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As Of Filer Filing For·On·As Docs:Size 2/20/20 Visteon Corp 10-K 12/31/19 120:22M |
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Document |
i ☑ | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State of | i Delaware | i 38-3519512 | |
(State
or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
i One Village Center Drive, | i Van Buren Township, | i Michigan | i 48111 |
(Address
of principal executive offices) | (Zip code) |
Title
of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered |
i Common Stock, par value $0.01 per share | i VC | i The
NASDAQ Stock Market LLC |
Warrants, each exercisable for 1.4 shares of Common Stock at an exercise price of $0.01 (expiring October 1, 2020) |
(Title of class) |
Document | Where
Incorporated |
2020 Proxy Statement | Part III (Items 10, 11, 12, 13 and 14) |
Page | ||
Item 1. | Business |
• | Electronic content and connectivity - The electronic content of vehicles continues to increase due to various
regulatory requirements and consumer demand for increased vehicle performance and functionality. The use of electronic components can reduce weight, expedite assembly, enhance fuel economy, improve emissions, increase safety and enhance vehicle performance. These benefits coincide with vehicles becoming more electric, connected and automated. Additionally, digital and portable technologies have dramatically influenced the lifestyle of today’s consumers, who expect products that enable such a lifestyle. Consequently, the vehicle cockpit is transforming into a fully digital environment with multi-displays systems incorporating larger, curved and complex displays and the consolidation of discrete electronic control units into a multi-core domain controller. |
• | Advanced
driver assistance systems ("ADAS") and autonomous driving - The industry continues to advance toward semi-autonomous and autonomous vehicles. The Society of Automotive Engineers has defined five levels of autonomy ranging from levels one and two with driver-assist functions whereby the driver is responsible for monitoring the environment, to level five with full autonomy under all conditions. Levels one and two are already popular in the market while levels three and above require a combination of sensors, radars, camera and LiDARs, requiring sensor fusion and machine learning technologies, as the system assumes the role of monitoring the environment. Level three includes features such as highway pilot and parking assist technology, for which a increased market penetration rate is expected over the next several years. |
• | Safety
and security - Governments continue to focus regulatory efforts on safer transportation. Accordingly, Original Equipment Manufacturers ("OEMs") are working to improve occupant and pedestrian safety by incorporating more safety-oriented technology in their vehicles. Additionally, in-vehicle connectivity has increased the need for robust cybersecurity systems to protect data, applications and associated infrastructure. Security features are evolving with advances in sensors and silicon. Suppliers must enable the security/safety initiatives of their customers including the development of new technologies. |
• | Vehicle standardization - OEMs continue to standardize vehicle platforms on a global basis,
resulting in a lower number of individual vehicle platforms, design cost savings and further scale of economies through the production of a greater number of models from each platform. Having operations in the geographic markets in which OEMs produce global platforms enables suppliers to meet OEMs’ needs more economically and efficiently, thus making global coverage a source of significant competitive advantage for suppliers with a diversified global footprint. Additionally, OEMs are looking to suppliers for increased collaboration to lower costs, reduce risks and decrease overall time to market. Suppliers that can provide fully engineered solutions, systems and pre-assembled combinations of component parts are positioned to leverage the trend toward system sourcing. As vehicles become more connected and cockpits more digitized, suppliers that can deliver modular hardware architectures, “open” software architectures and a software platform approach will be poised
to help OEMs achieve greater reuse of validated hardware circuitry, design scalability and faster development cycles. |
• | Compute
- A modular and scalable computing hardware platform designed to be adapted to Level 2-plus and above levels of automated driving; |
• | Runtime - In-vehicle middleware that provides a secure framework enabling applications and algorithms to communicate in a real time, high-performance environment; and |
• | Studio - A PC and cloud based development environment that enables automakers to create an ecosystem of developers for rapid algorithm development. Visteon's updated DriveCore Studio development environment allows developers
to leverage Microsoft's global, hyper-scale intelligent cloud solution to develop, test and validate autonomous driving algorithms. |
Sales
(a) | Property and Equipment, Net | |||||||||||||
Year Ended December 31 | December 31 | |||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | ||||||||||
United
States | 23 | % | 22 | % | 25 | % | 3 | % | 3 | % | ||||
Mexico | 1 | % | 2 | % | 2 | % | 17 | % | 15 | % | ||||
Total
North America | 24 | % | 24 | % | 27 | % | 20 | % | 18 | % | ||||
Portugal | 20 | % | 19 | % | 16 | % | 22 | % | 21 | % | ||||
Slovakia | 8 | % | 8 | % | 9 | % | 10 | % | 10 | % | ||||
Tunisia | 2 | % | 3 | % | 3 | % | 2 | % | 2 | % | ||||
France | 2 | % | 2 | % | 3 | % | 1 | % | 2 | % | ||||
Germany | — | % | — | % | — | % | 1 | % | 1 | % | ||||
Other
Europe | 1 | % | 1 | % | 1 | % | 2 | % | 2 | % | ||||
Intra-region
eliminations | — | % | — | % | — | % | — | % | — | % | ||||
Total
Europe | 33 | % | 33 | % | 32 | % | 38 | % | 38 | % | ||||
China
Domestic | 18 | % | 14 | % | 12 | % | ||||||||
China Export | 9 | % | 10 | % | 12 | % | ||||||||
Total
China | 27 | % | 24 | % | 24 | % | 21 | % | 22 | % | ||||
Japan | 13 | % | 17 | % | 16 | % | 5 | % | 5 | % | ||||
India | 4 | % | 4 | % | 3 | % | 8 | % | 8 | % | ||||
Thailand | 2 | % | 2 | % | 2 | % | 2 | % | 3 | % | ||||
Korea | — | % | — | % | — | % | — | % | — | % | ||||
Intra-region
eliminations | — | % | — | % | — | % | — | % | — | % | ||||
Total
Other Asia-Pacific | 19 | % | 23 | % | 21 | % | 15 | % | 16 | % | ||||
South
America | 3 | % | 3 | % | 2 | % | 6 | % | 6 | % | ||||
Inter-region
eliminations | (6 | )% | (7 | )% | (6 | )% | — | % | — | % | ||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||
(a)
Company sales based on geographic region where sale originates and not where customer is located. |
Item 1A. | Risk Factors |
• | changes to international trade agreements; |
• | local economic conditions, expropriation and nationalization, foreign exchange rate fluctuations and currency controls; |
• | withholding, border and other taxes on remittances and other payments by subsidiaries; |
• | investment
restrictions or requirements; |
• | export and import restrictions, including increases in border tariffs; |
• | the ability to effectively enforce intellectual property rights; |
• | new or additional U.S. sanctions on doing business with or in certain countries or with certain persons; and |
• | increases
in working capital requirements related to long supply chains. |
Item 1B. | Unresolved Staff Comments |
• | 30 corporate offices, technical and engineering centers and customer service centers in fourteen countries around the world, of which all were leased. |
• | 14
Electronics manufacturing and/or assembly facilities in Mexico, Portugal, Russia, Slovakia, Tunisia, India, Japan, China, Thailand and Brazil, of which 11 were leased and 3 were owned. |
Name | Age | Position | ||
Sachin
S. Lawande | 52 | Director, President and Chief Executive Officer | ||
58 | Vice President and Interim Chief Financial Officer | |||
Sunil K. Bilolikar | 58 | Senior
Vice President, Manufacturing Operations and Supply Chain | ||
Matthew M. Cole | 50 | Senior Vice President, Product Delivery | ||
Jochen Ladwig | 46 | Senior Vice President, Global Quality and Procurement | ||
Brett D. Pynnonen | 51 | Senior
Vice President and General Counsel | ||
Jerome J. Rouquet | 52 | Senior Vice President, Finance | ||
Markus J. Schupfner | 50 | Senior Vice President and Chief Technology Officer | ||
Kristin E. Trecker | 54 | Senior
Vice President and Chief Human Resources Officer | ||
Robert R. Vallance | 59 | Senior Vice President, Customer Business Groups |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Visteon Corporation | $100.00 | $107.15 | $127.71 | $198.92 | $95.82 | $137.64 |
Dow
Jones U.S. Auto & Parts Index | $100.00 | $97.26 | $99.06 | $121.50 | $94.24 | $116.97 |
S&P 500 | $100.00 | $101.37 | $113.49 | $138.26 | $132.19 | $173.80 |
Item 6. | Selected Financial Data |
Year
Ended December 31 | Year Ended December 31 | Year Ended December 31 | Year Ended December 31 | Year Ended December 31 | |||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
(Dollars
in Millions, Except Per Share Amounts) | |||||||||||||||||||
Statement of Operations Data: | |||||||||||||||||||
Net
sales | $ | 2,945 | $ | 2,984 | $ | 3,146 | $ | 3,161 | $ | 3,245 | |||||||||
Net
income from continuing operations | 82 | 173 | 175 | 131 | 42 | ||||||||||||||
Net
income (loss) from discontinued operations, net of tax | (1 | ) | 1 | 17 | (40 | ) | 2,286 | ||||||||||||
Net
income attributable to Visteon Corporation | $ | 70 | $ | 164 | $ | 176 | $ | 75 | $ | 2,284 | |||||||||
Basic
earnings (loss) per share | |||||||||||||||||||
Continuing operations | $ | 2.53 | $ | 5.53 | $ | 5.03 | $ | 3.28 | $ | 0.52 | |||||||||
Discontinued
operations | (0.04 | ) | 0.03 | 0.54 | (1.14 | ) | 53.48 | ||||||||||||
Basic
earnings per share attributable to Visteon Corporation | $ | 2.49 | $ | 5.56 | $ | 5.57 | $ | 2.14 | $ | 54.00 | |||||||||
Diluted
earnings (loss) per share | |||||||||||||||||||
Continuing operations | $ | 2.52 | $ | 5.49 | $ | 4.94 | $ | 3.25 | $ | 0.51 | |||||||||
Discontinued
operations | (0.04 | ) | 0.03 | 0.53 | (1.13 | ) | 52.12 | ||||||||||||
Diluted
earnings per share attributable to Visteon Corporation | $ | 2.48 | $ | 5.52 | $ | 5.47 | $ | 2.12 | $ | 52.63 | |||||||||
Balance
Sheet Data: | |||||||||||||||||||
Total assets | $ | 2,271 | $ | 2,007 | $ | 2,304 | $ | 2,373 | $ | 4,681 | |||||||||
Total
debt, excluding held for sale | $ | 385 | $ | 405 | $ | 393 | $ | 382 | $ | 383 | |||||||||
Total
Visteon Corporation stockholders' equity | $ | 480 | $ | 465 | $ | 637 | $ | 586 | $ | 1,057 | |||||||||
Statement
of Cash Flows Data: | |||||||||||||||||||
Cash provided from operating activities | $ | 183 | $ | 204 | $ | 215 | $ | 116 | $ | 338 | |||||||||
Cash
provided from (used by) investing activities | $ | (128 | ) | $ | (98 | ) | $ | (173 | ) | $ | 302 | $ | 2,358 | ||||||
Cash
used by financing activities | $ | (49 | ) | $ | (335 | ) | $ | (234 | ) | $ | (2,262 | ) | $ | (774 | ) |
• | 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 and the development of the DriveCore™ advanced safety platform positions Visteon to support these macro trends in automotive. |
• | Long-Term Growth and Margin Expansion - Visteon has continued to win an elevated level of business by demonstrating product quality, technical and development capability, new product innovation, reliability, timeliness, product design, manufacturing capability and flexibility, as well as overall customer service. |
• | Enhance
Shareholder Returns - The Company has returned approximately $3.3 billion to shareholders since 2015 through a combination of ongoing share repurchases and a one time $1.75 billion special dividend in 2016. The Company has $380 million of remaining authorization from the Board of Directors. This authorization is in place through the end of 2020. |
Light Vehicle Production | ||||||
2019 | 2018 | Change | ||||
Global | 88.9 | 94.2 | (5.6 | )% | ||
China | 24.7 | 26.8 | (8.1 | )% | ||
Other
Asia-Pacific | 21.5 | 22.4 | (3.8 | )% | ||
Europe | 21.1 | 22.0 | (4.0 | )% | ||
Americas | 19.6 | 20.4 | (3.9 | )% | ||
Other | 2.0 | 2.6 | (22.3 | )% | ||
Source:
IHS Automotive |
• | The Company recorded sales of $2,945 million representing a decrease of $39 million compared with the year ended December 31, 2018.
|
• | Gross margin was $324 million or 11.0% of sales for the year ended December 31, 2019 , compared to $411 million or 13.8% of sales for the same period of 2018. |
• | Net income attributable to Visteon was
$70 million for the year ended December 31, 2019 , compared to net income of $164 million for the same period of 2018. |
• | Total cash was $469 million, including $3 million of restricted cash as of December 31, 2019, $2 million higher than $467
million, including $4 million of restricted cash as of December 31, 2018. |
• | In the fourth quarter of 2019, the Company's sales growth, excluding currency and acquisitions, as compared to 2018, outperformed the market by 7%. |
Year Ended December 31 | |||||||||||
(In
millions) | 2019 | 2018 | Change | ||||||||
Sales | $ | 2,945 | $ | 2,984 | $ | (39 | ) | ||||
Cost
of sales | (2,621 | ) | (2,573 | ) | (48 | ) | |||||
Gross margin | 324 | 411 | (87 | ) | |||||||
Selling,
general and administrative expenses | (221 | ) | (193 | ) | (28 | ) | |||||
Restructuring expense, net | (4 | ) | (29 | ) | 25 | ||||||
Interest
expense, net | (9 | ) | (7 | ) | (2 | ) | |||||
Equity in net income of non-consolidated affiliates | 6 | 13 | (7 | ) | |||||||
Other
income, net | 10 | 21 | (11 | ) | |||||||
Provision for income taxes | (24 | ) | (43 | ) | 19 | ||||||
Net
income from continuing operations | 82 | 173 | (91 | ) | |||||||
Net income (loss) from discontinued operations, net of tax | (1 | ) | 1 | (2 | ) | ||||||
Net
income | 81 | 174 | (93 | ) | |||||||
Net income attributable to non-controlling interests | (11 | ) | (10 | ) | (1 | ) | |||||
Net
income attributable to Visteon Corporation | $ | 70 | $ | 164 | $ | (94 | ) | ||||
Adjusted EBITDA* | $ | 234 | $ | 330 | $ | (96 | ) | ||||
*
Adjusted EBITDA is a Non-GAAP financial measure, as defined in Note 3. |
(In millions) | Sales | Cost
of Sales | |||||
$ | 2,984 | $ | (2,573 | ) | |||
Volume, mix, and net new business | 22 | (91 | ) | ||||
Currency | (59 | ) | 47 | ||||
VFAE
consolidation | 38 | (32 | ) | ||||
Customer pricing, net | (71 | ) | — | ||||
Engineering costs, net* | — | (21 | ) | ||||
Cost
performance, design changes and other | 31 | 49 | |||||
$ | 2,945 | $ | (2,621 | ) | |||
*
Excludes the impact of currency and the consolidation of VFAE. |
Year
Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Gross engineering costs | $ | (440 | ) | $ | (431 | ) | |
Engineering recoveries | 140 | 145 | |||||
Engineering
costs, net | $ | (300 | ) | $ | (286 | ) |
Year Ended December 31 | |||||||||||||
(In
millions) | 2019 | 2018 | |||||||||||
% of Sales | % of Sales | ||||||||||||
Sales | $ | 2,945 | $ | 2,984 | |||||||||
Cost
of sales, excluding engineering costs | (2,321 | ) | 78.8 | % | (2,287 | ) | 76.6 | % | |||||
Engineering costs, net | (300 | ) | 10.2 | % | (286 | ) | 9.6 | % | |||||
Gross
margin | $ | 324 | 11.0 | % | $ | 411 | 13.8 | % |
Year
Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Pension financing benefits, net | $ | 10 | $ | 13 | |||
Transformation
initiatives | — | 4 | |||||
Gain on non-consolidated affiliate transactions, net | — | 4 | |||||
$ | 10 | $ | 21 |
Year Ended December 31 | |||||||||||
(In
millions) | 2019 | 2018 | Change | ||||||||
Net income attributable to Visteon Corporation | $ | 70 | $ | 164 | $ | (94 | ) | ||||
Depreciation
and amortization | 100 | 91 | 9 | ||||||||
Restructuring expense, net | 4 | 29 | (25 | ) | |||||||
Interest
expense, net | 9 | 7 | 2 | ||||||||
Equity in net income of non-consolidated affiliates | (6 | ) | (13 | ) | 7 | ||||||
Provision
for income taxes | 24 | 43 | (19 | ) | |||||||
Net (income) loss from discontinued operations, net of tax | 1 | (1 | ) | 2 | |||||||
Net
income attributable to non-controlling interests | 11 | 10 | 1 | ||||||||
Non-cash, stock-based compensation expense | 17 | 8 | 9 | ||||||||
Other | 4 | (8 | ) | 12 | |||||||
Adjusted
EBITDA | $ | 234 | $ | 330 | $ | (96 | ) |
Year Ended December 31 | |||||||||||
(In millions) | 2018 | 2017 | Change | ||||||||
Sales | $ | 2,984 | $ | 3,146 | $ | (162 | ) | ||||
Cost
of sales | (2,573 | ) | (2,655 | ) | 82 | ||||||
Gross margin | 411 | 491 | (80 | ) | |||||||
Selling,
general and administrative expenses | (193 | ) | (226 | ) | 33 | ||||||
Restructuring expense, net | (29 | ) | (14 | ) | (15 | ) | |||||
Interest
expense, net | (7 | ) | (16 | ) | 9 | ||||||
Equity in net income of non-consolidated affiliates | 13 | 7 | 6 | ||||||||
Loss
on divestiture | — | (33 | ) | 33 | |||||||
Other income, net | 21 | 14 | 7 | ||||||||
Provision
for income taxes | (43 | ) | (48 | ) | 5 | ||||||
Net income from continuing operations | 173 | 175 | (2 | ) | |||||||
Net
income from discontinued operations, net of tax | 1 | 17 | (16 | ) | |||||||
Net income | 174 | 192 | (18 | ) | |||||||
Net
income attributable to non-controlling interests | (10 | ) | (16 | ) | 6 | ||||||
Net income attributable to Visteon Corporation | $ | 164 | $ | 176 | $ | (12 | ) | ||||
Adjusted
EBITDA* | $ | 330 | $ | 370 | $ | (40 | ) | ||||
*
Adjusted EBITDA is a Non-GAAP financial measure, as defined in Note 3. |
(In millions) | Sales | Cost of Sales | |||||
$ | 3,146 | $ | (2,655 | ) | |||
Volume, mix, and net new business | (151 | ) | 42 | ||||
VFAE
consolidation | 13 | (9 | ) | ||||
Currency | 48 | (31 | ) | ||||
Customer pricing and other | (72 | ) | — | ||||
Engineering
cost, net | — | (21 | ) | ||||
Cost performance | — | 101 | |||||
$ | 2,984 | $ | (2,573 | ) |
Year Ended December 31 | |||||||
2018 | 2017 | ||||||
(Dollars in Millions) | |||||||
Gross
engineering costs | $ | (431 | ) | $ | (392 | ) | |
Engineering recoveries | 145 | 133 | |||||
Engineering
costs, net | $ | (286 | ) | $ | (259 | ) |
Year Ended December 31 | |||||||||||||
(In
millions) | 2018 | 2017 | |||||||||||
% of Sales | % of Sales | ||||||||||||
Sales | $ | 2,984 | $ | 3,146 | |||||||||
Cost
of sales, excluding engineering costs | (2,287 | ) | 76.6 | % | (2,396 | ) | 76.2 | % | |||||
Engineering costs, net | (286 | ) | 9.6 | % | (259 | ) | 8.2 | % | |||||
Gross
margin | $ | 411 | 13.8 | % | $ | 491 | 15.6 | % |
Year Ended December 31 | |||||||
(In millions) | 2018 | 2017 | |||||
Pension
financing benefits, net | $ | 13 | $ | 12 | |||
Transformation initiatives | 4 | (2 | ) | ||||
Gain
on non-consolidated affiliate transactions, net | 4 | 4 | |||||
$ | 21 | $ | 14 |
Year Ended December 31 | |||||||||||
(In millions) | 2018 | 2017 | Change | ||||||||
Net
income attributable to Visteon Corporation | $ | 164 | $ | 176 | $ | (12 | ) | ||||
Depreciation and amortization | 91 | 87 | 4 | ||||||||
Restructuring
expense, net | 29 | 14 | 15 | ||||||||
Interest expense, net | 7 | 16 | (9 | ) | |||||||
Equity
in net income of non-consolidated affiliates | (13 | ) | (7 | ) | (6 | ) | |||||
Loss on divestiture | — | 33 | (33 | ) | |||||||
Provision
for income taxes | 43 | 48 | (5 | ) | |||||||
Net (income) loss from discontinued operations, net of tax | (1 | ) | (17 | ) | 16 | ||||||
Net
income attributable to non-controlling interests | 10 | 16 | (6 | ) | |||||||
Non-cash, stock-based compensation expense | 8 | 12 | (4 | ) | |||||||
Other | (8 | ) | (8 | ) | — | ||||||
Adjusted
EBITDA | $ | 330 | $ | 370 | $ | (40 | ) |
(In millions) | Total | Less
than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||||||
Debt | $ | 387 | $ | 37 | $ | — | $ | — | $ | 350 | |||||||||
Purchase
obligations | 97 | 54 | 39 | 4 | — | ||||||||||||||
Interest
payments on long-term debt | 44 | 10 | 21 | 13 | — | ||||||||||||||
Operating
leases, including imputed interest | 195 | 36 | 55 | 46 | 58 | ||||||||||||||
Total
contractual obligations | $ | 723 | $ | 137 | $ | 115 | $ | 63 | $ | 408 |
• | Long-term
rate of return on plan assets: The expected long-term rate of return is used to calculate net periodic pension cost. The required use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year. Over time the expected long-term rate of return on plan assets is designed to approximate actual returns. The expected long-term rate of return for pension assets has been estimated based on various inputs, including historical returns for the different asset classes held by the Company’s trusts and its asset allocation, as well as inputs from internal and external sources regarding expected capital market returns, inflation and other variables. |
• | Discount
rate: The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected benefit payments for each plan at its annual measurement date. The Company
used discount rates ranging from 0.45% to 8.95% to determine its pension and other benefit obligations as of December 31, 2019, including weighted average discount rates of 3.34% for U.S. pension plans and 2.39% for non-U.S. pension plan. |
Impact on U.S. 2020 Pretax Pension Expense | Impact
on U.S. Plan 2019 Funded Status | Impact on Non-U.S. 2020 Pretax Pension Expense | Impact on Non-U.S. Plan 2019 Funded Status | ||||
25 basis point decrease in discount rate (a)(b) | Less than -$1 million | -$27 million | Less
than -$1 million | -$13 million | |||
25 basis point increase in discount rate (a)(b) | Less than + $1 million | +$26 million | Less than +$1 million | +$14 million | |||
25 basis point decrease in expected return on assets (a) | +$1.6
million | Less than +$1 million | |||||
25 basis point increase in expected return on assets (a) | -$1.6 million | Less than -$1 million | |||||
(a) Assumes
all other assumptions are held constant. | |||||||
(b) Excludes impact of assets used to hedge discount rate volatility. |
• | Visteon’s ability to satisfy its future capital and liquidity
requirements; Visteon’s ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to Visteon; Visteon’s ability to comply with covenants applicable to it; and the continuation of acceptable supplier payment terms. |
• | Visteon’s ability to satisfy its pension and other postretirement employee benefit obligations, and to retire outstanding debt and satisfy other contractual commitments, all at the levels and times planned by management. |
• | Visteon’s ability to access funds
generated by its foreign subsidiaries and joint ventures on a timely and cost-effective basis. |
• | Changes in the operations (including products, product planning and part sourcing), financial condition, results of operations or market share of Visteon’s customers. |
• | Changes in vehicle production volume of Visteon’s customers in the markets where it operates. |
• | Increases
in commodity costs or disruptions in the supply of commodities, including resins, copper, fuel and natural gas. |
• | Visteon’s ability to generate cost savings to offset or exceed agreed-upon price reductions or price reductions to win additional business and, in general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs and capital investments. |
• | Visteon’s ability to compete favorably with automotive parts suppliers with lower cost structures
and greater ability to rationalize operations; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements. |
• | Restrictions in labor contracts with unions that restrict Visteon’s ability to close plants, divest unprofitable, noncompetitive businesses, change local work rules and practices at a number of facilities and implement cost-saving measures. |
• | The costs
and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential asset impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities. |
• | Significant changes in the competitive environment in the major markets where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold. |
• | Legal and administrative proceedings, investigations
and claims, including shareholder class actions, inquiries by regulatory agencies, product liability, warranty, employee-related, environmental and safety claims and any recalls of products manufactured or sold by Visteon. |
• | Changes in economic conditions, currency exchange rates, changes in foreign laws, regulations or trade policies or political stability in foreign countries where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold. |
• | Shortages of materials or
interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components or supplies to manufacture its products or where its products are manufactured, distributed or sold. |
• | 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. |
• | Possible
terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system or fuel prices and supply. |
• | The cyclical and seasonal nature of the automotive industry. |
• | Visteon’s ability to comply with environmental, safety and other regulations applicable to it and any increase in the requirements, responsibilities and associated expenses and expenditures of these regulations. |
• | Visteon’s
ability to protect its intellectual property rights, and to respond to changes in technology and technological risks and to claims by others that Visteon infringes their intellectual property rights. |
• | Visteon’s ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting. |
• | Impact of the coronavirus on our suppliers, our manufacturing facilities and automotive sales in China. |
• | Other
factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings. |
Item
8. | Financial Statements and Supplementary Data |
Page No. | |
Revenue Recognition | ||
Description of the Matter | As
discussed in Note 1, Summary of Significant Accounting Policies, the Company’s sales contracts with its customers may provide for discrete price adjustments during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in production 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. Auditing the consideration the Company expects to be entitled to in exchange for certain of its products which are subject to non-routine price adjustments is highly judgmental due to changes in production specifications and commercial negotiations with customers throughout the life of the production periods. | |
How We Addressed the Matter in Our Audit | We identified and tested controls relating to the identification and evaluation
of non-routine pricing adjustments including management’s evaluation of the commercial facts and circumstances to support the most likely consideration to which the Company expects to be entitled. Our audit procedures included, among others, inspecting communications between the Company and its customers related to the pricing arrangements, making inquiries of the sales representatives who are responsible for negotiations with customers, testing any subsequent adjustments for appropriate amount and timing, obtaining written representations from management regarding customer agreements, and performing retrospective reviews of management’s estimates to identify any contrary evidence. | |
Income
Taxes - Realizability of Deferred Tax Assets | ||
Description of the Matter | As more fully described in Note 15, Income Taxes, as of December 31, 2019, the Company had deferred tax assets of $198 million (net of valuation allowances totaling $1,132 million, comprised of $768 million in the U.S. and $364 million in foreign jurisdictions, primarily Germany and France). Deferred tax assets are reduced by a valuation allowance if, based upon the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized. Management’s analysis
of the realizability of its deferred tax assets was critical to our audit because the assessment process by jurisdiction is complex, involves judgment, and includes assumptions that may be affected by future market or economic conditions. | |
How We Addressed the Matter in Our Audit | We tested controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s projections of future taxable income, the future reversal of existing taxable temporary differences, and management’s identification and use of tax planning strategies. We evaluated the Company’s assessment of
the realizability of deferred tax assets and the resulting valuation allowance. Our audit procedures included testing the calculations of existing temporary book-tax differences. We also tested the Company’s scheduling of the reversal of existing temporary taxable differences by jurisdiction and of the appropriate character of income. We evaluated the assumptions used by the Company to develop projections of future taxable income by jurisdiction and tested the completeness and accuracy of the underlying data used in its projections. For example, we compared the projections of future taxable income with the actual results of prior periods as well as management’s consideration of current industry and economic trends. We also assessed the historical accuracy of management’s projections and reconciled
the projections of future income with other forecasted financial information prepared by the Company. Lastly, we involved our tax specialists to evaluate the application of tax law in the Company’s use of tax planning strategies. |
Year
Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Sales | $ | i 2,945 | $ | i 2,984 | $ | i 3,146 | |||||
Cost
of sales | ( i 2,621 | ) | ( i 2,573 | ) | ( i 2,655 | ) | |||||
Gross
margin | i 324 | i 411 | i 491 | ||||||||
Selling,
general and administrative expenses | ( i 221 | ) | ( i 193 | ) | ( i 226 | ) | |||||
Restructuring
expense, net | ( i 4 | ) | ( i 29 | ) | ( i 14 | ) | |||||
Interest
expense | ( i 13 | ) | ( i 14 | ) | ( i 21 | ) | |||||
Interest
income | i 4 | i 7 | i 5 | ||||||||
Equity
in net income of non-consolidated affiliates | i 6 | i 13 | i 7 | ||||||||
Loss
on divestiture | i — | i — | ( i 33 | ) | |||||||
Other
income, net | i 10 | i 21 | i 14 | ||||||||
Income
before income taxes | i 106 | i 216 | i 223 | ||||||||
Provision
for income taxes | ( i 24 | ) | ( i 43 | ) | ( i 48 | ) | |||||
Net
income from continuing operations | i 82 | i 173 | i 175 | ||||||||
Net
income (loss) from discontinued operations, net of tax | ( i 1 | ) | i 1 | i 17 | |||||||
Net
income | i 81 | i 174 | i 192 | ||||||||
Net
income attributable to non-controlling interests | ( i 11 | ) | ( i 10 | ) | ( i 16 | ) | |||||
Net
income attributable to Visteon Corporation | $ | i 70 | $ | i 164 | $ | i 176 | |||||
Basic
earnings (loss) per share: | |||||||||||
Continuing operations | $ | i 2.53 | $ | i 5.53 | $ | i 5.03 | |||||
Discontinued
operations | ( i 0.04 | ) | i 0.03 | i 0.54 | |||||||
Basic
earnings per share attributable to Visteon Corporation | $ | i 2.49 | $ | i 5.56 | $ | i 5.57 | |||||
Diluted
earnings (loss) per share: | |||||||||||
Continuing operations | $ | i 2.52 | $ | i 5.49 | $ | i 4.94 | |||||
Discontinued
operations | ( i 0.04 | ) | i 0.03 | i 0.53 | |||||||
Diluted
earnings per share attributable to Visteon Corporation | $ | i 2.48 | $ | i 5.52 | $ | i 5.47 |
Year
Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Net income | $ | i 81 | $ | i 174 | $ | i 192 | |||||
Foreign
currency translation adjustments | ( i 13 | ) | ( i 46 | ) | i 68 | ||||||
Net
investment hedge | i 9 | i 7 | ( i 22 | ) | |||||||
Benefit
plans, net of tax (a) | ( i 43 | ) | ( i 8 | ) | i 12 | ||||||
Unrealized
hedging gains (losses), net of tax (b) | ( i 6 | ) | i 1 | i 6 | |||||||
Other
comprehensive income (loss), net of tax | ( i 53 | ) | ( i 46 | ) | i 64 | ||||||
Comprehensive
income | i 28 | i 128 | i 256 | ||||||||
Comprehensive
income attributable to non-controlling interests | i 9 | i 6 | i 21 | ||||||||
Comprehensive
income attributable to Visteon Corporation | $ | i 19 | $ | i 122 | $ | i 235 |
December 31 | |||||||
2019 | 2018 | ||||||
ASSETS | |||||||
Cash
and equivalents | $ | i 466 | $ | i 463 | |||
Restricted
cash | i 3 | i 4 | |||||
Accounts
receivable, net | i 514 | i 486 | |||||
Inventories,
net | i 169 | i 184 | |||||
Other
current assets | i 193 | i 159 | |||||
Total
current assets | i 1,345 | i 1,296 | |||||
Property
and equipment, net | i 436 | i 397 | |||||
Intangible
assets, net | i 127 | i 129 | |||||
Right-of-use
assets | i 165 | i — | |||||
Investments
in non-consolidated affiliates | i 48 | i 42 | |||||
Other
non-current assets | i 150 | i 143 | |||||
Total
assets | $ | i 2,271 | $ | i 2,007 | |||
LIABILITIES
AND EQUITY | |||||||
Short-term debt | $ | i 37 | $ | i 57 | |||
Accounts
payable | i 511 | i 436 | |||||
Accrued
employee liabilities | i 73 | i 67 | |||||
Current
lease liability | i 30 | i — | |||||
Other
current liabilities | i 147 | i 161 | |||||
Total
current liabilities | i 798 | i 721 | |||||
Long-term
debt | i 348 | i 348 | |||||
Employee
benefits | i 292 | i 257 | |||||
Non-current
lease liability | i 139 | i — | |||||
Deferred
tax liabilities | i 27 | i 23 | |||||
Other
non-current liabilities | i 72 | i 76 | |||||
Stockholders’
equity: | |||||||
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of December 31, 2019 and 2018) | i — | i — | |||||
Common
stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 28 million shares outstanding as of December 31, 2019 and 2018) | i 1 | i 1 | |||||
Additional
paid-in capital | i 1,342 | i 1,335 | |||||
Retained
earnings | i 1,679 | i 1,609 | |||||
Accumulated
other comprehensive loss | ( i 267 | ) | ( i 216 | ) | |||
Treasury
stock | ( i 2,275 | ) | ( i 2,264 | ) | |||
Total
Visteon Corporation stockholders’ equity | i 480 | i 465 | |||||
Non-controlling
interests | i 115 | i 117 | |||||
Total
equity | i 595 | i 582 | |||||
Total
liabilities and equity | $ | i 2,271 | $ | i 2,007 |
Year
Ended December 31 | |||||||||||
2019 | 2018 | 2017 | |||||||||
Operating Activities | |||||||||||
Net income | $ | i 81 | $ | i 174 | $ | i 192 | |||||
Adjustments
to reconcile net income to net cash provided from operating activities: | |||||||||||
Depreciation and amortization | i 100 | i 91 | i 87 | ||||||||
Non-cash
stock-based compensation | i 17 | i 8 | i 12 | ||||||||
Losses
on divestitures and impairments | i — | i — | i 33 | ||||||||
Transaction
gains | i — | ( i 8 | ) | ( i 11 | ) | ||||||
Equity
in net income of non-consolidated affiliates, net of dividends remitted | ( i 6 | ) | ( i 13 | ) | ( i 7 | ) | |||||
Other
non-cash items | i 8 | i 3 | i 1 | ||||||||
Changes
in assets and liabilities: | |||||||||||
Accounts receivable | ( i 33 | ) | i 44 | i 10 | |||||||
Inventories | i 13 | i 1 | ( i 3 | ) | |||||||
Accounts
payable | i 73 | ( i 19 | ) | ( i 54 | ) | ||||||
Other
assets and other liabilities | ( i 70 | ) | ( i 77 | ) | ( i 45 | ) | |||||
Net
cash provided from operating activities | i 183 | i 204 | i 215 | ||||||||
Investing
Activities | |||||||||||
Capital expenditures, including intangibles | ( i 142 | ) | ( i 127 | ) | ( i 99 | ) | |||||
Loans
to non-consolidated affiliate, net of repayments | i 11 | i — | i — | ||||||||
Acquisition
of businesses, net of cash acquired | i — | i 16 | ( i 47 | ) | |||||||
Payments
on divestiture of businesses | i — | i — | ( i 48 | ) | |||||||
Proceeds
from asset sales and business divestitures | i — | i — | i 15 | ||||||||
Other,
net | i 3 | i 13 | i 6 | ||||||||
Net
cash used by investing activities | ( i 128 | ) | ( i 98 | ) | ( i 173 | ) | |||||
Financing
Activities | |||||||||||
Repurchase of common stock | ( i 20 | ) | ( i 300 | ) | ( i 200 | ) | |||||
Short-term
debt, net | ( i 19 | ) | i 12 | i 10 | |||||||
Dividends
paid to non-controlling interests | ( i 9 | ) | ( i 28 | ) | ( i 38 | ) | |||||
Distribution
payments | i — | ( i 14 | ) | ( i 1 | ) | ||||||
Stock
based compensation tax withholding payments | i — | ( i 7 | ) | ( i 1 | ) | ||||||
Principal
payments on debt | i — | — | ( i 2 | ) | |||||||
Other | ( i 1 | ) | i 2 | ( i 2 | ) | ||||||
Net
cash used by financing activities | ( i 49 | ) | ( i 335 | ) | ( i 234 | ) | |||||
Effect
of exchange rate changes on cash and equivalents | ( i 4 | ) | ( i 13 | ) | i 19 | ||||||
Net
increase (decrease) in cash and equivalents | i 2 | ( i 242 | ) | ( i 173 | ) | ||||||
Cash
and equivalents at beginning of the year | i 467 | i 709 | i 882 | ||||||||
Cash
and equivalents at end of the year | $ | i 469 | $ | i 467 | $ | i 709 | |||||
Supplemental
Disclosures: | |||||||||||
Cash paid for interest | $ | i 14 | $ | i 15 | $ | i 16 | |||||
Cash
paid for income taxes, net of refunds | $ | i 40 | $ | i 47 | $ | i 49 |
Total
Visteon Corporation Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Common Stock | Stock Warrants | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income
(Loss) | Treasury Stock | Total Visteon Corporation Stockholders' Equity | Non-Controlling Interests | Total Equity | |||||||||||||||||||||||||||
$ | i 1 | $ | — | $ | i 1,327 | $ | i 1,269 | $ | ( i 233 | ) | $ | ( i 1,778 | ) | $ | i 586 | $ | i 138 | $ | i 724 | ||||||||||||||||
Net
income | i — | i — | i — | i 176 | i — | i — | i 176 | i 16 | i 192 | ||||||||||||||||||||||||||
Other
comprehensive income | i — | i — | i — | i — | i 59 | i — | i 59 | i 5 | i 64 | ||||||||||||||||||||||||||
Stock-based
compensation, net | i — | i — | i 12 | i — | i — | i 4 | i 16 | i — | i 16 | ||||||||||||||||||||||||||
Repurchase
of shares of common stock | i — | i — | i — | i — | i — | ( i 200 | ) | ( i 200 | ) | i — | ( i 200 | ) | |||||||||||||||||||||||
Dividends
payable | i — | i — | i — | i — | i — | i — | i — | ( i 2 | ) | ( i 2 | ) | ||||||||||||||||||||||||
Cash
dividends | i — | i — | i — | i — | i — | i — | i — | ( i 33 | ) | ( i 33 | ) | ||||||||||||||||||||||||
$ | i 1 | $ | — | $ | i 1,339 | $ | i 1,445 | $ | ( i 174 | ) | $ | ( i 1,974 | ) | $ | i 637 | $ | i 124 | $ | i 761 | ||||||||||||||||
Net
income | i — | i — | i — | i 164 | i — | i — | i 164 | i 10 | i 174 | ||||||||||||||||||||||||||
Other
comprehensive loss | i — | i — | i — | i — | ( i 42 | ) | i — | ( i 42 | ) | ( i 4 | ) | ( i 46 | ) | ||||||||||||||||||||||
Stock-based
compensation, net | i — | i — | ( i 4 | ) | i — | i — | i 10 | i 6 | i — | i 6 | |||||||||||||||||||||||||
Repurchase
of shares of common stock | i — | i — | i — | i — | i — | ( i 300 | ) | ( i 300 | ) | i — | ( i 300 | ) | |||||||||||||||||||||||
Cash
dividends | i — | i — | i — | i — | i — | i — | i — | ( i 28 | ) | ( i 28 | ) | ||||||||||||||||||||||||
Business
acquisition | i — | i — | i — | i — | i — | i — | i — | i 15 | i 15 | ||||||||||||||||||||||||||
$ | i 1 | $ | i — | $ | i 1,335 | $ | i 1,609 | $ | ( i 216 | ) | $ | ( i 2,264 | ) | $ | i 465 | $ | i 117 | $ | i 582 | ||||||||||||||||
Net
income | i — | i — | i — | i 70 | i — | i — | i 70 | i 11 | i 81 | ||||||||||||||||||||||||||
Other
comprehensive loss | i — | i — | i — | i — | ( i 51 | ) | i — | ( i 51 | ) | ( i 2 | ) | ( i 53 | ) | ||||||||||||||||||||||
Stock-based
compensation, net | i — | i — | i 5 | i — | i — | i 9 | i 14 | i — | i 14 | ||||||||||||||||||||||||||
Repurchase
of shares of common stock | i — | i — | i — | i — | i — | ( i 20 | ) | ( i 20 | ) | i — | ( i 20 | ) | |||||||||||||||||||||||
Cash
dividends | i — | i — | i — | i — | i — | i — | i — | ( i 9 | ) | ( i 9 | ) | ||||||||||||||||||||||||
Acquisition
of non-controlling interest | i — | i — | i 2 | i — | i — | i — | i 2 | ( i 2 | ) | i — | |||||||||||||||||||||||||
$ | i 1 | $ | i — | $ | i 1,342 | $ | i 1,679 | $ | ( i 267 | ) | $ | ( i 2,275 | ) | $ | i 480 | $ | i 115 | $ | i 595 |
Year
Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Pension financing benefits, net | $ | i 10 | $ | i 13 | $ | i 12 | |||||
Transformation
initiatives | — | i 4 | ( i 2 | ) | |||||||
Gain
on non-consolidated transactions, net | i — | i 4 | i 4 | ||||||||
$ | i 10 | $ | i 21 | $ | i 14 |
• | Developed technology intangible assets, which are amortized over average, estimated useful lives generally ranging from i 6
to i 12 years. |
• | Customer-related intangible assets, which are amortized over average, estimated useful lives generally ranging from i 7
to i 12 years. |
• | Software development costs are capitalized after the software product development reaches technological feasibility and until the software product becomes releasable to customers. These intangible assets are amortized using
the straight-line method over estimated useful lives generally ranging from i 3 to i 5
years. |
• | Other intangible assets are amortized using the straight-line method over estimated useful lives based on the nature of the intangible asset. |
Year Ended December 31 | ||||||
(In millions) | 2019 | 2018 | ||||
Geographical Markets (a) | ||||||
Europe | $ | i 978 | $ | i 981 | ||
Americas | i 792 | i 800 | ||||
China
Domestic | i 527 | i 405 | ||||
China
Export | i 262 | i 309 | ||||
Other
Asia-Pacific | i 560 | i 678 | ||||
Eliminations | ( i 174 | ) | ( i 189 | ) | ||
$ | i 2,945 | $ | i 2,984 | |||
(a)
Company sales based on geographic region where sale originates and not where customer is located. |
Year
Ended December 31 | ||||||
(In millions) | 2019 | 2018 | ||||
Product Lines | ||||||
Instrument clusters | $ | i 1,314 | $ | i 1,209 | ||
Audio
and infotainment | i 721 | i 772 | ||||
Information
displays | i 486 | i 509 | ||||
Body
and security | i 117 | i 110 | ||||
Telematics | i 76 | i 68 | ||||
Climate
controls | i 72 | i 122 | ||||
Other
(includes HUD) | i 159 | i 194 | ||||
$ | i 2,945 | $ | i 2,984 |
Year Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Net
income attributable to Visteon Corporation | $ | i 70 | $ | i 164 | $ | i 176 | |||||
Depreciation
and amortization | i 100 | i 91 | i 87 | ||||||||
Restructuring
expense, net | i 4 | i 29 | i 14 | ||||||||
Interest
expense, net | i 9 | i 7 | i 16 | ||||||||
Equity
in net income of non-consolidated affiliates | ( i 6 | ) | ( i 13 | ) | ( i 7 | ) | |||||
Loss
on divestiture | i — | i — | i 33 | ||||||||
Provision
for income taxes | i 24 | i 43 | i 48 | ||||||||
Net
(income) loss from discontinued operations, net of tax | i 1 | ( i 1 | ) | ( i 17 | ) | ||||||
Net
income attributable to non-controlling interests | i 11 | i 10 | i 16 | ||||||||
Non-cash,
stock-based compensation expense | i 17 | i 8 | i 12 | ||||||||
Other | i 4 | ( i 8 | ) | ( i 8 | ) | ||||||
Adjusted
EBITDA | $ | i 234 | $ | i 330 | $ | i 370 |
Year Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
United
States | $ | i 663 | $ | i 654 | $ | i 776 | |||||
Mexico | i 38 | i 67 | i 70 | ||||||||
Total
North America | i 701 | i 721 | i 846 | ||||||||
Portugal | i 602 | i 563 | i 508 | ||||||||
Slovakia | i 237 | i 235 | i 294 | ||||||||
Tunisia | i 71 | i 96 | i 109 | ||||||||
France | i 53 | i 70 | i 84 | ||||||||
Other
Europe | i 16 | i 20 | i 20 | ||||||||
Intra-region
eliminations | ( i 1 | ) | ( i 3 | ) | ( i 11 | ) | |||||
Total
Europe | i 978 | i 981 | i 1,004 | ||||||||
China
Domestic | i 527 | i 405 | i 381 | ||||||||
China
Export | i 262 | i 309 | i 363 | ||||||||
Total
China | i 789 | i 714 | i 744 | ||||||||
Japan | i 393 | i 494 | i 495 | ||||||||
India | i 110 | i 114 | i 92 | ||||||||
Thailand | i 57 | i 69 | i 81 | ||||||||
Korea | — | i 2 | i 12 | ||||||||
Intra-region
eliminations | — | ( i 1 | ) | ( i 1 | ) | ||||||
Total
Other Asia-Pacific | i 560 | i 678 | i 679 | ||||||||
South
America | i 91 | i 79 | i 68 | ||||||||
Inter-region
eliminations | ( i 174 | ) | ( i 189 | ) | ( i 195 | ) | |||||
$ | i 2,945 | $ | i 2,984 | $ | i 3,146 | ||||||
Company
sales based on geographic region where sale originates and not where customer is located. |
Year Ended December
31 | |||||||
(In millions) | 2019 | 2018 | |||||
Europe | $ | i 207 | $ | i 152 | |||
North
America | i 186 | i 74 | |||||
China | i 93 | i 86 | |||||
Other
Asia-Pacific | i 86 | i 60 | |||||
South
America | i 29 | i 25 | |||||
$ | i 601 | $ | i 397 | ||||
Tangible
long-lived assets include property, plant and equipment and right-of-use assets. |
Year
Ended December 31 | |||||||||||
(In millions, except per share amounts) | 2019 | 2018 | 2017 | ||||||||
Numerator: | |||||||||||
Net
income from continuing operations attributable to Visteon | $ | i 71 | $ | i 163 | $ | i 159 | |||||
Net
income (loss) from discontinued operations attributable to Visteon | ( i 1 | ) | i 1 | i 17 | |||||||
Net
income attributable to Visteon | $ | i 70 | $ | i 164 | $ | i 176 | |||||
Denominator: | |||||||||||
Average
common stock outstanding - basic | i 28.1 | i 29.5 | i 31.6 | ||||||||
Dilutive
effect of performance based share units and other | i 0.1 | i 0.2 | i 0.6 | ||||||||
Diluted
shares | i 28.2 | i 29.7 | i 32.2 | ||||||||
Basic
and Diluted Per Share Data: | |||||||||||
Basic earnings (loss) per share attributable to Visteon: | |||||||||||
Continuing operations | $ | i 2.53 | $ | i 5.53 | $ | i 5.03 | |||||
Discontinued
operations | ( i 0.04 | ) | i 0.03 | i 0.54 | |||||||
$ | i 2.49 | $ | i 5.56 | $ | i 5.57 | ||||||
Diluted
earnings (loss) per share attributable to Visteon: | |||||||||||
Continuing operations | $ | i 2.52 | $ | i 5.49 | $ | i 4.94 | |||||
Discontinued
operations | ( i 0.04 | ) | i 0.03 | i 0.53 | |||||||
$ | i 2.48 | $ | i 5.52 | $ | i 5.47 |
(In
millions) | Electronics | Other | Total | ||||||||
$ | i 31 | $ | i 9 | $ | i 40 | ||||||
Expense | i 7 | — | i 7 | ||||||||
Change
in estimates | i 8 | ( i 1 | ) | i 7 | |||||||
Utilization | ( i 30 | ) | ( i 2 | ) | ( i 32 | ) | |||||
Foreign
currency | i 2 | i — | i 2 | ||||||||
i 18 | i 6 | i 24 | |||||||||
Expense | i 24 | — | i 24 | ||||||||
Change
in estimates | i 5 | i 1 | i 6 | ||||||||
Utilization | ( i 26 | ) | ( i 4 | ) | ( i 30 | ) | |||||
Foreign
currency | ( i 1 | ) | i — | ( i 1 | ) | ||||||
i 20 | i 3 | i 23 | |||||||||
Expense | i 5 | — | i 5 | ||||||||
Change
in estimates | ( i 1 | ) | ( i 1 | ) | ( i 2 | ) | |||||
Utilization | ( i 15 | ) | i — | ( i 15 | ) | ||||||
Foreign
currency | ( i 1 | ) | i — | ( i 1 | ) | ||||||
$ | i 8 | $ | i 2 | $ | i 10 |
December
31 | |||||||
(In millions) | 2019 | 2018 | |||||
YFVIC (50%) | $ | i 43 | $ | i 38 | |||
Others | i 5 | i 4 | |||||
Total
investments in non-consolidated affiliates | $ | i 48 | $ | i 42 |
Year Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Billings
to affiliates (a) | $ | i 75 | $ | i 52 | |||
Purchases
from affiliates (b) | $ | i 73 | $ | i 79 | |||
(a)
Primarily relates to parts production and engineering reimbursement | |||||||
(b) Primarily relates to engineering services as well as selling, general and administrative expenses |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Payables
due to YFVIC | $ | i 9 | $ | i 17 | |||
Exposure
to loss in YFVIC | |||||||
Investment in YFVIC | $ | i 43 | $ | i 38 | |||
Receivables
due from YFVIC | i 41 | i 36 | |||||
Subordinated
loan receivable | i 8 | i 20 | |||||
Loan
guarantee | i — | i 11 | |||||
Maximum
exposure to loss in YFVIC | $ | i 92 | $ | i 105 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Raw
materials | $ | i 100 | $ | i 124 | |||
Work-in-process | i 28 | i 26 | |||||
Finished
products | i 41 | i 34 | |||||
$ | i 169 | $ | i 184 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Land | $ | i 12 | $ | i 13 | |||
Buildings
and improvements | i 83 | i 76 | |||||
Machinery,
equipment and other | i 599 | i 531 | |||||
Construction
in progress | i 80 | i 56 | |||||
Total
property and equipment | i 774 | i 676 | |||||
Accumulated
depreciation | ( i 362 | ) | ( i 303 | ) | |||
i 412 | i 373 | ||||||
Product
tooling, net of amortization | i 24 | i 24 | |||||
Property
and equipment, net | $ | i 436 | $ | i 397 |
Year Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Depreciation | $ | i 78 | $ | i 73 | $ | i 71 | |||||
Amortization | i 6 | i 3 | i 3 | ||||||||
$ | i 84 | $ | i 76 | $ | i 74 |
(In millions) | Estimated Weighted Average Useful Life (years) | Gross Intangibles | Accumulated Amortization | Net Intangibles | |||||||||
Definite-Lived: | |||||||||||||
Developed
technology | i 7 | $ | i 40 | $ | ( i 35 | ) | $ | i 5 | |||||
Customer
related | i 10 | i 89 | ( i 51 | ) | i 38 | ||||||||
Capitalized
software development | i 4 | i 32 | ( i 5 | ) | i 27 | ||||||||
Other | i 20 | i 15 | ( i 4 | ) | i 11 | ||||||||
Subtotal | i 176 | ( i 95 | ) | i 81 | |||||||||
Indefinite-Lived: | |||||||||||||
Goodwill | i 46 | i — | i 46 | ||||||||||
Total
| $ | i 222 | $ | ( i 95 | ) | $ | i 127 |
(In millions) | Gross Intangibles | Accumulated Amortization | Net Intangible | Additions | Foreign Currency | Amortization Expense | Net
Intangibles | ||||||||||||||||||||
Definite-Lived: | |||||||||||||||||||||||||||
Developed technology | $ | i 40 | $ | ( i 31 | ) | $ | i 9 | $ | i — | $ | ( i 1 | ) | $ | ( i 3 | ) | $ | i 5 | ||||||||||
Customer
related | i 90 | ( i 42 | ) | i 48 | i — | ( i 1 | ) | ( i 9 | ) | i 38 | |||||||||||||||||
Capitalized
software development | i 16 | ( i 3 | ) | i 13 | i 16 | i — | ( i 2 | ) | i 27 | ||||||||||||||||||
Other | i 14 | ( i 2 | ) | i 12 | i 1 | i — | ( i 2 | ) | i 11 | ||||||||||||||||||
Subtotal | i 160 | ( i 78 | ) | i 82 | i 17 | ( i 2 | ) | ( i 16 | ) | i 81 | |||||||||||||||||
Indefinite-Lived: | |||||||||||||||||||||||||||
Goodwill | i 47 | i — | i 47 | i — | ( i 1 | ) | i — | i 46 | |||||||||||||||||||
Total
| $ | i 207 | $ | ( i 78 | ) | $ | i 129 | $ | i 17 | $ | ( i 3 | ) | $ | ( i 16 | ) | $ | i 127 |
(In millions) | Gross Intangibles | Accumulated Amortization | Net Intangibles | Additions | Foreign
Currency | Amortization Expense | Net Intangibles | ||||||||||||||||||||
Definite-Lived: | |||||||||||||||||||||||||||
Developed technology | $ | i 40 | $ | ( i 27 | ) | $ | i 13 | $ | i — | $ | ( i 1 | ) | $ | ( i 3 | ) | $ | i 9 | ||||||||||
Customer
related | i 88 | ( i 35 | ) | i 53 | i 7 | ( i 3 | ) | ( i 9 | ) | i 48 | |||||||||||||||||
Capitalized
software development | i 8 | ( i 1 | ) | i 7 | i 8 | i — | ( i 2 | ) | i 13 | ||||||||||||||||||
Other | i 13 | ( i 1 | ) | i 12 | i 2 | ( i 1 | ) | ( i 1 | ) | i 12 | |||||||||||||||||
Subtotal | i 149 | ( i 64 | ) | i 85 | i 17 | ( i 5 | ) | ( i 15 | ) | i 82 | |||||||||||||||||
Indefinite-Lived: | |||||||||||||||||||||||||||
Goodwill | i 47 | i — | i 47 | i 2 | ( i 2 | ) | i — | i 47 | |||||||||||||||||||
Total
| $ | i 196 | $ | ( i 64 | ) | $ | i 132 | $ | i 19 | $ | ( i 7 | ) | $ | ( i 15 | ) | $ | i 129 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Recoverable
taxes | $ | i 61 | $ | i 46 | |||
Joint
venture receivables | i 41 | i 37 | |||||
Contractually
reimbursable engineering costs | i 29 | i 40 | |||||
Prepaid
assets and deposits | i 22 | i 20 | |||||
Royalty
agreements | i 17 | i — | |||||
China
bank notes | i 16 | i 12 | |||||
Other | i 7 | i 4 | |||||
$ | i 193 | $ | i 159 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Deferred
tax assets | $ | i 59 | $ | i 45 | |||
Recoverable
taxes | i 28 | i 33 | |||||
Contractually
reimbursable engineering costs | i 24 | i 29 | |||||
Royalty
agreements | i 11 | i — | |||||
Joint
venture note receivables | i 8 | i 20 | |||||
Other | i 20 | i 16 | |||||
$ | i 150 | $ | i 143 |
Year Ended December 31 | |||
(In millions) | 2019 | ||
Operating lease cost (includes immaterial variable lease costs) | $ | ( i 41 | ) |
Short-term
lease cost | ( i 1 | ) | |
Sublease income | i 5 | ||
Total
lease cost | $ | ( i 37 | ) |
Year
Ended December 31 | |||
(In millions) | 2019 | ||
Cash out flows from operating leases | $ | i 38 | |
Right-of-use assets obtained
in exchange for lease obligations | $ | i 38 |
(In
millions) | |||
2020 | $ | i 36 | |
2021 | i 29 | ||
2022 | i 26 | ||
2023
| i 24 | ||
2024 | i 22 | ||
2025
and thereafter | i 58 | ||
Total future minimum lease payments | i 195 | ||
Less
imputed interest | ( i 26 | ) | |
Total lease liabilities | $ | i 169 | |
Weighted
Average Interest Rate | Carrying Value | ||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||
Short-Term Debt: | |||||||||||
Short-term
borrowings | i 4.3% | i 4.8% | $ | i 37 | $ | i 57 | |||||
Long-Term
Debt: | |||||||||||
Term facility due March 24, 2024 | i 3.2% | i 3.2% | $ | i 348 | $ | i 348 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Product
warranty and recall accruals | $ | i 34 | $ | i 34 | |||
Deferred
income | i 22 | i 16 | |||||
Rents
and royalties | i 19 | i 14 | |||||
Non-income
taxes payable | i 17 | i 13 | |||||
Restructuring
reserves | i 10 | i 23 | |||||
Joint
venture payables | i 9 | i 17 | |||||
Income
taxes payable | i 7 | i 15 | |||||
Dividends
payable | i 3 | i 3 | |||||
Other | i 26 | i 26 | |||||
$ | i 147 | $ | i 161 |
December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Product warranty and recall accruals | $ | i 15 | $ | i 14 | |||
Foreign
currency hedges | i 14 | i 18 | |||||
Royalty
agreements | i 13 | i — | |||||
Deferred
income | i 9 | i 14 | |||||
Income
tax reserves | i 5 | i 6 | |||||
Non-income
tax reserves | i 1 | i 5 | |||||
Other | i 15 | i 19 | |||||
$ | i 72 | $ | i 76 |
U.S.
Plans | Non-U.S. Plans | ||||||||||||||||||||||
Year Ended December 31 | Year Ended December 31 | ||||||||||||||||||||||
(In millions, except percentages) | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
Costs
Recognized in Income: | |||||||||||||||||||||||
Pension service cost: | |||||||||||||||||||||||
Service
cost | $ | — | $ | — | $ | — | $ | ( i 2 | ) | $ | ( i 2 | ) | $ | ( i 2 | ) | ||||||||
Pension
financing benefit (cost): | |||||||||||||||||||||||
Interest cost | ( i 30 | ) | ( i 27 | ) | ( i 29 | ) | ( i 8 | ) | ( i 8 | ) | ( i 9 | ) | |||||||||||
Expected
return on plan assets | i 40 | i 41 | i 41 | i 10 | i 9 | i 9 | |||||||||||||||||
Amortization
of losses and other | — | — | — | ( i 1 | ) | ( i 2 | ) | ( i 2 | ) | ||||||||||||||
Settlements
and curtailments | i — | i — | i — | — | i — | i 2 | |||||||||||||||||
Restructuring
related pension cost: | |||||||||||||||||||||||
Special termination benefits (a) | i — | ( i 2 | ) | i — | ( i 1 | ) | i — | ( i 2 | ) | ||||||||||||||
Net
pension income (expense) | $ | i 10 | $ | i 12 | $ | i 12 | $ | ( i 2 | ) | $ | ( i 3 | ) | $ | ( i 4 | ) | ||||||||
Weighted
Average Assumptions: | |||||||||||||||||||||||
Discount rate | i 4.33 | % | i 3.65 | % | i 4.12 | % | i 3.34 | % | i 3.28 | % | i 3.51 | % | |||||||||||
Compensation
increase | N/A | N/A | N/A | i 3.51 | % | i 3.62 | % | i 3.66 | % | ||||||||||||||
Long-term
return on assets | i 6.78 | % | i 6.74 | % | i 6.73 | % | i 4.73 | % | i 4.86 | % | i 5.24 | % | |||||||||||
(a)
Primarily related to restructuring actions |
Year
Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Accumulated benefit obligation | $ | i 1,088 | $ | i 813 | |||
Projected
benefit obligation | $ | i 1,107 | $ | i 818 | |||
Fair
value of plan assets | $ | i 830 | $ | i 582 |
U.S.
Plans | Non-U.S. Plans | |||||||||||
Weighted Average Assumptions | 2019 | 2018 | 2019 | 2018 | ||||||||
Discount rate | i 3.34 | % | i 4.33 | % | i 2.39 | % | i 3.34 | % | ||||
Rate
of increase in compensation | N/A | N/A | i 3.16 | % | i 3.51 | % |
U.S. Plans | Non-U.S. Plans | ||||||||||||||
Year Ended December 31 | Year
Ended December 31 | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Change in Benefit Obligation: | |||||||||||||||
Benefit
obligation — beginning | $ | i 760 | $ | i 840 | $ | i 250 | $ | i 281 | |||||||
Service
cost | i — | i — | i 2 | i 2 | |||||||||||
Interest
cost | i 30 | i 27 | i 8 | i 8 | |||||||||||
Actuarial
loss (gain) | i 88 | ( i 63 | ) | i 40 | ( i 17 | ) | |||||||||
Special
termination benefits | i — | i 2 | i 1 | i — | |||||||||||
Foreign
exchange translation | i — | i — | i 4 | ( i 16 | ) | ||||||||||
Benefits
paid and other | ( i 40 | ) | ( i 46 | ) | ( i 5 | ) | ( i 8 | ) | |||||||
Benefit
obligation — ending | $ | i 838 | $ | i 760 | $ | i 300 | $ | i 250 | |||||||
Change
in Plan Assets: | |||||||||||||||
Plan assets — beginning | $ | i 567 | $ | i 647 | $ | i 200 | $ | i 220 | |||||||
Actual
return on plan assets | i 102 | ( i 35 | ) | i 26 | ( i 5 | ) | |||||||||
Sponsor
contributions | i 1 | i 1 | i 7 | i 7 | |||||||||||
Foreign
exchange translation | i — | i — | i 4 | ( i 14 | ) | ||||||||||
Benefits
paid and other | ( i 40 | ) | ( i 46 | ) | ( i 5 | ) | ( i 8 | ) | |||||||
Plan
assets — ending | $ | i 630 | $ | i 567 | $ | i 232 | $ | i 200 | |||||||
Total
funded status at end of period | $ | ( i 208 | ) | $ | ( i 193 | ) | $ | ( i 68 | ) | $ | ( i 50 | ) | |||
Balance
Sheet Classification: | |||||||||||||||
Other non-current assets | $ | i — | $ | i — | $ | i 3 | $ | i 4 | |||||||
Accrued
employee liabilities | i — | i — | ( i 2 | ) | ( i 1 | ) | |||||||||
Employee
benefits | ( i 208 | ) | ( i 193 | ) | ( i 69 | ) | ( i 53 | ) | |||||||
Accumulated
other comprehensive loss: | |||||||||||||||
Actuarial loss | i 79 | i 53 | i 50 | i 27 | |||||||||||
Tax
effects/other | ( i 1 | ) | i — | ( i 14 | ) | ( i 9 | ) | ||||||||
$ | i 78 | $ | i 53 | $ | i 36 | $ | i 18 |
U.S.
Plans | Non-U.S. Plans | ||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Actuarial loss (gain) | $ | i 26 | $ | i 13 | $ | i 23 | $ | ( i 4 | ) | ||||||
Deferred
taxes | ( i 1 | ) | i — | ( i 5 | ) | i 1 | |||||||||
Currency/other | i — | i — | i 1 | — | |||||||||||
Reclassification
to net income | i — | i — | ( i 1 | ) | ( i 2 | ) | |||||||||
$ | i 25 | $ | i 13 | $ | i 18 | $ | ( i 5 | ) |
(In millions) | U.S. Plans | Non-U.S. Plans | |||||
2020 | $ | i 40 | $ | i 6 | |||
2021 | i 39 | i 6 | |||||
2022 | i 40 | i 7 | |||||
2023 | i 41 | i 8 | |||||
2024 | i 40 | i 10 | |||||
Years
2025 - 2029 | i 217 | i 54 |
Target Allocation | Percentage of Plan Assets | ||||||||||||||||
U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||
2020 | 2020 | 2019 | 2018 | 2019 | 2018 | ||||||||||||
Equity
securities | i 38 | % | i 34 | % | i 37 | % | i 30 | % | i 38 | % | i 27 | % | |||||
Fixed
income | i 15 | % | i 43 | % | i 18 | % | i 18 | % | i 39 | % | i 41 | % | |||||
Alternative
strategies | i 46 | % | i 14 | % | i 44 | % | i 51 | % | i 14 | % | i 19 | % | |||||
Cash | i 1 | % | i 3 | % | i 1 | % | i 1 | % | i 4 | % | i 8 | % | |||||
Other | i — | % | i 6 | % | i — | % | i — | % | i 5 | % | i 5 | % | |||||
i 100 | % | i 100 | % | i 100 | % | i 100 | % | i 100 | % | i 100 | % |
Year Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Income
(Loss) Before Income Taxes: (a) | |||||||||||
U.S | $ | i 5 | $ | i 76 | $ | i 84 | |||||
Non-U.S | i 95 | i 127 | i 132 | ||||||||
Total
income before income taxes | $ | i 100 | $ | i 203 | $ | i 216 | |||||
Current
Tax Provision: | |||||||||||
Non-U.S | $ | i 29 | i 42 | $ | i 42 | ||||||
Deferred
Tax Provision (Benefit): | |||||||||||
Non-U.S | ( i 5 | ) | i 1 | i 6 | |||||||
Total
deferred tax provision (benefit) | ( i 5 | ) | i 1 | i 6 | |||||||
Provision
for income taxes | $ | i 24 | $ | i 43 | $ | i 48 | |||||
(a) Income
(loss) before income taxes excludes equity in net income of non-consolidated affiliates. |
Year
Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Tax provision (benefit) at U.S. statutory rate of 21% for 2019 and 2018, and 35% for 2017 | $ | i 21 | $ | i 43 | $ | i 76 | |||||
Impact
of foreign operations | i 23 | i 16 | ( i 5 | ) | |||||||
Non-U.S
withholding taxes | i 10 | i 14 | i 15 | ||||||||
Tax
holidays in foreign operations | ( i 5 | ) | ( i 5 | ) | ( i 7 | ) | |||||
State
and local income taxes | — | i 3 | ( i 1 | ) | |||||||
Tax
reserve adjustments | i 2 | ( i 6 | ) | ( i 14 | ) | ||||||
Change
in valuation allowance | ( i 10 | ) | ( i 81 | ) | ( i 270 | ) | |||||
Impact
of U.S. tax reform | ( i 18 | ) | i 33 | i 250 | |||||||
Impact
of tax law change | — | i 35 | i 5 | ||||||||
Research
credits | ( i 1 | ) | ( i 5 | ) | ( i 1 | ) | |||||
Other | i 2 | ( i 4 | ) | — | |||||||
Provision
for income taxes | $ | i 24 | $ | i 43 | $ | i 48 |
• | As a result of the Act, the Company remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The
Company recorded a cumulative income tax charge of $ i 267 million (less than $ i 1
million income tax charge in 2018 and $ i 267 million income tax charge in 2017); the impact of which was entirely offset by a corresponding income tax benefit associated with a reduction in the U.S. valuation allowance in those years. |
• | The
Act requires a mandatory deemed repatriation of post-1986 undistributed foreign earnings, which results in a one- time transition tax. The Company recorded a cumulative charge of $ i 52 million ($ i 33
million in 2018 and $ i 19 million charge in 2017) related to the one-time transition tax, which was partially offset by the $ i 36
million reversal of the Company’s existing deferred tax liability (net of foreign tax credits) associated with repatriation of unremitted foreign earnings. The cumulative $ i 16 million income tax charge was entirely offset by a corresponding income tax benefit associated with a reduction in the U.S. valuation allowance in those years. |
• | For
tax years beginning after December 31, 2017, the Act introduces new provisions for U.S. taxation of certain global intangible low-taxed income (“GILTI”). The Company has made the policy election to record any liability associated with GILTI in the period in which it is incurred. |
December
31 | |||||||
(In millions) | 2019 | 2018 | |||||
Deferred Tax Assets: | |||||||
Net operating losses and credit carryforwards | $ | i 1,099 | $ | i 1,090 | |||
Employee
benefit plans | i 73 | i 64 | |||||
Lease
liability | i 55 | i — | |||||
Fixed
assets and intangibles | i 14 | i 9 | |||||
Warranty | i 11 | i 10 | |||||
Inventory | i 9 | i 9 | |||||
Restructuring | i 5 | i 8 | |||||
Capitalized
expenditures for tax reporting | i 5 | i 3 | |||||
Deferred
income | i 4 | i 5 | |||||
Other | i 55 | i 57 | |||||
Valuation
allowance | ( i 1,132 | ) | ( i 1,144 | ) | |||
Total
deferred tax assets | $ | i 198 | $ | i 111 | |||
Deferred
Tax Liabilities: | |||||||
Outside basis investment differences, including withholding tax | $ | i 64 | $ | i 57 | |||
Right-of-use
assets | i 54 | i — | |||||
Fixed
assets and intangibles | i 16 | i 17 | |||||
All
other | i 32 | i 15 | |||||
Total
deferred tax liabilities | i 166 | i 89 | |||||
Net
deferred tax assets (liabilities) | $ | i 32 | $ | i 22 | |||
Consolidated
Balance Sheet Classification: | |||||||
Other non-current assets | $ | i 59 | $ | i 45 | |||
Deferred
tax liabilities non-current | i 27 | i 23 | |||||
Net
deferred tax assets (liabilities) | $ | i 32 | $ | i 22 |
Year Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Beginning
balance | $ | i 10 | $ | i 18 | |||
Tax
positions related to current period | |||||||
Additions | i 3 | — | |||||
Tax
positions related to prior periods | |||||||
Additions | i 1 | — | |||||
Reductions | ( i 1 | ) | ( i 4 | ) | |||
Lapses
in statute of limitations | — | ( i 4 | ) | ||||
Ending balance | $ | i 13 | $ | i 10 |
December
31 | |||||||
(In millions) | 2019 | 2018 | |||||
Yanfeng Visteon Automotive Electronics Co., Ltd. | $ | i 56 | $ | i 56 | |||
Shanghai
Visteon Automotive Electronics Co., Ltd. | i 41 | i 43 | |||||
Changchun
Visteon FAWAY Automotive Electronics Co., Ltd. | i 17 | i 15 | |||||
Other | i 1 | i 3 | |||||
$ | i 115 | $ | i 117 |
Year
Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Changes in AOCI: | |||||||
Beginning balance | $ | ( i 216 | ) | $ | ( i 174 | ) | |
Other
comprehensive loss before reclassification, net of tax | ( i 46 | ) | ( i 42 | ) | |||
Amounts
reclassified from AOCI | ( i 5 | ) | i — | ||||
Ending
balance | $ | ( i 267 | ) | $ | ( i 216 | ) | |
Changes
in AOCI by component: | |||||||
Foreign currency translation adjustments | |||||||
Beginning balance | $ | ( i 142 | ) | $ | ( i 100 | ) | |
Other
comprehensive loss before reclassification (a) | ( i 11 | ) | ( i 42 | ) | |||
Ending
balance | ( i 153 | ) | ( i 142 | ) | |||
Net
investment hedge | |||||||
Beginning balance | ( i 5 | ) | ( i 12 | ) | |||
Other
comprehensive income before reclassification (a) | i 15 | i 9 | |||||
Amounts
reclassified from AOCI (b) | ( i 6 | ) | ( i 2 | ) | |||
Ending
balance | i 4 | ( i 5 | ) | ||||
Benefit
plans | |||||||
Beginning balance | ( i 71 | ) | ( i 63 | ) | |||
Other
comprehensive loss before reclassification, net of tax (c) | ( i 44 | ) | ( i 10 | ) | |||
Amounts
reclassified from AOCI | i 1 | i 2 | |||||
Ending
balance | ( i 114 | ) | ( i 71 | ) | |||
Unrealized
hedging gain (loss) | |||||||
Beginning balance | i 2 | i 1 | |||||
Other
comprehensive income (loss) before reclassification, net of tax (d) | ( i 6 | ) | i 1 | ||||
Ending
balance | ( i 4 | ) | i 2 | ||||
AOCI
ending balance | $ | ( i 267 | ) | $ | ( i 216 | ) |
• | For equity settled stock-based compensation instruments, compensation cost is measured based on grant date fair value of the award and is recognized over the applicable service period. For equity settled stock-based compensation instruments, the delivery of
Company shares may be on a gross settlement basis or on a net settlement basis, as determined by the recipient. The Company's policy is to deliver such shares using treasury shares or issuing new shares. |
• | Cash settled stock-based compensation instruments are subject to liability accounting. At the end of each reporting period, the vested portion of the obligation for cash settled stock-based compensation instruments is adjusted to fair value based on the period-ending market prices of the Company's common stock. Related compensation expense is recognized based on changes
to the fair value over the applicable service period. |
Year
Ended December 31 | Unrecognized Stock-Based Compensation Expense | ||||||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||||||
Performance based share units | $ | i 6 | $ | ( i 2 | ) | $ | i 6 | $ | i 8 | ||||||
Restricted
stock units | i 9 | i 8 | i 11 | i 8 | |||||||||||
Stock
options | i 2 | i 2 | i 2 | i 1 | |||||||||||
Total
stock-based compensation expense | $ | i 17 | $ | i 8 | $ | i 19 | $ | i 17 |
PSUs | Weighted Average Grant Date Fair Value | |||||
(In thousands) | ||||||
Non-vested
as of December 31, 2016 | i 414 | $ | i 51.94 | |||
Granted | i 78 | i 110.66 | ||||
Vested | ( i 16 | ) | i 90.45 | |||
Forfeited
| ( i 15 | ) | i 103.72 | |||
Non-vested
as of December 31, 2017 | i 461 | i 58.76 | ||||
Granted | i 87 | i 124.90 | ||||
Vested | ( i 63 | ) | i 105.29 | |||
Forfeited
| ( i 290 | ) | i 33.85 | |||
Non-vested
as of December 31, 2018 | i 195 | i 110.42 | ||||
Granted | i 71 | i 111.98 | ||||
Vested | ( i 73 | ) | i 89.74 | |||
Forfeited | ( i 23 | ) | i 118.87 | |||
Non-vested
as of December 31, 2019 | i 170 | $ | i 118.77 |
Year Ended December 31 | |||||
2019 | 2018 | ||||
Expected volatility | i 31.2 | % | i 24.1 | % | |
Risk-free
rate | i 2.43 | % | i 2.33 | % | |
Expected
dividend yield | i — | % | i — | % |
RSUs | Weighted
Average Grant Date Fair Value | |||||
Non-vested as of December 31, 2016 | i 170 | $ | i 83.30 | |||
Granted | i 99 | i 94.73 | ||||
Vested | ( i 29 | ) | i 83.46 | |||
Forfeited | ( i 10 | ) | i 83.66 | |||
Non-vested
as of December 31, 2017 | i 230 | i 87.09 | ||||
Granted | i 70 | i 123.52 | ||||
Vested | ( i 102 | ) | i 96.34 | |||
Forfeited | ( i 34 | ) | i 61.69 | |||
Non-vested
as of December 31, 2018 | i 164 | i 105.24 | ||||
Granted | i 141 | i 79.61 | ||||
Vested | ( i 71 | ) | i 93.60 | |||
Forfeited | ( i 18 | ) | i 92.18 | |||
Non-vested
as of December 31, 2019 | i 216 | $ | i 90.98 |
Stock
Options | SARs | ||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||
Expected
term (in years) | i 5 | i 5 | i 5 | N/A | N/A | i 5 | |||||||||
Expected
volatility | i 27.69 | % | i 22.95 | % | i 27.31 | % | N/A | N/A | i 27.31 | % | |||||
Risk-free
interest rate | i 2.43 | % | i 2.58 | % | i 2.03 | % | N/A | N/A | i 2.03 | % |
Stock Options | Weighted Average Exercise Price | SARs | Weighted
Average Exercise Price | ||||||||||
(In thousands) | (In thousands) | ||||||||||||
i 115 | $ | i 68.37 | i 13 | $ | i 51.10 | ||||||||
Granted | i 84 | i 94.77 | i 2 | i 94.77 | |||||||||
Exercised | ( i 26 | ) | i 65.79 | ( i 7 | ) | i 44.33 | |||||||
Forfeited
or expired | ( i 7 | ) | i 77.36 | — | i 59.59 | ||||||||
i 166 | i 81.72 | i 8 | i 69.21 | ||||||||||
Granted | i 78 | i 124.35 | — | — | |||||||||
Exercised | ( i 31 | ) | i 68.02 | ( i 1 | ) | i 51.25 | |||||||
i 213 | i 99.36 | i 7 | i 72.84 | ||||||||||
Granted | i 106 | i 80.97 | — | i — | |||||||||
Exercised | ( i 4 | ) | i 59.37 | — | i — | ||||||||
Forfeited
or expired | ( i 32 | ) | i 96.02 | — | — | ||||||||
i 283 | $ | i 93.51 | i 7 | $ | i 72.84 | ||||||||
Exercisable
at December 31, 2019 | i 129 | $ | i 91.65 | i 6 | $ | i 70.05 |
Stock
Options and SARs Outstanding | |||||||||
Exercise Price | Number Outstanding | Weighted Average Remaining Life | Weighted Average Exercise Price | ||||||
(In
thousands) | (In years) | ||||||||
$10.00 - $60.00 | i 7 | i 2.1 | $ | i 54.80 | |||||
$60.01
- $80.00 | i 48 | i 3.3 | $ | i 72.89 | |||||
$80.01
- $100.00 | i 166 | i 5.3 | $ | i 87.40 | |||||
$100.01
- $130.00 | i 69 | i 5.3 | $ | i 124.35 | |||||
i 290 |
• | Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the
Company has the ability to access. |
• | Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability. |
• | Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. |
(In millions) | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||
Asset Category: | ||||||||||||||||||||
Retirement
plan assets | $ | i 131 | $ | i 353 | $ | i 15 | $ | i 363 | $ | i 862 | ||||||||||
Foreign
currency instruments | $ | i — | $ | i — | $ | i — | $ | i — | $ | — | ||||||||||
Liability
Category: | ||||||||||||||||||||
Foreign currency instruments | $ | i — | $ | i 6 | $ | i — | $ | i — | $ | i 6 | ||||||||||
Interest
rate swaps | $ | i — | $ | i 7 | $ | i — | $ | i — | $ | i 7 |
(In millions) | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||
Asset Category: | ||||||||||||||||||||
Retirement
plan assets | $ | i 112 | $ | i 271 | $ | i 14 | $ | i 370 | $ | i 767 | ||||||||||
Foreign
currency instruments | $ | i — | $ | i 1 | $ | i — | $ | i — | $ | i 1 | ||||||||||
Liability
Category: | ||||||||||||||||||||
Foreign currency instruments | $ | i — | $ | i 16 | $ | i — | $ | i — | $ | i 16 | ||||||||||
Interest
rate swaps | $ | i — | $ | i 2 | $ | i — | $ | i — | $ | i 2 |
• | Short-term
investments, such as cash and cash equivalents, are immediately available or are highly liquid and not subject to significant market risk. Assets comprised of cash, short-term sovereign debt, or high credit-quality money market securities and instruments held directly by the plan are categorized as Level 1. Assets in a registered money market fund are reported as registered investment companies. Assets in a short-term investment fund ("STIF") are categorized as Level 2. Cash and cash equivalent assets denominated in currencies other than the U.S. dollar are reflected in U.S. dollar terms at the exchange rate prevailing at the balance sheet dates. |
• | Registered investment companies are mutual
funds that are registered with the Securities and Exchange Commission. Mutual funds may invest in various types of securities or combinations thereof including equities, fixed income securities, and other assets that are subject to varying levels of market risk and are categorized as Level 1. The share prices for mutual funds are published at the close of each business day. |
• | Treasury and government securities consist of debt securities issued by the U.S. and non-U.S. sovereign governments and agencies, thereof. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 1 while others are valued by independent valuation firms that employ standard methodologies
associated with valuing fixed-income securities and are categorized as Level 2. |
• | Corporate debt securities consist of fixed income securities issued by corporations. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 1 while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are categorized as Level 2. |
• | Common
and preferred stocks consist of shares of equity securities. These are directly-held assets that are generally publicly traded in regulated markets that provide readily available market prices and are categorized as Level 1. |
• | Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds, including equities and fixed income securities, are generally publicly traded in regulated markets that provide readily available market prices. The entire balance of an investment in a common trust fund that does not have a readily observable market prices as available on a third-party information source, notwithstanding whether the investment
has daily liquidity, is categorized as Level 2; unless the investment fund has investment holdings significant to its valuation that are considered as Level 3; or the fund is considered as an alternative strategy (including hedge and diversifying strategies) for which valuation is established by NAV as a practical expedient. |
• | Liability Driven Investing (“LDI”) is an investment strategy that utilizes certain instruments and securities, interest-rate swaps and other financial derivative instruments intended to hedge a portion of the changes in pension liabilities associated with changes in the actuarial discount rate as applied to the plan’s liabilities. The instruments and securities used
typically include total return swaps and other financial derivative instruments. The valuation methodology of the financial derivative instruments contained in this category of assets utilizes standard pricing models associated with fixed income derivative instruments and are categorized as Level 2. |
• | Other investments include miscellaneous assets and liabilities and are primarily comprised of pending transactions and collateral settlements and are categorized as Level 2. |
• | Limited
partnerships and hedge funds represent investment vehicles with underlying exposures in alternative credit, hedge and diversifying strategies (including hedge fund of funds), real assets, and certain equity exposures. The underlying assets in these funds may include securities transacted in active markets as well as other assets that have values less readily observable and may require valuation techniques that require inputs that are not readily observable. Investment in these funds may be subject to a specific notice period prior to the intended transaction date. In addition, transactions in these funds may require longer settlement terms than traditional mutual funds. These assets are valued based on their respective NAV as a practical expedient to estimate fair value due to the absence of readily available market prices. |
• | Insurance
contracts are reported at cash surrender value and have significant unobservable inputs and are categorized as Level 3. |
(In millions) | ||||||||||||||||
Asset Category | Level
1 | Level 2 | NAV | Total | ||||||||||||
Registered investment companies | $ | i 3 | $ | i — | $ | i — | $ | i 3 | ||||||||
Common
and preferred stocks | i 27 | i — | i — | i 27 | ||||||||||||
Common
trust funds | i — | i 152 | i 123 | i 275 | ||||||||||||
LDI | i — | i 111 | i — | i 111 | ||||||||||||
Limited
partnerships and hedge funds | i — | i — | i 206 | i 206 | ||||||||||||
Cash
and cash equivalents | i 1 | i 7 | i — | i 8 | ||||||||||||
Total | $ | i 31 | $ | i 270 | $ | i 329 | $ | i 630 |
(In
millions) | ||||||||||||||||
Asset Category | Level 1 | Level 2 | NAV | Total | ||||||||||||
Registered investment
companies | $ | i 3 | $ | i — | $ | i — | $ | i 3 | ||||||||
Common
trust funds | i — | i 100 | i 127 | i 227 | ||||||||||||
LDI | i — | i 104 | i — | i 104 | ||||||||||||
Common
and preferred stock | i 22 | i — | i — | i 22 | ||||||||||||
Limited
partnerships and hedge funds | i — | i — | i 205 | i 205 | ||||||||||||
Cash
and cash equivalents | i — | i 6 | i — | i 6 | ||||||||||||
Total | $ | i 25 | $ | i 210 | $ | i 332 | $ | i 567 |
(In millions) | ||||||||||||||||||||
Asset
Category | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||
Registered investment companies | $ | i 59 | $ | i 24 | $ | i — | $ | i — | $ | i 83 | ||||||||||
Treasury
and government securities | i 34 | i 18 | i — | i — | i 52 | |||||||||||||||
Cash
and cash equivalents | i 4 | i 1 | i — | i — | i 5 | |||||||||||||||
Corporate
debt securities | i — | i 8 | i — | i — | i 8 | |||||||||||||||
Common
and preferred stock | i 3 | i — | i — | i — | i 3 | |||||||||||||||
Common
trust funds | i — | i 35 | i — | i 18 | i 53 | |||||||||||||||
Limited
partnerships | i — | i — | i — | i 16 | i 16 | |||||||||||||||
Insurance
contracts | i — | i — | i 15 | i — | i 15 | |||||||||||||||
Derivative
instruments | i — | ( i 3 | ) | i — | i — | ( i 3 | ) | |||||||||||||
Total | $ | i 100 | $ | i 83 | $ | i 15 | $ | i 34 | $ | i 232 |
(In
millions) | ||||||||||||||||||||
Asset Category | Level 1 | Level 2 | Level 3 | NAV | Total | |||||||||||||||
Registered
investment companies | $ | i 29 | $ | i 17 | $ | i — | $ | i — | $ | i 46 | ||||||||||
Treasury
and government securities | i 50 | i 24 | i — | i — | i 74 | |||||||||||||||
Cash
and cash equivalents | i 6 | — | i — | i — | i 6 | |||||||||||||||
Corporate
debt securities | — | i 3 | i — | i — | i 3 | |||||||||||||||
Common
and preferred stock | i 2 | i — | i — | i — | i 2 | |||||||||||||||
Common
trust funds | i — | i 22 | i — | i 21 | i 43 | |||||||||||||||
Limited
partnerships | i — | i — | i — | i 17 | i 17 | |||||||||||||||
Insurance
contracts | i — | i — | i 14 | i — | i 14 | |||||||||||||||
Derivative
instruments | i — | ( i 5 | ) | i — | i — | ( i 5 | ) | |||||||||||||
Total | $ | i 87 | $ | i 61 | $ | i 14 | $ | i 38 | $ | i 200 |
Amount of Gain (Loss) | |||||||||||||||||||||||
Recorded Income (Loss) in AOCI, net of tax | Reclassified
from AOCI into Income (Loss) | Recorded in Income (Loss) | |||||||||||||||||||||
(In millions) | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Foreign
currency risk – Sales: | |||||||||||||||||||||||
Non-designated cash flow hedges | $ | — | $ | — | $ | — | $ | — | $ | i 1 | $ | — | |||||||||||
Foreign
currency risk – Cost of sales: | |||||||||||||||||||||||
Cash flow hedges | — | — | — | i 1 | — | — | |||||||||||||||||
Non-designated
cash flow hedges | — | — | — | — | ( i 1 | ) | i 2 | ||||||||||||||||
Interest
rate risk - Interest expense, net: | |||||||||||||||||||||||
Net investment hedges | i 15 | i 9 | i 6 | i 2 | i — | i — | |||||||||||||||||
Interest
rate swap | ( i 6 | ) | i 1 | i — | ( i 1 | ) | i — | i — | |||||||||||||||
$ | i 9 | $ | i 10 | $ | i 6 | $ | i 2 | $ | — | $ | i 2 |
Percentage of Total Net Sales | Percentage
of Total Accounts Receivable | |||||||||||||
December 31, | ||||||||||||||
2019 | 2018 | 2017 | ||||||||||||
Ford | i 22 | % | i 26 | % | i 28 | % | i 12 | % | i 14 | % | ||||
Mazda | i 14 | % | i 18 | % | i 17 | % | i 5 | % | i 9 | % | ||||
Renault/Nissan | i 13 | % | i 12 | % | i 14 | % | i 13 | % | i 11 | % |
Assets
Acquired | Liabilities Assumed | |||||||
Cash and equivalents | $ | i 16 | Payable
to Visteon Corporation | $ | i 9 | |||
Accounts receivable, net | i 12 | Accounts
payable | i 6 | |||||
Inventories, net | i 4 | Other
current liabilities | i 5 | |||||
Other current assets | i 6 | Income
taxes payable | i 1 | |||||
Property and equipment, net | i 5 | Other
non-current liabilities | i 2 | |||||
Intangible assets including goodwill | i 9 | Total
liabilities assumed | i 23 | |||||
Other non-current assets | i 1 | Non-controlling
interest | i 15 | |||||
Total assets acquired | $ | i 53 | Visteon
Corporation Consideration | $ | i 15 |
Year
Ended December 31 | |||||||||||
(In millions) | 2019 | 2018 | 2017 | ||||||||
Sales | $ | i — | $ | i — | $ | i — | |||||
Cost
of sales | ( i 2 | ) | ( i 5 | ) | i — | ||||||
Gross
margin | ( i 2 | ) | ( i 5 | ) | i — | ||||||
Selling,
general and administrative expenses | i — | ( i 1 | ) | i — | |||||||
Gain
on Climate Transaction | i — | i 4 | i 7 | ||||||||
Gain
on Interiors Divestiture | i — | i — | i 8 | ||||||||
Restructuring
expense | i 1 | ( i 1 | ) | i — | |||||||
Income
(loss) from discontinued operations before income taxes | ( i 1 | ) | ( i 3 | ) | i 15 | ||||||
Benefit
for income taxes | i — | i 4 | i 2 | ||||||||
Net
income (loss) from discontinued operations attributable to Visteon | $ | ( i 1 | ) | $ | i 1 | $ | i 17 |
Year Ended December 31 | |||||||
(In millions) | 2019 | 2018 | |||||
Beginning
balance | $ | i 48 | $ | i 49 | |||
Accruals
for products shipped | i 20 | i 19 | |||||
Change
in estimates | ( i 2 | ) | ( i 5 | ) | |||
Specific
cause actions | i 6 | i 9 | |||||
Currency/other | ( i 1 | ) | i 2 | ||||
Settlements | ( i 22 | ) | ( i 26 | ) | |||
Ending
balance | $ | i 49 | $ | i 48 |
2019 | 2018 | ||||||||||||||||||||||||||||||
(In
millions, except per share amounts) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | First Quarter | Second Quarter | Third
Quarter | Fourth Quarter | |||||||||||||||||||||||
Sales | $ | i 737 | $ | i 733 | $ | i 731 | $ | i 744 | $ | i 814 | $ | i 758 | $ | i 681 | $ | i 731 | |||||||||||||||
Gross
margin | i 66 | i 70 | i 84 | i 104 | i 129 | i 104 | i 82 | i 96 | |||||||||||||||||||||||
Income
from continuing operations before income taxes | i 11 | i 16 | i 31 | i 48 | i 88 | i 49 | i 32 | i 47 | |||||||||||||||||||||||
Net
income from continuing operations | i 16 | i 8 | i 18 | i 40 | i 67 | i 37 | i 23 | i 46 | |||||||||||||||||||||||
Net
income | i 16 | i 8 | i 18 | i 39 | i 69 | i 36 | i 24 | i 45 | |||||||||||||||||||||||
Net
income attributable to Visteon Corporation | $ | i 14 | $ | i 7 | $ | i 14 | $ | i 35 | $ | i 65 | $ | i 35 | $ | i 21 | $ | i 43 | |||||||||||||||
Per
Share Data: | |||||||||||||||||||||||||||||||
Basic
earnings per share attributable to Visteon Corporation | $ | i 0.50 | $ | i 0.25 | $ | i 0.50 | $ | i 1.24 | $ | i 2.14 | $ | i 1.19 | $ | i 0.71 | $ | i 1.50 | |||||||||||||||
Diluted
earnings per share attributable to Visteon Corporation | $ | i 0.49 | $ | i 0.25 | $ | i 0.50 | $ | i 1.24 | $ | i 2.11 | $ | i 1.17 | $ | i 0.71 | $ | i 1.49 |
Item
9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Item 10. | Directors,
Executive Officers and Corporate Governance |
Item 11. | Executive Compensation |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Plan
Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)(1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)(1) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c) | |||||||
Equity compensation plans approved by security holders | 769,080 | $ | 93.03 | 1,379,391 | ||||||
Equity
compensation plans not approved by security holders | — | $ | — | — | ||||||
Total | 769,080 | $ | 93.03 | 1,379,391 |
(1) | Comprised
of stock options, stock appreciation rights, which may be settled in stock or cash at the election of the Company, and outstanding restricted stock and performance stock units, which may be settled in stock or cash at the election of the Company without further payment by the holder, granted pursuant to the Visteon Corporation 2010 Incentive Plan, the Non-Employee Director Stock Unit Plan, and the Deferred Compensation Plan for Non-Employee Directors. The weighted-average exercise price of outstanding options, warrants and rights does not take into account restricted stock or performance stock units that will be settled without any further payment by the holder. |
Item
13. | Certain Relationships and Related Transactions, and Director Independence |
Item 14. | Principal Accountant Fees and Services |
Item 15. | Exhibits and Financial
Statement Schedules |
(a) | The following documents are filed as part of this report: |
1. | Financial Statements |
2. | Financial
Statement Schedules |
(In millions) | Balance at Beginning of
Period | (Benefits)/ Charges to Income | Deductions(a) | Other( b) | Balance at End of
Period | ||||||||||||||
Year Ended December 31, 2019: | |||||||||||||||||||
Allowance for doubtful accounts | $ | i 6 | $ | i 5 | $ | ( i 1 | ) | $ | i — | $ | i 10 | ||||||||
Valuation
allowance for deferred taxes | i 1,144 | ( i 10 | ) | i — | ( i 2 | ) | i 1,132 | ||||||||||||
Year
Ended December 31, 2018: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 8 | $ | 2 | $ | (4 | ) | $ | — | $ | 6 | ||||||||
Valuation
allowance for deferred taxes | 1,242 | (81 | ) | — | (17 | ) | 1,144 | ||||||||||||
Year
Ended December 31, 2017: | |||||||||||||||||||
Allowance for doubtful accounts | $ | 10 | $ | 3 | $ | (5 | ) | $ | — | $ | 8 | ||||||||
Valuation
allowance for deferred taxes | 1,532 | (270 | ) | — | (20 | ) | 1,242 |
(a) | Deductions
represent uncollectible accounts charged off. |
(b) | Deferred taxes valuation allowance - represents adjustments recorded through other comprehensive income, exchange, expiration of tax attribute carryforwards, and various tax return true-up adjustments, all of which impact deferred taxes and the related valuation allowances. In 2019, the $ i 2
million overall decrease in the valuation allowance for deferred taxes is comprised of $ i 7 million related to exchange, partially offset by $ i 5
million related to other comprehensive income. In 2018, the $ i 17 million overall decrease in the valuation allowance for deferred taxes is comprised of$ i 18
million related to exchange, partially offset by $ i 1 million related to other comprehensive income. In 2017, the $ i 20
million overall decrease in the valuation allowance for deferred taxes is comprised of $ i 38 million related to adjusting outside basis differences associated with the Company's investment in a U.S. partnership and $ i 26
million for various tax return true-up adjustments and other items, including adjustments recorded through other comprehensive income. These decreases were partially offset by $ i 44 million related to exchange. |
Exhibit
No. | Description | |
Amendment No. 4 to Credit Agreement, dated as of May 30, 2018, by and among Visteon Corporation, the guarantors party thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon
Corporation filed on June 1, 2018). | ||
Exhibit
No. | Description | |
Exhibit No. | Description | |
101.INS | XBRL Instance Document.** | |
101.SCH | XBRL
Taxonomy Extension Schema Document.** | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document.** | |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document.** | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document.** | |
101.DEF | XBRL
Taxonomy Extension Definition Linkbase Document.** |
* | Indicates that exhibit is a management contract or compensatory plan or arrangement. |
VISTEON CORPORATION | ||
By: | ||
Interim Chief Financial Officer |
Signature | Title | |
/s/ SACHIN LAWANDE | Director, President and Chief Executive Officer | |
(Principal Executive Officer) | ||
Interim Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) | ||
/s/
JAMES J. BARRESE* | Director | |
/s/ NAOMI M. BERGMAN* | Director | |
/s/ JEFFREY D. JONES* | Director | |
/s/
JOANNE M. MAGUIRE* | Director | |
/s/ ROBERT J. MANZO* | Director | |
/s/ FRANCIS M. SCRICCO* | Director | |
/s/
DAVID L. TREADWELL* | Director | |
/s/ HARRY J. WILSON* | Director | |
/s/ ROUZBEH YASSINI-FARD* | Director | |
*By: | /s/
BRETT PYNNONEN | |
Attorney-in-Fact |
This ‘10-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/24/24 | ||||
3/24/24 | ||||
3/24/22 | ||||
4/9/21 | ||||
12/31/20 | ||||
10/1/20 | ||||
9/30/20 | ||||
Filed on: | 2/20/20 | 8-K | ||
2/14/20 | SC 13G/A | |||
2/1/20 | ||||
1/1/20 | ||||
For Period end: | 12/31/19 | SD | ||
12/19/19 | 8-K | |||
12/15/19 | ||||
12/9/19 | ||||
12/1/19 | ||||
6/30/19 | 10-Q, 10-Q/A | |||
4/9/19 | ||||
1/1/19 | ||||
12/31/18 | 10-K, SD | |||
12/15/18 | ||||
10/15/18 | ||||
9/1/18 | ||||
6/30/18 | 10-Q | |||
6/7/18 | 4 | |||
6/1/18 | 4, 8-K | |||
5/30/18 | 8-K, SD | |||
1/1/18 | ||||
12/31/17 | 10-K, SD | |||
12/22/17 | ||||
12/15/17 | 8-K | |||
12/1/17 | 4 | |||
12/31/16 | 10-K, SD | |||
12/1/16 | ||||
1/15/16 | ||||
12/31/15 | 10-K, SD | |||
12/9/15 | 3 | |||
12/1/15 | ||||
6/29/15 | 3, 4 | |||
6/9/15 | 4, 8-K | |||
12/31/14 | 10-K, 10-K/A, ARS, SD | |||
10/17/14 | ||||
10/1/10 | 3, 4, 8-K | |||
List all Filings |