfolio. Two, I'd like to mention are FlexAir, which is our polyethylene alternative to a molded polyurethane cushioning material. So this product can replace molded urethane. It's environmentally a 50% improvement in carbon dioxide emissions, and that's been rolled into the thermal comfort system portfolio. We just went into production on the Hyundai Santa Fe earlier this year with that product, and there are 28 other projects in development around FlexAir, which has been a real nice part of our initial launch of these products. We've also launched a new facility for our thermal comfort systems in North Africa. So leveraging Lear's operating model there, which is helping our margins in this first phase. The second phase of our product roadmap is component modularity, and this is where we are combining two or more parts of the complete seat that I described earlier. This is really where you can start to eliminate parts, eliminate complexity, and start to leverage the performance enhancements that we want. We've got 12 different OEMs have given Lear sourcing language as part of a JIT award. And what this allows us to do is, as we're working in the JIT development with this sourcing language, we can insource or source ourselves all of the thermal comfort components and then bring thermal comfort modularity to the OEM and help them realize their cost targets and their performance benefits. So customers are very engaged and like the value proposition there. We're launching a first phase two module very late next year with a luxury European OEM, and this module combines the pneumatic massage, heating, and ventilation systems of the seat all into one piece. So we're excited to get that going too. It's great. Then finally, phase three is our full seat modularity, which I went into earlier. This combines all of the thermal comfort components along with the trim cover and, in some cases, the cushioning system. That gets shipped in one piece. We have 10 ongoing projects on different vehicles right now, and we're planning to be in production with that product in 2026, which is on track with our timeline for February. We said in June, actually. Great. Let's translate some of this into maybe some of the targets that you laid out. I think the most interesting one here is some of the market share targets. I think you laid out at the seating product day, 25% share currently in JIT, targeting 29%. Total market including components, you're targeting 32% for 2027. There's share gains. Maybe give us a sense and I think you just alluded that you're seeing some higher win rates. How this strategy is playing out in terms of the bidding and how this ultimately will get reflected in the backlog because I think the share gains are really a critical part of this growth-over-market strategy that you have in Lear. Right. Yeah, the growth-over-market in seating historically is driven by two factors. It's content growth, CPV growth, which has typically been around 1%, 1.5% a year. That's additional features going into the seats or mixed within the market in the luxury or full-size SUVs that have more content. And then market share gains is the bigger component of our growth-over-market. And so we've announced over $2 billion of conquest wins with the programs we've taken from competitors. Many of those have launched already, but we're still ramping up the most recent conquest awards. The Grand Wagoneer and Wagoneer launched last year in September. So that's ramping up. And then the BMW 5 Series and i5 in Europe and Asia, that's launching this year as well. So those are a couple of the kind of near-term market share gains or drivers of market share gains that we're seeing in seating going forward. We see thermal comfort in modularity as a key driver enabler of both the JIT market share that we've established as well as our seat component plus JIT taken together into 32% of the total seat market. And so our thought is that at some point, we're going to reach sort of a saturation point on JIT market share. So we want to also focus on growing our component businesses. Eric referred to FlexAir as just one example. The foam market today, the polyurethane foam, is a $4.5 billion market. We have less than 10% of that today. Looking at the industry shift to polyethylene that we're driving, we see an opportunity to grab a significant portion of that seat cushioning market. That's the key enabler of the overall 32% of the seat market that we're targeting, that plus modularity. So selling modules to our competitors that are sourced by our customers so it's an agnostic-to-JIT strategy that allows us to sell more components. And in certain cases, there are customers that are making their own seats. We won't talk about specific customers, but this gives us access to those customers as well because of our vertical integration capabilities. We can sell anything from seat covers to complete seat modules, which opens up a whole new growth market for us longer term. Maybe if we could just talk a bit about some of the margin dynamics. In part of your recent guidance, you talked about there's some effects and inflation, headwinds. What is your ability to offset some of these headwinds on the margin front as far as some of your initiatives, be it automation or restructuring or pricing, vertical? What are the levers you have? Yeah, I mean, the basic business equation that we have each year, you're trying to offset your customer contractual price reductions and wage inflation. And the net of that, what we've referred to as net performance. And both of our businesses are generating modest positive net performance this year. And really, what's obscuring the progress we've made in efficiencies and the gains we're making through our investments in automation and vision systems is the level of wage inflation. And I would argue that this is sort of the peak year. We had commodity inflation, and we've had, I think, global inflation generally has peaked last year. And sort of the last piece of that is that rolling into wages. So we're seeing that affect globally. And I would argue that at 78% is what we're seeing this year, which is twice the historical norm. That is the peak. Next year, we'll see that start to work its way down. It's not maybe going to go back down to 3%-4% where it's run historically, but I think it's going ahead in that direction. And so you'll start to see the full effect of all these investments we've made in automation show themselves in margin improvement once we have a more reasonable level of wage inflation offset. Of course, we're in negotiations with our customers to pass through portions of that as well. Our guidance suggests that we will either pass it through or offset it through our performance initiatives this year. Okay. Okay. Very topical, right? People seem to like share buybacks these days. There was some news on this front lately. You increased your authorization to $1.5 billion, $600 million increase. Your plan extended through the end of 2026. So maybe you could just refresh us on capital allocation. In the past, I think there's been a balance and a blend, some buybacks, but obviously some bolt-on M&A. How are you thinking about capital allocation these days, and is there an incremental focus on share buybacks? Yeah, I think we demonstrated that last year that we're shifting our emphasis to share repurchases and returning cash to shareholders through that mechanism. If we look at our historical approach to capital deployment, we focused first on investing the business organically, tucking acquisitions in organically to round out our capabilities. We're very happy with the portfolio that we have in both segments right now. After completing the acquisitions of Kongsberg and IGB, we think that largely it gives us the capabilities that we need to be the leader or continue to be the leader in seating. We do see an opportunity to do some modest tuck-in acquisitions on the automation and equipment side like we did over the last three or four years with ASI, Fagora, and InTouch. And we're starting to see the benefits of those investments impacting our business right now. So those are $15 million-$25 million acquisitions, not significant, not going to move the needle. So the predominant focus is going to be on returning cash to shareholders through share repurchases. We We bought back more than $300 million, about 4% of our market cap last year. Given our outlook for free cash flow this year, we would expect to do something similar to that or maybe a little bit more. And we had a great discussion on this topic last week in our board meeting. The board authorized the increase. And so we're absolutely in lockstep with the board in terms of their view on capital deployment as well. And there is a signaling effect with that announcement that we made the beginning part of this week that we are fully committed to returning excess cash to shareholders through share repurchases. So that's the same time. Can you just remind us on minimum cash balance target leverage and the framework generally? Maybe there's some bolt-on M&A, but generally, most of the free cash should be going toward. Yeah, I think that's fair. Our gross leverage target's 1.5x EBITDA. We're right there now. On a short-term basis, we could nudge that up a little bit, and we're going to grow into more capacity as earnings continue to grow as well. We have end of the year, I think, with $1.2 billion of cash on hand. That's an area that we're comfortable with. Sort of $1 billion-$1.2 billion cash on hand is sufficient to run the business. Let's wrap with a couple of questions on e-systems. I think the margin trajectory is a key point here. Maybe you can give us a sense. Obviously, slower EV penetration is impacting some of the pace of margin expansion. Maybe you can give us a sense that in the face of the slower EV uptake, what are the levers you have to continue driving e-systems margins higher and to offset the inflation, offset maybe some of the weaker EV uptake? Yeah. Yeah, Yeah, despite the lower EV volumes, we still have a very strong backlog in E-Systems. We have $1 billion of new business for rolling out over the next three years. Each of the last three years, we've won $1 billion of new business. And so that's going to be the single biggest catalyst over time, I think, of market expansion in E-Systems. That coupled with what we're doing on the performance side, efficiency improvements passing through inflationary increases to customers, that combination, the automation benefits that we referred to earlier in Seating also apply in these systems. Fantastic opportunities there. And we really took a step back and simplified the portfolio. We did a deep dive on the strategy three or four years ago, simplified the portfolio, started to exit some of the non-core products, and made a small acquisition in M&N Plastics to round out our capabilities in connection systems. That's helped us grow the business and improve the margin profile of the business. That capability was initially just in North America. Now we're replicating that in North Africa for the European market. That was a key catalyst of winning the Intercell Connect Board award with GM and the Ultium battery system. That's going to be a key driver of growth in E-Systems, even with the lower volumes. It's still a very attractive business for us. I think it's that combination of backlog, repositioning the portfolio, growing the connection systems, and improving efficiencies. Those four points taken together really led to the 110 basis points we improved margins by last year and the 100 basis points we're guiding to this year. So a pretty meaningful improvement in the margin profile of the business last year and then looking forward as well. Thank you. We're out of time. Jason Erickson, and the Lear team, thank you so much for joining us. Oh, thank you, Dan.