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. 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, incorporates increased connectivity through onboard computing, software and cloud-enabled features, and includes 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 technology market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital, incorporates increased connectivity through onboard computing, software and cloud-enabled features, and includes more advanced safety and Artificial Intelligence ("AI") 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, and voice enabled. The Company's broad portfolio of digital cockpit and electrification electronics 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, AI and voice enabled. The Company'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, attractive inorganic growth 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 $256 million of Company common stock under this program. During the three months ended March 31, 2026, the Company paid a total of $10 million of quarterly cash dividends.

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, attractive inorganic growth opportunities, and returning capital to shareholders. Since 2023, the Company has returned nearly $300 million to shareholders through a combination of share repurchases and cash dividends. In June 2026, the Company reinforced its commitment to shareholder returns by authorizing a new $800 million share repurchase program extending through 2029.

Previous wording

The pie charts below highlight the net sales breakdown for Visteon for the three months ended March 31, 2026.

Current wording

The pie charts below highlight the net sales breakdown for Visteon for the three and six months ended June 30, 2026.

Previous wording

Global light‑vehicle production declined approximately 3% in the first quarter of 2026, based on April 2026 S&P Global data, with production volumes for the Company’s key customers declining by approximately 4%. In North America, industry production declined by approximately 2%, while production volumes at the Company’s major customers declined by an estimated 4%. Despite lower production levels, retail demand remained relatively resilient, with U.S. seasonally adjusted retail sales remaining above 16 million units. This reflected continued consumer demand for internal‑combustion and hybrid vehicles, partially offset by a decline in electric‑vehicle (“EV”) purchases following the expiration of federal EV tax credits. In Europe, industry production decreased approximately 1% compared to the prior year, while production volumes at the Company’s largest European customers declined by approximately 4%. In China, production volumes declined by approximately 10%, with production at the Company’s key customers declining at a similar rate.

Current wording

Global light‑vehicle production was flat in the second quarter of 2026 compared to 2025, based on July 2026 Mobility Global, Inc. data, with production volumes for the Company’s key customers declining by approximately 5%. In the Americas, industry production increased by approximately 1%, while production volumes at the Company’s major customers declined by an estimated 4%. Retail demand remained relatively resilient, with U.S. seasonally adjusted retail sales remaining above 16 million units. This reflected continued consumer demand for internal‑combustion and hybrid vehicles, partially offset by a decline in electric‑vehicle (“EV”) purchases following the expiration of federal EV tax credits. In Europe, industry production decreased approximately 1% compared to the prior year, while production volumes at the Company’s largest European customers declined by approximately 3%. In China, production volumes declined by approximately 3%, with production at the Company’s key customers declining by approximately 13%.

Previous wording

Looking ahead, S&P Global expects global light-vehicle production to decrease by 2% compared to 2025, with production volumes for the Company’s key customers are anticipated to decline by a slightly higher rate. North American, Chinese, and European production are each expected to decline by 2%. The recent conflict in the Middle East may further decrease production, though the magnitude of the decrease is uncertain. Memory chip market conditions may create cost pressures and have the potential to affect industry production volumes, as memory supplier capacity is increasingly allocated to support growth in data center infrastructure. The impact of tariffs on the automotive industry remains uncertain, with the potential to increase production costs and weigh on future vehicle volumes; however, the effects have been minimal to date.

Current wording

Looking ahead, Mobility Global, Inc. expects global light-vehicle production to decrease by 2% compared to 2025, with production volumes for the Company’s key customers anticipated to decline by approximately 4%. The ongoing conflict in the Middle East may further decrease production, though the magnitude of the decrease is uncertain. Memory chip market conditions are creating cost pressures and have the potential to affect industry production volumes, as memory supplier capacity is increasingly allocated to support growth in data center infrastructure. The impact of tariffs on the automotive industry remains uncertain, with the potential to increase production costs and weigh on future vehicle volumes; however, the effects have been minimal to date.

Previous wording

The automotive industry continues to face ongoing risks related to tariffs, vehicle affordability, economic uncertainty, geopolitical developments including the recent conflict in the Middle East, semiconductor chip shortages, production disruptions, and changes in customer market share. The potential impact on future periods’ financial statements, results of operations, and cash flows will depend on the evolution of tariff policies, plant production schedules, supply-chain conditions, and the pace of EV adoption.

Current wording

The extent to which these factors affect future financial performance will depend on the evolution of tariff policies, customer production schedules, supply chain conditions, customer market share shifts, and the pace of EV adoption.

Previous wording

Gross engineering costs relate to forward model program development, advanced engineering activities and services. Net engineering costs were $57 million and $52 million for the three months ended March 31, 2026 and 2025, respectively. The increase is primarily due to recent engineering services acquisitions, partially offset by lower personnel costs.

Current wording

Gross engineering costs relate to forward model program development, advanced engineering activities and services. Net engineering costs were $62 million and $52 million for the three months ended June 30, 2026 and 2025, respectively. The increase is primarily due to recent engineering services acquisitions and timing of project spend, partially offset by lower personnel costs.

Previous wording

Interest income for the three months ended March 31, 2026 increased by $1 million when compared to the same period in 2025. The increase in interest income, net of expense, during 2026 is due to higher cash balances which yield interest income.

Current wording

Interest, net for the three months ended June 30, 2026 increased by $1 million when compared to the same period in 2025. The increase in interest, net is due to lower interest expense related to the debt amendment executed in April 2026.

Previous wording

Net sales for the three months ended March 31, 2026 totaled $954 million, representing an increase of $20 million compared with the same period of 2025. Volumes and net new business decreased net sales by $23 million. Customer pricing decreased net sales by $5 million as a result of annual price reductions and customer recoveries. Favorable currency increased net sales by $24 million, primarily attributable to the euro and Brazilian real, partially offset by the Indian rupee. Other cost performance, design changes and other increased net sales by $24 million primarily due to one-time items and sales from the recently acquired engineering services companies.

Current wording

Net sales for the six months ended June 30, 2026 totaled $1,914, representing an increase of $11 million compared with the same period of 2025. Volumes and net new business decreased net sales by $40 million. Customer pricing decreased net sales by $6 million as a result of annual price reductions, partially offset by higher customer recoveries. Favorable currency increased net sales by $28 million, primarily attributable to the euro and Brazilian real, partially offset by the Indian rupee. Other cost performance, design changes and other increased net sales by $29 million primarily due to one-time items and sales from the recently acquired engineering services companies and other commercial items.

Previous wording

Cost of sales increased by $45 million for the three months ended March 31, 2026 compared with the same period in 2025. Volume, mix and net new business decreased cost of sales by $16 million. Net engineering costs, excluding currency, increased cost of sales by $2 million. Foreign currency increased cost of sales by $28 million, primarily attributable to the euro, Indian rupee, and Chinese renminbi. Cost performance, design changes and other increased cost of sales by $31 million primarily due to timing of recoveries, higher semiconductor costs, and higher warranty costs, partially offset by ongoing cost discipline.

Current wording

Cost of sales increased by $59 million for the six months ended June 30, 2026 compared with the same period in 2025. Volume, mix and net new business decreased cost of sales by $29 million. Net engineering costs, excluding currency, increased cost of sales by $14 million. Foreign currency increased cost of sales by $39 million, primarily attributable to the euro, Chinese renminbi, and Brazilian real. Cost performance, design changes and other increased cost of sales by $35 million primarily due to higher semiconductor and warranty costs, partially offset by ongoing cost discipline.

Previous wording

During the three months ended March 31, 2026, the Company recorded $18 million of net restructuring expense. These expenses are primarily related to employee severance. The increase is primarily related to a restructuring program approved during the three months ended March 31, 2026.

Current wording

During the six months ended June 30, 2026 and 2025, the Company recorded $17 million and $1 million of net restructuring expense, respectively, primarily related to employee severance. The increase is primarily related to a restructuring program approved during the first quarter of 2026.

Previous wording

Other income, net was $4 million and $1 million for the three months ended March 31, 2026 and 2025, respectively. Other income, net consisted primarily of net pension financing benefits.

Current wording

Other income, net was $2 million for the six months ended June 30, 2026 and 2025. Other income, net for the six months ended June 30, 2026 consisted primarily of net pension financing benefits, partially offset by acquisition costs and debt amendment fees. Other income, net for the six months ended June 30, 2025 consisted primarily of net pension financing benefits, partially offset by acquisition costs.

Previous wording

Adjusted EBITDA 1 was $104 million for the three months ended March 31, 2026 representing a decrease of $25 million compared with the same period of 2025. Lower volumes decreased Adjusted EBITDA 1 by $7 million. Customer pricing decreased Adjusted EBITDA 1 by $5 million as a result of annual price reductions and customer recoveries. Foreign currency decreased Adjusted EBITDA 1 by $6 million, primarily attributable to the Indian rupee and Japanese yen, partially offset by the euro and Brazilian real. Net engineering costs, excluding currency, decreased Adjusted EBITDA 1 by $2 million. Cost performance, commercial discipline as well as the impact of one-time items decreased Adjusted EBITDA 1 by $5 million.

Current wording

Adjusted EBITDA 1 was $220 million for the six months ended June 30, 2026 representing a decrease of $43 million compared with the same period of 2025. Lower volumes decreased Adjusted EBITDA 1 by $11 million. Customer pricing decreased Adjusted EBITDA 1 by $6 million as a result of annual price reductions, partially offset by customer recoveries. Foreign currency decreased Adjusted EBITDA 1 by $14 million, primarily attributable to the Indian rupee, Japanese yen, and Mexican peso, partially offset by the Brazilian real. Net engineering costs, excluding currency, decreased Adjusted EBITDA 1 by $14 million. Cost performance, commercial discipline as well as the impact of one-time items, partially offset by higher semiconductor cost, increased Adjusted EBITDA 1 by $2 million.

Previous wording

The Company's provision for income taxes of $26 million for the three months ended March 31, 2025 represents an increase of $13 million compared with $13 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.

Current wording

The Company's provision for income taxes of $48 million for the six months ended June 30, 2025 represents an increase of $22 million compared with $26 million in the same period of 2024. The increase in tax expense is primarily attributable to higher pretax income, as well as changes in the geographic mix of earnings and differing tax rates between jurisdictions. Additionally, the increase reflects higher withholding taxes, largely attributable to unfavorable foreign exchange movements.

Previous wording

Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of March 31, 2026, the Company’s corporate credit ratings has been upgraded from BB to BB+ by Standard & Poor’s and from Ba2 to Ba1 by Moody'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 $151 million and the Company had $400 million of available credit under the revolving credit facility, as of March 31, 2026.

Current wording

Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of June 30, 2026, the Company’s corporate credit ratings were BB+ by Standard & Poor’s and Ba1 by Moody'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 $189 million and the Company had $400 million of available credit under the revolving credit facility, as of June 30, 2026.

Previous wording

As of March 31, 2026, the Company had total cash and cash equivalents of $682 million, including $2 million of restricted cash and $108 million of cash attributable to the Company's joint venture partners should the Company elect to issue cash dividends.

Current wording

As of June 30, 2026, the Company had total cash and cash equivalents of $650 million, including $2 million of restricted cash and $94 million of cash attributable to the Company's joint venture partners should the Company elect to issue cash dividends.

Previous wording

Cash balances totaling $618 million were located in jurisdictions outside of the United States, of which approximately $260 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 $532 million were located in jurisdictions outside of the United States, of which approximately $210 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 three months ended March 31, 2026, the Company paid $10 million in quarterly cash dividends.

Current wording

During the three and six months ended June 30, 2026, the Company paid $10 million and $20 million, respectively, in quarterly cash dividends.

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. During the three months ended March 31, 2026, the Company purchased 329,530 shares at an average price of $91.04 related to this program for a total of $30 million. Decisions regarding future dividends remain at the sole discretion of the Board of Directors and will depend on a range of factors, including general economic conditions, the Company’s financial performance, available liquidity, capital requirements, regulatory considerations, and other relevant matters. These actions reflect the Company’s ongoing commitment to shareholder returns and form an integral part of its broader capital allocation strategy.

Current wording

Decisions regarding future dividends remain at the sole discretion of the Board of Directors and will depend on a range of factors, including general economic conditions, the Company’s financial performance, available liquidity, capital requirements, regulatory considerations, and other relevant matters. These actions reflect the Company’s ongoing commitment to shareholder returns and form an integral part of its broader capital allocation strategy.

Previous wording

During the three months ended March 31, 2026, cash contributions to the Company's defined benefit plans were less than $1 million related to its US plan and $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 the remainder of 2026 will be less than $1 million and $5 million, respectively.

Current wording

During the six months ended June 30, 2026, cash contributions to the Company's defined benefit plans were less than $1 million related to its US plan and $3 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 the remainder of 2026 will be less than $1 million and $3 million, respectively.

Previous wording

During the three months ended March 31, 2026, 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 2026 will approximate $20 million.

Current wording

During the six months ended June 30, 2026, the Company paid $15 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 2026 will approximate $20 million.

Previous 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, 2026, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $23 million. The Company further expects that it is reasonably possible that the anticipated settlement of an ongoing bilateral Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service and the India Tax Authority (“ITA”) could result in payment to the ITA in the range of $10 to $15 million (including interest) by the end of 2026. Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the timing of cash settlement, if any, for its remaining unrecognized tax benefits 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 June 30, 2026, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $9 million. The Company signed a bilateral Advance Pricing Agreement (“APA”) with the U.S. Internal Revenue Service and the India Tax Authority (“ITA”) that resulted in a cash settlement paid to the ITA of $15 million (including interest) in the second quarter.

Previous wording

Cash provided by operating activities decreased to $6 million for the three months ended March 31, 2026, from $70 million in the prior‑year period. The decrease was primarily attributable to lower net income and higher net working capital outflows of $40 million driven by higher accounts receivable and inventory, partially offset by increased accounts payable.

Current wording

Cash provided by operating activities decreased to $43 million for the six months ended June 30, 2026, from $165 million in the prior‑year period. The decrease was primarily attributable to lower net income and higher net working capital outflows of $76 million driven by higher accounts receivable and inventory, partially offset by increased accounts payable.

Previous wording

Cash used by financing activities during the three months ended March 31, 2026 was $47 million, representing a $29 million increase as compared to the same period in 2025. This increase is primarily attributable to a cash dividends paid to shareholders of $10 million and higher share repurchases as compared to 2025 of $23 million, partially offset by lower dividends paid to non-controlling interests of $4 million.

Current wording

Cash used by financing activities during the six months ended June 30, 2026 was $77 million, representing a $39 million increase as compared to the same period in 2025. This increase is primarily attributable to a cash dividend paid to shareholders of $20 million and higher share repurchases as compared to 2025 of $29 million.