VISTEON CORP
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 18, 2025
VC$75.68-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-20.
0001111335-24-000018
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-18.
0001111335-25-000006
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 133 previous paragraphs and 135 current paragraphs.
78 unchanged; 38 reworded; 19 added; 16 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (19)
Current report
Industry vehicle volumes were approximately 89 million units in 2024, a modest decline compared to 2023 as the worldwide semiconductor and other supply related shortages began to ease, offset by mixed industry dynamics that reduced light vehicle production in Europe and North America. North America production levels were slightly lower as vehicle affordability affected consumer demand, partially offset by OEMs rebuilding inventories. Production levels in Europe were lower, with a weak macroeconomic environment and the expiration of government incentives on electric vehicles weighing on production. In China, domestic OEMs continued to gain market share amid intense price competition in a weak domestic market. Looking forward, vehicle production is expected to decline slightly in 2025, with Visteon’s customer production expected to decline mid-single digits, and ongoing risks related to vehicle affordability, economic uncertainty, potential geopolitical challenges, and customer market share changes. The magnitude of the impact on the financial statements, results of operations, and cash flows will be dependent on plant production schedules, supply chain impacts, global economic impacts, and electric vehicle adoption.
Current report
The Company recorded $32 million and $5 million of net restructuring expense for the years ended December 31, 2024 and 2023, respectively. The increase is due to a 2024 global restructuring plan announced in September 2024 aimed at improving efficiency and further rationalize the Company’s footprint.
Current report
Net interest income for the year ended December 31, 2024, was $2 million, compared to interest expense of $7 million in the same period 2023. The increase in interest income during 2024 reflects increased cash balances.
Current report
Equity in net loss of non-consolidated affiliates was $3 million and $10 million for the years ended December 31, 2024 and 2023, respectively. The loss in each year is due to operating losses at an affiliate.
Current report
In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $49 million non-cash tax benefit to Net income attributable to Visteon Corporation or $1.76 per diluted share. 2023 includes a non-cash tax benefit to Net income attributable to Visteon Corporation of $313 million, or $11.10 per diluted share in the fourth quarter, and $10.98 per diluted share for the full year, related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Current report
Business Combinations
Current report
We allocate the fair value of purchase consideration to the assets acquired, liabilities assumed, and any noncontrolling interest based on their fair values at the acquisition date. When determining the fair values, we make significant estimates and assumptions, especially concerning intangible assets. Critical estimates when valuing intangible assets include expected future cash flows based on consideration of revenue and revenue growth rates and margins, customer attrition rates, future changes in technology and brand awareness, loyalty and position, and discount rates. Any purchase consideration in excess of the fair values of the net assets acquired is recorded as goodwill.
Current report
Amounts recorded in a business combination may change during the measurement period, which is a period not to exceed one year from the date of acquisition, as additional information about conditions existing at the acquisition date becomes available.
Current report
Acquisition costs are expensed as incurred.
Current report
The Company's income tax expense, deferred tax assets, deferred tax liabilities, and liabilities for uncertain tax benefits reflect management’s best estimate of current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimates are required in the determination of consolidated income tax expense.
Current report
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating the Company's ability to realize a benefit with respect to the deferred tax assets in the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including historical and projected future taxable income, the expected timing of the reversals of existing temporary differences, the expected utilization of existing tax attribute carryforwards (e.g., net operating losses and foreign tax credits), and tax planning strategies.
Current report
In developing the Company's estimates of future taxable income, the Company considers both the historical operating results adjusted for certain nonrecurring transactions, as well as the Company's actual forecasted state, federal, and foreign pretax operating income. These estimates, and the relative weights placed thereon, require the use of significant judgment and are consistent with the plans and estimates the Company is using to manage the underlying businesses.
Current report
If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded.
Current report
Prior to the year ended December 31, 2023, the Company recorded a full valuation allowance against the U.S. deferred tax assets primarily due to historical cumulative losses.
Current report
For the year ended December 31, 2023, the Company evaluated both positive and negative evidence when considering if it was more likely than not that US deferred tax assets would be realized. The Company concluded that the positive evidence, which included the Company (1) being in a substantive three-year U.S. cumulative income position, (2) reporting U.S. income for 10 of the past 12 quarters, and (3) forecasting U.S. book and taxable income for the year ending December 31, 2024, outweighed the negative evidence (the Company’s history of losses).
Current report
More specifically, the Company’s forecast of future taxable income using its objective and verifiable earnings history, indicated that it was more likely than not that the Company would be able to realize a benefit for a substantial portion of its U.S. deferred tax assets, resulting in a partial release of its valuation allowance related to its U.S. deferred tax assets. The deferred tax assets not expected to be realized based on the Company’s projections relate primarily to the Company’s existing foreign tax credit carryforwards, as the Company has been and is expected to continue to generate excess credits in the near term, resulting in an inability to use all of its existing credits prior to their expiration dates; certain U.S. federal net operating loss carryforwards that were not expected to provide an incremental cash savings (i.e., they would only displace credits and deductions the Company would have otherwise had available to it); and State operating loss carryforwards with a limited carryforward. The Company recorded a $313 million income tax benefit related to the partial release of its U.S. valuation allowance as of December 31, 2023.
Current report
In evaluating the realizability of its U.S. deferred tax assets as of December 31, 2024, the Company considered all positive and negative evidence to determine whether the deferred tax assets are more likely than not to be realized. This assessment resulted in a $49 million income tax benefit, further reducing the U.S. valuation allowance. The change in evidence for assessing the realization of U.S. deferred taxes was primarily due to the Company's actual U.S. taxable income in 2024 exceeding the previous year’s projections, along with projections indicating continued U.S. taxable income in 2025.
Current report
The Company’s results of operations are heavily dependent upon customer orders. The potential impact of government actions, such as enforcement of tariffs, has not yet been included in the company’s projections but could have a significant impact on the realization of its deferred tax assets. Given the inherent uncertainty in estimating future events, including projected taxable income, any improvement or deterioration in the Company’s future operating performance could lead to significant changes in the Company's valuation allowance assessments. Factors influencing the remaining valuation allowance include variations in forecasted sales volumes, which depend on customer orders, potential changes in U.S. tax law (such as the capitalization of research and development costs), and the amount of future foreign tax credits generated (since these credits are utilized before the foreign tax credit carryforwards). Additionally, the complexity of determining U.S. taxable income and related foreign tax credit utilization, considering the Company's global structure, the nature of its deferred tax assets, and the timing of carryforward expiration of some tax attributes, makes it challenging to fully assess the impact on the remaining valuation allowance if meaningful changes occur.
Current report
•Uncertainties in U.S. policy regarding trade agreements, tariffs or other internation trade policies and any response to such actions by foreign countries.
Removed paragraphs (16)
Previous report
For the last few years, the industry has been negatively impacted by the COVID-19 pandemic, worldwide semiconductor and other supply related shortages, a UAW strike, and increased geopolitical challenges. Industry vehicle volumes increased in 2022 and again in 2023 as the worldwide semiconductor and other supply related shortages have eased. However, industry production volumes of approximately 90 million units in 2023 remained below recent industry production levels that peaked in 2017 and risks related to vehicle affordability, economic uncertainty, potential geopolitical challenges, and customer market share changes create ongoing uncertainties. The magnitude of the impact on the financial statements, results of operations, and cash flows will depend on the evolution of the semiconductor supply, plant production schedules, supply chain impacts, and global economic impacts.
Previous report
To address the near-term challenges created from the worldwide semiconductor and supply chain shortages, Visteon continued the proactive initiatives aimed at increasing product availability for its customers while minimizing the impact of incremental costs to the business. Visteon continued to work with its customers to pass along the elevated costs caused by semiconductor shortages.
Previous report
The Company recorded $5 million and $9 million of net restructuring expense for the years ended December 31, 2023 and 2022, respectively, primarily related to employee severance.
Previous report
In 2022, due to the geopolitical situation in Eastern Europe the Company elected to close the Russian facility resulting in a non-cash impairment charge of $5 million to fully impair property and equipment andreduce inventory to its net realizable value.
Previous report
Net interest expense for the year ended December 31, 2023, was $7 million, representing a decrease of $3 million as compared to 2022. Interest expense for these periods is primarily related to the Company's term debt facility partially offset by cash balances invested at higher interest rates.
Previous report
Equity in net income of non-consolidated affiliates was a loss of $10 million and $1 million for the years ended December 31, 2023 and 2022, respectively. The decrease is primarily due to various operational and non-operational charges incurred at an affiliate.
Previous report
Impairment of Long-lived Assets
Previous report
The Company monitors long-lived assets for impairment indicators on an ongoing basis. If an impairment indicator exists, the Company will test the long-lived asset group for recoverability by comparing the undiscounted cash flows expected to be generated from the long-lived assets compared to the related net book values. If the net book value of the asset group exceeds the undiscounted cash flows, the asset group is written down to its fair value and an impairment loss recognized. Fair value is determined using appraisals, management estimates or discounted cash flow calculations.
Previous report
In 2022, due to the geopolitical situation in Eastern Europe the Company elected to close the Russian facility resulting in a non-cash impairment charge of $5 million to fully impair property and equipment andreduce inventory to its net realizable value. Additionally, as a result of the closure, during the fourth quarter of 2022, the Company recorded a charge of approximately $3 million related to foreign currency translation amounts recorded in accumulated other comprehensive loss.
Previous report
During the fourth quarter of 2021, the Company recorded an impairment of certain long-lived assets in Brazil due to rising costs and deteriorating business conditions. As a result, the Company recorded a non-cash impairment charge of $9 million to write-down property and equipment to its fair value as of December 31, 2021.
Previous report
See Note 3, "Restructuring and Impairments” in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Previous report
The Company is subject to income taxes in the U.S. and numerous non-U.S. jurisdictions. Significant judgment is required in determining the Company’s worldwide provision for income taxes, deferred tax assets and liabilities, and valuation allowances recorded against the Company’s net deferred tax assets. Deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards.
Previous report
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance to reduce deferred tax assets when it is more likely than not that such assets will not be realized. In the event the Company's operating performance improves or deteriorates in a filing jurisdiction or entity, future assessments could conclude a smaller or larger valuation allowance will be needed. Due to the complexity of some of these uncertainties, the ultimate resolution may be materially different from the current estimate.
Previous report
Fair Value Measurements
Previous report
The Company uses fair value measurements in the preparation of its financial statements, utilizing various inputs including those that can be readily observable, indirectly observable or are unobservable. The Company utilizes market-based data and valuation techniques that maximize the use of observable inputs. Additionally, the Company applies assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. See Note 16, "Fair Value Measurements" and Note 6, "Property and Equipment" in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Previous report
•Continued and future impacts related to the conflict between Russia and the Ukraine including supply chain disruptions, reduction in customer demand, and the imposition of sanctions on Russia.
Reworded paragraphs (38)
Previous wording
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition, and cash flows of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s consolidated financial statements and related notes appearing in Item 8 of this Form 10-K “Financial Statements and Supplementary Data”. For discussion related to changes in financial condition and the results of operations for fiscal year 2022-related items, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for fiscal year 2022, which was filed with the Securities and Exchange Commission on February 16, 2023.
Current wording
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition, and cash flows of the Company. MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s consolidated financial statements and related notes appearing in Item 8 of this Annual Report on Form 10-K “Financial Statements and Supplementary Data”. For discussion related to changes in financial condition and the results of operations for fiscal year 2023-related items, refer to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for fiscal year 2023, which was filed with the Securities and Exchange Commission on February 20, 2024.
Previous wording
•Technology Innovation- The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, learning and voice enabled. Visteon's broad portfolio of cockpit electronics technology, the industry's first wireless battery management system, and the development of safety technology integrated into its domain controllers positions Visteon to support these macro trends in the automotive industry.
Current wording
•Technology Innovation- The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, learning and voice enabled. Visteon's broad portfolio of digital cockpit and electrification electronics positions Visteon to support these macro trends in the automotive industry.
Previous wording
•Enhance Shareholder Returns While Maintaining a Strong Balance Sheet- The Company has continued to maintain a strong balance sheet to withstand industry volatility while providing a foundation for future growth and shareholder returns. In March 2023, the Company announced a $300 million share repurchase program maturing at the end of 2026. The Company repurchased $106 million of Company common stock during 2023 as part of this program.
Current wording
•Balanced Capital Allocation with a Strong Balance Sheet - The Company continues to maintain a strong balance sheet to withstand near-term industry volatility and support a balanced capital allocation framework. The Company is primarily focused on allocating capital to high-returning organic initiatives that increase internal capabilities, pursuing attractive inorganic opportunities, and returning capital to shareholders. In March 2023, the Company announced a $300 million share repurchase program maturing at the end of 2026. The Company has repurchased $169 million of Company common stock under this program. During the year ended December 31, 2024, Visteon spent a net cash outlay of $55 million on inorganic growth, to acquire an advanced design and R&D services firm and a software firm.
Previous wording
Visteon continued to focus on execution throughout 2023, building a foundation of sustainable growth, margin expansion, and cash flow generation. Visteon reported sales of $3,954 million, a year-over-year increase of 5%, which represents continued out-performance compared to customer production. When excluding the impact of pricing from supply chain recoveries, Visteon’s base sales grew 12% from the prior year. Adjusted EBITDA* was $434 million, or 11% of sales as a result of operational leverage from higher volumes as well as commercial and cost discipline. Visteon continued to build the foundation for sustainable growth launching 129 new products during 2023. Visteon's next-generation products continue to be featured on its customer's key vehicles and platforms. Additionally, Visteon was awarded $7.2 billion in new business wins with strong representation in all product categories. Wins included cluster wins of approximately $1.6 billion, driven primarily by digital clusters, multiple SmartCore™ wins with lifetime revenue in excess of $1.3 billion, multiple large multi-display wins bringing total displays wins in excess of $0.8 billion for the year, momentum in connected services with the Company's first App Store win, first power electronics win for an integrated battery junction box, and incremental battery management system wins that extend the scope of previous customer wins.
Current wording
Visteon continued to focus on execution throughout 2024, building a foundation of sustainable growth, margin expansion, and cash flow generation. Visteon reported sales of $3,866 million, a year-over-year decrease of 2%, representing continued out-performance compared to customer production despite significant headwinds in the China market and lower supply chain recoveries from customers. Net Income attributable to Visteon of $274 million declined compared to the prior year primarily due to a larger deferred tax valuation allowance release in 2023 as compared to 2024. Adjusted EBITDA* was $474 million, a 9% increase compared to prior year due to strong commercial and cost discipline. Visteon continued to build the foundation for sustainable growth launching 95 new products during 2024. Visteon's next-generation products continue to be featured on its customer's key vehicles and platforms. Additionally, Visteon was awarded $6.1 billion in new business wins with strong representation in all product categories. Wins included clusters wins of approximately $1.1 billion, driven primarily by digital clusters, multiple SmartCore™ and infotainment wins with lifetime revenue in excess of $1.5 billion, multiple large multi-display wins bringing total displays wins to $2.6 billion for the year, and $0.7 billion of electrification wins highlighted by a power electronics win for an on-board charger and DC-DC converter.
Previous wording
2023 includes a non-cash tax benefit of $313 million related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Current wording
In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $49 million non-cash tax benefit to Net income attributable to Visteon Corporation or $1.76 per diluted share. 2023 includes a non-cash tax benefit to Net income attributable to Visteon Corporation of $313 million, or $11.10 per diluted share in the fourth quarter, and $10.98 per diluted share for the full year, related to a reduction in the valuation allowance against the U.S. deferred tax assets.
Previous wording
Net sales for the year ended December 31, 2023 totaled $3,954 million, which represents an increase of $198 million compared with 2022. Volumes and net new business increased net sales by $500 million due to increases in customer production and continued market outperformance as a result of recent product launches. Customer pricing decreased net sales by $256 million primarily as a result of lower customer recoveries due to improving supply chain dynamics related to the worldwide semiconductor supply shortage. Unfavorable currency decreased net sales by $44 million, primarily attributable to the Chinese renminbi, Japanese yen, and Indian rupee, partially offset by the euro. Other cost performance, primarily related to design changes, decreased sales by $2 million.
Current wording
Net sales for the year ended December 31, 2024 totaled $3,866 million, which represents an decrease of $88 million compared with 2023. Volumes and net new business increased net sales by $125 million due to continued market outperformance as a result of recent product launches and sales volumes in the America's, partially offset by lower sales in China due to market dynamics. Customer pricing decreased net sales by $142 million as a result of lower customer recoveries due to improving supply chain dynamics and annual price reductions. Unfavorable currency decreased net sales by $30 million, primarily attributable to the Chinese renminbi, Japanese yen, and Brazilian real, partially offset by the euro. Other cost performance, design changes and other decreased net sales by $41 million. primarily due to the non-recurrence of certain prior period one time commercial items.
Previous wording
Cost of sales increased $79 million for the year ended December 31, 2023, when compared with 2022. Volume, mix and net new business increased cost of sales by $386 million. Foreign currency decreased cost of sales by $19 million, primarily attributable to the Chinese renminbi and India rupee, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased cost of sales by $14 million. Favorable cost performance, design changes and other decreased cost of sales by $302 million primarily due to improved supply chain dynamics related to the worldwide semiconductor supply shortage as well as manufacturing efficiencies.
Current wording
Cost of sales decreased $132 million for the year ended December 31, 2024, when compared with 2023. Volume, mix and net new business increased cost of sales by $104 million. Net engineering costs, excluding currency, decreased cost of sales by $16 million as a result of favorable timing of engineering recoveries. Foreign currency decreased cost of sales by $17 million, primarily attributable to the Mexican peso and Japanese yen, partially offset by the Brazilian real. Cost performance, design changes and other decreased cost of sales by $203 million primarily due to lower recoveries from improving supply chain dynamics and manufacturing efficiencies.
Previous wording
Gross engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs. Net engineering costs of $210 million for the year ended December 31, 2023, including the impacts of currency, were $14 million higher than the same period of 2022. This increase is primarily related to lower recoveries, higher personnel cost, and inflation; partially offset by the timing of project expense.
Current wording
Gross engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs. Gross engineering costs of $334 million for the year ended December 31, 2024, where $4 million higher than the same period of 2023, and included the the acquisition of a German R&D services firm. Net engineering costs of $191 million for the year ended December 31, 2024, including the impacts of currency, were $19 million lower than the same period of 2023. This decrease is primarily related to favorable timing of recoveries during 2024 compared to the prior period.
Previous wording
Selling, general, and administrative expenses were $207 million, or 5.2% of net sales, and $188 million, or 5.0% of net sales, during the years ended December 31, 2023 and 2022, respectively. The increase is primarily due to increased personnel costs and reserves for bad debt.
Current wording
Selling, general, and administrative expenses were $207 million, or 5.4% of net sales, and $207 million, or 5.2% of net sales, for the years ended December 31, 2024 and 2023, respectively. Expenses remained unchanged during 2024 due to decreased amortization expense offset by increased employee expenses.
Previous wording
The Company's benefit from income taxes was $248 million for year ended December 31, 2023, an increased benefit of $293 million when compared with income tax expense in 2022. During the fourth quarter of 2023, the Company released $313 million of its deferred tax valuation allowance related to its U.S. federal and certain state deferred tax assets. Excluding this item, the $20 million year-over-year increase in income tax expense is primarily attributable to the overall increase in pre-tax income, including changes in the mix of earnings and differing tax rates between jurisdictions as well as withholding taxes.
Current wording
The Company's provision for income taxes was $14 million for year ended December 31, 2024, reflecting a $262 million increase compared to the $248 million benefit from income taxes in 2023. In the fourth quarter of 2023, the Company released $313 million from its deferred tax valuation allowance related to U.S. federal and certain state deferred tax assets. In 2024, the Company determined that additional U.S. deferred income tax assets were more likely than not to be realized resulting in a $49 million non-cash tax benefit.
Previous wording
Adjusted EBITDA is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The Company uses Adjusted EBITDA as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.
Current wording
Adjusted EBITDA is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under U.S. generally accepted accounting principles ("GAAP") and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments, and debt service requirements. The Company uses Adjusted EBITDA as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.
Previous wording
Adjusted EBITDA was $434 million for the year ended December 31, 2023, representing an increase of $86 million when compared with Adjusted EBITDA of $348 million for 2022. Favorable volumes and mix increased Adjusted EBITDA by $114 million. Foreign currency decreased Adjusted EBITDA by $24 million, primarily attributable to the Japanese yen and Mexican peso. Net engineering costs, excluding currency, decreased Adjusted EBITDA by $12 million. Customer pricing decreased Adjusted EBITDA by $256 million primarily as a result of lower semiconductor open market purchases and the associated customer recoveries due to improving supply chain dynamics related to the worldwide semiconductor supply shortage. Other cost performance increased Adjusted EBITDA by $261 million primarily related to design changes and improved supply chain dynamics related to the worldwide semiconductor supply shortage as well as manufacturing efficiencies.
Current wording
Adjusted EBITDA was $474 million for the year ended December 31, 2024, representing an increase of $40 million when compared to 2023. Favorable volumes and mix, and the ongoing benefits of cost and commercial discipline increased Adjusted EBITDA by $37 million. Foreign currency decreased Adjusted EBITDA by $12 million, primarily attributable to the Brazilian real and Japanese yen, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased Adjusted EBITDA by $15 million from favorable timing of recoveries.
Previous wording
A substantial portion of the Company's cash flows from operations are generated by operations located outside of the United States. Accordingly, the Company utilizes a combination of cash repatriation strategies, including dividends and distributions, royalties, and other intercompany arrangements to provide the funds necessary to meet obligations globally. The Company’s ability to access funds from its subsidiaries is subject to, among other things, customary regulatory and statutory requirements and contractual arrangements including joint venture agreements and local credit facilities. Moreover, repatriation efforts may be modified by the Company according to prevailing circumstances.
Current wording
A substantial portion of the Company's cash flows from operations are generated by operations located outside of the U.S. Accordingly, the Company utilizes a combination of cash repatriation strategies, including dividends and distributions, royalties, and other intercompany arrangements to provide the funds necessary to meet obligations globally. The Company’s ability to access funds from its subsidiaries is subject to, among other things, customary regulatory and statutory requirements and contractual arrangements including joint venture agreements and local credit facilities. Moreover, repatriation efforts may be modified by the Company according to prevailing circumstances.
Previous wording
Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of December 31, 2023, the Company’s corporate credit rating is BB- by Standard & Poor’s. See Note 10, "Debt" in the Company's consolidated financial statements included in Item 8 of this Form 10-K for a comprehensive discussion of the Company's debt facilities. Incremental funding requirements of the Company's consolidated foreign entities are primarily accommodated by intercompany cash pooling structures. Affiliate working capital lines had availability of $151 million and the Company had $400 million of available credit under the revolving credit facility as of December 31, 2023.
Current wording
Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of December 31, 2024, the Company’s corporate credit rating is BB by Standard & Poor’s. See Note 11, "Debt" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for a comprehensive discussion of the Company's debt facilities. Incremental funding requirements of the Company's consolidated foreign entities are primarily accommodated by intercompany cash pooling structures and intercompany load agreements. Affiliate working capital lines had availability of $150 million and the Company had $400 million of available credit under the revolving credit facility as of December 31, 2024.
Previous wording
As of December 31, 2023, the Company had total cash and equivalents of $518 million, including $3 million of restricted cash. Cash balances totaling $383 million were located in jurisdictions outside of the United States, of which approximately $85 million is considered permanently reinvested for funding ongoing operations outside of the U.S. If such permanently reinvested funds were repatriated to the U.S., no U.S. federal taxes would be imposed on the distribution of such foreign earnings due to U.S. tax reform enacted in December 2017. However, the Company would be required to accrue additional tax expense primarily related to foreign withholding taxes.
Current wording
As of December 31, 2024, the Company had total cash and equivalents of $626 million, including $3 million of restricted cash. Cash balances totaling $489 million were located in jurisdictions outside of the United States, of which approximately $65 million is considered permanently reinvested for funding ongoing operations outside of the U.S. If such permanently reinvested funds were repatriated to the U.S., no U.S. federal taxes would be imposed on the distribution of such foreign earnings due to U.S. tax reform enacted in December 2017. However, the Company would be required to accrue additional tax expense primarily related to foreign withholding taxes.
Previous wording
During the year ended December 31, 2023, cash contributions to the Company's non-U.S. employee retirement plans were approximately $7 million. Additionally, the Company expects to make contributions to its US and non-US defined benefit pension plans of $9 and $7 million, respectively, during 2024.
Current wording
During the year ended December 31, 2024, cash contributions to the Company's U.S and non-U.S. employee retirement plans were approximately $26 million. Additionally, the Company expects to make contributions to its US and non-US defined benefit pension plans of $4 million and $8 million, respectively, during 2025.
Previous wording
During the year ended December 31, 2023, the Company paid $8 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is provided in Note 3, "Restructuring and Impairments" in the Company's consolidated financial statements included in Item 8 of this Form 10-K.
Current wording
During the year ended December 31, 2024, the Company paid $10 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is provided in Note 4, "Restructuring and Impairments" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Previous wording
The Company has committed to make investments totaling $15 million in two entities principally focused on the automotive sector pursuant to limited partnership agreements. As of December 31, 2023, the Company has contributed $12 million toward the aggregate investment commitments. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount.
Current wording
The Company has committed to make investments totaling $20 million in multiple entities principally focused on the automotive sector pursuant to limited partnership agreements. As of December 31, 2024, the Company has contributed $13 million toward the aggregate investment commitments. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount.
Previous wording
On March 2, 2023 the Company's board of directors authorized a share repurchase program of $300 million of common stock through December 31, 2026. Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. During the year ended December 31, 2023, the Company has purchased 783,290 shares at an average price of $135.22 related to this program.
Current wording
On March 2, 2023 the Company's board of directors authorized a share repurchase program of $300 million of common stock through December 31, 2026. Under this program, the Company will repurchase shares at the prevailing market prices pursuant to specified share price and daily volume limits. During the year ended December 31, 2024, the Company has purchased 647,755 shares at an average price of $97.97 related to this program totaling $63 million.
Previous wording
As of December 31, 2023, the Company has contractual purchase obligations of approximately $22 million through 2028.
Current wording
As of December 31, 2024, the Company has contractual purchase obligations of approximately $41 million through 2029.
Previous wording
The Company has operating leases primarily for corporate offices, technical and engineering centers, vehicles, and certain equipment with future lease obligations ranging from 2024 to 2033. Additional discussion regarding the Company's leasing activities is provided in Note 8, "Leases" in the Company's consolidated financial statements included in Item 8 of this Form 10-K.
Current wording
The Company has operating leases primarily for corporate offices, technical and engineering centers, vehicles, and certain equipment with future lease obligations ranging from 2025 to 2035. Additional discussion regarding the Company's leasing activities is provided in Note 9, "Leases" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K.
Previous wording
The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of December 31, 2023, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $17 million. Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the period of cash settlement, if any, with the respective taxing authorities. For further information related to the Company’s unrecognized tax benefits, see Note 13, “Income Taxes,” to the consolidated financial statements included in this Report.
Current wording
The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of December 31, 2024, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $15 million. Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the period of cash settlement, if any, with the respective taxing authorities. For further information related to the Company’s unrecognized tax benefits, see Note 14, “Income Taxes,” to the consolidated financial statements included in this Report.
Previous wording
The Company generated $267 million of cash from operating activities during the year ended December 31, 2023, as compared to $167 million during 2022 representing a $100 million increase.
Current wording
The Company generated $427 million of cash from operating activities during the year ended December 31, 2024, as compared to $267 million during 2023 representing a $160 million increase.
Previous wording
The increase in cash from operations in 2023 when compared to the prior period is primarily attributable to higher Adjusted EBITDA of $86 million and improved working capital usage of $50 million, primarily related to customer collections and improved inventory management, offset by decreased payables. The increases are partially offset by an increase of $39 million of cash paid for taxes.
Current wording
The increase in cash from operations in 2024 when compared to the prior period is primarily attributable to higher Adjusted EBITDA of $40 million and improved working capital inflow of $95 million, primarily related to accounts receivable and accounts payable.
Previous wording
Net cash used by investing activities during the year ended December 31, 2023 totaled $123 million, as compared to cash used of $68 million in 2022, representing increased usage of $55 million. This increase in cash used by investing activities is primarily due to increased capital expenditures of $44 million.
Current wording
Net cash used by investing activities was $189 million and $123 million during the years ended December 31, 2024 and 2023, respectively. The $66 million increase in cash used by investing activities compared to the prior year is primarily due to increased capital expenditures of $12 million and the acquisition of businesses, net of cash acquired, of $55 million.
Previous wording
Net cash used by financing activities during the year ended December 31, 2023 totaled $156 million, as compared to a use of $9 million for 2022, representing increased usage of $147 million. This increase is primarily attributable to repurchases of common stock of $106 million and dividends paid to non-controlling interest of $29 million during the year ended December 31, 2023. The Company also repaid $13 million of principal on the term debt facility.
Current wording
Net cash used by financing activities was $100 million and $156 million for during the years ended December 31, 2024 and 2023, respectively. This $56 million decrease compared to the prior year is primarily attributable to lower repurchases of common stock of $43 million and decreased dividends paid to non-controlling interest of $17 million.
Previous wording
See "Liquidity" above and also see Note 10, "Debt" and Note 14, "Stockholders' Equity and Non-controlling Interests" to the Company's consolidated financial statements included in Item 8 of this Form 10-K for further information.
Current wording
See "Liquidity" above and also see Note 11, "Debt" and Note 15, "Stockholders' Equity and Non-controlling Interests" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information.
Previous wording
See Note 16, "Fair Value Measurements" to the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Current wording
See Note 17, "Fair Value Measurements" to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
The Company’s significant accounting policies have been disclosed in the consolidated financial statements and accompanying notes under Note 1, “Summary of Significant Accounting Policies” to the Company's consolidated financial statements included in Item 8 of this Form 10-K. Certain policies relate to estimates that involve matters that are highly uncertain at the time the accounting estimate is made and different estimates or changes to an estimate could have a material impact on the reported financial position, changes in financial condition or results of operations. Such critical estimates are discussed below. For these, materially different amounts could be reported under varied conditions and assumptions. Other items in the Company's consolidated financial statements require estimation, however, in the Company's opinion, they are not as critical as those discussed below.
Current wording
The Company’s significant accounting policies have been disclosed in the consolidated financial statements and accompanying notes under Note 1, “Summary of Significant Accounting Policies” to the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K. Certain policies relate to estimates that involve matters that are highly uncertain at the time the accounting estimate is made and different estimates or changes to an estimate could have a material impact on the reported financial position, changes in financial condition or results of operations. Such critical estimates are discussed below. For these, materially different amounts could be reported under varied conditions and assumptions. Other items in the Company's consolidated financial statements require estimation; however, in the Company's opinion, they are not as critical as those discussed below.
Previous wording
Revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Discrete price adjustments may occur during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in product specifications. Some of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be entitled based on historical experience and input from customer negotiations. See Note 1, "Summary of Significant Accounting Policies” in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Current wording
Revenue is measured based on the transaction price and the quantity of parts specified in a contract with a customer. Discrete price adjustments may occur during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in product specifications. Some of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be entitled based on historical experience and input from customer negotiations. See Note 1, "Summary of Significant Accounting Policies” in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
The Company accrues for warranty obligations for products sold based on management estimates, with support from the Company’s sales, engineering, quality, and legal functions, of the amount that eventually will be required to settle such obligations. This accrual is based on several factors including contractual arrangements, past experience, current claims, production changes, industry developments, and various other considerations. The Company accrues for product recall claims related to potential financial participation in customer actions to provide remedies as a result of actual or threatened regulatory or court actions or the Company’s determination of the potential for such actions. The Company's accrual for recall claims is based on specific facts and circumstances underlying individual claims with support from the Company’s engineering, quality, and legal functions. Amounts accrued are based upon management’s best estimate of the amount that will ultimately be required to settle such claims. See Note 18, "Commitments and Contingencies" in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Current wording
The Company accrues for warranty obligations for products sold based on management estimates, with support from the Company’s sales, engineering, quality, and legal functions, of the amount that eventually will be required to settle such obligations. This accrual is based on several factors including contractual arrangements, past experience, current claims, production changes, industry developments, and various other considerations. The Company accrues for product recall claims related to potential financial participation in customer actions to provide remedies as a result of actual or threatened regulatory or court actions or the Company’s determination of the potential for such actions. The Company's accrual for recall claims is based on specific facts and circumstances underlying individual claims with support from the Company’s engineering, quality, and legal functions. Amounts accrued are based upon management’s best estimate of the amount that will ultimately be required to settle such claims. See Note 19, "Commitments and Contingencies" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
The Company accrues costs in connection with its restructuring of the engineering, administration, and manufacturing organizations. These accruals include estimates primarily related to employee headcount, local statutory benefits, and other employee termination costs. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are recognized when identified. See Note 3, “Restructuring and Impairments” in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Current wording
The Company accrues costs in connection with its restructuring of the engineering, administration, and manufacturing organizations. These accruals include estimates primarily related to employee headcount, local statutory benefits, and other employee termination costs. Actual costs may vary from these estimates. These accruals are reviewed on a quarterly basis and changes to restructuring actions are recognized when identified. See Note 4, “Restructuring and Impairments” in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
Certain Company employees participate in defined benefit pension plans or retirement/termination indemnity plans. The Company has approximately $142 million in unfunded net pension liabilities as of December 31, 2023, of which approximately $113 million and $29 million are attributable to U.S. and non-U.S. pension plans, respectively. The determination of the Company’s obligations and expense for its pension plans is dependent on assumptions set by the Company used by actuaries in calculating such amounts. Assumptions, including the discount rate, expected long-term rate of return on plan assets, and rate of increase in compensation, are described in Note 11, “Employee Benefit Plans” to the Company’s consolidated financial statements included in Item 8 of this Form 10-K, which are incorporated herein by reference.
Current wording
Certain Company employees participate in defined benefit pension plans or retirement/termination indemnity plans. The Company has approximately $97 million in unfunded net pension liabilities as of December 31, 2024, of which approximately $80 million and $17 million are attributable to U.S. and non-U.S. pension plans, respectively. The determination of the Company’s obligations and expense for its pension plans is dependent on assumptions set by the Company used by actuaries in calculating such amounts. Assumptions, including the discount rate, expected long-term rate of return on plan assets, and rate of increase in compensation, are described in Note 12, “Employee Benefit Plans” to the Company’s consolidated financial statements included in Item 8 of this Annual Report on Form 10-K, which are incorporated herein by reference.
Previous wording
The Company has set the long-term rates of return assumptions for its 2024 pension expense which range from 2.00% to 9.60% outside the U.S. and 7.23% in the U.S.
Current wording
The Company has set the long-term rates of return assumptions for its 2025 pension expense which range from 2.00% to 10.60% outside the U.S. and 7.06% in the U.S.
Previous wording
In the ordinary course of the Company’s business, there are many transactions and calculations where the final tax determination is uncertain. The Company is regularly audited by tax authorities. Where appropriate, the Company accrues for contingencies related to income tax risks and non-income tax risks. See Note 13, "Income Taxes" in the Company's consolidated financial statements included in Item 8 of this Form 10-K for additional information.
Current wording
See Note 13, "Income Taxes" in the Company's consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information.
Previous wording
See Note 1, “Summary of Significant Accounting Policies” to the Company's consolidated financial statements under Item 8 of this Form 10-K for a discussion of recent accounting pronouncements.
Current wording
See Note 1, “Summary of Significant Accounting Policies” to the Company's consolidated financial statements under Item 8 of this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.
Previous wording
Certain statements contained or incorporated in this Annual Report on Form 10-K which are not statements of historical fact constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements give current expectations or forecasts of future events. Words such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “seek”, “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements. These statements reflect the Company’s current views with respect to future events and are based on assumptions and estimates, which are subject to risks and uncertainties including those discussed in Item 1A under the heading “Risk Factors” and elsewhere in this Form 10-K. Accordingly, undue reliance should not be placed on these forward-looking statements. Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this Form 10-K. The Company does not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made and qualifies all of its forward-looking statements by these cautionary statements.
Current wording
Certain statements contained or incorporated in this Annual Report on Form 10-K which are not statements of historical fact constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements give current expectations or forecasts of future events. Words such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “seek”, “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance signify forward-looking statements. These statements reflect the Company’s current views with respect to future events and are based on assumptions and estimates, which are subject to risks and uncertainties including those discussed in Item 1A under the heading “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on these forward-looking statements. Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this Annual Report on Form 10-K. The Company does not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made and qualifies all of its forward-looking statements by these cautionary statements.
Previous wording
•Changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership, or use of Visteon’s products or assets.
Current wording
•Changes in laws, tariffs, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, prohibit, or otherwise affect, the manufacture, licensing, distribution, sale, ownership, or use of Visteon’s products or assets.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
2023 includes a non-cash tax benefit of $313 million related to a reduction in the valuation allowance against the U.S. deferred tax assets.