Good morning. My name is Steve, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lear Corporation First Quarter 2012 Earnings Call. [Operator Instructions] Thank you. I'll now turn the call over to Ed Lowenfeld, Vice President of Investor Relations. Please go ahead.

Thank you, Steve. Good morning, everyone, and thank you for joining us for our first quarter 2012 earnings call. Our earnings press release was filed this morning with the Securities and Exchange Commission, and materials for our earnings call are posted on our website, lear.com, through the Investor Relations link. Today's presenters our Matt Simoncini, President and CEO; and Jeff Vanneste, Chief Financial Officer. Also participating on the call are several other members of Lear's leadership team. Before we begin, I'd like to remind you that during the call, we will be making forward-looking statements that are subject to risks and uncertainties. Some of the factors that could impact our future results are described in the last slide of the presentation materials and also in our SEC filings. In addition, we will be referring to certain non-GAAP financial measures. Additional information regarding these measures can be found in the slides labeled Non-GAAP Financial Information, also at the end of the presentation materials. Slide #2 shows the agenda for today's review. First, Matt Simoncini will provide a company overview. Next, Jeff Vanneste will review our first quarter financial results and 2012 outlook. Then Matt will have some wrap-up comments. Following the formal presentation, we will be happy to take your questions. Now please turn to Slide #3, and I'll hand it over to Matt.

Thanks, Ed. We're off to a good start in 2012 with another quarter of solid financial performance. We continue to receive customer and industry recognition and we recently announced an acquisition that we believe will further strengthen our Seating business. Sales increased 4% to $3.6 billion in the first quarter. Excluding the impact of foreign exchange, sales were up 6% in line with global production. Core operating earnings were $195 million, down 5% from a year ago, but still one of our strongest quarters in the recent years. Our Electrical business continued to benefit from greater scale and previous restructuring actions with sales up 6% and earnings up 21%. We were honored last month to be named "Corporation of the Year" by General Motors and as Supplier of the Year for the 14th time. Additionally last week, we received an Automotive News PACE Award for our Solid State Smart Junction Box recognizing our industry-leading technology in this critical component. In April, we signed an agreement to acquire Guilford Mills, a leading global provider of automobile and specialty fabrics. I'll cover this acquisition in more detail on the next few slides. We continue to return cash to shareholders through dividends and share repurchases. During the quarter, we announced an increase in both of these programs. Slide #4 highlights the strategic benefits of our pending acquisition of Guilford Mills. This acquisition is consistent with our strategy of selective vertical integration and expansion of our component capabilities. Guilford is a leading global provider of fabric for seats, headliners and other interior applications. We believe Guilford will strengthen our existing industry-leading seat cover business by providing synergies through increased design and manufacturing expertise, which will improve quality and enhance value to our customers. We believe this acquisition will offer both Lear and Guilford strong…

Thanks, Matt. Slide 7 provides financial highlights for the first quarter. Global vehicle production was up 6%, reflecting a 16% increase in North America and a 49% increase in Japan, both of which were favorably impacted by increased production following last year's earthquake and tsunami in Japan. Vehicle production in Europe and China was down 6% and 2%, respectively. Lear sales were up -- were $3.6 billion, up 4% from a year ago. Excluding the impact of foreign exchange, primarily a lower euro, Lear sales in the quarter were up 6%, consistent with the change in global production. Core operating earnings were $195 million, down 5% from a year ago. The decrease in earnings primarily reflects increased product and facility launch costs, higher program development costs associated with the backlog and selling price reductions, partially offset by increased sales and operating performance improvements. Free cash flow was a use of $65 million in the quarter, and we finished the quarter with cash at $1.6 billion. Our reported EPS was $1.32 a share. On the next few slides, I'll cover our first quarter results in more detail. Slide 8 shows vehicle production in our key markets for the first quarter. In the quarter, global vehicle production was 20.2 million units, up 6% from 2011 and a record for the first quarter. Excluding Japan, global vehicle production was up less than 2%. As we have mentioned on previous calls, our annual sales in Japan are relatively modest at approximately $200 million. Slide 9 shows our financial results for the first quarter of 2012. As previously mentioned, sales were up 4% to $3.6 billion. In Europe, adjusting for foreign exchange, our sales were down 4% better than the industry production decline of 6%. I will provide further detail about our European business later…

Thanks, Jeff. In North America, the recovery appears to be gaining momentum. At the same time, market conditions in Europe remain challenging and a bit uncertain. Looking at our 2 business segments, we continue to forecast margins in the 6.5% to 7% range. Our Electrical business will continue its trend of improving year-over-year sales and margins. In Seating, we now expect the cadence of margins to be consistent between the first and second half of 2012. The Guilford Mills acquisition, which we expect to close in the second quarter, will further strengthen our Seating business. Going forward, we plan to continue to invest in both business segments through a combination of organic investment and niche acquisitions. This strategy is intended to further strengthen both businesses and support profitable growth and increased shareholder value. In closing, I want to congratulate the Lear team. The customer and industry recognition we received recently is a testament to the hard work and dedication of our employees. With that, we'd be happy to take your questions.

[Operator Instructions] And your first question comes from the line of Peter Nesvold from Jefferies & Company. H. Peter Nesvold - Jefferies & Company, Inc., Research Division: Maybe, first, a question on cash flow. So if I go to Slide 19, and you talk a little bit about this in the outlook, but I'm hoping maybe you could just maybe rephrase a little bit. The midpoint of the adjusted net income for the Lear is $505 million for this year, free cash flow of $275 million. Can you just provide sort of the big picture walk from $505 million to $275 million, why is free cash flow lagging net income?

Let me take it off of EBITDA and give you some of the bigger pieces of it. CapEx, obviously, is $425 million, cash interest is about $55 million, cash tax is about $125 million, restructuring spend is about $60 million, and then the rest of it's between pension and working capital. So that's kind of the big major puts and takes. H. Peter Nesvold - Jefferies & Company, Inc., Research Division: Okay. All right. That's helpful. And just a brief follow-up and then I'll hand it off. On the acquisition, because I think this is the first opportunity you've had to speak to the investment community broadly since the acquisition was announced. There's been a lot of debate in the investment community about the value of vertical integration in the Seating business. Can you maybe speak to how you see the benefit of vertical integration and is this maybe specific to the fabrics area or are there other areas within Seating that you think could be attractive in terms of vertical integration?

I think, vertical integration is extremely important in the Seating business because it's a key driver of value and more importantly, quality, which we're responsible for as the end assembler and designer of a seat system. The areas that we're looking at besides bolstering our industry-leading cut and sew businesses is the mechanisms, recliners and tracks, as well as foam, as the key contributors to the quality and value of a seat. So we would look at those components in addition to surface materials and cut and sew capabilities. H. Peter Nesvold - Jefferies & Company, Inc., Research Division: And do you get any pressure from the OEMs, with the OEMs moving to a directed buyer model, and does that undercut some of the benefit of this strategy?

No. I think it actually supports it in that. You have to be, as a directed supplier, you have to be the low-cost producer. And I think from our standpoint by controlling the components, we can provide better value because it's complete design solution, designed in its entirety, as opposed to trying to get different components to fit together from different manufacturers. The key to anything is always to be the lowest cost and highest quality producer. And I think by getting selectively vertigrated into it, which we've been doing and which the industry has been doing for quite a while now, is really the key to success and I think it has the support of our customers. The key with anything is, each of the subcomponents have a different type of financial footprint and DNA and it will impact the margins. If you want a pure JIT or just-in-time assembly model to build the print, then obviously, the margins would be -- you could support the investment with a lower margin footprint. As we get more vertically integrated, I think that supports a higher margin, so you always get back to your cost of capital.

Your next question comes from the line of Brian Johnson with Barclays Capital.

Just one more question on Guilford Mills, and I just want to make sure we understand the European exposure. Did that come with any nonautomotive -- 2 questions, did that come with any nonautomotive fabric businesses that you could potentially resell? And then secondly, it listed JCI as a major customer, how do you anticipate that relationship going forward?

Well, Brian, it has about 15% nonautomotive, which we actually are excited by because the spread of the engineering and a lot of the structure over a whole new kind of leg of growth, because the technologies are similar and we would not be looking to divest that business. As far as the business with Johnson, it does have business with Johnson and it's really on their headliner fabric, which is state-of-art and provides certain cost benefits, as opposed to other fabric that's in the marketplace. And in our business, it's not uncommon to have buy-sell relationships with your competitors. We have them with Faurecia, with Johnson Controls, with Delphi, Yazaki, so it's not uncommon. And we have a tendency to work through those issues that we have, so I don't anticipate it being an issue.

Okay. And over on Slide 11, it looks like -- is it fair to say your VW business is mainly with Audi or is there VW-VW business there as well?

No. It's with both. We've got a good book of business on the Seating. It's with both, probably balanced between the 2 of them fairly equally.

And any -- since VW is rolling over its product lines to new platforms, kind of any visibility into sort of the backlog and how it's developing in the luxury segments? Because I know you update that later in the year.

We will update backlog later in the year. But what I would tell you is that as cars and automakers are going to the global platforms, I think that's a niche for somebody like Lear that has component capabilities, complete design capabilities, component capabilities in pretty much every region in the world. So as carmakers are turning over their platforms to go to a more global, global small, global mid-sized, that's an opportunity for Lear. And from that standpoint, we are continuing to win our fair share of business during the first quarter. And I would expect that to continue with Volkswagen as well.

Your next question comes from the line of John Murphy with Bank of America.

First, just on the sales guidances. As we look at the first quarter, x ForEx, you guys were roughly in line with what the global industry data as far as volumes. And then you look at sort of what you're indicating versus full year volumes, you'd underperform volumes by about 5% to 8%. I'm just curious what you think specifically drives some of that material disconnection as we go through the course of the year? Because it looks like the normalization of Japan boom in the first quarter shouldn't be as big of a headwind as we go into the second, third and fourth quarter. I'm just trying to understand what the severe under performance would be in the second, third and fourth quarter?

I wouldn't call it severe underperformance, Murph. The way we look at it is there's still a lot of uncertainty. Based on our production assumptions that we outline on Page 18 of the slide deck, we're comfortable with the sales numbers. Basically, the guidance at production is relatively unchanged. And also we don't sell to the industry, we sell to certain car lines within the industry and we have a little bit more exposure in Europe than we do in China, and definitely more than we would have a Japan on the recovery there. So from my standpoint, still early in the year. The assumptions, broad-based assumptions are relatively unchanged and so we felt it was prudent at this time not to change guidance.

Okay. Then just a second question, maybe kind of a follow-up to that. I mean how much of an impact did the GMT900 have in the first quarter? And is the sort of the slowdown of 40,000 to 50,000 units sequentially part of the reason that we might actually see this slowdown in sales versus production?

Yes. I mean, it's an important program, obviously, because there's nothing like it in the industry as far as the volume and then, again, it has a lot of content. And a lot of the content is Lear content. So if that production number pulled back it would have an impact on the second quarter.

Okay. And then just a last question on the acquisition and potential for acquisitions going forward. It sounds like Guilford Mills, I mean some of the stuff is outside Seating, it's headliners, material for headliners. Just curious, I mean, would you guys reconsider IAC as sort of a niche acquisition or something that would be a bolt-on to buy the stake that you don't own? Because it sounds like this Guilford Mills is a little more than just pure seating fabric. It sounds like it's moving into the IAC realm, just curious what your update is there, particularly because you have the old CFO on board as the new CFO of your company.

Yes. I wouldn't connect those dots. I see the non-core holding. We've exited the interiors, as you know, Murph, to focus on seating and electrical distribution. As far as Guilford, you're right. There is non-seating fabric in there. But the technology and the engineering of the fabric, as well as the manufacturing has certain synergies. So to me, there's a natural kind of fit, as opposed to just doing seat fabric. It doesn't signal in any way our intention to reenter the interior space, so to speak. IAC is not core and we'd be looking to monetize our investment in that entity at some point in the future.

And to that $260 million you mentioned, is that sort of the upper end of niche, by your definitions on acquisitions or is that up to $500,000 to $1 billion? I mean what's the sort of the definition of niche, just curious...

That's about what we think about for a niche acquisition. And I'll put parameters around it. But that's about a niche acquisition, $250 million.

Your next question comes from the line of Rod Lache with Deutsche Bank.

Just a couple housekeeping things first. First on Seating, could you tell us what the FX impact was there? Was it around $60 million on a year-over-year basis?

Going through our notes right now, Jeff, do you…

From a sales perspective?

Yes.

It's around $50 million for the quarter.

$50 million. Okay. And you said that, that acquisition of Guilford closes in the second quarter. Is that now incorporated into your guidance?

No. We anticipate it to be closed in the quarter, Rod, but it's not incorporated in the guidance.

Okay. And then just getting back to the sort of the year-over-year bridge in Seating. EBIT was stronger than expected in the quarter, but still down about $20 million. You guys had highlighted the product development and the launches, a $15 million of drag. I would think that the top line growth, the organic volume growth, which historically contributed at 15% and backlog at 10% would have more than offset that, maybe $25 million or $30 million from that. Can you just sort of address that remaining variance that got you down to this level of profitability? And how does that variance look going forward?

Yes, I think the pieces that we miss sometimes is mix. Each plant, each, obviously, platform has its own financial DNA, Rob, but also pricing. And pricing typically runs in our business about 2% net. So I think if you plug that in and maybe make allowances for the mix, not being as rich in the back half, you'll get close to the number, if you also add in the step-up in launch and product development.

I was more looking at the first quarter. So the mix should have been pretty good, I would think, in the quarter. So if you basically sort of broke down the top line growth. Basically, there must have been some volume in backlog that contribute here at some 10% for the backlog and 15% for the volume. And it looks like maybe there's $25 million or $30 million of sort of other negative on a year-over-year basis?

That's including -- have you taken into consideration the FX and the pricing level?

Yes. Well, I would think so. But maybe you can just help us, if you thought about it in terms of year-over-year bridge, do you have any way of bucketing...

Well, backlog is about 90, if that gets you there. Backlog is about 90, that typically converts at around 10% incrementally.

Okay. So the backlog was $200 million for the year, but it was like very first half weighted?

In Seating it's more front-end loaded than it is in Electrical.

Okay. Well, that's part of it. And then you guys had talked about getting to 7% plus margin for that business at some point in the back half. Is that still the case or have there been other developments which sort of reduced that target?

No. I still think we can exit the year at a 7% clip.

Okay. And then just lastly, you had been talking about guidance for the overall company of about $15 million negative from commodities, but it looks like it was a little bit of a positive. Is that something that appears to be changing if you mark it to market?

No. I wouldn't say that that's changed at all. We're still holding the commodity number impact about the same year-over-year because part of what happens too, Rod, is there's time delay between when you're impacted by the commodity price changes and why they're relatively flat year-over-year. What ended up happening last year is we got more of an impact later in the year than we did in the beginning. So overall, still a negative for us.

Your next question comes from the line of Chris Ceraso with Credit Suisse. Christopher J. Ceraso - Crédit Suisse AG, Research Division: So a couple of questions. On the Seating margin, do you think it's going to be down in Q2 versus Q1 in line with the expected pretty meaningful decline in the output on the full-size trucks at GM?

Yes. I think it will be down, but it's not -- that's not the only reason why. So we're still in launch phase, product development phase. You also have a mix issue in Europe, kind of pullback, overall pullback in production in the second quarter versus the first quarter. So I think those are contributing factors. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then just, I think you just touched on this, but previously had you been saying that the second half margins would be better than the first and now you're saying comparable?

Right. We do think the margins first half, second half will be comparable in the Seats segment. Really this quarter benefited somewhat by the timing of certain commercial settlements that we thought would be more linear or more back-half loaded, Chris, than they ended up being. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. So it's not that, second half is worse, it's that Q1 was better than you thought.

Right. I mean, toned down a little bit, you're right though. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then just remind me on the price down, do you still disproportionately bear that in Q1. You talk about 2%, it's not 2% of the full year, right? But is it heavier in Q1 than it is in subsequent quarters?

No. It's not that it's heavier. It's typically pretty balanced and linear during the year. There may be odd cases where it's up a little bit higher based on the mix and the timing of new program awards. What is different though is that the cost savings take more time to implement. The efficiency offsets to that kind of gain during the year, whether they're supply chain efficiency gains or actually just manufacturing efficiency improvements, usually kind of come back during the year. So that's more of a driver than actually the pricing. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then lastly, I think you quantified it, maybe I missed it, but the year-over-year headwind from launch cost and development cost and then what's your expectation as you roll forward, did those start to diminish and by when?

Yes. The year-over-year launch impact, we have basically a launch cost of around $35 million for the full – for the quarter. And that, on a year-over-year basis, Jason -- Jeff?

Well, I mean, year-over-year basis, we see launch costs in total being down on a year-over-year basis. As we look at the cadence of launch costs in the various segments, we see that in Seating, launch costs would generally tail down in the back half. And on the Electrical side of the business, we would see those being relatively flat between the first and second half.

In the quarter, they were, I think a variance of around what $10 million, Jeff?

Yes, sub-$10 million. Christopher J. Ceraso - Crédit Suisse AG, Research Division: So I'm sorry, so that was up $10 million year-over-year, that's launch. Does that include the development and the program preparation cost too or is that just launch?

No. It's an incremental -- that would be an incremental $7 million to $8 million, thereabouts. Christopher J. Ceraso - Crédit Suisse AG, Research Division: In Q1?

In Q1. Christopher J. Ceraso - Crédit Suisse AG, Research Division: Okay. And then these both tail off as you go through the year?

Yes.

Your next question comes from the line of Itay Michaeli from Citigroup.

Just a question on the 2012 production guidance. Can you refresh us on what you're assuming for Detroit Three production in North America year-over-year, as well as the GMT900 now?

Yes, Jeff the…

On the Detroit Three, we're forecasting volumes to be up on a year-over-year basis by 4%.

And do you have the assumption for GMT900 platform?

The GMT900 in our guidance is 988,000 vehicles.

Okay. And can you remind us how much of the Seating business today is in North America. And of that, roughly how much of it is Detroit Three revenue?

We don't get that specific on the revenue breakdown. Roughly, I would tell you that what we do say is roughly 20% of our revenue -- 40% of our revenue combines globally between Ford and GM. The North American split on revenue, I don't think we've been that specific on Seating and Electrical, I'd like to keep it that way.

Sure. And then on the commercial settlement, not sure if you actually quantify what that was, but do you have a sense of what the margin would have been x some of the -- it looks you expected some commercial settlements in Q1, but perhaps more linearly, do you have what it would have been excluding the higher commercial settlements that you did receive?

Yes. Maybe it was about $10 million, 35 basis points, probably.

Okay. And then just lastly, I noticed CapEx in the quarter of $69 million, looks fairly low relative to your full year guidance. You did have a fair amount of launches in Q1. Any color on how we should think about the rest of the year there?

Yes. I would take the remaining CapEx and kind of just keep it pretty steady. Second quarter looks like the remaining balance from the guidance, it's pretty linear for the remainder of the year. I'd probably model it that way.

Your next question comes from the line of Emmanuel Rosner from CLSA. Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division: I was a bit surprised by the Electrical sales growth of 6% year-over-year in the quarter. You had disclosed a backlog of $600 million in electrical alone for the year, which by itself, like is about 19% gross versus 2011. So does that have to do with the timing of business launches in Electrical?

Yes. It's a couple things. It's the timing of the launch, it's the backlog in the first quarter is not linear, it's a little bit lower and it builds up as the year goes on. But you also need to take into consideration the impact of foreign exchange and pricing when you do your walk. Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division: Okay. So can you just quantify how much backlog you had in the first quarter in Electrical?

It's about $60 million. Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division: $60 million. Okay. So and that's out of the $600 million for the year still, right?

Well, we think the backlog for this segment in 2012 will be a little over, I think, it's $430 million or $425 million. Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division: Okay. And then regarding your Guilford acquisition, I guess, the disclosed purchase price of $260 million, that seems to represent a fairly hefty multiple of EBITDA of probably more than 7x. Now I fully understand the strategic rationale for this vertical integration. I'm just curious, financially speaking, how do you expect this to help the business. Like are you seeing some synergies? Will it help you get some more business wins? Will margins, overall, improve over the next few years from then?

Well, I think, one, we're not talking about the multiple and I'm asking confirming that your multiple is correct, let's put it that way. But that being said, anything that we're looking at buying, it's a fair statement to say it's probably going to trade at a multiple that's higher than Lear's. We continue to invest in our business to ensure that we can continue to provide value to our customers or -- and stay competitive if we're going to be successful for the longer term. There are synergies that are both sales synergies, technology synergies, as well as cost synergies by putting it together so that the value is greater than the sum of the 2 parts. And that's our investment rationale for doing it. Emmanuel Rosner - Credit Agricole Securities (USA) Inc., Research Division: Understood. And I guess just finally on the restructuring cash in the quarter. In your working capital slide, I think you were talking about $46 million spend in excess of the expense. I think you for the year you were looking at about $60 million, did you spend most of the restructuring in the first quarter this year?

It was a big quarter for restructuring cash because if you remember, fourth quarter we exceeded our cash flow. And at the time, what we were explaining is that we took the expense for a closure of facility in Spain, but the cash actually did not -- wasn't spent until January. That's the big driver of our restructuring cash for 2012. Restructuring expense, however, is greatly reduced in 2012 as we get to more a normalized number [indiscernible].

Your next question comes from the line of Brett Hoselton from KeyBanc.

I wanted to ask you a little bit about your margins and your longer-term expectations. It appears as though the Seating margins are kind of stabilizing here in that 6.5% to 7% range. And as you move into 2013, and maybe 2014 and so forth, is your expectation that Seating margins will remain in that 6.5% to 7% range or is there some reason to believe that it might get better or worse?

Well, I think it's a function of the upfront investment both in engineering and capital and the level of vertical integration. And right now the current level of vertical integration that we're at now in upfront investment, this business should run in the 7% range, 7% to 7.5%, which we think at that point there's a fair enough gap to our cost of capital and the return on investment. So really to us, the margins are more a function of what it's going to take to produce the products that your sourced on and the programs that you're sourced on, Brett. So if there was a build to print just-in-time assembly of its fleet [ph], that obviously would warrant or require a loss of a margin to justify the investment. For us, longer term, we think at our current level of vertical integration that the return at the 7% range of earnings is the right earnings and we're still confident we will get there.

And then on the electronic side, you've clearly have seen some very nice improvement with some of the new business coming online. And it looks like your backlog's fairly robust, at least into next year. Would you expect to continue to see improvement in the electronics margins and therefore, possibly push it above that 6.5% to 7% range in 2013?

Yes. I don't want to get into giving guidance on 2013 and the first quarter of '12, but what we've said historically, and we still believe it to be true is that, again, the margins are a function of the investment required to do the programs and the mix of the components and the engineering that you need to produce the programs you're on. In this particular segment, it had been impacted negatively historically by a lack of scale and a high fixed cost structure, as we put these facilities in all around the world and continued to invest in high power, which drove a high fixed cost. As we've gained scale and approached the $4 billion numbers, what you're seeing is the margins recover and we're taking advantage of the restructuring that we spent in this segment over the last 3, 4, 5 years. So we would expect to see a continued improvement in the margins as we continue to gain scale and we expect to continue to gain scale in this segment.

And then switching gears just briefly on the new business backlog. Your cadence, you've got $800 million this year, $700 million next year and $300 million in 2014. Typically your out year, your third year, you see a nice improvement as you bid on new contracts and win new business. Is there any reason to believe that, that $300 million in 2014 is not going to improve materially? I guess I'm basically asking how's your bidding been going?

We've been winning business at a fair clip consistent with the prior years, so I would use probably the prior year business wins as a guide, Brett, but we've been winning our share of business and I would expect that 2014 number to improve.

Your next question comes from the line of Colin Langan from UBS.

I apologize if it's asked already, but could you provide any color on other expenses and equity income line. It seems a bit stronger. And I think over last year, it tends to be in that cost, it seems like it was about a net $8 million benefit, is that a sustainable rate or should income flow going forward?

The equity income in the quarter of 9.7 was roughly 40% attributable to one of our non-core joint ventures, which we've already talked about, IAC. And with respect to that, obviously, as Matt talked about we view that as non-core and are seeking to monetize that investment. So on a longer-term basis, we would see the equity earnings in the slightly lower than that adjusting for IAC.

So the net rate there -- but until you monetize it, it should stay at this kind of rate or...

I'm sorry, you broke up a little bit, Colin, could you repeat your question please?

But in the interim until you monetize that asset it should stay at this rate.

I would keep it at -- I'd probably have it at about $5 million a quarter or thereabouts, it won't be that far off.

Your next question comes from the line of Matthew Stover from Guggenheim Partners.

Two questions. One is on the PA-12. I'm wondering if you folks have any insight or outlook as to how that may or may not impact you specifically? And then I have a bigger picture question.

I'm not sure, you're saying Page 12 on the Seating margins?

No. PA-12 resin, I'm sorry.

Well, it doesn't really impact us directly and we have not yet seen production disruptions associated with it. That's not to say that we won't in the future. But in the history of the auto industry, they're pretty resilient when there are disruptions like this, Matt. And if the car line is selling, we'll figure out a way to get the allocation to it produce it. But we haven't seen a disruption yet. And I wouldn't really think that it would be meaningful for the full year. It may put a chop in the quarter, but I really haven't seen it yet.

The second question is, so your friends in France have a parent that has cash flow and capital issues in a very weak environment. And a source of capital for them may be to do something strategic with Faurecia. And I'm wondering if as you sort of look at the behavior in the market, have you seen any change in behavior from them? And two, do you have any opinions about how that might unfold?

Not really. I mean, there's nothing in the marketplace that I'd like to discuss. We are taking a disciplined approach to pricing. Our focus is to make sure that the business models and the quotes that we provide to our customers are sustainable upfront when we provide them and make sure that we have a business model to support our cost competitive footprint, all of which, what we're doing. We're not interested in purchasing Faurecia, I want to make that very clear. But other than that, there's not a whole lot more I want to say about it.

Your next question comes from the line of Joseph Spak from RBC Capital Markets.

I recognize that Guilford's not in your official guidance, but even if we assume it closes second quarter, it's in the back half of the year, is there anything in terms of deal costs or maybe amortization that should prevent the deal from being accretive in the back half?

At 1% interest net of cash, pretty much everything's accretive. What I would do, Joe, is just use -- take 6 months of $400 million in sales and use the margins preceding if you're trying to figure out what it would impact us, in the event that we're able to close this deal in the second quarter as we anticipate.

Okay. Great. That's helpful. And then in the quarter, I appreciate sort of the commentary and the impact from the commercial settlements and I recognize there was stronger GMT 900 production as well. But it does seem like the cost efficiencies are maybe coming in a little bit quicker as well. Can you comment on that? And is that sort of a source for sort of your continued confidence in the margins for the rest of the year?

The business continues to improve from an efficiency standpoint and cost-reduction standpoint. They are making progress. Ray Scott, the President of the division, his team is doing an outstanding job of putting in standardized business processes and improving operations. So I wouldn't say they came in quicker. They came in pretty much as expected, but we expected them to improve.

Okay. And then just one housekeeping, I think, previously, you said the launch cost for the year positive $15 million. I know you still said sort of a tailwind in the back half, is that still sort of a good number for the year?

It's a little bit less than that. But yes, it's pretty close and we would expect them to improve as the year goes on, in relation to the prior year.

Okay. And then just -- I think you had a comment on the buyback residual [ph] share, you'll buy back shares consistently. Is that -- should we sort of assume that, that means consistent with the first quarter or do we see that rate accelerating a little bit here and going forward?

I would assume at this point, if you take the remaining authorization that is open for the next 7 quarters, and assume that it's going to be done pretty steady over those 7 quarters for now.

Your next question comes from the line of Adam Brooks with Sidoti & Company. Adam Brooks - Sidoti & Company, LLC: Just a few quick questions. Can you maybe give us a sense of those top 10 platforms in Europe? What percentage of revenue they account for Europe?

Do we have that offhand, guys? Just a minute, Adam, let's see if we can get you some help on that. About 25% -- about 25%. Adam Brooks - Sidoti & Company, LLC: All right. And then real quickly on the electrical segment revenue, the underperformance there I guess relative to how you've been doing recently. I know I think you're a little bit overweight forward there, was that really a function of that plus the launches being more back-half weighted or is there anything else involved?

I'm sorry, on the Electrical segment did you say? Adam Brooks - Sidoti & Company, LLC: On the electrical segment, yes.

Yes. I thought the Electrical segment performed very well actually, and it stepped up the margins year-over-year. So the performance there really was scale and the benefits of fire restructuring actions and the backlog coming on. So I don't see -- I don't think I understand your question. Adam Brooks - Sidoti & Company, LLC: I guess this is just more from a revenue point of view. I guess you've been doing 20% plus the past years.

I see, I see. Yes. I think what it is, is that the backlog's more back-end loaded. The backlog in the quarter is probably half of what we'll see in the quarters 3 and 4. Adam Brooks - Sidoti & Company, LLC: Okay. And then lastly, you talked a little bit about acquisitions and looking a return on invested capital, do you have a hurdle rate that you've thrown out there?

Not necessarily. But we estimate our cost of capital in the 10% to 11% range, we'd like to get our investments that are greater than that, obviously, to create value for our shareholders.

Your next question comes from the line Aditya Oberoi from Goldman Sachs.

So I just wanted to take your opinion on T900 production. Recently GM took up their full year SAAR forecast for U.S., and if that means that T900 demand also goes in line with the increased forecast, do you think they have the capacity to produce a T900, which is up year-over-year, or do you think they will be capacity constrained?

No. They absolutely have the capacity to make everything that they can sell. So if they have -- if we saw a 20% step up in the rates, they would still have the capacity, as we would to support that level of volume.

Great. And my second question is on the Guilford acquisition or actually not on the Guilford acquisition, but on your acquisition strategy. Now that Guilford is almost done, would you have any preference for acquisitions in a specific segment or you're still kind of open to both the segments.

We're open to both the segments in all regions of the world. Again, our focus is on the components and strengthening our component capabilities, as well as emerging markets. Looking at capabilities in emerging markets or anything that comes in with the diversification or adds diversification from a sales base standpoint. But no, we're open to both segments. I think that does it. Is there one more, Ed? Okay, there's one more?

Yes. Your final question comes from the line of Ravi Shanker from Morgan Stanley.

A couple of quick questions on the acquisition. One is, you said that the Guilford Mills margins are pretty similar to Seating and in the past you said that one of the benefits of vertical integration is to kind of boost margins because the margins of components are higher than the overall Seating business. Do you see potential to grow these margins over time with restructuring or with anything else or is it pretty steady at these levels?

No. I think, really, the margins are more of a function of the level of investment required to do it. The mills, which we also have a mill based out of Asia, it's pretty consistent with the capital intensity of the seat business overall and on average. And so from our standpoint, it really doesn't change the footprint, or the financial footprint, so to speak, of what the returns are going to be or what the returns requirement of the margin profile, Ravi. So from our standpoint, no, it does not change it. The synergies that we're looking for right now are really to meet, more than anything, to penetrate the sales and grow and utilize our expertise and try to sell a little more efficiently.

Got it. And also you said that your focus is on making further component acquisitions. Can you just give a sense on how you're going about this. I mean are there targets that you've identified globally that you're kind of just kind of having conversations with them and persuading them to sell? Or are there even enough targets out there and how are you going about this?

Yes. What we do is, first off, we set what we're looking for from a strategic standpoint anything that would provide component capabilities, would add benefit of emerging markets components in emerging markets, anything that would diversify our sales base or add, facilitate the growth with customers that were maybe are not as represented as well as we would like, or facilitate the growth in Electrical. Those are kind of our main sweet spots of what we're looking for. Then we'd go out and we have a very active monitoring process of what is out there in the marketplace. Third, we look to see if it's actually actionable and start to dialogue with the equity group or the equity owners. And then we start looking at valuation on whether or not it makes sense and whether or not it would fit well into Lear. So any given time there's multiple, multiple entities being evaluated. And that's not new or recent, that's been going on. It's just, in many cases, a lot of people are looking for the same things and where you find -- you may not find that it's actionable. And where it's actionable, it may not something that really fits. And so we're being very judicious in our search process and our selection process. Now with that, I think it rolls up and we've answered everybody's question. And probably who remains are the Lear employees. I want to thank Jeff for his great job on his first earnings call and the entire Lear team for their great work in the quarter. And I want to thank you personally for all your hard work. So with that, thank you very much and I'll see everybody later. Bye, bye.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.