VISTEON CORP

Previous wording

Visteon is a global automotive technology company serving the mobility industry, dedicated to creating more enjoyable, connected, and safe driving experiences. Our platforms leverage proven, scalable hardware and software solutions that enable the digital, electric and autonomous evolution of our global automotive customers. The automotive mobility market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital and towards device and cloud connected, electric vehicles, and vehicles with more advanced safety features.

Current wording

Visteon is a global automotive technology company serving the mobility industry, dedicated to creating more enjoyable, connected, and safe driving experiences. The Company's platforms leverage proven, scalable hardware and software solutions that enable the digital, electric, and autonomous evolution of its global automotive customers. The automotive mobility market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital and towards device and cloud connected, electric vehicles, and vehicles with more advanced safety features.

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

•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 $126 million of Company common stock under this program. On August 29, 2024, Visteon acquired all equity shares of a German advanced design and R&D services firm for a net cash outlay of $48 million as a growth initiative.

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 $176 million of Company common stock under this program. During the year ended December 31, 2024, Visteon spent a net cash outlay of $54 million on inorganic growth, to acquire an advanced design and R&D services firm and a software firm.

Previous wording

The pie charts below highlight the net sales breakdown for Visteon for the three and nine months ended September 30, 2024.

Current wording

The pie charts below highlight the net sales breakdown for Visteon for the three months ended March 31, 2025.

Previous wording

Automotive industry production has been turbulent in recent years with impacts from the COVID-19 pandemic, worldwide semiconductor and other supply related shortages, a UAW strike, inflation, increased geopolitical challenges, and the industry transition to electric vehicles. 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 are expected to decline approximately 2 million units which equates to approximately 88 million units produced in 2024, which is below recent industry production levels that peaked in 2017. 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 be dependent on plant production schedules, supply chain impacts, global economic impacts, and electric vehicle adoption.

Current wording

The industry continues to face ongoing risks related to tariffs, 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 tariff dynamics, plant production schedules, supply chain impacts, global economic impacts, and electric vehicle adoption.

Previous wording

Net sales for the three months ended September 30, 2024 totaled $980 million, representing a decrease of $34 million compared with the same period of 2023. Volumes and net new business increased net sales by $20 million due to market outperformance as a result of recent product launches partially offset by lower customer vehicle production volumes. Customer pricing decreased net sales by $31 million as a result of lower customer recoveries due to improving supply chain dynamics and annual price reductions. Currency decreased net sales by $11 million, primarily attributable to the Brazilian real. Cost performance, design changes and other decreased net sales by $12 million, which includes a decrease to net sales due to the non-recurrence of certain prior period one time commercial items.

Current wording

Net sales for the three months ended March 31, 2025 totaled $934 million, representing an increase of $1 million compared with the same period of 2024. Volumes and net new business increased net sales by $26 million due to continued market outperformance as a result of recent product launches and sales volumes in the Americas and Europe, partially offset by lower sales in China due to market dynamics. Customer pricing decreased net sales by $35 million as a result of annual price reductions and lower customer recoveries due to improving supply chain dynamics. Unfavorable currency decreased net sales by $20 million, primarily attributable to the Brazilian real and the euro. Other cost performance, design changes and other increased net sales by $30 million primarily due to design changes and other one-time commercial items.

Previous wording

Cost of sales decreased by $22 million for the three months ended September 30, 2024 compared with the same period in 2023. Volume, mix and net new business increased cost of sales by $16 million. Net engineering costs, excluding currency, decreased cost of sales by $5 million. Foreign currency decreased cost of sales by $1 million, primarily attributable to the Mexican peso and Brazilian real, partially offset by the euro. Cost performance, design changes, and other decreased cost of sales by $32 million primarily due to improving supply chain dynamics and manufacturing efficiencies.

Current wording

Cost of sales decreased by $18 million for the three months ended March 31, 2025 compared with the same period in 2024. Volume, mix and net new business increased cost of sales by $20 million. Net engineering costs, excluding currency, decreased cost of sales by $5 million. Foreign currency decreased cost of sales by $13 million, primarily attributable to the Brazilian real and the euro. Cost performance, design changes and other decreased cost of sales by $20 million primarily due to 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 $47 million for the three months ended September 30, 2024, including the impacts of currency, were $7 million lower than the same period of 2023. This decrease is primarily related to higher recoveries during 2024 compared to the prior period.

Current wording

Gross engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs. Net engineering costs of $52 million for the three months ended March 31, 2025, including the impacts of currency, were $8 million lower than the same period of 2024. This decrease is primarily related to improved engineering efficiencies and favorable timing of recoveries during 2025 compared to the prior period.

Previous wording

Selling, general, and administrative expenses were $51 million and $52 million, during the three months ended September 30, 2024 and 2023, respectively. The decrease is primarily due to lower amortization expense compared to the same period in 2023.

Current wording

Selling, general, and administrative expenses were $47 million and $52 million, during the three months ended March 31, 2025 and 2024, respectively. Expenses decreased during the three months ended March 31, 2025 as compared to same period prior year due to lower bad debt and employee expenses.

Previous wording

During the three months ended September 30, 2024, the Company recorded $28 million of net restructuring expense primarily related to employee severance.

Current wording

During the three months ended March 31, 2025 the Company recorded no restructuring expense. During the three months ended March 31, 2024, the Company recorded $2 million of net restructuring expense. These expenses are primarily related to employee severance.

Previous wording

Other income, net was $2 million for the three month period ending September 30, 2024 and was primarily due to net pension financing benefits partially offset by costs related to the German Acquisition.

Current wording

Other income, net was $1 million for the three month period ending March 31, 2025 and was primarily due to net pension financing benefits partially offset by costs related to business acquisitions.

Previous wording

The Company's provision for income taxes of $11 million for the three months ended September 30, 2024 represents a decrease of $10 million compared with $21 million in the same period of 2023. The decrease in tax expense is attributable to the reassessment of the German valuation allowance resulting in a $7 million valuation allowance release during the third quarter of 2024, primarily in connection with the German Acquisition, and the overall decrease in net income, including changes in the mix of earnings and differing tax rates between jurisdictions.

Current wording

The Company's provision for income taxes of $28 million for the three months ended March 31, 2025 represents an increase of $9 million compared with $19 million in the same period of 2024. The increase in tax expense is primarily attributable to the overall increase in net income, including changes in the mix of earnings and differing tax rates between jurisdictions.

Previous wording

The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.

Current wording

The Company defines Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring and impairment expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.

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

("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 $119 million for the three months ended September 30, 2024, representing a decrease of $9 million when compared to $128 million for the same period of 2023. Volume and new business increased Adjusted EBITDA by $4 million due to market outperformance as a result of recent product launches partially offset by lower customer vehicle production volumes. Foreign currency decreased Adjusted EBITDA by $10 million primarily attributable to the Brazilian real and euro, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased Adjusted EBITDA by $5 million. Cost performance, design changes and other decreased Adjusted EBITDA by $8 million, primarily related to pricing and the non-recurrence of certain prior period one time commercial items, partially offset by operational efficiencies.

Current wording

Adjusted EBITDA was $129 million for the three months ended March 31, 2025, representing an increase of $27 million when compared to $102 million for the same period of 2024. Favorable volumes and mix, and the ongoing benefits of cost and commercial discipline increased Adjusted EBITDA by $28 million. Foreign currency decreased Adjusted EBITDA by $6 million, primarily attributable to the Brazilian real and the euro, partially offset by the Mexican peso. Net engineering costs, excluding currency, increased Adjusted EBITDA by $5 million primarily due to engineering efficiencies and the favorable timing of recoveries.

Previous wording

Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of September 30, 2024, the Company’s corporate credit rating is BB by Standard & Poor’s. See Note 9, "Debt" 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, which may be utilized by the Company's local subsidiaries and consolidated joint ventures, had availability of $152 million and the Company had $400 million of available credit under the revolving credit facility, as of September 30, 2024.

Current wording

Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of March 31, 2025, the Company’s corporate credit rating is BB by Standard & Poor’s. See Note 9, "Debt" 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, which may be utilized by the Company's local subsidiaries and consolidated joint ventures, had availability of $149 million and the Company had $400 million of available credit under the revolving credit facility, as of March 31, 2025.

Previous wording

As of September 30, 2024, the Company had total cash and cash equivalents of $553 million, including $3 million of restricted cash. Cash balances totaling $436 million were located in jurisdictions outside of the United States, of which approximately $25 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

Cash balances totaling $569 million were located in jurisdictions outside of the United States, of which approximately $215 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 nine months ended September 30, 2024, cash contributions to the Company's defined benefit plans was $7 million related to its U.S. plans and $5 million related to its non-U.S. plans. The Company estimates that total cash contributions related to its U.S. and non-U.S. defined benefit pension plans during 2024 will be $9 million and $7 million, respectively.

Current wording

During the three months ended March 31, 2025, cash contributions to the Company's defined benefit plans were $1 million related to its non-U.S. plans. The Company estimates that total cash contributions related to its U.S. and non-U.S. defined benefit pension plans during 2025 will be $4 million and $5 million, respectively.

Previous wording

During the nine months ended September 30, 2024, the Company paid $7 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is included in Note 4, "Restructuring." The Company estimates that total cash restructuring payments through 2025 will approximate $20 million.

Current wording

During the three months ended March 31, 2025, the Company paid $3 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is included in Note 4, "Restructuring." The Company estimates that total cash restructuring payments through 2025 will approximate $19 million.

Previous wording

The Company committed to make a $20 million investment in two entities managed by venture capital firms principally focused on the automotive sector pursuant to limited partnership agreements. As of September 30, 2024, the Company 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.

Current wording

The Company has committed to make a $20 million investment in multiple entities principally focused on the automotive sector pursuant to limited partnership agreements. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount. As of March 31, 2025, the Company has contributed a total of approximately $13 million toward the aggregate investment commitments. These limited partnerships are classified as equity method investments.

Previous wording

The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of September 30, 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.

Current wording

The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of March 31, 2025, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $16 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.

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. As of September 30, 2024, the Company has purchased 953,840 shares at an average price of $132.01.

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. As of March 31, 2025, the Company has purchased 1,505,379 shares at an average price of $116.86.

Previous wording

The Company generated $224 million of cash inflows from operating activities during the nine months ended September 30, 2024, representing an improvement of $55 million as compared to prior year. The increase in cash from operations during 2024 is primarily attributable to higher Adjusted EBITDA, the timing of certain non-income based tax payments and higher cash interest income, partially offset by an increase in working capital.

Current wording

The Company generated $70 million and $69 million of cash inflows from operating activities during each of the three months ended March 31, 2025 and 2024, respectively. The increase is primarily attributable to higher Adjusted EBITDA offset by the timing of certain non-income based tax payments and higher employee related payments.

Previous wording

Net cash used by investing activities during the nine months ended September 30, 2024 totaled $148 million, representing $68 million of increased usage as compared to the same period in 2023. This increase in cash used by investing activities is primarily due to the German Acquisition, net of cash acquired, of $48 million and increased capital expenditures of $14 million.

Current wording

Net cash used by investing activities during the three months ended March 31, 2025 totaled $33 million, representing $4 million of decreased usage as compared to the same period in 2024. This decrease in cash used by investing activities is primarily due to decreased capital expenditures of $2 million.

Previous wording

Cash used by financing activities during the nine months ended September 30, 2024 was $40 million, representing a $79 million decrease as compared to the same period in 2023. This decrease is primarily attributable to higher cash outflows during 2023 related to dividends paid to non-controlling interest of $27 million and higher share repurchases as compared to 2024 of $56 million.

Current wording

Cash used by financing activities during the three months ended March 31, 2025 was $18 million, representing a $13 million decrease as compared to the same period in 2024. This decrease is primarily attributable to lower share repurchases as compared to 2024 of $13 million.

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.