Good morning, everyone, and welcome to the Lear Corporation First Quarter 2025 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. I would now like to turn the conference call over to Tim Brumbaugh, Vice President, Investor Relations. Please go ahead. Thanks, Jamie. Good morning, everyone, and thank you for joining us for Lear's First Quarter 2025 earnings call. Presenting today are Ray Scott, Lear 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 the call for Q&A. You can find a copy of the presentation that accompanies these remarks at irlear.com. Before Ray begins, I'd like to take this opportunity to remind you that, as we conduct this call, we'll 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 two, our actual results could differ materially from these forward-looking statements due to many factors discussed in our latest 10-K 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 three. First, Ray will review highlights from the quarter and provide a business update. Jason will then review our first quarter results and provide an update on the factors impacting our full-year guidance. Finally, Ray will offer some concluding remarks. Following the formal presentation, we would be happy to take your questions. Now, I'd like to invite Ray to begin. Thanks, Tim. Please turn to slide five, which highlights key financial metrics for the first quarter of 2025. We delivered $5.6 billion of revenue in the first quarter. Core operating earnings were $270 million, and our total company operating margins improved to 4.9%, near our previously targeted exit run rate of 5%, despite a challenging production environment. Adjusted earnings per share was $3.12. Operating cash flow was a use of $128 million in the first quarter. Slide six summarizes key business and financial highlights from the quarter. As a reminder, our strategic priorities continue to be extending our global leadership position in Seating, expanding margins in E-Systems through our focused product portfolio, growing our operational excellence and competitive advantage through IDEA by Lear, and supporting our sustainable value creation with disciplined capital allocation. Our execution on these key priorities enabled us to improve our operating margins in both Seating and E-Systems, as well as for the total company in the quarter, despite the challenging market conditions. This improvement was driven by historic levels of positive net performance, contributing 125 basis points to Seating and 155 basis points to E-Systems margins. Efficiency improvements, particularly in E-Systems, and savings from our investments in restructuring and automation in both segments are driving durable operating performance. This was our best single quarter of net performance since the second quarter of 2021. We're extending our global leadership position in Seating, winning two new Comfort Flex programs and a new Global Seat program with key Chinese domestic automakers. For Volvo, we will provide a Comfort Flex module combining ventilation and pneumatic lumbar support. We will also supply our combined steering wheel heat and hands-on detection module for a second program with Hyundai. This award illustrates how winning and validating a module for a customer can lead to the sourcing of additional programs. The performance improvements driven by our Comfort Flex modules are gaining recognition from third parties such as Motor Trend. In a recent review of the Lucid Gravity, Motor Trend noted the massage seats for both front passengers were nothing short of exceptional, offering a deeper and more therapeutic experience than most rivals. We supply the Comfort Flex module that combines heat, ventilation, and lumbar and massage for the Lucid Gravity. In China, we won several awards with domestic Chinese automakers such as BYD, FAW, and Xiaopeng. In April, we took operating control of one of our joint ventures in China, which supplies seats on two key programs for BYD. Consolidating this joint venture is expected to add approximately $70 million to our reported revenue for 2025. In E-Systems, we continue to win new business across all our focused product lines. The awarded business, totaling more than $750 million in annual sales, was the most in any quarter in more than a decade. In wiring, we won two key awards with Ford and BMW. For Ford, we won a large award for a program with production in North America, including conquest volume, incremental to the portion we currently supply. We were awarded our third major wire harness program with BMW, launching in 2028, and building on the momentum we have with BMW. This is our first BMW wire award in China. Our teams continue to develop innovative solutions. This quarter, we were awarded a second-generation battery disconnect unit with a key customer by providing an enhanced design relative to the current generation. Our innovation continues to be recognized by third parties. Our zone control module won a PACE Award from Automotive News. Its highly configurable software increases scalability and enables flexibility in wire harness designs. I'd like to congratulate the team for this incredible honor. The first quarter results highlight our ability to execute our strategy in any macro environment. During the quarter, we repurchased $25 million worth of shares, demonstrating our confidence in our long-term outlook for the company. Slide seven provides an update on the key metrics we introduced during our last quarterly earnings call, which investors can use to track our progress on expanding margins and generating long-term revenue growth. For Seating, we still expect a quote up to $3 billion in Conquest opportunities this year, with most programs awarded in the second half. While the quote pipeline remains robust, customers had delayed sourcing on some programs into 2026, and there could be more as customers reevaluate their plans based on the recent changes to tariff policies. In E-Systems, approximately 20% of our first quarter awards were for Conquest business, including incremental content on the existing Ford Wire programs. We continue to pursue additional Conquest opportunities. Customer interest in our innovative module seat product is growing. Two additional awards for our Comfort Flex modules bring our total to 21 programs for Comfort Flex, Comfort Max Seat, and Flex Air products. Our robust pipeline of development projects will lead to further program wins. Our strong relationships with Chinese domestic automakers continue to deliver new program wins. We will supply complete seats for several programs with BYD, FAW, and Xiaopeng in China, and continue our discussions with BYD to support their global growth outside of China. The FAW Award is Conquest business, and we are actively quoting additional opportunities with both FAW and Xiaopeng, as well as other Chinese domestic customers that we expect will be sourced in the coming quarters. Our first quarter performance was driven by strong performance across the key metrics we previously outlined as enablers to improve margins in both segments. Investments in IDEA by Lear and our automation projects generated $11 million of savings in the first quarter, with benefits compounding over the year. Restructuring investments contributed $12 million of savings in the first quarter. Efficiency improvements in our operations allowed us to reduce our global hourly headcount by 3,600 in the first quarter, primarily in Mexico and Eastern Europe. Since the end of 2023, we have reduced our global hourly headcount by nearly 19,000, or 10%. Our strategic actions drove our strong net performance in the quarter. We are on pace to deliver at least 40 basis points in Seating and 80 basis points of net performance in E-Systems this year. Lastly, the 4.9% operating margin we delivered in the first quarter increases our confidence that we can continue to expand margins in both business segments over time. Turning to slide eight, the global trade landscape is shifting rapidly, and tariffs are at the forefront of these changes. I will provide an overview of our exposure and the proactive steps we are taking to mitigate the risks. Our exposure is primarily in two areas: direct exposure, where we are the importer of record into countries with tariffs on the components, and indirect exposure to the vehicle production that may be disrupted due to tariffs or softening demand. The tariff impact was minimal in the first quarter, and we are working with our customers to ensure full recovery of the costs we incurred. Our direct exposure is primarily in Mexico and Honduras. On an annual basis, we import into the U.S. from Mexico approximately $2.8 billion of components, where either Lear or suppliers provide the parts, and Lear is the importer of record. These components are primarily trim and structures in Seating and wire harnesses in E-Systems. Approximately 94% of the components imported into the U.S. from Mexico and Canada are U.S. USMCA compliant, a significant increase from approximately 77% that were fully compliant at the end of 2024, due to the work that we have done to ensure all compliant parts are certified. On an annual basis, we import approximately $625 million of components from Honduras, primarily wire harnesses in E-Systems, which are subject to the Section 232 tariffs. We already have customer commitments in place, which cover more than 90% of the Honduras exposure, and expect to complete agreements with customers for the remaining 10% in the coming days. Changes to North American production due to customer schedules or softening customer demand is our primary indirect tariff exposure. Approximately $1.8 billion of our 2024 North American sales was derived from vehicles exported to the U.S. from Mexico and Canada. Additional indirect exposure is on European vehicles exported to the U.S. Of our approximately $8 billion of sales in Europe for 2024, about $1 billion, or 13%, were on vehicles exported to the U.S. We have taken proactive steps and moved aggressively to minimize our gross exposure. Our first step was to build a team of 60 individuals from across the organization focused on measuring our exposure through our supply chain development processes to track and report our costs and execute our mitigation actions. Our continued focus on automation and investments we made in digital tools such as Foundry have enabled us to quickly develop operational capabilities to track the impact of tariffs and support our commercial recovery claims with our customers. Our message to customers has been very clear: 100% of all tariffs must be recovered. At the same time, the team has worked very aggressively to provide solutions to minimize the overall exposure for our customers. Innovative designs, engineering changes, and alternative sourcing options can reduce the overall tariff cost. As the largest U.S.-based automotive supplier, we continue to have conversations with the administration and other key elected officials to clearly explain how our supply chain has been optimized, as well as the rationale for sourcing certain labor-intensive products from Mexico and Honduras. This ultimately ensures our customers can produce and sell vehicles at competitive prices in the U.S. market and globally. The evolving trade policy environment has clearly created uncertainty for the automotive industry. We're developing multiple planning and manufacturing scenarios to quickly respond to changes in trade policy. Our investments in automation provide us with a competitive advantage to grow capabilities we currently have in the U.S., such as injection molded components, stamping, foam, Flex Air, fabrics, and the assembly of battery disconnect units in their self-connect boards. While tariffs are impacting the entire automotive industry, Lear is taking proactive approaches to reduce the direct and indirect impact of tariffs through innovative solutions. Now I'd like to turn the call over to Jason for the financial review. Thanks, Ray. Slide 10 shows vehicle production and key exchange rates for the first quarter. Global production increased 1% compared to the same period last year, slightly better than expected due to higher production in all regions, but still down 5% on a Lear sales-weighted basis, driven by lower year-over-year production in North America and Europe. Production volumes declined by 5% in North America and by 7% in Europe, while volumes in China were up 12%. U.S. dollar strengthened against both the EUR and the RMB. Slide 11 highlights Lear's growth of the market. In the first quarter, sales performed in line with global industry production, with Seating growth of the market in line and E-Systems down 1%. Excluding the impact of the wind down of discontinued product lines, E-Systems' growth of the market would have been 4%. In Europe, sales outperformed industry production by two percentage points, driven by new business with BMW and Renault in E-Systems, as well as higher volumes in several Mercedes and Land Rover programs in Seating. North America revenue growth lagged the market by two percentage points, reflecting lower volumes on Lear platforms such as the Jeep Wagoneer and Ford Explorer and Aviator in Seating and the Ford Escape in E-Systems. New Seating and E-Systems business on the Volvo EX90 and the Chevrolet Equinox EV in Seating offset a portion of the underperformance in the region. Our China business lagged industry growth estimates by five percentage points, driven by lower volumes on several BMW programs in Seating and the wind down of onboard charger business for several GLR programs in E-Systems. New business on the Xiaomi SU7 and two Leap Motor programs in Seating and the Xiaoping Mona in E-Systems offset a portion of the underperformance in China. We continue to grow our share with key Chinese automakers such as BYD and Geely, which will further improve our customer mix in China going forward. We recently took operating control of a Seating joint venture in China supporting two BYD programs, which will have a positive impact on our consolidated growth over market going forward and provide investors with a clear view of the strength of our competitive position in this key market. During the slide 12, I'll highlight our financial results for the first quarter of 2025. Our sales declined 7% year-over-year to $5.6 billion, excluding the impact of foreign exchange, commodities, acquisitions, and divestitures. Sales were down 5%, reflecting lower volumes on Lear platforms, partially offset by the addition of new business in both our business segments. Core operating earnings were $270 million compared to $280 million last year, driven by lower volumes on Lear platforms, partially offset by positive net performance and our margin accretive backlog. Adjusted earnings per share were $3.12, as compared to $3.18 a year ago, reflecting lower Adjusted Net Income, partially offset by the benefit of our share repurchase program. First quarter operating cash flow was a use of $128 million. As expected, operating cash flow was negatively impacted in the quarter by the timing of the close of this quarter as compared to last year and higher cash restructuring costs, which will further improve our cost structure going forward. Slide 13 explains the variance in sales and adjusted operating margins for the first quarter in the Seating segment. Sales for the first quarter were $4.2 billion, a decrease of $327 million, or 7%, from 2024, including the impact of foreign exchange, commodities, acquisitions, and divestitures. Sales were down 5% due to lower volumes on Lear platforms, partially offset by the addition of new business. Adjusted earnings were $280 million, down $15 million, or 5%, from 2024, with adjusted operating margins of 6.7%. Operating margins were higher compared to last year, reflecting strong net performance, partially offset by lower production on Lear platform. Slide 14 explains the variance in sales and adjusted operating margins in the E-Systems segment for the first quarter. Sales for the first quarter were $1.4 billion, a decrease of $108 million, or 7%, from 2024, including the impact of foreign exchange, commodities, acquisitions, and divestitures. Sales were down 5%, driven primarily by the wind down of discontinued product lines and lower volumes on Lear platforms, partially offset by the addition of new business. Adjusted earnings were $74 million, or 5.2% of sales, compared to $77 million and 5.1% of sales in 2024. Operating margins were higher compared to last year, reflecting strong net performance in the roll on of our margin accretive backlog, partially offset by lower production on Lear platforms and the wind down of discontinued product lines. The strong net performance in the quarter was driven by operating improvements across all regions that we expect to result in durable improvements to our margins going forward. Slide 15 provides an update on our full year outlook. While our first quarter results were solid and we have made significant progress on our operational improvement initiatives, the ongoing international trade negotiations have introduced significant uncertainty in both the broader global economy as well as the automotive industry. As Ray indicated earlier, there are two exposures that we're managing: the direct impact of tariffs and the indirect impact on production volume and mix. We remain confident that we will recover the indirect impact, the direct impact of tariffs. This has been our position from the start, and we have made significant progress in our negotiations with customers. On the other hand, the indirect impact associated with production volume and mix is not yet clear. External production forecasts have deteriorated since February, and we expect that OEMs will need time to adjust their production and mix plans to account for the recent changes in global trade policy. On the positive side, we expect the recent weakening of the U.S. dollar to have a favorable impact on our full year results, and we continue to make progress on negotiations with customers to recover the full cost of tariffs. In addition, we are making significant progress on our operating performance initiatives and remain on track for the net performance targets outlined at the beginning of the year. We are increasing our investment in restructuring to accelerate our footprint rationalization actions and reduce costs. At the same time, we are lowering our capital spending by roughly the same amount as we adjust our new capacity and other discretionary capital investments in response to the weaker industry production outlook. While as a result of the uncertainty in the industry, we are not reaffirming our 2025 full year outlook, we do remain confident we can deliver the operating performance improvements highlighted on our last earnings call. We typically speak at a public investor conference during each quarter, and we'll use those opportunities to provide updates on the business, and we'll reintroduce our full year outlook when we have increased clarity from customers on their production plans for the remainder of the year. Moving to slide 16, we highlight our balanced capital allocation strategy. We have a strong balance sheet and liquidity profile, which is a significant competitive advantage for us in today's uncertain environment. We do not have any near-term outstanding debt maturities. Our earliest bond maturity is in 2027, and our debt structure has a weighted average life of approximately 12 years. Our cost of debt is low, averaging approximately 4%. In addition, we have $2.8 billion of available liquidity. Our capital allocation priorities remain consistent. We are focused on generating strong cash flow, investing in the core business to drive profitable growth, and returning excess cash to shareholders. During the quarter, we repurchased $25 million worth of shares. Our current share repurchase authorization has approximately $1.1 billion remaining, which allows us to repurchase shares through December 31st, 2026. We are temporarily pausing share repurchase activity to ensure we maintain our strong liquidity position during this period of uncertainty. Based on recent developments, we believe this pause will be short and are planning to reinstate share repurchases as soon as visibility improves. Now I'll turn it back to Ray for some closing thoughts. Thanks, Jason. Please turn to slide 18. Our first quarter results provided another clear example of our ability to deliver strong performance in a volatile industry environment. We continue to execute on our strategic initiative to position the company for revenue growth and margin improvement. In Seating, we are winning new business in thermal comfort and expanding our presence with Chinese domestic customers. Motor Trend recognized the performance improvements we can deliver through our Comfort Flex and Comfort Max Seat module solutions. In these systems, our historic quarter of business wins, particularly in wiring and the next generation battery disconnect unit, sets us up for long-term revenue growth of our focus product portfolio. The Automotive News PACE Award for our zone control module highlights the innovation our teams are developing for our customers. Extending our leadership in operational excellence through our investments in IDEA by Lear is driving margin improvement throughout the business. We have a strong balance sheet with no near-term debt maturities that allows us flexibility in our capital allocation strategy and positions us well to navigate tariff-related industry headwinds. As we work through challenging industry conditions, we are proactively taking steps to position Lear for future success, and we're committed to keeping the investor community updated in the current dynamic environment. I couldn't be more proud to lead the Lear team, and I want to thank all our employees for their dedication and hard work, and now we'd be happy to take your questions. We will now begin the question and answer session. To ask a question, you may press star and then one on your touch-tone phones. 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 ask a question. At this time, we'll pause momentarily to assemble the roster. Our first question today comes from Joe Spak from UBS. Please go ahead with your question. Thanks. Good morning, everyone. Right. I guess this is the first question. Have you seen any meaningful changes to the production schedules yet, or are you just anticipating this? The reason I ask is it just seems interesting that the further we get into earnings season here, the more guidance withdrawals we're getting. I'm wondering if we're seeing some more breaking changes to the schedules. Yeah, I think we have seen changes announced throughout the last four or five weeks. I would not say that there has been any recent uptick in the number of announcements, but clearly, the environment remains pretty dynamic. Maybe Joe, I will just take a minute to explain our thought process on why we decided to withdraw guidance at this point. As a result of having our call a little bit later in the cycle, we have had the benefit of hearing from our customers, what they are saying on their calls. We have seen some positive developments in terms of the cost of tariffs for the industry. Certainly, this industry has faced challenges over the last five years, from COVID to the chip shortage issue and supply chain disruptions. I think this is really a very different situation. As we were thinking about how to guide in this environment, what would be helpful to investors, what we struggled with is the wide range that we would end up guiding to account for all the variability in the production outlook. There are really three variables that remain right now. First, how do the end consumers respond to price increases, a higher pricing in the market, which seems likely to happen? How do our customers react to those changes? Do they have a preference for market share, or do they try and capture some price benefit in the opportunity for their margins associated with that? Lastly, what additional trade policies are enacted by the U.S. or our trading partners as these negotiations evolve? Listening to our customers' earnings calls, you could hear the sort of tension in that decision-making framework between market share and margins that they're working through. Given that uncertainty in what their plans are, we thought that we ended up with too wide of a range to be helpful for investors. Until there's visibility, at least on those first two variables, we're not in a position to provide guidance that would be useful, I think, for investors. We have fairly decent clarity and visibility on the second quarter, but there still are changes coming. We are presenting at an investor conference in the second week of June, June 10th or 11th, and we will provide more clear guidance on the second quarter specifically at that event once we see a little bit more visibility on the items I just mentioned. Thanks for all that color. As a second question, I just want to make sure I understand, and sorry to sort of go back to tariffs here, but it seems like with the disclosure you laid out on the direct impact, actually Honduras ends up being one of the bigger factors here. Is there a way to get your customers to be the importer of record or get anointed as an approved importer record such that they could claim that 3.75% reimbursement? And then as you think about that particular country exposure and the reimbursement is expected to go down in a year, maybe away in two years, is that where you need to see most of the work done? Ray, I know you've made some comments about potentially moving some production around. Yeah, I think to the first point, Joe, yes. I think the team has done a remarkable job of presenting all options to our customers. One of those options is who is going to be the reporter of record as far as locations. That is an option we have put on, and it absolutely is something that we're considering and talking to our customers about. With respect to the ability to move parts and manufacturing, I mean, those are the things that we're looking at. It's still a very competitive location for us. Obviously, like Jason mentioned, there's still a lot of work to be done or there's still work that's going to be done on what that's going to be at the end of the day. It's really going to come down to what that reciprocal tariff or what that tariff will be on those components in Honduras will look like. Those discussions are going on with our customer. I do not know, Jason, if you want to add a little bit on that. Yeah. Our understanding, Joe, on the 3.75% exemption credit, so to speak, is that the OEMs, our customers, can indicate which of their components can be given that exemption. I think a product like wire harnesses has a fairly high likelihood of being a product that would be imported to the U.S. tariff-free, whether we are the importer of record or the customer is. I do not think that necessarily has to shift from us to our customer in order to take advantage of that new rule there. Just to go back to your first comment in regards to Honduras, yes, it is our most significant exposure. Since I'm sure this is a question that is going to come up as the call progresses, I can address that now. Overall, we see our gross tariff costs at about $200 million. About half of that is Honduras. That's because the wire harnesses are on the annex that accompanies the Section 232 auto tariffs, and they're subject to the 25% tariff. We think it's highly likely that that tariff rate is adjusted because wire harnesses really do not have a place on that annex in the same way engines, transmissions, or other highly technical parts do. I think it's kind of misplaced, and you've heard customers and others advocate for that change. As a result of that, you would then revert to the 10% tariff rate, the reciprocal tariff rate that's in place with Honduras. At a 10% rate, Honduras is still competitive with Mexico. We think ultimately that's where it ends up, but there's clearly some uncertainty on how long that process takes to get there. The other half of our tariff exposure, the other $100 million for this year, roughly half of that is on components where our customers control the sourcing with our suppliers. They have direct responsibility for that. They're having negotiations and discussions with those suppliers, and that would be passed through—whatever the outcome of that negotiation would be passed through from our customer to the supplier. What we're really focused on in terms of the direct exposure is that remaining $50 million, roughly 25% of the gross exposure is for products where we are the importer of record and we control the sourcing. We have already made tremendous progress in reducing that exposure through design changes and sourcing changes, and we will continue to reduce that. We have had very productive discussions with our customers about recovering the cost of that tariff in the interim. I think it is important to mention that we have been very clear with the customer that we expect 100% recovery, if it is directed or indirect, on the components. For the majority of our customers, they have agreed on 100% of what I will call directed, their source components. For the indirected, I feel very, very confident that we are going to get full recovery on a net position. I think the team has done a great job of commercializing what our expectation is, and we are making really good improvements on that side of it. I also think that there are alternative solutions that can work to, I think, our advantage with how we can relocate components. I mentioned some of the strong manufacturing presence we have in the United States and how we can relocate things to the United States in certain areas, around the ones I mentioned with foam and textiles and stampings and those types of components that would work really well here in the U.S. I think the team has done a really nice job. I have confidence because the conversations are going extremely well. I think we've made some very good progress. I think what the team has done with these systems on the wire harness shows the level of expectations and the results we expect across the board from all customers. Appreciate all the detail, guys. Thanks, Joe. Our next question comes from Dan Leigh from Barclays. Please go ahead with your question. Hi, good morning. Thanks for taking the question. I wanted to start with a question on the outlook. I recognize there's uncertainty, and you'll provide us with an update. Maybe we could just go back to the original outlook that you provided. Just give us a sense because it feels like you're getting most of the recoveries on the tariffs, and you say you expect 100% recoveries. What is the lower end of your outlook contemplating as far as LVP by region? Maybe you could just talk about some of the pluses and minuses outside of tariffs that we've seen versus the guidance that you provided back in February. Dan, our February guidance contemplated production down 1% globally and down 2% on a Lear-weighted basis. I think we had a billion-dollar range on revenue. There would be another 2% roughly decline there beyond that. It is called 4% down on a Lear-weighted basis. The other kind of key assumption affecting the top line would have been around the foreign exchange rates. We had the EUR at 1.04 and the RMB at 7.30. I think we are going to see some top line improvement as a result of FX. You are going to see some revenue as a result of the pass-through of tariffs. You are going to see some reduction in revenue associated with the volume reductions that are anticipated, and some of which have been announced and are taking place here in the second quarter. The North America market is probably the biggest question mark. S&P's forecast is for 14 million units, I believe, of production, and we were at 15 in the prior guidance. That is the biggest risk factor if you look at what the external prognosticators are suggesting. As we think about where the kind of puts and takes are, I think we're looking at Europe. We're looking at vehicles produced in Mexico and Canada. Then we're looking at vehicles produced in Japan and Korea that are imported into the U.S. What our customers ultimately decide to do, again, around market share versus margin preservation, is going to have a profound impact on the volumes of vehicles imported into the U.S. market and ultimately on the production of vehicles that we supply parts to. That is the big variable that is difficult to predict. In terms of the other things we can control, we talked about tariff costs and recoveries. We expect full recovery. We do not see that as a particularly large issue. In terms of our cost structure in general, we are on track to deliver the commitments we made around automation and restructuring savings and our other efficiency program improvements. I certainly do not want to lose sight of the very strong first quarter we had in both business segments. It really increased our confidence in being able to achieve the full-year guidance that we provided for net performance, which was 40 basis points in Seating and 80 basis points in margin improvement in E-Systems for net performance. We far exceeded that in the first quarter. The things that we can control remain well on track and maybe a little bit ahead of where we started the year. Great. Thank you. Maybe just a follow-up question. If you could just maybe double-click on the pieces that are driving the performance. Broadly, it feels like the tariffs just place an added pressure on both the Seating and electrical architecture wire harness businesses, which, as it was, these are tight-margin businesses to begin with. You have laid out a series of all of these strategic actions. How are you starting to see this play into maybe separating yourselves from the pack and taking share? I know you referenced that you won some awards in E-Systems. First of all, it was a great quarter. I think the E-Systems team did a remarkable job, not just when we talk about expanding our margins and operational excellence and what they did as far as performance, but the growth side. It was a really good quarter for us. I think it comes down to a couple of things. One, the performance and how they're performing with a particular OE. I do think that we can't overlook the innovation and capabilities that we've been able to deliver, both on the product side. I think equally as important is the operational side. It's interesting. We've been really strategically looking at how we can change our operational excellence and advance automation and software development, some of the things we've mentioned with how we're designing different efficiencies on the plant floor. That allows us to be extremely competitive and still get a return above our cost of capital. That's everything we're focused on. I think those elements that we've been working on for more than 10 years are really starting to show the benefits in the operations today. We did great. We really put ourselves out there as far as being able to track us to our investors and show how we are performing from a net performance perspective. The team did a great job. It also shows up in growth because we can quote business where we still get a return above our cost of capital as we are introducing new technology innovation on the plant floor. I think that is an important message because we have been talking about that for some time, and we are seeing the conviction in how we are delivering, not just from a performance standpoint, but from a growth perspective. We absolutely believe that is something that we can continue to do. It puts us in a great position today and currently as we expand our margins, but more importantly, as we are winning new business. Great. Thank you. Our next question comes from Emmanuel Rosner from Wolfe Research. Please go ahead with your question. Great. Thank you so much. I was actually hoping to follow up on the cost performance, which obviously was quite impressive in the quarter. You mentioned an accelerated investment in restructuring. Curious to what extent you could still inflect up the benefit from these actions still this year, especially in case some of these indirect tariff impacts come and the volume plays out sort of weaker. Do you have any room to offset some of that with accelerated benefits on the net performance side, basically higher than your initial guidance? Yeah, that's certainly our goal. We're looking to increase our restructuring investment this year by between $30 million and $40 million. Some of that will produce an immediate benefit to our cost structure. There will be some additional net performance that results from that investment in restructuring. We are dialing back our capital spending as well by a similar amount. Most of that relates to capacity that we do not need as a result of lower volumes and some discretionary spending. A little bit of it is also on the automation side where you have some longer payback projects that we are going to push out to next year. Emmanuel, what we really did is just kind of took a step back and looked at all of the investment opportunities that we have across both our capital expenditure program and our restructuring program and force ranked those based on payback and sort of reprioritized our investments. That led to some, again, additional investment in restructuring and a little lower investment in CapEx. The net effect of that should be positive for net performance this year. Yeah. I think that's important, Emmanuel, that during this time of uncertainty, our priorities are operational excellence. As Jason mentioned, how we're focused on capital deployment, where we're focused based on returns, how we can accelerate particular areas of our products or region or manufacturing facilities. The second priority is our balance sheet. We're very disciplined on what we're looking at, how we're spending capital, where we're spending capital, even building some assumptions around changes in volume and how we deploy capital, really getting at potentially even getting at and cutting our capital costs based on what we see relative to volumes and how we're really focused on cash. I mean, even our commercial agreements that we're putting in place are two elements. One is to get 100% recovery, but also to minimize any type of cash impact relative to how we're solving those commercial issues. The two disciplines between operation and commercial are equally weighted as far as how we're really aggressively going after that. I think the last one is the strategic options, how we're positioned. We're a U.S.-based company, a large U.S.-based company. We believe we have some strategic options that we can take advantage of. I think that's going to play out over a little time as they've got these rebates that they're going to receive and those wear out over three years, how we're going to reposition for our customers. I'll tell you one thing that comes up as we discuss all these with our customers. We learned quite a bit through COVID. We learned quite a bit through the EV collapse with volumes. We're really focused on terms and conditions. If we're going to deploy capital, what do the terms and conditions look like relative to how we're going to get returns above our cost of capital based on volume, based on deployment of capital, how we're focused? We also look at this as an opportunity to go back and really discuss the terms and conditions relative to our customers because I think we've learned quite a bit over the last five years. Those terms need to change. I mean, particularly around suppliers and making investments for our customers, not just short-term, but longer-term. We've really got at this. I'm really proud of the team. I tell you that mitigation ideas, innovation ideas, the engineering ideas, the things that they've come up with, really, I think, put us in a better position to really get at the things I mentioned as far as priorities within this company right now. Yeah. Thanks for the color. And then actually, two quick follow-ups. The first one is beyond just the impact on or risk to industry volumes. Do you see any risk from the current uncertainty on backlog, the backlog that you announced last quarter? And then specifically on the balance sheet, obviously, continued commitments in returning excess cash to shareholders. But are you pausing the buyback at all while figuring out what the outlook and free cash flow for the year looks like, or is it just continuing? Yeah. Emmanuel, I'll start with the second question first. We are pausing our share repurchases here for a short period of time until there is more visibility on the production environment. We believe that will be brief, and we hope to restart that soon once we have a better understanding of our customers' production plans for really the second half of the year. In terms of the backlog, I think it's too early to provide an update on the two-year backlog. We announced the 2025, 2026 backlog. Certainly, the award in Wire and the other awards in E-Systems in general in the quarter will help the longer-term growth rate of that business. $150 million of the $750 million of new business awards were conquest awards. Those are market share gains. Those will drive growth for the business longer term. I think once we sort of get through this wind down of products that we're exiting in E-Systems, you'll see a return to the more normalized growth rates we've enjoyed over the last five or six years in that segment. Thank you. You're welcome. Our next question comes from Colin Langan from Wells Fargo. Please go ahead with your question. Oh, great. Thanks for taking my questions. And congrats on a pretty good margin in the quarter. Just wondering, I think a couple of weeks before the quarter ended, you were talking about a low 4%. You ended at 4.9%. What came in so much better at the end of the quarter to kind of get you so much higher than what you were thinking? Yeah. There were really two things that happened. The production held up better than we had anticipated in what we were seeing at that time. Particularly in Asia, we saw a very, very strong March, much better than we had expected. In addition to that, we did see a little bit of a pull ahead of some of our commercial performance in the Seating segment in particular. There is probably 20 basis points of that net performance that we delivered in the first quarter that we had anticipated in the second quarter and beyond. Those are the two primary factors. Just generally speaking, just strong operating performance in both business segments. It does not often happen that way where you get sort of everyone performing at such a high level simultaneously. That is what we had. We had great performance in both Seating and E-Systems and really across all regions. It was just a testament to the strong finish of the quarter for the team more than anything. I appreciate the recognition too because I feel the same way. I felt really good about the first quarter. Unfortunately, like we've talked about, the indirect situation around tariffs is kind of the uncertainty that we're faced with right now as an industry. I think it gives you a good indication. Even during a very tough quarter relative to volatility around production, we can perform well. I think it's really a great job by the operation teams, both in Seating and E-Systems, and how they performed. I was really happy with the numbers. Got it. That's helpful, Colin. Just talking on performance, which I covered a couple of times on the call already. If I look at the initial full-year guide, I think it implied something like $130 million, 55 basis points. I believe you got more than half of that already in Q1. Is that what you were anticipating? I mean, I guess it sounds like from comments earlier that performance is actually coming in stronger and should we interpret that as if it was not for tariffs, you would actually be raising guidance today? Yeah. I think that certainly the first quarter came in better than we expected. That could lead to an improved number for the full year. There are still lots of moving parts that we are managing here. I think your math is right. More than half of our full-year net performance was achieved in the first quarter, what we had guided to previously. Part of that is kind of the year-over-year look at the business. The first quarter in E-Systems in particular last year was pretty weak. We had very high launch costs. We had some efficiency issues in our North America operations, which we talked about throughout last year. Those improved significantly from the first half of last year to the second half of last year. The comp gets a little harder in the second half of the year than it was for the first half, Colin. That is also a driver. I mean, would you have raised guidance if it was not for the tariff issue, or is that just too early to say? That is a theoretical question. I mean, if there was not this level of volume uncertainty, we certainly would not have been talking about lowering guidance. I will put it this way. We would have been very confident in the year. We would have been in a good position, especially coming out of that first quarter. Got it. All right. Thanks for taking my questions. You're welcome. Our next question comes from John Murphy from Bank of America. Please go ahead with your question. Good morning, guys. Just a very simple question to start. When you think about doing winding wiring harnesses in Honduras, I just wonder, Ray, if you could walk us through sort of the evolution of how that wound up being in Mexico and then got pushed down to Honduras from a labor cost perspective, but also maybe a labor availability perspective as well. Yeah. One, okay, so we've done a lot of work, even working with Washington, trying to explain wire harnesses in very similar trim covers. They're very labor-intensive, unattractive jobs that I say that, like Jason mentioned, need to get moved off The Annex. The migration was about labor arbitrage and having enough labor. We have facilities that can have anywhere from 5,000 to 6,000 employees in a facility running multiple platforms to be the most efficient for our customers that we ship to. The move from Mexico to Honduras was really driven around the continuation of the labor arbitrage. Honduras is a very good location for us. I mean, we have great quality. The absentee is very low. The job satisfaction, the work environment, everything is a really, really good location for us. It is ideal for us. As a matter of fact, we talked a little bit previously about even migrating more of our business to Honduras. Obviously, we put that on pause until we get some clarity around what is going to happen. It's been a move from what was Juárez to Central Mexico down to even further south of Mexico, now to Honduras. It has worked out extremely well for us in both locations. That's really how we've moved our wire harness business from Mexico to Honduras. Okay. Maybe just a follow-up. When you think about wiring harness and other stuff that's done outside of the U.S., what's kind of the hurdle bringing it back to the U.S.? Is it just labor cost, labor availability, and how much do you think you can automate it? I'm just trying to understand really here. I mean, it kind of gets out there in the public a little bit more widely. No, it's a good question. I think the first—yeah, no, that's a good question. I think the first roadblock would be the labor scarcity, the labor issue of attracting that type of work here in the U.S. The way I describe it, there are very attractive jobs that are very sophisticated, technical. We do just-in-time assembly of seats here in the U.S., and UAW-represented workers, great work. That type of work makes a lot of sense. I think when you look at a wire harness, it is very labor-intensive. The automation is coming. It is going to take some time. It is not quite there yet. There are some very challenging aspects of a harness, even though we have made significant improvements with automation in harnesses. It is not quite there yet. I think the roadblocks really are the labor scarcity, the workforce development that would be required to bring those types of jobs here. I think the attractiveness from a worker's perspective would be extremely low, very tough. The technology just quite isn't there yet to bring and automate a major wire. I mean, these harnesses are hundreds of pounds. They're extremely labor-intensive as you're doing the taping and the crimping and the assembly of the harness itself. Those are probably the big roadblocks that I think would be a very tough move to move to the United States. Okay. Just another question. You highlighted, and it was incredibly helpful, the tariff commentary, $1 billion of parts that are coming across the Atlantic from Europe on European-produced vehicles. Some of those might not make it here. It might be fewer. In reality, there might be market share shifts that occur in the U.S. market that offset that. Could you kind of just remind us generally what's coming across the pond there? And then also maybe your exposures here in North America because there might be a really good story to market share gains from your domestic automakers as well as a result of that. Yeah. John, just to clarify, that's $1 billion of revenue that's associated with parts we sell to customers that are for vehicles produced in Europe and imported into the U.S. So it's that part imports. Yeah. The biggest component of that is with Jaguar Land Rover, so the Range Rover, Range Rover Sport, Defender, that whole product lineup. We just saw that they announced that they're restarting shipments into the U.S. They're going to continue participating in this market. The VW Group and their luxury brands, Audi and Porsche in particular, and to a lesser extent, Mercedes and Stellantis. With Mercedes, they have also announced the move of one of their key programs, which we have the Seating for in Europe, to Tuscaloosa. We see over time that we will likely benefit from that business that is relocated from Europe into the U.S. as our customers adjust their footprint. In terms of who may benefit here in the U.S., I do not want to go too far down that path, but I think our largest platform in the U.S. market is the GM Full-Size SUV program that is produced down in Arlington, Texas. We also have the Ford Explorer. We have business with Hyundai, with BMW, with lots of customers here that have a domestic footprint that could benefit longer term from this tariff regime. It is hard to say exactly how it is going to play out, but those are some of the highlights of programs that may be impacted. It is fair to say the uncertainty in the guidance is not all to the downside. It may actually eventually be to the upside, right? It is uncertainty. Yeah. Yeah. That is right. I mean, yeah. Look at the GM Full-Size SUV inventory levels. I think that came out again yesterday or the day before, 30 days on hand. Yeah. Certainly, it seems like there could be some opportunities as well. That affected our thought process around that reaffirming guidance. Okay. And then just lastly, it sounds like there is some program extensions and stuff that is getting pushed out on winds. Can you just remind us, as programs are extended, if we're looking at a five or six-year program that goes to seven or maybe eight years, whatever it may be, what are the requirements for refurbishing tooling or extending tooling and other plant equipment for another year or two? Are there big capital commitments, or is this more of a gravy situation for you? No, it's more of we like the situation. There's the extending programs, usually programs that are long in the tooth. We've done a nice job with VAD, engineering changes, cost savings. No, we like it. And there isn't a tremendous amount of there might be some modification to some capital that we have in place, but there's no significant reinvestment that's required. We can run the current capital that's in place. It also gives us an opportunity to reevaluate contracts because they need to extend the contracts. The terms and conditions that are in place need to be extended, which means in some respects, you get to sit down and reestablish where you're at. Okay. Very helpful. Thanks, guys. Yeah. Thank you. Our next question comes from Itay McKelly from TD Cowen. Please go ahead with your question. Great. Thank you. Good morning, everyone. Just two quick ones for me. First, going back to slide eight, you mentioned mixed headwinds due to components on high-content trims. Just curious whether you're actually seeing any pressure on trim mix thus far in Q2, both in North America and perhaps globally. Yeah. You'd say it's something we're anticipating. We haven't seen a lot of it, but there are some specific examples where we have seen this impact. Most notably, things like rear-seat entertainment where there is a component that is imported with a high tariff rate. The customer may reconsider their option packages, and we lose that content if that screen is on the back of the seat, for example. Things like that. We have not seen significant changes in features generally, but we would not be surprised to see that as part of the response to customers managing higher costs. That was the reason we included that on the slide. As part of our mitigation plans, we are giving our customers alternative options. We have some insight, even the options we are giving them to mitigate tariff costs or other related costs or lack of components. I think it is just more our insight of what we are doing and how we are communicating with our customers. That is very helpful. A quick follow-up on the new business awards in the quarter. Congrats on the progress. How should we think about the timing of when these awards flow into revenue? Do some of these actually launch as early as 2027? Most of it is in 2028. I think there may be a little bit at the tail end of 2027, but I think it is mostly 2028. Yep. Great. That is very helpful. Thank you. Thank you. Ladies and gentlemen, with that, we will be wrapping up today's question and answer session. I would like to turn the floor back over to Ray Scott for any closing remarks. Yeah. Thank you. I would like to thank everyone for participating in the call today. I would also like to thank the Lear employees that are on the call. You guys did a great job in the first quarter. I couldn't be more proud of the work that you're doing and an exceptional job on what we're doing as far as the organization and really protecting the company with tariffs and costs and giving our customers options to mitigate their own costs. I appreciate all the hard work. So proud of the work that you've done. Thank you. Ladies and gentlemen, with that, we'll conclude today's conference call and presentation. We do thank you for joining. You may now disconnect your lines.