Document/ExhibitDescriptionPagesSize 1: 10-Q Quarterly Report HTML 1.53M
2: EX-31.1 Certification -- §302 - SOA'02 HTML 26K
3: EX-31.2 Certification -- §302 - SOA'02 HTML 25K
4: EX-32.1 Certification -- §906 - SOA'02 HTML 22K
5: EX-32.2 Certification -- §906 - SOA'02 HTML 22K
11: R1 Cover HTML 75K
12: R2 Condensed Consolidated Statements of Comprehensive HTML 119K
Income (Loss)
13: R3 Condensed Consolidated Balance Sheets HTML 148K
14: R4 Condensed Consolidated Balance Sheets HTML 37K
(Parentheticals)
15: R5 Condensed Consolidated Statements of Cash Flows HTML 93K
16: R6 Condensed Consolidated Statements of Changes in HTML 75K
Equity
17: R7 Summary of Significant Accounting Policies HTML 29K
18: R8 Non-Consolidated Affiliates HTML 43K
19: R9 Restructuring Activities HTML 41K
20: R10 Inventories HTML 30K
21: R11 Goodwill and Other Intangible Assets HTML 52K
22: R12 Other Assets HTML 47K
23: R13 Other Liabilities HTML 47K
24: R14 Debt HTML 40K
25: R15 Employee Benefit Plans HTML 66K
26: R16 Income Taxes HTML 26K
27: R17 Stockholders' Equity and Non-controlling Interests HTML 85K
28: R18 Earnings Per Share HTML 46K
29: R19 Fair Value Measurements and Financial Instruments HTML 75K
30: R20 Commitments and Contingencies HTML 45K
31: R21 Segment Information and Revenue Recognition HTML 91K
32: R22 Summary of Significant Accounting Policies HTML 36K
(Policies)
33: R23 Non-Consolidated Affiliates (Tables) HTML 39K
34: R24 Restructuring Activities (Tables) HTML 34K
35: R25 Inventories (Tables) HTML 31K
36: R26 Goodwill and Other Intangible Assets (Tables) HTML 52K
37: R27 Other Assets (Tables) HTML 47K
38: R28 Other Liabilities (Tables) HTML 48K
39: R29 Debt (Tables) HTML 29K
40: R30 Employee Benefit Plans (Tables) HTML 43K
41: R31 Stockholders' Equity and Non-controlling Interests HTML 82K
(Tables)
42: R32 Earnings Per Share (Tables) HTML 45K
43: R33 Fair Value Measurements and Financial Instruments HTML 63K
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44: R34 Commitments and Contingencies (Tables) HTML 33K
45: R35 Segment Information and Revenue Recognition HTML 88K
(Tables)
46: R36 Summary of Significant Accounting Policies HTML 25K
(Details)
47: R37 Non-Consolidated Affiliates - Narrative (Details) HTML 29K
48: R38 Non-Consolidated Affiliates - Investments in HTML 34K
Non-Consolidated Equity Method Affiliates
(Details)
49: R39 Non-Consolidated Affiliates - Summary of HTML 42K
Investments in YFVIC (Details)
50: R40 Restructuring Activities - Narrative (Details) HTML 58K
51: R41 Restructuring Activities - Summary of HTML 35K
Restructuring Reserves and Related Activities
(Details)
52: R42 Inventories (Details) HTML 32K
53: R43 Goodwill and Other Intangible Assets - Schedule of HTML 57K
Intangible Assets (Details)
54: R44 Other Assets - Current Assets (Details) HTML 41K
55: R45 Other Assets - Narrative (Details) HTML 34K
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(Details)
58: R48 Other Liabilities - Other Noncurrent Liabilities HTML 40K
(Details)
59: R49 Debt - Schedule of Debt (Details) HTML 30K
60: R50 Debt - Narrative (Details) HTML 61K
61: R51 Employee Benefit Plans - Benefit Expenses HTML 48K
(Details)
62: R52 Employee Benefit Plans - Narrative (Details) HTML 55K
63: R53 Income Taxes - Income Tax Provision Narrative HTML 40K
(Details)
64: R54 Income Taxes - Unrecognized Tax Benefits Narrative HTML 25K
(Details)
65: R55 Stockholders' Equity and Non-controlling Interests HTML 36K
- Schedule of Non-controlling Interests (Details)
66: R56 Stockholders' Equity and Non-controlling Interests HTML 56K
- AOCI (Details)
67: R57 Earnings Per Share - Basic and Diluted Earnings HTML 61K
Per Share (Details)
68: R58 Fair Value Measurements and Financial Instruments HTML 59K
- Narrative (Details)
69: R59 Fair Value Measurements and Financial Instruments HTML 47K
- Financial Statement Presentation (Details)
70: R60 Commitments and Contingencies (Details) HTML 49K
71: R61 Commitments and Contingencies - Reconciliation of HTML 34K
Changes (Details)
72: R62 Segment Information and Revenue Recognition - HTML 56K
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73: R63 Segment Information and Revenue Recognition - HTML 42K
Sales and Assets by Geographic Region (Details)
74: R64 Segment Information and Revenue Recognition - HTML 45K
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Narrative (Details)
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(Exact name of registrant as specified in its charter)
State of
iDelaware
i38-3519512
(State
or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
iOne Village Center Drive,
iVan Buren Township,
iMichigan
i48111
(Address
of principal executive offices)
(Zip code)
Registrant’s telephone number, including area code: (i800)-iVISTEON
Securities registered pursuant to Section 12(b) of the Act:
Title
of each class
Trading Symbol(s)
Name of each exchange on which registered
iCommon Stock, Par Value $.01 Per Share
iVC
iThe
NASDAQ Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. iYesü No__
Indicate
by check mark whether the registrant: has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). iYesü No
__
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,""accelerated filer,”"smaller reporting company" and “emerging growth company" in Rule 12b-2 of the Exchange Act.
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes i☐No
ü
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ü No ☐
Preferred stock (par value ii0.01/,
ii50/ million shares authorized, iinone/
outstanding as of June 30, 2022 and December 31, 2021)
i—
i—
Common
stock (par value $i0.01, i250 million shares authorized, i55
million shares issued, i28.1 and 28 million shares outstanding as of June 30, 2022 and December 31, 2021, respectively)
i1
i1
Additional
paid-in capital
i1,345
i1,349
Retained
earnings
i1,710
i1,664
Accumulated
other comprehensive loss
(i265)
(i229)
Treasury
stock
(i2,259)
(i2,269)
Total
Visteon Corporation stockholders’ equity
i532
i516
Non-controlling
interests
i94
i100
Total equity
i626
i616
Total
liabilities and equity
$
i2,146
$
i2,234
See
accompanying notes to the condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. iSummary of Significant Accounting Policies
i
Basis
of Presentation - Interim Financial Statements
The condensed consolidated financial statements of Visteon Corporation and Subsidiaries (the "Company" or "Visteon") have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission ("SEC") have been condensed or omitted pursuant to such rules and regulations. These interim condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments, except as otherwise disclosed) that management believes are necessary for a fair presentation
of the results of operations, financial position, stockholders' equity, and cash flows of the Company for the interim periods presented. Interim results are not necessarily indicative of full-year results.
iUse of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported herein. Considerable judgment is involved in making these determinations and the use of different estimates or
assumptions could result in significantly different results. Management believes its assumptions and estimates are reasonable and appropriate. However, actual results could differ from those reported herein. Events and changes in circumstances arising after June 30, 2022, including those resulting from the impacts of COVID-19 and the subsequent semiconductor supply shortage, as further described in Note 14, "Commitments and Contingencies", will be reflected in management's estimates in future periods.
iAllowance
for Doubtful Accounts: The Company establishes an allowance for doubtful accounts for accounts receivable based on the current expected credit loss impairment model (“CECL”). The Company applies a historical loss rate based on historic write-offs by region to aging categories. The historical loss rate is adjusted for current conditions and reasonable and supportable forecasts of future losses, as necessary.The Company may also record a specific reserve for individual accounts when the Company becomes aware of specific customer circumstances, such as in the case of a bankruptcy filing
or deterioration in the customer's operating results or financial position. The allowance for doubtful accounts was $i4 million as of June 30, 2022 and December 31, 2021.
i
Recently
Adopted Accounting Pronouncements
Government Assistance - In November 2021, the FASB issued ASU 2021-10, "Government Assistance (Topic 832) - Disclosures by Business Entities about Government Assistance." to increase the transparency of government assistance including the disclosure of the types of assistance, an entity’s accounting for the assistance, and the effect of the assistance on an entity’s financial statements. The amendments in this update are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. The adoption of the guidance did not have a material impact on the Company’s condensed consolidated financial statements.
7
NOTE
2. iNon-Consolidated Affiliates
Investments in Affiliates
i
The
Company's investments in non-consolidated equity method affiliates include the following:
The Company evaluates whether joint ventures in which it has invested are Variable Interest Entities (“VIE”) at the start of each new venture and when a reconsideration event has occurred. The Company consolidates a VIE if it is determined to be the primary beneficiary of the VIE having both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.
The Company determined that YFVIC is a VIE. The
Company holds a variable interest in YFVIC primarily related to its ownership interests and subordinated financial support. The Company and Yangfeng Automotive Trim Systems Co. Ltd. ("YF") each own i50% of YFVIC and neither entity has the power to control the operations of YFVIC; therefore, the Company is not the primary beneficiary of YFVIC and does not consolidate the joint venture.
The
Company's investments in YFVIC consists of the following:
June 30,
December 31,
(In millions)
2022
2021
Payables due to YFVIC
$
i40
$
i20
Exposure
to loss in YFVIC:
Investment in YFVIC
$
i34
$
i36
Receivables
due from YFVIC
i51
i48
Maximum
exposure to loss in YFVIC
$
i85
$
i84
The
Company recorded a $9 million settlement charge related to a one-time contract dispute with a joint venture partner during the second quarter 2022. This charge is recorded within Cost of Sales.
Equity Investments
In 2018, the Company committed to make a $i15 million investment in two funds managed by
venture capital firms principally focused on the automotive sector pursuant to limited partnership agreements. As a limited partner in each fund, the Company will periodically make capital contributions toward this total commitment amount. As of June 30, 2022, the Company has contributed a total of approximately $i10 million toward the aggregate investment
commitments. These limited partnerships are classified as equity method investments.
NOTE 3. iRestructuring and Impairments
Given the economically-sensitive and highly competitive nature of the automotive electronics industry, the
Company continues to closely monitor current market factors and industry trends, including potential impacts related to COVID-19, taking action as necessary which may include restructuring actions. However, there can be no assurance that any such actions will be sufficient to fully offset the impact of adverse factors on the Company or its results of operations, financial position and cash flows.
8
Current
restructuring actions include the following:
•During the second quarter 2022 the Company approved and recorded $i2 million of restructuring expense primarily in Europe in order to improve efficiencies and rationalize the Company's footprint. As of June 30, 2022,
$i1 million remains accrued related to this action.
•During the first quarter 2022 the Company approved and recorded restructuring expense, primarily impacting Europe, in order to improve efficiencies and rationalize the Company's footprint and to capture the indefinite suspension of operations in Russia. During
the first six months of 2022, $i2 million of restructuring expense was recorded related to this action. As of June 30, 2022, $i2 million remains accrued
related to this action.
•During 2021 the Company approved various restructuring programs, primarily impacting Europe and Brazil in order to improve efficiencies and rationalize the Company's footprint. During the first six months of 2022 the Company recorded $i1 million
of costs related to these programs. As of June 30, 2022, $i2 million remains accrued related to these programs.
•During 2020 the Company approved various restructuring programs impacting engineering, administrative and manufacturing functions to improve efficiency and rationalize the
Company’s footprint. During the second quarter of 2022 the Company recorded $i1 million of costs related to these programs. As of June 30, 2022, $i6
million remains accrued related to these programs.
•During 2018, the Company approved a restructuring program impacting legacy employees at a South America facility due to the wind-down of certain products. As of June 30, 2022, $i2 million remains accrued related to this program.
•As
of June 30, 2022, the Company retained restructuring reserves as part of the Company's divestiture of the majority of its global Interiors business (the "Interiors Divestiture") of $i2 million associated with completed programs for the fundamental reorganization of operations at facilities in Brazil and France.
Restructuring
Reserves
i
The Company’s restructuring reserves and related activity are summarized below.
During
the six months ended June 30, 2022, due to the current geopolitical situation in Eastern Europe the Company indefinitely suspended operations in Russia beginning in the second quarter 2022. As such, the Company recognized a non-cash impairment charge of $i2 million to fully impair property and equipment as of June
30, 2022.
During the six months ended June 30, 2022, the Company recorded a $i2 million charge to reduce certain inventory in Russia to its net realizable value based on the Company’s suspension of operations in Russia during
the second quarter 2022.
9
NOTE 4. iInventories
iInventories,
net consist of the following components:
June 30,
December 31,
(In millions)
2022
2021
Raw materials
$
i254
$
i206
Work-in-process
i26
i29
Finished
products
i26
i27
$
i306
$
i262
NOTE 5. iGoodwill and Other Intangible Assets
i
Intangible
assets, net are comprised of the following:
Capitalized
software development consists of software development costs intended for integration into customer products.
NOTE 6. iOther Assets
i
Other
current assets are comprised of the following components:
June 30,
December 31,
(In millions)
2022
2021
Receivables from non-consolidated affiliates
$
i51
$
i48
Recoverable
taxes
i49
i40
Contractually
reimbursable engineering costs
i33
i34
Prepaid
assets and deposits
i28
i21
Derivative
financial instruments
i5
i2
Royalty
agreements
i3
i4
China bank notes
i—
i3
Other
i6
i6
$
i175
$
i158
/
The
Company receives bank notes from certain customers in China to settle trade accounts receivable. The collection of such bank notes are included in operating cash flows based on the substance of the underlying transactions which are operating in nature. The Company redeemed $i70 million and $i82
million of China bank notes during the six months ended June 30, 2022
10
and 2021, respectively. Remaining amounts outstanding at third-party institutions related to sold bank notes will mature by the end of the fourth quarter of 2022.
In July 2022, the Company terminated the derivative financial instruments and received approximately $6 million of proceeds upon settlement.
i
Other
non-current assets are comprised of the following components:
June 30,
December 31,
(In millions)
2022
2021
Deferred tax assets
$
i47
$
i47
Contractually
reimbursable engineering costs
i31
i34
Recoverable
taxes
i9
i9
Pension
assets
i6
i7
Royalty
agreements
i1
i2
Other
i15
i12
$
i109
$
i111
/
Current
and non-current contractually reimbursable engineering costs are related to pre-production design and development costs incurred pursuant to long-term supply arrangements that are contractually guaranteed for reimbursement by customers. The Company expects to receive cash reimbursement payments of $i17 million during the remainder of 2022, $i31
million in 2023, $i12 million in 2024, $i3 million in 2025, and $i1
million in 2026 and beyond.
NOTE 7. iOther Liabilities
i
Other
current liabilities are summarized as follows:
June 30,
December 31,
(In millions)
2022
2021
Deferred income
$
i51
$
i69
Payables
to non-consolidated affiliates
i40
i20
Product
warranty and recall accruals
i28
i30
Non-income
taxes payable
i23
i26
Restructuring
reserves
i12
i16
Royalty
reserves
i11
i12
Income taxes payable
i8
i8
Other
i44
i37
$
i217
$
i218
/
i
Other
non-current liabilities are summarized as follows:
Short-term borrowings are related to subsidiary borrowings. As of June 30, 2022, the Company has no short-term borrowing and there is $i187 million available capacity under short-term credit facilities.
Long-Term Debt
As
of June 30, 2022, the Company has an amended credit agreement ("Credit Agreement") which includes a $350 million Term Facility maturing March 24, 2024 and a $400 million Revolving Credit Facility which matures the earlier of (i) December 24, 2024, (ii) 90 days prior to the scheduled maturity of the Term Facility, or (iii) the date of the termination of the Company's Credit Agreement.
Interest on the Term Facility loans accrue at a rate equal to a LIBOR-based rate plus an applicable margin of i1.75% per annum. Loans under the Company's Revolving Credit Facility accrue interest at a rate equal to a LIBOR-based rate plus an applicable margin of between i1.00%
and i2.00%, as determined by the Company's total gross leverage ratio.
The Credit Agreement requires compliance with customary affirmative and negative covenants and contains customary events of default. The Revolving Credit Facility also requires that the Company maintain a total net leverage ratio no greater
than i3.50:1.00. During any period when the Company’s corporate and family ratings meet investment grade ratings, certain of the negative covenants are suspended.
The Revolving Credit Facility also provides $i75
million availability for the issuance of letters of credit and a maximum of $i20 million for swing line borrowings. Any amount of the facility utilized for letters of credit or swing line loans outstanding will reduce the amount available under the existing Revolving Credit Facility. The Company may request increases in the limits under the Credit Agreement and may request the addition of one or more term loan facilities. Outstanding borrowings may be prepaid without penalty
(other than borrowings made for the purpose of reducing the effective interest rate margin or weighted average yield of the loans). There are mandatory prepayments of principal in connection with: (i) excess cash flow sweeps above certain leverage thresholds, (ii) certain asset sales or other dispositions, (iii) certain refinancing of indebtedness and (iv) over-advances under the Revolving Credit Facility. There are no excess cash flow sweeps required at the Company’s current leverage level.
All obligations under the Credit Agreement and obligations with respect to certain cash management services and swap transaction agreements between the Company and its lenders are unconditionally guaranteed by certain of the
Company’s subsidiaries. Under the terms of the Credit Agreement, any amounts outstanding are secured by a first-priority perfected lien on substantially all property of the Company and the subsidiaries party to the security agreement, subject to certain limitations.
12
Other
The Company has a $i5 million letter of credit facility, whereby the Company is required to maintain a cash collateral account equal to i103%
(i110% for non-U.S. dollar denominated letters)of the aggregate stated amount of issued letters of credit and must reimburse any amounts drawn under issued letters of credit. The Company had $i2
million of outstanding letters of credit issued under this facility secured by restricted cash, as of June 30, 2022. Additionally, the Company had $i4 million of locally issued letters of credit with $i2
million of collateral as of June 30, 2022, to support various tax appeals, customs arrangements and other obligations at its local affiliates.
Subsequent Event
On July 19, 2022, the Company entered into a new amendment to the Credit Agreement to, among other things, extend the maturity dates of both facilities. The amended Revolving Credit Facility and Term Facility will mature on July 19, 2027 as disclosed in the Form 8-K filed with the Securities and Exchange Commission on July 22, 2022.
NOTE
9. iEmployee Benefit Plans
i
The Company's
net periodic benefit costs for all defined benefit plans for the three month periods ended June 30, 2022 and 2021 were as follows:
U.S. Plans
Non-U.S. Plans
(In
millions)
2022
2021
2022
2021
Costs Recognized in Income:
Pension service (cost):
Service
cost
$
i—
$
i—
$
(i1)
$
i—
Pension
financing benefits (cost):
Interest cost
$
(i5)
$
(i4)
$
(i1)
$
(i1)
Expected
return on plan assets
i10
i10
i2
i2
Amortization
of losses and other
—
(i1)
(i1)
(i1)
Total
pension financing benefits:
i5
i5
—
—
Net
pension benefit (cost)
$
i5
$
i5
$
(i1)
$
—
/
The
Company's net periodic benefit costs for all defined benefit plans for the six month periods ended June 30, 2022 and 2021 were as follows:
U.S. Plans
Non-U.S. Plans
(In
millions)
2022
2021
2022
2021
Costs Recognized in Income:
Pension service (cost):
Service
cost
$
i—
$
i—
$
(i1)
$
i—
Pension
financing benefits (costs):
Interest cost
$
(i10)
$
(i8)
$
(i3)
$
(i3)
Expected
return on plan assets
i20
i19
i4
i4
Amortization
of losses and other
—
(i2)
(i1)
(i1)
Total
pension financing benefits:
i10
i9
—
—
Net
pension benefit (cost)
$
i10
$
i9
$
(i1)
$
—
Pension
financing benefits are classified as Other income, net on the Company's condensed consolidated statements of comprehensive income.
During the six months ended June 30, 2022, cash contributions to the Company's defined benefit plans were $i2 million related to its non-U.S.
plans. The Company estimates that total cash contributions to its non-U.S. defined benefit pension plans during 2022 will be $i6 million.
13
NOTE
10. iIncome Taxes
During the six month period ended June 30, 2022, the Company recorded a provision for income tax of $i15 million
which reflects income tax expense in countries where the Company is profitable, accrued withholding taxes, and the inability to record a tax benefit for pretax losses and/or recognize expense for pretax income in certain jurisdictions, including the United States ("U.S."), due to valuation allowances. Pre-tax losses in jurisdictions where valuation allowances are maintained and no income tax benefits are recognized totaled $i13 million
and $i34 million for the six month periods ended June 30, 2022 and 2021, respectively, resulting in an increase in the Company's effective tax rate.
The
Company's provision for income taxes in interim periods is computed by applying an estimated annual effective tax rate against income before income taxes, excluding equity in net income of non-consolidated affiliates for the period. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained.
The need to maintain valuation allowances against deferred tax assets in the U.S. and other affected countries will cause variability in the Company’s quarterly and annual effective tax rates.
Full valuation allowances against deferred tax assets in the U.S. and applicable foreign countries will be maintained until sufficient positive evidence exists to reduce or eliminate them. The Company evaluates its deferred income taxes quarterly to determine if valuation allowances are required or should be adjusted.
During the second quarter of 2022, there were no material changes in unrecognized tax benefits. The long-term portion of uncertain income tax positions (including interest) of $i8 million
is included in other non-current liabilities on the condensed consolidated balance sheet, while $i3 million is reflected as a reduction of a deferred tax asset related to a net operating loss included in other non-current assets on the condensed consolidated balance sheet. Outstanding income tax refund claims related primarily to India and Brazil jurisdictions, total $i7 million
as of June 30, 2022, and are included in other non-current assets on the condensed consolidated balance sheets.
14
NOTE 11. iStockholders’ Equity and Non-controlling
Interests
Non-Controlling Interests
i
The Company's non-controlling interests are as follows:
Changes in Accumulated other comprehensive income (loss) (“AOCI”) and reclassifications out of AOCI by component include:
Three
Months Ended June 30,
Six Months Ended June 30,
(In millions)
2022
2021
2022
2021
Changes in AOCI:
Beginning balance
$
(i225)
$
(i321)
$
(i229)
$
(i304)
Other
comprehensive income (loss) before reclassification, net of tax
(i41)
i14
(i37)
(i4)
Amounts
reclassified from AOCI
i1
i2
i1
i3
Ending
balance
$
(i265)
$
(i305)
$
(i265)
$
(i305)
Changes
in AOCI by Component:
Foreign currency translation adjustments
Beginning balance
$
(i156)
$
(i148)
$
(i149)
$
(i115)
Other
comprehensive income (loss) before reclassification, net of tax (a)
(i50)
i17
(i57)
(i16)
Ending
balance
(i206)
(i131)
(i206)
(i131)
Net
investment hedge
Beginning balance
i10
(i2)
i4
(i15)
Other
comprehensive income (loss) before reclassification, net of tax (a)
i7
(i1)
i15
i13
Amounts
reclassified from AOCI
i1
(i2)
(i1)
(i3)
Ending
balance
i18
(i5)
i18
(i5)
Benefit
plans
Beginning balance
(i80)
(i163)
(i81)
(i165)
Other
comprehensive income (loss) before reclassification, net of tax (b)
i1
(i1)
i1
i—
Amounts
reclassified from AOCI
i—
i2
i1
i3
Ending
balance
(i79)
(i162)
(i79)
(i162)
Unrealized
hedging gain (loss)
Beginning balance
i1
(i8)
(i3)
(i9)
Other
comprehensive income (loss) before reclassification, net of tax (c)
i1
(i1)
i4
(i1)
Amounts
reclassified from AOCI
i—
i2
i1
i3
Ending
balance
i2
(i7)
i2
(i7)
Total
AOCI
$
(i265)
$
(i305)
$
(i265)
$
(i305)
(a)
There were no income tax effects for either period due to the valuation allowance.
(b) Net tax expense was less than $iiii1///
million related to benefit plans for the three and six months ended June 30, 2022 and 2021.
/
(c) There were no income tax effects related to unrealized hedging gain (loss) for either period due to the valuation allowance.
NOTE 12. iEarnings
Per Share
Basic earnings per share is calculated by dividing net income attributable to Visteon by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by dividing net income by the weighted average number of common and potentially dilutive common shares outstanding. Performance based share units are considered contingently issuable shares and are included in the computation of diluted earnings per share based on the number of shares that would be issuable if the reporting date were the end of the contingency period and if the result would be dilutive.
16
i
The
table below provides details underlying the calculations of basic and diluted earnings per share:
Three Months Ended June 30,
Six Months Ended June 30,
(In millions, except per share amounts)
2022
2021
2022
2021
Numerator:
Net
income (loss) attributable to Visteon
$
i24
$
(i11)
$
i46
$
i5
Denominator:
Average
common stock outstanding - basic
i28.1
i28.0
i28.1
i27.9
Dilutive
effect of performance based share units and other
i0.3
i—
i0.4
i0.4
Diluted
shares
i28.4
i28.0
i28.5
i28.3
Basic
and Diluted Per Share Data:
Basic
earnings (loss) per share attributable to Visteon
$
i0.85
$
(i0.39)
$
i1.64
$
i0.18
Diluted
earnings (loss) per share attributable to Visteon:
$
i0.85
$
(i0.39)
$
i1.61
$
i0.18
/
NOTE
13. iFair Value Measurements and Financial Instruments
Fair Value Measurements
The Company uses a three-level fair value hierarchy that categorizes assets and liabilities measured at fair value based on the observability of the inputs utilized in the valuation. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority
to unobservable inputs.
•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.
Items
Measured at Fair Value on a Recurring Basis
The Company is exposed to various market risks including, but not limited to, changes in currency exchange rates arising from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt, dividends, and investments in subsidiaries. The Company manages these risks, in part, through the use of derivative financial instruments. The maximum length of time over which the Company hedges the variability in the future cash flows related to transactions, excluding those transactions
as related to the payment of variable interest on existing debt, is eighteen months. The maximum length of time over which the Company hedges forecasted transactions related to variable interest payments is the term of the underlying debt.
Hedge instruments are measured at fair value on a recurring basis under an income approach using industry-standard models that consider various assumptions, including time value, volatility factors, current market and contractual prices for the underlying and non-performance risk. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument or may derived from observable data. Accordingly, the Company's currency instruments are classified as Level 2 in the fair
value hierarchy.
The Company presents its derivative positions and any related material collateral under master netting arrangements that provide for the net settlement of contracts, by counterparty, in the event of default or termination. Derivative financial instruments are included in the Company’s condensed consolidated balance sheets. There is no cash collateral on any of these derivatives.
17
Currency Exchange Rate Instruments: The
Company primarily uses forward contracts denominated in Euro, Japanese yen, Thai baht, Brazilian real, and Mexican peso intended to mitigate the variability of cash flows denominated in currency other than the hedging entity's functional currency.
As of June 30, 2022the Company had no foreign currency economic derivative instruments. At December 31, 2021, the Company had undesignated foreign currency derivative instruments with notional amounts of $i32
million and an aggregate fair value of a liability of less than $i1 million as of December 31, 2021.
Cross Currency Swaps: The Company has executed cross-currency swap transactions intended to mitigate the variability of the U.S. dollar value of its investment in certain of its non-U.S. entities. These transactions are designated as net investment hedges
and the Company has elected to assess hedge effectiveness under the spot method. Accordingly, periodic changes in the fair value of the derivative instruments attributable to factors other than spot exchange rate variability are excluded from the measurement of hedge ineffectiveness and reported directly in earnings each reporting period.
As of June 30, 2022the Company had cross currency swaps with an aggregate notional value of $50 million. The fair value of these derivatives is an asset of $2 million.
As of December 31, 2021, the
Company had cross currency swaps with an aggregate notional value of $250 million. The fair value of these derivatives was an asset of $i2 million and a non-current liability of $i9 million. During April 2022, the
Company terminated certain of these cross currency swaps and received $5 million of proceeds upon settlement. There was no ineffectiveness associated with such derivatives at the time of the termination.
Interest Rate Swaps: The Company utilizes interest rate swap instruments to manage its exposure and to mitigate the impact of interest rate variability. The instruments are designated as cash flow hedges, accordingly, the effective portion of the periodic changes in fair value is recognized in accumulated other comprehensive income, a component of shareholders' equity. Subsequently, the accumulated gains and losses recorded in equity are reclassified to income in the period during which the hedged cash flow impacts earnings.
As of June 30,
2022the Company had interest rate swaps of $100 million. The fair value of these derivatives is an asset of $i3 million as of June 30, 2022. As of June 30, 2022, a gain of $i2
million is expected to be reclassified out of accumulated other comprehensive income into earnings within the next twelve months.
As of December 31, 2021, the Company had interest rate swaps with an aggregate notional value of $300 million. The fair value of these derivatives was a non-current liability of $i4 million. In April 2022, the
Company terminated certain of these interest rate swaps and paid $2 million upon settlement.
Subsequent Event
In July 2022, the Company terminated all remaining derivative financial instruments and received approximately $6 million of proceeds upon settlement. Simultaneously, the Company executed new cross currency swaps with a notional value of $200 million and interest rate swaps with a notional value of $250 million.
18
Financial Statement Presentation
i
Gains
and losses on derivative financial instruments for the three and six months ended June 30, 2022 and 2021 are as follows:
Recorded
Income (Loss) into AOCI, net of tax
Reclassified from AOCI into Income (Loss)
Recorded in (Income) Loss
(In millions)
2022
2021
2022
2021
2022
2021
Three months
ended June 30,
Foreign currency risk - Cost of sales:
Foreign
currency derivative instruments
$
—
$
—
$
—
$
—
$
i—
$
i1
Interest
rate risk - Interest expense, net:
Interest rate swaps
i1
(i1)
i—
(i2)
i—
i—
Cross
currency swaps
i7
(i1)
(i1)
i2
i—
i—
$
i8
$
(i2)
$
(i1)
$
—
$
—
$
i1
Six
months ended June 30,
Foreign currency risk - Cost of sales:
Foreign
currency derivative instruments
$
—
$
—
$
—
$
—
$
i3
$
i1
Interest
rate risk - Interest expense, net:
Interest rate swaps
i4
(i1)
(i1)
(i3)
i—
i—
Cross
currency swaps
i15
i13
i1
i3
i—
i—
$
i19
$
i12
$
—
$
—
$
i3
$
i1
/
Items
Not Carried at Fair Value
The Company's fair value of debt was $i338 million and $i354
million as of June 30, 2022 and December 31, 2021, respectively. Fair value estimates were based on the current rates offered to the Company for debt of the same remaining maturities. Accordingly, the Company's debt fair value disclosures are classified as Level 2 in the fair value hierarchy.
Concentrations of Credit Risk
Financial instruments including cash equivalents, derivative contracts, and accounts receivable, expose the Company
to counterparty credit risk for non-performance. The Company’s counterparties for cash equivalents and derivative contracts are banks and financial institutions that meet the Company’s credit rating requirements. The Company’s counterparties for derivative contracts are substantial investment and commercial banks with significant experience using such derivatives. The Company manages its credit risk pursuant to written policies that specify minimum
counterparty credit profile and by limiting the concentration of credit exposure amongst its multiple counterparties.
The Company's credit risk with any single customer does not exceed ten percent of total accounts receivable except for Ford and GM and their affiliates. Ford represents i16% and i18%
of the Company's balance as of June 30, 2022 and December 31, 2021, respectively. GM represents i10% and i8%
of the Company's balance as of June 30, 2022 and December 31, 2021, respectively.
NOTE 14. iCommitments and Contingencies
Litigation
and Claims
In 2003, the Local Development Finance Authority of the Charter Township of Van Buren, Michigan issued approximately $i28 million in bonds finally maturing in 2032, the proceeds of which were used at least in part to assist in the development of the Company’s U.S. headquarters located in the Township. During January 2010, the
Company and the Township entered into a settlement agreement (the “Settlement Agreement”) that, among other things, reduced the taxable value of the headquarters property to current market value. The Settlement Agreement also provided that the Company would negotiate in good faith with
19
the Township, pursuant to the terms of the Settlement Agreement, in the event that property tax payments were inadequate to permit the Township to meet its payment obligations with respect to the bonds. In October 2019, the Township notified the Company that the Township
had incurred a shortfall under the bonds of less than $i1 million and requested that the Company meet to discuss payment. The parties met in November 2019 but no agreement was reached. On December 9, 2019, the Township commenced litigation against the Company in Michigan’s Wayne County Circuit Court claiming damages
of $i28 million related to what the Township alleges to be the current shortfall and projected future shortfalls under the bonds. The Company disputes the factual and legal assertions made by the Township and intends to defend the matter vigorously. The Company is not able to estimate the possible loss or range of loss in connection
with this matter.
In November 2013, the Company and Halla Visteon Climate Control Corporation (“HVCC”), jointly filed an Initial Notice of Voluntary Self-Disclosure statement with the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) regarding certain sales of automotive HVAC components by a minority-owned, Chinese joint venture of HVCC into Iran. The Company updated that notice in December 2013, and subsequently filed a voluntary self-disclosure regarding these sales with OFAC in March 2014. In May 2014, the Company voluntarily filed a supplementary self-disclosure identifying additional sales of automotive HVAC components by the Chinese
joint venture, as well as similar sales involving an HVCC subsidiary in China, totaling $i12 million, and filed a final voluntary-self disclosure with OFAC on October 17, 2014. OFAC is currently reviewing the results of the Company’s investigation. Following that review, OFAC may conclude that the disclosed sales resulted in violations of U.S. economic sanctions laws and warrant
the imposition of civil penalties, such as fines, limitations on the Company's ability to export products from the United States, and/or referral for further investigation by the U.S. Department of Justice. Any such fines or restrictions may be material to the Company’s financial results in the period in which they are imposed, but the Company is not able to estimate the possible loss or range of loss in connection with this matter. Additionally, disclosure of this conduct and any fines or other action relating to this conduct could harm the Company’s reputation and have a material adverse effect on its business, operating results
and financial condition. The Company cannot predict when OFAC will conclude its own review of voluntary self-disclosures or whether it may impose any of the potential penalties described above.
The Company's operations in Brazil are subject to highly complex labor, tax, customs and other laws. While the Company believes that it is in compliance with such laws, it is periodically engaged in litigation regarding the application of these laws. The Company maintained accruals of $i9
million for claims aggregating $i56 million in Brazil as of June 30, 2022. The amounts accrued represent claims that are deemed probable of loss and are reasonably estimable based on the Company's assessment of the claims and prior experience with similar matters.
The adverse impacts of the COVID-19 pandemic led to a significant reduction in vehicle production in the first
half of 2020, which was followed by increased consumer demand and vehicle production schedules in the second half of 2020, particularly in the fourth quarter. Because semiconductor suppliers have been unable to rapidly reallocate production to serve the automotive industry, the surge in demand has led to a worldwide semiconductor supply shortage. The Company's semiconductor suppliers, along with most automotive component supply companies that use semiconductors, have been unable to fully meet the vehicle production demands of our customers due to events which are outside the Company's control, including but not limited to, the COVID-19 pandemic, the global semiconductor shortage, a fire at a semiconductor fabrication facility in Japan, significant weather events impacting semiconductor supplier facilities
in the southern United States, and other extraordinary events. The Company is working closely with suppliers and customers to attempt to minimize potential adverse impacts of these events. Certain customers have communicated that they expect the Company to absorb some of the financial impact of their reduced production and are reserving their rights to claim damages arising from supply shortages, however, the Company believes it has a number of legal defenses to such claims and intends to defend any such claims vigorously. The Company has also notified semiconductor suppliers that it will seek compensation from them for failure
to deliver sufficient quantities. The Company is not able to estimate the possible loss or range of loss in connection with this matter at this time.
While the Company believes its accruals for litigation and claims are adequate, the final amounts required to resolve such matters could differ materially from recorded estimates and the Company's results of operations and cash flows could be materially affected.
Guarantees and Commitments
As part of 2015 divestitures involving the Company's former
climate and interiors businesses, the Company continues to provide lease guarantees to divested Climate and Interiors entities. As of June 30, 2022, the Company has $i2 million and $i2
million of outstanding guarantees, related to the divested Climate and Interiors entities, respectively. The guarantees represent the maximum potential amount that the Company could be required to pay under the guarantees in the event of default by the guaranteed parties. The guarantees will generally cease upon expiration of current lease agreement which expire in 2026 and 2024 for the Climate and Interiors entities, respectively.
20
Product Warranty and Recall
Amounts accrued for product warranty and recall claims are based on management’s best estimates of the
amounts that will ultimately be required to settle such items. The Company’s estimates for product warranty and recall obligations are developed with support from its sales, engineering, quality and legal functions and include due consideration of contractual arrangements, past experience, current claims and related information, production changes, industry and regulatory developments, and various other considerations. The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued or beyond what the Company may recover from its suppliers.
i
The
following table provides a rollforward of changes in the product warranty and recall claims liability:
Six Months Ended June 30,
(In millions)
2022
2021
Beginning balance
$
i50
$
i64
Provisions
i7
i8
Changes
in estimates
i3
i1
Currency/other
(i3)
(i2)
Settlements
(i10)
(i10)
Ending
balance
$
i47
$
i61
/
Other
Contingent Matters
Various legal actions, governmental investigations and proceedings and claims are pending or may be instituted or asserted in the future against the Company, including those arising out of alleged defects in the Company’s products; governmental regulations relating to safety; employment-related matters; customer, supplier and other contractual relationships; intellectual property rights; product warranties; customs and international trade regulations; product recalls; product liability claims; and environmental matters. Some of the foregoing matters may involve compensatory, punitive or antitrust or other treble damage claims in very large amounts, or demands for recall campaigns, environmental
remediation programs, sanctions, or other relief which, if granted, would require very large expenditures. The Company enters into agreements that contain indemnification provisions in the normal course of business for which the risks are considered nominal and impracticable to estimate.
Contingencies are subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance. Reserves have been established by the Company for matters discussed in the immediately foregoing paragraphs where losses are deemed probable and reasonably estimable. It is possible, however, that some of the matters discussed in the foregoing paragraphs could be decided unfavorably to the
Company and could require the Company to pay damages or make other expenditures in amounts, or a range of amounts, that cannot be estimated as of June 30, 2022 and that are in excess of established reserves. The Company does not reasonably expect, except as otherwise described herein, based on its analysis, that any adverse outcome from such matters would have a material effect on the Company’s financial condition, results of operations or cash flows, although such an outcome is possible.
21
NOTE
15. iSegment Information and Revenue Recognition
The Company’s single reportable segment is Electronics. The Company's Electronics segment provides vehicle cockpit electronics products to customers, including instrument clusters, information displays, infotainment systems, audio systems, telematics solutions, head-up
displays, as well as battery monitoring systems. As the Company has ione reportable segment, total assets, depreciation, amortization, and capital expenditures are equal to consolidated results.
Financial results for the Company's reportable segment have been prepared using a management approach, which is consistent with the basis and manner in which
financial information is evaluated by the Company's chief operating decision maker in allocating resources and in assessing performance. The Company’s chief operating decision maker, the Chief Executive Officer, evaluates the performance of the Company’s segment primarily based on net sales, before elimination of inter-company shipments, Adjusted EBITDA (a non-U.S. GAAP financial measure, as defined below), and operating assets.
Adjusted EBITDA
The Company defines
Adjusted EBITDA as net income attributable to the Company adjusted to eliminate the impact of depreciation and amortization, non-cash stock-based compensation expense, provision for income taxes, net interest expense, net income attributable to non-controlling interests, restructuring and impairment expense, equity in net income of non-consolidated affiliates, and other gains and losses not reflective of the Company's ongoing operations.
Adjusted EBITDA is presented as a supplemental measure of the Company's financial performance that management believes is useful to investors because the excluded items may vary significantly
in timing or amounts and/or may obscure trends useful in evaluating and comparing the Company's operating activities across reporting periods. Not all companies use identical calculations and, accordingly, the Company's presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be a substitute for net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to be a measure of cash flow available for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments, and debt service requirements.
The Company uses Adjusted EBITDA as a factor in incentive compensation decisions and to evaluate the effectiveness of the Company's business strategies. In addition, the Company's credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain covenants.
22
i
Segment
Adjusted EBITDA and reconciliation to net income (loss) attributable to Visteon is as follows:
Three Months Ended June 30,
Six Months Ended June 30,
(In millions)
2022
2021
2022
2021
Net
income (loss) attributable to Visteon Corporation
$
i24
$
(i11)
$
i46
$
i5
Depreciation
and amortization
i25
i28
i52
i55
Provision
for income taxes
i7
i4
i15
i16
Non-cash,
stock-based compensation expense
i8
i5
i13
i9
Restructuring
and impairment expense
i4
i1
i11
i—
Interest
expense, net
i3
i2
i5
i4
Net
income (loss) attributable to non-controlling interests
(i1)
i—
i—
i3
Equity
in net income of non-consolidated affiliates
(i1)
i—
(i4)
i—
Other
i10
i1
i12
i2
Adjusted
EBITDA
$
i79
$
i30
$
i150
$
i94
/
Revenue
Recognition
i
Disaggregated net sales by geographical market and product lines is as follows:
Three
Months Ended June 30,
Six Months Ended June 30,
(In millions)
2022
2021
2022
2021
Geographical Markets
Europe
$
i311
$
i219
$
i594
$
i495
Americas
i281
i159
i520
i361
China
Domestic
i109
i115
i251
i239
China
Export
i46
i43
i94
i97
Other
Asia-Pacific
i130
i95
i264
i214
Eliminations
(i29)
(i21)
(i57)
(i50)
$
i848
$
i610
$
i1,666
$
i1,356
/
i
Three
Months Ended June 30,
Six Months Ended June 30,
(In millions)
2022
2021
2022
2021
Product Lines
Instrument clusters
$
i415
$
i298
$
i805
$
i649
Information
displays
i121
i97
i254
i215
Infotainment
i106
i77
i216
i195
Cockpit
domain controller
i101
i43
i183
i89
Body
and security
i36
i28
i69
i63
Telematics
i20
i16
i37
i34
Other
i49
i51
i102
i111
$
i848
$
i610
$
i1,666
$
i1,356
/
During
the six months ended June 30, 2022, revenue recognized related to performance obligations satisfied in previous periods represented less than ii1/%
of consolidated net sales. The Company has no material contract assets, contract liabilities, or capitalized contract acquisition costs as of June 30, 2022.
23
Item
2.Management's Discussion and Analysis of Financial Condition and Results of Operations
Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the results of operations, financial condition, and cash flows of Visteon Corporation (“Visteon” or the “Company”). MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission on February 17, 2022 and the financial statements and accompanying notes to the financial statements included elsewhere herein.
Executive
Summary
Strategic Priorities
Visteon is a global automotive technology company serving the mobility industry, dedicated to creating more enjoyable, connected, and safe driving experiences. Our platforms leverage proven, scalable hardware and software solutions that enable the digital, electric and autonomous evolution of our global automotive customers. The automotive mobility market is expected to grow faster than underlying vehicle production volumes as the vehicle shifts from analog to digital and towards device and cloud connected, electric vehicles, and vehicles with more advanced safety features.
The Company has laid out the following strategic priorities:
•Technology
Innovation - The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, learning, and voice enabled. Visteon's broad portfolio of cockpit electronics technology, the industry's first wireless battery management system, and the development of the DriveCore™ advanced safety platform positions Visteon to support these macro trends in the automotive industry.
•Long-Term Growth - The Company has continued to win business at a rate that exceeds current sales
levels 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 While Maintaining a Strong Balance Sheet - The Company has returned approximately $3.3 billion to shareholders since 2015. In addition, the Company has continued to maintain a strong balance sheet to withstand near-term industry volatility while providing a foundation for future growth and shareholder returns.
24
Financial
Results
The pie charts below highlight the net sales breakdown for Visteon for the three and six months ended June 30, 2022.
*Regional net sales are based on the geographic region where sales originate and not where customer is located (excludes inter-regional
eliminations).
Global Automotive Market Conditions and Production Levels
The automotive industry has been negatively impacted by the COVID-19 pandemic and the ongoing semiconductor shortage. In the first half of 2021, semiconductor supply was further impacted by a winter storm in Texas and a fire at the facility of a semiconductor supplier in Japan. In addition, COVID outbreaks in the middle of 2021 in Southeast Asia caused several back-end processing facilities that perform assembly and test of semiconductors to be negatively impacted. Industry vehicle volumes are expected to increase in 2022 due to strong consumer demand and historically low inventory levels at auto dealerships. However, vehicle production volumes will be negatively impacted due to on-going shortages of semiconductors, disruptions caused by the geopolitical situation in Eastern Europe, and the recent COVID-19
related lockdowns in China. The magnitude of the impact on the financial statements and results of operations and cash flows will depend on the evolution of the semiconductor supply shortage, plant production schedules, and supply chain impacts.
Net sales for the three months ended June 30, 2022 totaled $848 million, representing an increase
of $238 million compared with the same period of 2021. Volumes and net new business increased net sales by $137 million. Unfavorable currency decreased net sales by $21 million, primarily attributable to the euro and Japanese yen. Favorable customer pricing increased net sales by $122 million primarily driven by customer recoveries related to supply chain and material cost increases associated with the worldwide semiconductor supply shortage.
Cost of sales increased by $199 million for the three months ended June 30, 2022 compared with the same period in 2021. Volume, mix and net new business increased cost of sales by $106 million. Foreign currency decreased cost of sales by $23 million, primarily attributable to the euro and Japanese yen. Net engineering costs, excluding currency, decreased cost of sales by $4 million. Unfavorable cost performance, design changes, and other
increased cost of sales by $120 million primarily due to supply chain and material cost impacts associated with the worldwide semiconductor supply shortage.
26
A summary of net engineering costs is shown below:
Three Months Ended June 30,
(In millions)
2022
2021
Gross
engineering costs
$
(81)
$
(86)
Engineering recoveries
40
39
Engineering costs, net
$
(41)
$
(47)
Gross
engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs. Net engineering costs of $41 million for the three months ended June 30, 2022, including the impacts of currency, were $6 million lower than the same period of 2021. This decrease is primarily related to lower engineering personnel costs during the second quarter of 2022.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses were $43 million and $44 million, during the three months ended June 30, 2022 and 2021, respectively.
Restructuring and impairment
During
the second quarter 2022, the Company aimed to improve efficiencies primarily in Europe and rationalize the Company's footprint. As such, the Company recorded $2 million of restructuring expense primarily related to employee severance.
Interest Expense, Net
Interest expense, net, for the three months ended June 30, 2022 and 2021 was $3 million and $2 million, respectively. Interest expense for these periods is primarily related to the borrowings on
the Company's term debt facility.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net income of non-consolidated affiliates was $1 million and less than $1 million for the three months ended June 30, 2022 and 2021, respectively. The increase in income is primarily attributable due to increased volumes at the Company's non-consolidated affiliates.
Other Income, Net
Other income, net of $5 million for the three-month
periods ending June 30, 2022 and 2021 is primarily due to net pension financing benefits.
Income Taxes
The Company's provision for income taxes of $7 million for the three months ended June 30, 2022 represents an increase of $3 million compared with $4 million in the same period of 2021. The increase in tax expense is attributable to the overall year over year increase in profit before tax excluding equity income, including changes in the mix of earnings and differing rates between jurisdictions, and the non-recurrence of a $1 million tax benefit related to enacted
tax law changes in the U.K. resulting in the remeasurement of net deferred tax assets. These increases were partially offset by a $1 million decrease in withholding taxes driven primarily by favorable exchange.
Adjusted EBITDA
Adjusted EBITDA (a non-GAAP financial measure, as defined in Note 15, "Segment Information") was $79 million for the three months ended June 30, 2022, representing an increase of $49 million when compared to $30 million for the same period of 2021. The change was primarily driven by higher sales volumes and increased net customer recoveries related to supply chain and material cost increases associated with the worldwide semiconductor supply shortage.
The reconciliation of net
income (loss) attributable to Visteon to Adjusted EBITDA for the three months ended June 30, 2022 and 2021, is as follows:
27
Three Months Ended June 30,
(In
millions)
2022
2021
Change
Net income (loss) attributable to Visteon Corporation
$
24
$
(11)
$
35
Depreciation and amortization
25
28
(3)
Non-cash,
stock-based compensation expense
8
5
3
Provision for income taxes
7
4
3
Restructuring and impairment expense
4
1
3
Interest
expense, net
3
2
1
Net income attributable to non-controlling interests
(1)
—
(1)
Equity in net income of non-consolidated
affiliates
Net sales for the six months ended June 30, 2022 totaled $i1,666 million, representing an increase of $310 million compared with the same period of 2021. Volumes and net new business increased net sales
by $182 million. Unfavorable currency decreased net sales by $33 million, primarily attributable to the euro and Japanese yen. Favorable customer pricing increased net sales by $163 million primarily driven by customer recoveries related to supply chain and material cost increases associated
28
with the worldwide semiconductor supply shortage.
Cost of sales increased by $268 million for the six months ended June 30, 2022 compared with the same period in 2021. Volume, mix, and net new business increased cost of sales by $139 million. Foreign currency decreased cost of sales by $32 million, primarily attributable to the euro and Japanese
yen. Net engineering costs, excluding currency, decreased cost of sales by $14 million. Unfavorable cost performance, design changes and other increased cost of sales by $175 million primarily due supply chain and material cost impacts associated with the worldwide semiconductor supply shortage.
A summary of net engineering costs is shown below:
Six Months Ended June 30,
(In millions)
2022
2021
Gross
engineering costs
$
(162)
$
(166)
Engineering recoveries
73
60
Engineering costs, net
$
(89)
$
(106)
Gross
engineering costs relate to forward model program development and advanced engineering activities and exclude contractually reimbursable engineering costs. Net engineering costs of $89 million for the six months ended June 30, 2022, including the impacts of currency, were $17 million lower than the same period of 2021. This decrease is primarily related to increased engineering recoveries during the first half 2022.
Selling, General and Administrative Expenses
Selling, general, and administrative expenses were $i87
million and $i89 million, during the six months ended June 30, 2022 and 2021, respectively.
Restructuring and impairment
During the second quarter 2022, the Company approved and recorded $i2
million of restructuring expense primarily in Europe in order to improve efficiencies and rationalize the Company's footprint.
During the first quarter 2022, the Company approved and recorded restructuring expense, primarily impacting Europe, in order to improve efficiencies and rationalize the Company's footprint and to capture the indefinite suspension of operations in Russia. During the first six months of 2022, $i2 million
of restructuring expense was recorded related to this action.
During the six months ended June 30, 2022, due to the current geopolitical situation in Eastern Europe the Company indefinitely suspended operations in Russia beginning in the second quarter 2022. As such, the Company recognized a non-cash impairment charge of $i2
million to fully impair property and equipment as of June 30, 2022.
During the six months ended June 30, 2022, the Company recorded a $i2 million charge to reduce certain inventory in Russia to its net realizable value based on the
Company’s suspension of operations in Russia during the second quarter 2022.
Interest Expense, Net
Interest expense, net, for the six months ended June 30, 2022 and 2021 was $5 million and $4 million, respectively. Interest expense for these periods is primarily related to the borrowings on the Company's term debt facility.
Equity in Net Income of Non-Consolidated Affiliates
Equity in net income of non-consolidated affiliates was $i4
million and less than $1 million for the six months ended June 30, 2022 and 2021, respectively. The increase in income is primarily attributable due to increased sales at the Company's non-consolidated affiliates.
Other Income, Net
Other income, net of $i10
million and $i9 million for the six-month periods ending June 30, 2022 and 2021 is primarily due to net pension financing benefits.
29
Income Taxes
The
Company's provision for income taxes of $i15 million for the six months ended June 30, 2022 represents a decrease of $1 million compared with $i16
million in the same period of 2021. The decrease in tax expense is attributable to several items including the non-recurrence of a $2 million provision for income taxes related to uncertain tax positions attributable to certain related party transactions, the $1 million decrease in withholding taxes driven primarily by favorable exchange, offset by increases in tax expense attributable primarily to the overall year over year increase in profit before tax excluding equity income, including changes in the mix of earnings and differing tax rates between jurisdictions.
Adjusted EBITDA
Adjusted EBITDA (a non-GAAP financial measure, as defined in Note 15, "Segment Information") was $150 million for the six months ended June 30, 2022, representing an increase of $56 million when compared to $94 million
for the same period of 2021. The change was primarily driven by higher sales volumes and increased net customer recoveries related to supply chain and material cost increases associated with the worldwide semiconductor supply shortage.
The reconciliation of net income (loss) attributable to Visteon to Adjusted EBITDA for the six months ended June 30, 2022 and 2021, is as follows:
Six
Months Ended June 30,
(In millions)
2022
2021
Change
Net income (loss) attributable to Visteon Corporation
$
46
$
i5
$
41
Depreciation
and amortization
52
i55
(3)
Provision for income taxes
15
i16
(1)
Non-cash,
stock-based compensation expense
13
i9
4
Interest expense, net
5
i4
1
Net
income (loss) attributable to non-controlling interests
—
i3
(3)
Restructuring and impairment expense
11
i—
11
Equity
in net income of non-consolidated affiliates
$
(4)
i—
(4)
Other
12
i2
10
Adjusted
EBITDA
$
150
$
i94
$
56
Liquidity
The
Company's primary sources of liquidity are cash flows from operations, existing cash balances, and borrowings under available credit facilities. As we continue to evaluate ongoing impacts of the COVID-19 pandemic including the semiconductor supply shortage and other supply chain impacts, the Company believes funds generated from these sources will continue to sufficiently sustain ongoing operations and support investment in differentiating technologies. The Company will continue to closely monitor its available liquidity and maintain access to additional liquidity to weather these challenging conditions. The Company's intra-year needs are normally impacted by seasonal effects in the industry, such as mid-year
shutdowns, the ramp-up of new model production, and year-end shutdowns at key customers. The ongoing COVID-19 pandemic and related semiconductor supply shortage may exacerbate the intra-year requirements.
A substantial portion of the Company's cash flows from operations are generated by operations located outside of the United States. Accordingly, the Company utilizes a combination of cash repatriation strategies, including dividends and distributions, royalties, and other intercompany arrangements to provide the funds necessary to meet obligations globally. The Company’s ability to access funds from its subsidiaries
is subject to, among other things, customary regulatory and statutory requirements and contractual arrangements including joint venture agreements and local credit facilities. Moreover, repatriation efforts may be modified by the Company according to prevailing circumstances.
Access to additional capital through the debt or equity markets is influenced by the Company's credit ratings. As of June 30, 2022, the Company’s corporate credit rating is Ba3 and BB- by Moody’s and Standard & Poor’s, respectively. See Note 8, "Debt" for a comprehensive discussion of the
Company's debt facilities. Incremental funding requirements of the Company's consolidated foreign entities are primarily accommodated by intercompany cash pooling structures. Affiliate working capital lines, which may be utilized by the Company's local subsidiaries and consolidated joint ventures, had availability of $187
30
million and the Company had $400 million of available credit
under the revolving credit facility, as of June 30, 2022. As of June 30, 2022, the Company was in compliance with all its debt covenants.
Cash Balances
As of June 30, 2022, the Company had total cash and cash equivalents of $325 million, including $3 million of restricted cash. Cash balances totaling $273 million were located in jurisdictions outside of the United States, of which approximately $45 million is considered permanently reinvested for funding ongoing operations outside of the U.S. If such permanently reinvested funds were repatriated to the U.S., no
U.S. federal taxes would be imposed on the distribution of such foreign earnings due to U.S. tax reform enacted in December 2017. However, the Company would be required to accrue additional tax expense primarily related to foreign withholding taxes.
Other Items Affecting Liquidity
During the six months ended June 30, 2022, cash contributions to the Company's defined benefit plans were $2 million related to its non-U.S. plans. The Company estimates that total cash contributions to its non-U.S. defined benefit pension plans during 2022 will be $6 million.
During
the six months ended June 30, 2022, the Company paid $9 million related to restructuring activities. Additional discussion regarding the Company's restructuring activities is included in Note 3, "Restructuring Activities."
The Company committed to make a $15 million investment in two funds managed by venture capital firms principally focused on the automotive sector pursuant to limited partnership agreements. As of June 30, 2022, the Company
contributed $10 million toward the aggregate investment commitments. As a limited partner in each entity, the Company will periodically make capital contributions toward this total commitment amount.
The Company may be required to make significant cash outlays related to its unrecognized tax benefits, including interest and penalties. As of June 30, 2022, the Company had unrecognized tax benefits, including interest and penalties, that would be expected to result in a cash outlay of $8 million. Given the number of years, jurisdictions and positions subject to examination, the
Company is unable to estimate the period of cash settlement, if any, with the respective taxing authorities.
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Cash Flows
Operating Activities
The Company used $72 million of cash from operating activities during the six months ended June 30, 2022. The decrease in cash from operations of $73 million is primarily attributable to increased working
capital outflows. Increased working capital outflows of $88 million as compared to prior year were primarily attributed to higher receivables due to increased sales and higher inventory levels resulting from the uneven supply chain environment, an increase in safety stock levels, and higher raw material prices. These increases were partially offset by an increase in Adjusted EBITDA (a non-GAAP financial measure, as discussed in Note 15, "Segment Information").
Investing Activities
Net cash used by investing activities during the both six months ended June 30, 2022 and 2021 totaled $31 million. Cash used by investing activities during 2022 is primarily attributable to capital expenditures during the six months ended June 30,
2022, partially offset by the settlement of net investment hedges of $5 million during the second quarter.
Financing Activities
Cash used by financing activities during the six months ended June 30, 2022 was $4 million and is attributable to the payment of subsidiary borrowings.
Debt and Capital Structure
See Note 8, “Debt” to the condensed consolidated financial statements included in Item 1.
Significant
Accounting Policies and Critical Accounting Estimates
See Note 1, “Summary of Significant Accounting Policies” to the accompanying condensed consolidated financial statements in Item 1.
Fair Value Measurements
See Note 13, “Fair Value Measurements and Financial Instruments” to the condensed consolidated financial statements included in Item 1.
Recent Accounting Pronouncements
See Note 1, “Summary of Significant Accounting
Policies” to the accompanying condensed consolidated financial statements in Item 1.
Forward-Looking Statements
Certain statements contained or incorporated in this Quarterly Report on Form 10-Q which are not statements of historical fact constitute “Forward-Looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements give current expectations or forecasts of future events. Words such as “anticipate”, “expect”, “intend”, “plan”, “believe”, “seek”, “estimate” and other words and terms of similar meaning in connection with discussions of future operating or financial performance
signify forward-looking statements. These statements reflect the Company’s current views with respect to future events and are based on assumptions and estimates, which are subject to risks and uncertainties. Accordingly, undue reliance should not be placed on these forward-looking statements. Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this report. The Company does not intend to update any of these forward-looking statements to reflect circumstances or events that occur after the statement is made and qualifies all of its forward-looking statements by these cautionary statements.
32
You
should understand that various factors, in addition to those discussed elsewhere in this document, could affect the Company’s future results and could cause results to differ materially from those expressed in such forward-looking statements, including:
•Significant or prolonged shortage of critical components from Visteon’s suppliers including, but not limited to semiconductors and those components from suppliers who are sole or primary sources.
•Continued and future impacts related to the conflict between Russia and the Ukraine including supply chain disruptions, reduction in customer demand, and the imposition of sanctions on Russia.
•Continued and future impacts of the coronavirus
("COVID-19") pandemic on the Visteon’s financial condition and business operations including global supply chain disruptions, market downturns, reduced consumer demand, and new government actions or restrictions.
•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.
•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 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.
•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.
•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.
•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.
33
•Possible
terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system, changes in fuel prices, and disruptions of 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.
•Disruptions in information technology systems including, but not limited to, system failure, cyber-attack, malicious computer software (malware), unauthorized physical or electronic access, or other natural or man-made incidents or disasters.
•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.
•Other factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.
34
Item 3.Quantitative
and Qualitative Disclosures About Market Risk
The primary market risks to which the Company is exposed include changes in currency exchange rates, interest rates and certain commodity prices. The Company manages these risks through operating actions including fixed price contracts with suppliers and cost sourcing arrangements with customers and through various derivative instruments. The Company's use of derivative instruments is strictly intended for hedging purposes to mitigate market risks pursuant to written risk management policies. Accordingly, derivative instruments are
not used for speculative or trading purposes. The Company's use of derivative instruments creates exposure to credit loss in the event of non-performance by the counter-party to the derivative financial instruments. The Company limits this exposure by entering into agreements directly with a variety of major financial institutions with high credit standards and that are expected to fully satisfy their obligations under the contracts. Additionally, the Company's ability to utilize derivatives to manage market risk is dependent on credit conditions, market conditions, and prevailing economic environment.
Foreign
Currency Risk
The Company's cash flows are exposed to the risk of adverse changes in exchange rates as related to the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, dividends, investments in subsidiaries, and anticipated foreign currency denominated transaction proceeds. Where possible, the Company utilizes derivative financial instruments to manage foreign currency exchange rate risks. Forward and option contracts may be utilized to mitigate the impact exchange rate variability
on the Company's cash flows. Foreign currency exposures are reviewed periodically and any natural offsets are considered prior to entering into a derivative financial instrument. The Company’s current primary hedged currency exposures include the euro, Chinese renminbi, Brazilian real, Indian rupee, and Bulgarian lev. The Company utilizes a strategy of partial coverage for transactions in these currencies. The Company's policy requires that hedge transactions relate to a specific portion of the exposure not to exceed the aggregate amount of the underlying transaction.
In addition
to the transactional exposure described above, the Company's operating results are impacted by the translation of its foreign operating income into U.S. dollars. The Company does not enter into currency exchange rate contracts to mitigate this exposure.
The hypothetical pre-tax gain or loss in fair value from a 10% favorable or adverse change in quoted currency exchange rates would be $5 million and $29 million for currency derivative financial instruments as of June 30, 2022 and December 31, 2021, respectively. These estimated changes assume a parallel shift in all
currency exchange rates and include the gain or loss on financial instruments used to hedge investments in subsidiaries. Because exchange rates typically do not all move in the same direction, the estimate may overstate the impact of changing exchange rates on the net fair value of the Company's financial derivatives. It is also important to note that gains and losses indicated in the sensitivity analysis would generally be offset by gains and losses on the underlying exposures being hedged.
Interest Rate Risk
See Note 13, "Fair Value Measurements and Financial Instruments" to the condensed consolidated financial statements included in Item 1 for additional information.
Commodity
Risk
The Company's exposures to market risk from changes in the price of production material are managed primarily through negotiations with suppliers and customers, although there can be no assurance that the Company will recover all such costs. The Company continues to evaluate derivatives available in the marketplace and may decide to utilize derivatives in the future to manage select commodity risks if an acceptable hedging instrument is identified for the Company's exposure level at that time, as well as the effectiveness of the financial hedge among other factors.
35
Item
4.Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in periodic reports filed with the SEC under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Senior Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
As of June 30,
2022, an evaluation was performed under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Senior Vice President and Chief Financial Officer, of the effectiveness of the design and operation of disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Senior Vice President and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2022.
Internal Control over Financial Reporting
There were no changes in the Company's
internal control over financial reporting during the three months ended June 30, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
36
Part II
Other Information
Item
1. Legal Proceedings
See the information above under Note 14, "Commitments and Contingencies," to the condensed consolidated financial statements which is incorporated herein by reference.
Item 1A.Risk Factors
Except as set forth below, as of June 30, 2022, there have been no material changes to the risk factors that were previously disclosed in Item 1A in the Company’s Form 10-K for the year ended December
31, 2021 filed with the SEC on February 17, 2022.
We are currently operating in a period of significant macro-economic uncertainty, including supply-chain disruptions and COVID-related lockdowns and increasing inflationary pressures and component costs. Although we have minimal operations in Russia, the conflict in Ukraine and the current COVID-related lockdowns in China are exacerbating component cost increases, supply chain challenges including the availability of natural resources used in production by our suppliers, and volatility with our customers’ production schedules. If the conflict in Ukraine continues for a lengthy period or spreads or the COVID-related lockdowns in China continue for a lengthy period or spread, it may have a materially negative impact on our business and results of operations.
The
macro-economic uncertainty has been exacerbated by the conflict in Ukraine. Although the length and impact of the ongoing conflict is highly unpredictable, it has exacerbated the availability, and volatility in prices, of commodities and components, inflationary pressures, credit markets, foreign exchange rates and supply chain disruptions. Furthermore, governments in the United States, United Kingdom, Canada and European Union have each imposed financial and economic sanctions on certain industry sectors and parties in Russia. These sanctions include controls on the export, re-export, and in-country transfer in Russia of certain goods, supplies, and technologies, including some that we use in our business in Russia. Existing or additional sanctions could further adversely affect the global economy, lead to litigation related to compliance with such sanctions, or further disrupt the global supply chain. Inflation is also currently high world-wide and may continue for
an unforeseen time.
The negative impact of the conflict in Ukraine and the current COVID lock-downs in China may exacerbate cost increases in raw material, transportation, energy, and commodities. Although we are negotiating with our customers with respect to these additional cost increases, commercial negotiations with our customers may not be successful or may not offset all of the adverse impact of higher transportation, energy and commodity costs. Additionally, even if we are successful with respect to negotiations with customers relating to cost increases, there may be delay before we recover any increased costs. These may have a material negative impact on our business and results of operations.
For additional information see Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K
for the year ended December 31, 2021 filed with the SEC on February 17, 2022. See also, "Forward-Looking Statements" included in Part I, Item 2 of this Quarterly Report on Form 10-Q.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
There were no purchases made by or on behalf of the Company, or an affiliated purchaser, of shares of the Company’s common stock during the first quarter of 2022.
* Indicates that exhibit is a management contract or compensatory plan or arrangement.
** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
In lieu of filing certain instruments with respect to long-term debt of the kind described in Item 601(b)(4) of Regulation S-K, Visteon
agrees to furnish a copy of such instruments to the Securities and Exchange Commission upon request.
Signatures
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, Visteon Corporation has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.