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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Visteon Corporation | NASDAQ:VC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 111.17 | 109.56 | 113.74 | 0 | 01:00:00 |
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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State of Delaware
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38-3519512
|
(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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One Village Center Drive, Van Buren Township, Michigan
|
48111
|
(Address of principal executive offices)
|
(Zip code)
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Title of Each Class
|
Name of Each Exchange on which Registered
|
Common Stock, par value $0.01 per share
|
The NASDAQ Stock Market LLC
|
Warrants, each exercisable for 1.3 shares of Common Stock at an exercise price of $0.01 (expiring October 1, 2020)
(Title of class)
|
Document
|
Where Incorporated
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2019 Proxy Statement
|
Part III (Items 10, 11, 12, 13 and 14)
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Page
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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 device and power connectivity. This requires increased electronic and technical content such as in-vehicle communication, navigation and entertainment capabilities. While original equipment vehicle manufacturers ("OEMs") are taking different paths to connect their vehicles to high-speed broadband internet connections in the short-term, future vehicles are expected to be built with vehicle-to-vehicle connectivity systems. There is momentum by OEMs to integrate discrete electronic control units into a multi-core domain controller to increase efficiency and reduce power consumption, cost and weight.
|
•
|
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, 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
|
•
|
Compute - A modular and scalable computing hardware platform designed to be adapted to all 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-based development environment that enables automakers to create an ecosystem of developers for rapid algorithm development.
|
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; and
|
•
|
increases in working capital requirements related to long supply chains.
|
Item 1B.
|
Unresolved Staff Comments
|
•
|
33 corporate offices, technical and engineering centers and customer service centers in eleven countries around the world, of which 32 were leased and 1 was owned.
|
•
|
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
|
|
51
|
|
Director, President and Chief Executive Officer
|
Christian A. Garcia
|
|
55
|
|
Executive Vice President and Chief Financial Officer
|
Sunil K. Bilolikar
|
|
57
|
|
Senior Vice President, Operations and Procurement
|
Matthew M. Cole
|
|
49
|
|
Senior Vice President, Product Development Engineering
|
Brett D. Pynnonen
|
|
50
|
|
Senior Vice President and General Counsel
|
Markus J. Schupfner
|
|
49
|
|
Senior Vice President and Chief Technology Officer
|
Kristin E. Trecker
|
|
53
|
|
Senior Vice President and Chief Human Resources Officer
|
Robert R. Vallance
|
|
58
|
|
Senior Vice President, Customer Business Groups
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Period
|
Total Number of Shares (or Units) Purchased (1)
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or units) Purchased as Part of Publicly Announced Plans or Programs (2)
|
|
Approximate Dollar Value of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
||
Oct. 1, 2018 to Oct. 31, 2018
|
—
|
|
|
$0.00
|
|
—
|
|
|
$0.00
|
Nov. 1, 2018 to Nov. 30, 2018
|
314,720
|
|
|
$79.64
|
|
—
|
|
|
$0.00
|
Dec. 1, 2018 to Dec. 31, 2018
|
400,885
|
|
|
$62.35
|
|
—
|
|
|
$0.00
|
Total
|
715,605
|
|
|
$69.94
|
|
—
|
|
|
$0.00
|
(1)
|
This column includes 981 shares surrendered to the Company by employees to satisfy tax withholding obligations in connection with the vesting of restricted stock units made pursuant to the Visteon Corporation 2010 Incentive Plan.
|
(2)
|
On January 15, 2018, the Company's Board authorized an additional $500 million share repurchases to be completed through 2020. As of December 31, 2018, there is $400 million remaining on this authorization. Additional repurchases of common stock, if any, may occur at the discretion of the Company.
|
|
December 31, 2013
|
December 31, 2014
|
December 31, 2015
|
December 31, 2016
|
December 31, 2017
|
December 31, 2018
|
Visteon Corporation
|
$100.00
|
$135.60
|
$145.30
|
$173.10
|
$269.70
|
$129.90
|
Dow Jones U.S. Auto & Parts Index
|
$100.00
|
$106.80
|
$103.90
|
$105.80
|
$129.80
|
$100.70
|
S&P 500
|
$100.00
|
$116.90
|
$118.50
|
$132.60
|
$161.60
|
$154.50
|
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
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(Dollars in Millions, Except Per Share Amounts)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,984
|
|
|
$
|
3,146
|
|
|
$
|
3,161
|
|
|
$
|
3,245
|
|
|
$
|
2,586
|
|
Net income (loss) from continuing operations
|
173
|
|
|
175
|
|
|
131
|
|
|
42
|
|
|
(75
|
)
|
|||||
Net income (loss) from discontinued operations, net of tax
|
1
|
|
|
17
|
|
|
(40
|
)
|
|
2,286
|
|
|
(131
|
)
|
|||||
Net income (loss) attributable to Visteon Corporation
|
$
|
164
|
|
|
$
|
176
|
|
|
$
|
75
|
|
|
$
|
2,284
|
|
|
$
|
(295
|
)
|
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
5.53
|
|
|
$
|
5.03
|
|
|
$
|
3.28
|
|
|
$
|
0.52
|
|
|
$
|
(2.14
|
)
|
Discontinued operations
|
0.03
|
|
|
0.54
|
|
|
(1.14
|
)
|
|
53.48
|
|
|
(4.30
|
)
|
|||||
Basic earnings (loss) attributable to Visteon Corporation
|
$
|
5.56
|
|
|
$
|
5.57
|
|
|
$
|
2.14
|
|
|
$
|
54.00
|
|
|
$
|
(6.44
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
5.49
|
|
|
$
|
4.94
|
|
|
$
|
3.25
|
|
|
$
|
0.51
|
|
|
$
|
(2.14
|
)
|
Discontinued operations
|
0.03
|
|
|
0.53
|
|
|
(1.13
|
)
|
|
52.12
|
|
|
(4.30
|
)
|
|||||
Diluted earnings (loss) attributable to Visteon Corporation
|
$
|
5.52
|
|
|
$
|
5.47
|
|
|
$
|
2.12
|
|
|
$
|
52.63
|
|
|
$
|
(6.44
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
2,007
|
|
|
$
|
2,304
|
|
|
$
|
2,373
|
|
|
$
|
4,681
|
|
|
$
|
5,323
|
|
Total debt, excluding held for sale
|
$
|
405
|
|
|
$
|
393
|
|
|
$
|
382
|
|
|
$
|
383
|
|
|
$
|
616
|
|
Total Visteon Corporation stockholders' equity
|
$
|
465
|
|
|
$
|
637
|
|
|
$
|
586
|
|
|
$
|
1,057
|
|
|
$
|
865
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided from operating activities
|
$
|
204
|
|
|
$
|
215
|
|
|
$
|
116
|
|
|
$
|
338
|
|
|
$
|
284
|
|
Cash (used by) provided from investing activities
|
$
|
(98
|
)
|
|
$
|
(173
|
)
|
|
$
|
302
|
|
|
$
|
2,358
|
|
|
$
|
(740
|
)
|
Cash used by financing activities
|
$
|
(335
|
)
|
|
$
|
(234
|
)
|
|
$
|
(2,262
|
)
|
|
$
|
(774
|
)
|
|
$
|
(359
|
)
|
•
|
Transformation of the Automotive Cockpit as a Smart Mobile Digital Assistant
- 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 increasing level of business by demonstrating product quality, technical and development capability, new product innovation, reliability and timeliness, product design and manufacturing capability and flexibility, as well as overall customer service.
|
•
|
Enhance Shareholder Returns
- The Company has returned $3.25 billion to shareholders since 2015 through a combination of ongoing share repurchases and a one time special dividend in 2016. The Company has $400 million of remaining authorization from the Board of Directors. This authorization is in place through the end of 2020
|
|
Light Vehicle Production
|
|||||||
|
2018
|
|
2017
|
|
Change
|
|||
Global
|
94.1
|
|
|
95.2
|
|
|
(1.1
|
)%
|
China
|
26.9
|
|
|
28.0
|
|
|
(4.1
|
)%
|
Other Asia-Pacific
|
22.4
|
|
|
22.0
|
|
|
2.0
|
%
|
Europe
|
22.0
|
|
|
22.2
|
|
|
(1.1
|
)%
|
Americas
|
20.3
|
|
|
20.4
|
|
|
—
|
%
|
Other
|
2.5
|
|
|
2.6
|
|
|
(2.3
|
)%
|
Source: IHS Automotive
|
•
|
The Company recorded sales of
$2,984 million
representing a
decrease
of
$162 million
compared with the year ended December 31, 2017.
|
•
|
Gross margin was
$411 million
or
13.8%
of sales for the year ended December 31, 2018, compared to
$491 million
or
15.6%
of sales for the same period of 2017.
|
•
|
Net income attributable to Visteon was
$164 million
for the year ended December 31, 2018, compared to net income of
$176 million
for the same period of 2017.
|
•
|
Total cash was
$467 million
, including
$4 million
of restricted cash as of December 31, 2018,
$242 million
lower
than
$709 million
, including
$3 million
of restricted cash as of December 31, 2017.
|
•
|
China domestic sales grew
6%
as compared to 2017, outperforming the market decline of
4%
.
|
|
Sales
|
|
Cost of Sales
|
||||
|
(Dollars in Millions)
|
||||||
December 31, 2017
|
$
|
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
|
)
|
||
Net cost performance
|
—
|
|
|
101
|
|
||
December 31, 2018
|
$
|
2,984
|
|
|
$
|
(2,573
|
)
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
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
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
|
(Dollars in Millions)
|
||||||||||
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
|
)
|
|
Electronics
|
|
Other
|
|
Total
|
||||||
|
(Dollars in Millions)
|
||||||||||
December 31, 2016
|
$
|
3,107
|
|
|
$
|
54
|
|
|
$
|
3,161
|
|
Volume, mix, and net new business
|
127
|
|
|
—
|
|
|
127
|
|
|||
Currency
|
5
|
|
|
—
|
|
|
5
|
|
|||
Exit of climate operations
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||
Customer pricing and other
|
(93
|
)
|
|
—
|
|
|
(93
|
)
|
|||
December 31, 2017
|
$
|
3,146
|
|
|
$
|
—
|
|
|
$
|
3,146
|
|
|
Electronics
|
|
Other
|
|
Total
|
||||||
|
(Dollars in Millions)
|
||||||||||
December 31, 2016
|
$
|
(2,642
|
)
|
|
$
|
(63
|
)
|
|
$
|
(2,705
|
)
|
Volume, mix, and net new business
|
(123
|
)
|
|
—
|
|
|
(123
|
)
|
|||
Currency
|
(12
|
)
|
|
—
|
|
|
(12
|
)
|
|||
Exit of climate operations
|
—
|
|
|
63
|
|
|
63
|
|
|||
Net cost performance
|
122
|
|
|
—
|
|
|
122
|
|
|||
December 31, 2017
|
$
|
(2,655
|
)
|
|
$
|
—
|
|
|
$
|
(2,655
|
)
|
|
Year Ended December 31
|
||||||
|
2017
|
|
2016
|
||||
|
(Dollars in Millions)
|
||||||
Pension financing benefits, net
|
$
|
12
|
|
|
$
|
12
|
|
Transformation initiatives
|
(2
|
)
|
|
(9
|
)
|
||
Gain on non-consolidated transactions
|
4
|
|
|
—
|
|
||
Foreign currency translation charge
|
—
|
|
|
(11
|
)
|
||
Integration costs
|
—
|
|
|
(2
|
)
|
||
Loss on asset contributions
|
—
|
|
|
(2
|
)
|
||
|
$
|
14
|
|
|
$
|
(12
|
)
|
|
Year Ended December 31
|
||||||||||
|
2017
|
|
2016
|
|
Change
|
||||||
|
(Dollars in Millions)
|
||||||||||
Net income attributable to Visteon Corporation
|
$
|
176
|
|
|
$
|
75
|
|
|
$
|
101
|
|
Depreciation and amortization
|
87
|
|
|
84
|
|
|
3
|
|
|||
Restructuring expense, net
|
14
|
|
|
49
|
|
|
(35
|
)
|
|||
Interest expense, net
|
16
|
|
|
12
|
|
|
4
|
|
|||
Equity in net income of non-consolidated affiliates
|
(7
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|||
Loss on divestiture
|
33
|
|
|
—
|
|
|
33
|
|
|||
Provision for income taxes
|
48
|
|
|
30
|
|
|
18
|
|
|||
Net (income) loss from discontinued operations, net of tax
|
(17
|
)
|
|
40
|
|
|
(57
|
)
|
|||
Net income attributable to non-controlling interests
|
16
|
|
|
16
|
|
|
—
|
|
|||
Non-cash, stock-based compensation expense
|
12
|
|
|
8
|
|
|
4
|
|
|||
Other
|
(8
|
)
|
|
25
|
|
|
(33
|
)
|
|||
Adjusted EBITDA
|
$
|
370
|
|
|
$
|
337
|
|
|
$
|
33
|
|
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||
Debt, including capital leases
|
$
|
407
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350
|
|
Purchase obligations
|
149
|
|
|
63
|
|
|
65
|
|
|
19
|
|
|
2
|
|
|||||
Interest payments on long-term debt
|
63
|
|
|
11
|
|
|
22
|
|
|
27
|
|
|
3
|
|
|||||
Operating leases
|
186
|
|
|
37
|
|
|
53
|
|
|
37
|
|
|
59
|
|
|||||
Total contractual obligations
|
$
|
805
|
|
|
$
|
168
|
|
|
$
|
140
|
|
|
$
|
83
|
|
|
$
|
414
|
|
•
|
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 .35% to 10.65% to determine its pension and other benefit obligations as of December 31, 2018, including weighted average discount rates of 4.33% for U.S. pension plans, and 3.34% for non-U.S. pension plan.
|
•
|
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.
|
•
|
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.
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions, Except Per Share Amounts)
|
||||||||||
Sales
|
$
|
2,984
|
|
|
$
|
3,146
|
|
|
$
|
3,161
|
|
Cost of sales
|
(2,573
|
)
|
|
(2,655
|
)
|
|
(2,705
|
)
|
|||
Gross margin
|
411
|
|
|
491
|
|
|
456
|
|
|||
Selling, general and administrative expenses
|
(193
|
)
|
|
(226
|
)
|
|
(224
|
)
|
|||
Restructuring expense, net
|
(29
|
)
|
|
(14
|
)
|
|
(49
|
)
|
|||
Interest expense
|
(14
|
)
|
|
(21
|
)
|
|
(18
|
)
|
|||
Interest income
|
7
|
|
|
5
|
|
|
6
|
|
|||
Equity in net income of non-consolidated affiliates
|
13
|
|
|
7
|
|
|
2
|
|
|||
Loss on divestiture
|
—
|
|
|
(33
|
)
|
|
—
|
|
|||
Other income (expense), net
|
21
|
|
|
14
|
|
|
(12
|
)
|
|||
Income before income taxes
|
216
|
|
|
223
|
|
|
161
|
|
|||
Provision for income taxes
|
(43
|
)
|
|
(48
|
)
|
|
(30
|
)
|
|||
Net income from continuing operations
|
173
|
|
|
175
|
|
|
131
|
|
|||
Net income (loss) from discontinued operations, net of tax
|
1
|
|
|
17
|
|
|
(40
|
)
|
|||
Net income
|
174
|
|
|
192
|
|
|
91
|
|
|||
Net income attributable to non-controlling interests
|
(10
|
)
|
|
(16
|
)
|
|
(16
|
)
|
|||
Net income attributable to Visteon Corporation
|
$
|
164
|
|
|
$
|
176
|
|
|
$
|
75
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.53
|
|
|
$
|
5.03
|
|
|
$
|
3.28
|
|
Discontinued operations
|
0.03
|
|
|
0.54
|
|
|
(1.14
|
)
|
|||
Basic earnings per share attributable to Visteon Corporation
|
$
|
5.56
|
|
|
$
|
5.57
|
|
|
$
|
2.14
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.49
|
|
|
$
|
4.94
|
|
|
$
|
3.25
|
|
Discontinued operations
|
0.03
|
|
|
0.53
|
|
|
(1.13
|
)
|
|||
Diluted earnings per share attributable to Visteon Corporation
|
$
|
5.52
|
|
|
$
|
5.47
|
|
|
$
|
2.12
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Net income
|
$
|
174
|
|
|
$
|
192
|
|
|
$
|
91
|
|
Foreign currency translation adjustments
|
(46
|
)
|
|
68
|
|
|
(11
|
)
|
|||
Net investment hedge
|
7
|
|
|
(22
|
)
|
|
6
|
|
|||
Benefit plans, net of tax
(a)
|
(8
|
)
|
|
12
|
|
|
(39
|
)
|
|||
Unrealized hedging gains (losses), net of tax
(b)
|
1
|
|
|
6
|
|
|
(6
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
(46
|
)
|
|
64
|
|
|
(50
|
)
|
|||
Comprehensive income
|
128
|
|
|
256
|
|
|
41
|
|
|||
Comprehensive income attributable to non-controlling interests
|
6
|
|
|
21
|
|
|
9
|
|
|||
Comprehensive income attributable to Visteon Corporation
|
$
|
122
|
|
|
$
|
235
|
|
|
$
|
32
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
ASSETS
|
|||||||
Cash and equivalents
|
$
|
463
|
|
|
$
|
706
|
|
Restricted cash
|
4
|
|
|
3
|
|
||
Accounts receivable, net
|
486
|
|
|
530
|
|
||
Inventories, net
|
184
|
|
|
189
|
|
||
Other current assets
|
159
|
|
|
175
|
|
||
Total current assets
|
1,296
|
|
|
1,603
|
|
||
Property and equipment, net
|
397
|
|
|
377
|
|
||
Intangible assets, net
|
129
|
|
|
132
|
|
||
Investments in non-consolidated affiliates
|
42
|
|
|
41
|
|
||
Other non-current assets
|
143
|
|
|
151
|
|
||
Total assets
|
$
|
2,007
|
|
|
$
|
2,304
|
|
LIABILITIES AND EQUITY
|
|||||||
Short-term debt, including current portion of long-term debt
|
$
|
57
|
|
|
$
|
46
|
|
Accounts payable
|
436
|
|
|
470
|
|
||
Accrued employee liabilities
|
67
|
|
|
105
|
|
||
Other current liabilities
|
161
|
|
|
180
|
|
||
Total current liabilities
|
721
|
|
|
801
|
|
||
Long-term debt
|
348
|
|
|
347
|
|
||
Employee benefits
|
257
|
|
|
277
|
|
||
Deferred tax liabilities
|
23
|
|
|
23
|
|
||
Other non-current liabilities
|
76
|
|
|
95
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of December 31, 2018 and 2017)
|
—
|
|
|
—
|
|
||
Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 28 million and 31 million shares outstanding as of December 31, 2018 and 2017, respectively)
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
1,335
|
|
|
1,339
|
|
||
Retained earnings
|
1,609
|
|
|
1,445
|
|
||
Accumulated other comprehensive loss
|
(216
|
)
|
|
(174
|
)
|
||
Treasury stock
|
(2,264
|
)
|
|
(1,974
|
)
|
||
Total Visteon Corporation stockholders’ equity
|
465
|
|
|
637
|
|
||
Non-controlling interests
|
117
|
|
|
124
|
|
||
Total equity
|
582
|
|
|
761
|
|
||
Total liabilities and equity
|
$
|
2,007
|
|
|
$
|
2,304
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
174
|
|
|
$
|
192
|
|
|
$
|
91
|
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
91
|
|
|
87
|
|
|
84
|
|
|||
Losses on divestitures and impairments
|
—
|
|
|
33
|
|
|
22
|
|
|||
Non-cash stock-based compensation
|
8
|
|
|
12
|
|
|
8
|
|
|||
Transaction (gains) losses
|
(8
|
)
|
|
(11
|
)
|
|
2
|
|
|||
Equity in net income of non-consolidated affiliates, net of dividends remitted
|
(13
|
)
|
|
(7
|
)
|
|
(1
|
)
|
|||
Other non-cash items
|
3
|
|
|
1
|
|
|
24
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
44
|
|
|
10
|
|
|
(19
|
)
|
|||
Inventories
|
1
|
|
|
(3
|
)
|
|
30
|
|
|||
Accounts payable
|
(19
|
)
|
|
(54
|
)
|
|
(10
|
)
|
|||
Other assets and other liabilities
|
(77
|
)
|
|
(45
|
)
|
|
(115
|
)
|
|||
Net cash provided from operating activities
|
204
|
|
|
215
|
|
|
116
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures, including intangibles
|
(127
|
)
|
|
(99
|
)
|
|
(75
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
16
|
|
|
(47
|
)
|
|
(15
|
)
|
|||
Payments on divestiture of businesses
|
—
|
|
|
(48
|
)
|
|
(10
|
)
|
|||
Settlement of net investment hedge
|
—
|
|
|
5
|
|
|
—
|
|
|||
Proceeds from asset sales and business divestitures
|
—
|
|
|
15
|
|
|
17
|
|
|||
Short-term investments, net
|
—
|
|
|
—
|
|
|
47
|
|
|||
Loans to non-consolidated affiliate, net of repayments
|
—
|
|
|
—
|
|
|
(8
|
)
|
|||
Net proceeds from Climate Transaction, including withholding tax refund
|
—
|
|
|
—
|
|
|
356
|
|
|||
Other, net
|
13
|
|
|
1
|
|
|
(10
|
)
|
|||
Net cash (used by) provided from investing activities
|
(98
|
)
|
|
(173
|
)
|
|
302
|
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Short-term debt, net
|
12
|
|
|
10
|
|
|
—
|
|
|||
Distribution payments
|
(14
|
)
|
|
(1
|
)
|
|
(1,736
|
)
|
|||
Stock based compensation tax withholding payments
|
(7
|
)
|
|
(1
|
)
|
|
(11
|
)
|
|||
Principal payments on debt
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||
Dividends paid to non-controlling interests
|
(28
|
)
|
|
(38
|
)
|
|
(13
|
)
|
|||
Repurchase of common stock
|
(300
|
)
|
|
(200
|
)
|
|
(500
|
)
|
|||
Other
|
2
|
|
|
(2
|
)
|
|
—
|
|
|||
Net cash used by financing activities
|
(335
|
)
|
|
(234
|
)
|
|
(2,262
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
(13
|
)
|
|
19
|
|
|
(11
|
)
|
|||
Net (decrease) increase in cash and equivalents
|
(242
|
)
|
|
(173
|
)
|
|
(1,855
|
)
|
|||
Cash and equivalents at beginning of the year
|
709
|
|
|
882
|
|
|
2,737
|
|
|||
Cash and equivalents at end of the year
|
$
|
467
|
|
|
$
|
709
|
|
|
$
|
882
|
|
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
15
|
|
|
$
|
16
|
|
|
$
|
14
|
|
Cash paid for income taxes, net of refunds
|
$
|
47
|
|
|
$
|
49
|
|
|
$
|
92
|
|
|
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
|
||||||||||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||||||||||||||||||
December 31, 2015
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,345
|
|
|
$
|
1,194
|
|
|
$
|
(190
|
)
|
|
$
|
(1,293
|
)
|
|
$
|
1,057
|
|
|
$
|
142
|
|
|
$
|
1,199
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
16
|
|
|
91
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(43
|
)
|
|
—
|
|
|
(43
|
)
|
|
(7
|
)
|
|
(50
|
)
|
|||||||||
Stock-based compensation, net
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
15
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|||||||||
Repurchase of shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(500
|
)
|
|
(500
|
)
|
|
—
|
|
|
(500
|
)
|
|||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|
(13
|
)
|
|||||||||
December 31, 2016
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,327
|
|
|
$
|
1,269
|
|
|
$
|
(233
|
)
|
|
$
|
(1,778
|
)
|
|
$
|
586
|
|
|
$
|
138
|
|
|
$
|
724
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
176
|
|
|
16
|
|
|
192
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
59
|
|
|
—
|
|
|
59
|
|
|
5
|
|
|
64
|
|
|||||||||
Stock-based compensation, net
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
16
|
|
|
—
|
|
|
16
|
|
|||||||||
Repurchase of shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(200
|
)
|
|
(200
|
)
|
|
—
|
|
|
(200
|
)
|
|||||||||
Dividends payable
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(33
|
)
|
|
(33
|
)
|
|||||||||
December 31, 2017
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,339
|
|
|
$
|
1,445
|
|
|
$
|
(174
|
)
|
|
$
|
(1,974
|
)
|
|
$
|
637
|
|
|
$
|
124
|
|
|
$
|
761
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
—
|
|
|
—
|
|
|
164
|
|
|
10
|
|
|
174
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|
(4
|
)
|
|
(46
|
)
|
|||||||||
Stock-based compensation, net
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
10
|
|
|
6
|
|
|
—
|
|
|
6
|
|
|||||||||
Repurchase of shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
|
(300
|
)
|
|
—
|
|
|
(300
|
)
|
|||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(28
|
)
|
|
(28
|
)
|
|||||||||
Business acquisition
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|||||||||
December 31, 2018
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,335
|
|
|
$
|
1,609
|
|
|
$
|
(216
|
)
|
|
$
|
(2,264
|
)
|
|
$
|
465
|
|
|
$
|
117
|
|
|
$
|
582
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Pension financing benefits, net
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
12
|
|
Transformation initiatives
|
4
|
|
|
(2
|
)
|
|
(9
|
)
|
|||
Gain on non-consolidated transactions, net
|
4
|
|
|
4
|
|
|
—
|
|
|||
Foreign currency translation charge
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||
Integration costs
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Loss on asset contributions
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
|
$
|
21
|
|
|
$
|
14
|
|
|
$
|
(12
|
)
|
•
|
Developed technology intangible assets, which are amortized over average, estimated useful lives generally ranging from
6
to
12
years.
|
•
|
Customer-related intangible assets, which are amortized over average, estimated useful lives generally ranging from
7
to
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
3
to
5
years.
|
•
|
Other intangible assets are amortized using the straight-line method over estimated useful lives based on the nature of the intangible asset.
|
Assets Acquired
|
|
|
Liabilities Assumed
|
|
||||
Cash and equivalents
|
$
|
16
|
|
|
Payable to Visteon Corporation
|
$
|
9
|
|
Accounts receivable, net
|
12
|
|
|
Accounts payable
|
6
|
|
||
Inventories, net
|
4
|
|
|
Other current liabilities
|
5
|
|
||
Other current assets
|
6
|
|
|
Income taxes payable
|
1
|
|
||
Property and equipment, net
|
5
|
|
|
Other non-current liabilities
|
2
|
|
||
Intangible assets including goodwill
|
9
|
|
|
Total liabilities assumed
|
23
|
|
||
Other non-current assets
|
1
|
|
|
Non-controlling interest
|
15
|
|
||
Total assets acquired
|
$
|
53
|
|
|
Visteon Corporation Consideration
|
$
|
15
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45
|
|
Cost of sales
|
(5
|
)
|
|
—
|
|
|
(59
|
)
|
|||
Gross margin
|
(5
|
)
|
|
—
|
|
|
(14
|
)
|
|||
Selling, general and administrative expenses
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Gain (loss) on Climate Transaction
|
4
|
|
|
7
|
|
|
(2
|
)
|
|||
Long-lived asset impairment
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Gain (loss) on Interiors Divestiture
|
—
|
|
|
8
|
|
|
(19
|
)
|
|||
Restructuring expense
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Other income (expense), net
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
(Loss) income from discontinued operations before income taxes
|
(3
|
)
|
|
15
|
|
|
(47
|
)
|
|||
Benefit for income taxes
|
4
|
|
|
2
|
|
|
7
|
|
|||
Net income (loss) from discontinued operations attributable to Visteon
|
$
|
1
|
|
|
$
|
17
|
|
|
$
|
(40
|
)
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
YFVIC
(50%)
|
$
|
38
|
|
|
$
|
28
|
|
Changchun FAWAY Auto Electronics Co., Ltd.
(50%)
|
—
|
|
|
10
|
|
||
Others
|
4
|
|
|
3
|
|
||
Total investments in non-consolidated affiliates
|
$
|
42
|
|
|
$
|
41
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Payables due to YFVIC
|
$
|
17
|
|
|
$
|
12
|
|
Exposure to loss in YFVIC
|
|
|
|
||||
Investment in YFVIC
|
$
|
38
|
|
|
$
|
28
|
|
Receivables due from YFVIC
|
36
|
|
|
35
|
|
||
Subordinated loan receivable
|
20
|
|
|
22
|
|
||
Loan guarantee
|
11
|
|
|
15
|
|
||
Maximum exposure to loss in YFVIC
|
$
|
105
|
|
|
$
|
100
|
|
|
Electronics
|
|
Other
|
|
Total
|
||||||
|
(Dollars in Millions)
|
||||||||||
December 31, 2015
|
$
|
33
|
|
|
$
|
5
|
|
|
$
|
38
|
|
Expense
|
41
|
|
|
16
|
|
|
57
|
|
|||
Reversals
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||
Utilization
|
(38
|
)
|
|
(12
|
)
|
|
(50
|
)
|
|||
Foreign currency
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
December 31, 2016
|
31
|
|
|
9
|
|
|
40
|
|
|||
Expense
|
19
|
|
|
—
|
|
|
19
|
|
|||
Reversals
|
(4
|
)
|
|
(1
|
)
|
|
(5
|
)
|
|||
Utilization
|
(30
|
)
|
|
(2
|
)
|
|
(32
|
)
|
|||
Foreign currency
|
2
|
|
|
—
|
|
|
2
|
|
|||
December 31, 2017
|
18
|
|
|
6
|
|
|
24
|
|
|||
Expense
|
31
|
|
|
1
|
|
|
32
|
|
|||
Reversals
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|||
Utilization
|
(26
|
)
|
|
(4
|
)
|
|
(30
|
)
|
|||
Foreign currency
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
December 31, 2018
|
$
|
20
|
|
|
$
|
3
|
|
|
$
|
23
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Raw materials
|
$
|
124
|
|
|
$
|
133
|
|
Work-in-process
|
26
|
|
|
24
|
|
||
Finished products
|
34
|
|
|
32
|
|
||
|
$
|
184
|
|
|
$
|
189
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Recoverable taxes
|
$
|
46
|
|
|
$
|
56
|
|
Contractually reimbursable engineering costs
|
40
|
|
|
14
|
|
||
Joint venture receivables
|
37
|
|
|
43
|
|
||
Prepaid assets and deposits
|
20
|
|
|
36
|
|
||
China bank notes
|
12
|
|
|
23
|
|
||
Other
|
4
|
|
|
3
|
|
||
|
$
|
159
|
|
|
$
|
175
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Deferred tax assets
|
$
|
45
|
|
|
$
|
46
|
|
Recoverable taxes
|
33
|
|
|
35
|
|
||
Contractually reimbursable engineering costs
|
29
|
|
|
24
|
|
||
Joint venture note receivables
|
20
|
|
|
22
|
|
||
Long term notes receivable
|
—
|
|
|
10
|
|
||
Other
|
16
|
|
|
14
|
|
||
|
$
|
143
|
|
|
$
|
151
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Land
|
$
|
13
|
|
|
$
|
13
|
|
Buildings and improvements
|
76
|
|
|
73
|
|
||
Machinery, equipment and other
|
531
|
|
|
471
|
|
||
Construction in progress
|
56
|
|
|
65
|
|
||
Total property and equipment
|
676
|
|
|
622
|
|
||
Accumulated depreciation
|
(303
|
)
|
|
(269
|
)
|
||
|
373
|
|
|
353
|
|
||
Product tooling, net of amortization
|
24
|
|
|
24
|
|
||
Property and equipment, net
|
$
|
397
|
|
|
$
|
377
|
|
|
|
|
December 31, 2018
|
||||||||||
|
Estimated Weighted Average Useful Life (years)
|
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangibles
|
||||||
|
|
|
(Dollars in Millions)
|
||||||||||
Definite-Lived:
|
|
|
|||||||||||
Developed technology
|
8
|
|
$
|
40
|
|
|
$
|
(31
|
)
|
|
$
|
9
|
|
Customer related
|
10
|
|
90
|
|
|
(42
|
)
|
|
48
|
|
|||
Capitalized software development
|
4
|
|
16
|
|
|
(3
|
)
|
|
13
|
|
|||
Other
|
20
|
|
14
|
|
|
(2
|
)
|
|
12
|
|
|||
Subtotal
|
|
|
160
|
|
|
(78
|
)
|
|
82
|
|
|||
Indefinite-Lived:
|
|
|
|||||||||||
Goodwill
|
|
|
47
|
|
|
—
|
|
|
47
|
|
|||
Total
|
|
|
$
|
207
|
|
|
$
|
(78
|
)
|
|
$
|
129
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||||||||||||||||||||||
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangible
|
|
Additions
|
|
Foreign Currency
|
|
Amortization Expense
|
|
Net Intangibles
|
||||||||||||||
|
(Dollars in Millions)
|
|
|
||||||||||||||||||||||||
Definite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Developed technology
|
$
|
40
|
|
|
$
|
(27
|
)
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
9
|
|
Customer related
|
88
|
|
|
(35
|
)
|
|
53
|
|
|
7
|
|
|
(3
|
)
|
|
(9
|
)
|
|
48
|
|
|||||||
Capitalized software development
|
8
|
|
|
(1
|
)
|
|
7
|
|
|
8
|
|
|
—
|
|
|
(2
|
)
|
|
13
|
|
|||||||
Other
|
13
|
|
|
(1
|
)
|
|
12
|
|
|
2
|
|
|
(1
|
)
|
|
(1
|
)
|
|
12
|
|
|||||||
Subtotal
|
149
|
|
|
(64
|
)
|
|
85
|
|
|
17
|
|
|
(5
|
)
|
|
(15
|
)
|
|
82
|
|
|||||||
Indefinite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Goodwill
|
47
|
|
|
—
|
|
|
47
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
47
|
|
|||||||
Total
|
$
|
196
|
|
|
$
|
(64
|
)
|
|
$
|
132
|
|
|
$
|
19
|
|
|
$
|
(7
|
)
|
|
$
|
(15
|
)
|
|
$
|
129
|
|
|
December 31, 2016
|
|
December 31, 2017
|
||||||||||||||||||||||||
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangibles
|
|
Additions
|
|
Foreign Currency
|
|
Amortization Expense
|
|
Net Intangibles
|
||||||||||||||
|
(Dollars in Millions)
|
|
|
||||||||||||||||||||||||
Definite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Developed technology
|
$
|
40
|
|
|
$
|
(25
|
)
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(3
|
)
|
|
$
|
13
|
|
Customer related
|
83
|
|
|
(25
|
)
|
|
58
|
|
|
—
|
|
|
4
|
|
|
(9
|
)
|
|
53
|
|
|||||||
Capitalized software development
|
4
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
(1
|
)
|
|
7
|
|
|||||||
Other
|
8
|
|
|
(1
|
)
|
|
7
|
|
|
4
|
|
|
1
|
|
|
—
|
|
|
12
|
|
|||||||
Subtotal
|
135
|
|
|
(51
|
)
|
|
84
|
|
|
8
|
|
|
6
|
|
|
(13
|
)
|
|
85
|
|
|||||||
Indefinite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Goodwill
|
45
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
47
|
|
|||||||
Total
|
$
|
180
|
|
|
$
|
(51
|
)
|
|
$
|
129
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
(13
|
)
|
|
$
|
132
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Product warranty and recall accruals
|
$
|
34
|
|
|
$
|
33
|
|
Restructuring reserves
|
23
|
|
|
24
|
|
||
Joint venture payables
|
17
|
|
|
12
|
|
||
Deferred income
|
16
|
|
|
18
|
|
||
Income taxes payable
|
15
|
|
|
12
|
|
||
Rents and royalties
|
14
|
|
|
24
|
|
||
Non-income taxes payable
|
13
|
|
|
10
|
|
||
Dividends payable
|
3
|
|
|
3
|
|
||
Distribution payable
|
—
|
|
|
14
|
|
||
Other
|
26
|
|
|
30
|
|
||
|
$
|
161
|
|
|
$
|
180
|
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Foreign currency hedges
|
$
|
18
|
|
|
$
|
23
|
|
Product warranty and recall accruals
|
14
|
|
|
16
|
|
||
Deferred income
|
14
|
|
|
16
|
|
||
Income tax reserves
|
6
|
|
|
12
|
|
||
Non-income tax reserves
|
5
|
|
|
7
|
|
||
Other
|
19
|
|
|
21
|
|
||
|
$
|
76
|
|
|
$
|
95
|
|
|
Weighted Average
Interest Rate
|
|
Carrying Value
|
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
(Dollars in Millions)
|
||||||
Short-Term Debt:
|
|
|
|
|
|
|
|
||||
Current portion of long-term debt
|
—%
|
|
3.9%
|
|
$
|
—
|
|
|
$
|
2
|
|
Short-term borrowings
|
4.8%
|
|
3.9%
|
|
57
|
|
|
44
|
|
||
|
|
|
|
|
$
|
57
|
|
|
$
|
46
|
|
Long-Term Debt:
|
|
|
|
|
|
|
|
||||
Term facility due March 24, 2024
|
3.2%
|
|
3.6%
|
|
$
|
348
|
|
|
$
|
347
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
Year Ended December 31
|
|
Year Ended December 31
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||||||
Costs Recognized in Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pension service cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
Pension financing benefit (cost):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
(27
|
)
|
|
(29
|
)
|
|
(28
|
)
|
|
(8
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||||
Expected return on plan assets
|
41
|
|
|
41
|
|
|
42
|
|
|
9
|
|
|
9
|
|
|
10
|
|
||||||
Amortization of losses and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Settlements and curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(1
|
)
|
||||||
Restructuring related pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Special termination benefits (a)
|
(2
|
)
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||||
Net pension income (expense)
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
Weighted Average Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Discount rate
|
3.65
|
%
|
|
4.12
|
%
|
|
4.37
|
%
|
|
3.28
|
%
|
|
3.51
|
%
|
|
4.60
|
%
|
||||||
Compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
3.62
|
%
|
|
3.66
|
%
|
|
3.70
|
%
|
||||||
Long-term return on assets
|
6.74
|
%
|
|
6.73
|
%
|
|
7.00
|
%
|
|
4.86
|
%
|
|
5.24
|
%
|
|
4.87
|
%
|
||||||
(a) Primarily related to restructuring actions
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Accumulated benefit obligation
|
$
|
813
|
|
|
$
|
892
|
|
Projected benefit obligation
|
$
|
818
|
|
|
$
|
898
|
|
Fair value of plan assets
|
$
|
582
|
|
|
$
|
661
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
Weighted Average Assumptions
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Discount rate
|
|
4.33
|
%
|
|
3.65
|
%
|
|
3.34
|
%
|
|
3.28
|
%
|
Rate of increase in compensation
|
|
N/A
|
|
|
N/A
|
|
|
3.51
|
%
|
|
3.62
|
%
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
Year Ended December 31
|
|
Year Ended December 31
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Dollars in Millions)
|
||||||||||||||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning
|
$
|
840
|
|
|
$
|
828
|
|
|
$
|
281
|
|
|
$
|
249
|
|
Service cost
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Interest cost
|
27
|
|
|
29
|
|
|
8
|
|
|
9
|
|
||||
Actuarial loss (gain)
|
(63
|
)
|
|
29
|
|
|
(17
|
)
|
|
8
|
|
||||
Settlements and curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Special termination benefits
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
(16
|
)
|
|
26
|
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Benefits paid and other
|
(46
|
)
|
|
(46
|
)
|
|
(8
|
)
|
|
(7
|
)
|
||||
Benefit obligation — ending
|
$
|
760
|
|
|
$
|
840
|
|
|
$
|
250
|
|
|
$
|
281
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
|
|
||||||
Plan assets — beginning
|
$
|
647
|
|
|
$
|
608
|
|
|
$
|
220
|
|
|
$
|
190
|
|
Actual return on plan assets
|
(35
|
)
|
|
84
|
|
|
(5
|
)
|
|
14
|
|
||||
Sponsor contributions
|
1
|
|
|
1
|
|
|
7
|
|
|
8
|
|
||||
Settlements
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
(14
|
)
|
|
16
|
|
||||
Benefits paid and other
|
(46
|
)
|
|
(46
|
)
|
|
(8
|
)
|
|
(7
|
)
|
||||
Plan assets — ending
|
$
|
567
|
|
|
$
|
647
|
|
|
$
|
200
|
|
|
$
|
220
|
|
Total funded status at end of period
|
$
|
(193
|
)
|
|
$
|
(193
|
)
|
|
$
|
(50
|
)
|
|
$
|
(61
|
)
|
Balance Sheet Classification:
|
|
|
|
|
|
|
|
|
|
||||||
Other non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
3
|
|
Accrued employee liabilities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Employee benefits
|
(193
|
)
|
|
(193
|
)
|
|
(53
|
)
|
|
(63
|
)
|
||||
Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
53
|
|
|
40
|
|
|
27
|
|
|
33
|
|
||||
Tax effects/other
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(10
|
)
|
||||
|
$
|
53
|
|
|
$
|
40
|
|
|
$
|
18
|
|
|
$
|
23
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
(Dollars in Millions)
|
||||||||||||||
Actuarial loss (gain)
|
$
|
13
|
|
|
$
|
(15
|
)
|
|
$
|
(4
|
)
|
|
$
|
(6
|
)
|
Deferred taxes
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Currency/other
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||
Reclassification to net income
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Divestitures
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
|
$
|
13
|
|
|
$
|
(15
|
)
|
|
$
|
(5
|
)
|
|
$
|
2
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
|
(Dollars in Millions)
|
||||||
2019
|
$
|
40
|
|
|
$
|
5
|
|
2020
|
38
|
|
|
6
|
|
||
2021
|
38
|
|
|
6
|
|
||
2022
|
39
|
|
|
7
|
|
||
2023
|
40
|
|
|
8
|
|
||
Years 2024 - 2028
|
215
|
|
|
50
|
|
|
Target Allocation
|
|
Percentage of Plan Assets
|
||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||||
|
2019
|
|
2019
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||
Equity securities
|
38
|
%
|
|
33
|
%
|
|
30
|
%
|
|
41
|
%
|
|
27
|
%
|
|
35
|
%
|
Fixed income
|
15
|
%
|
|
43
|
%
|
|
18
|
%
|
|
16
|
%
|
|
41
|
%
|
|
43
|
%
|
Alternative strategies
|
46
|
%
|
|
14
|
%
|
|
51
|
%
|
|
42
|
%
|
|
19
|
%
|
|
12
|
%
|
Cash
|
1
|
%
|
|
3
|
%
|
|
1
|
%
|
|
1
|
%
|
|
8
|
%
|
|
4
|
%
|
Other
|
—
|
%
|
|
7
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5
|
%
|
|
6
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
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
|
||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
December 31, 2018
|
||||||||
|
(Dollars in Millions)
|
||||||||||||||
Performance based share units
|
$
|
(2
|
)
|
|
$
|
6
|
|
|
$
|
4
|
|
|
$
|
9
|
|
Restricted stock units
|
8
|
|
|
11
|
|
|
6
|
|
|
7
|
|
||||
Stock options
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
||||
Total stock-based compensation expense
|
$
|
8
|
|
|
$
|
19
|
|
|
$
|
12
|
|
|
$
|
17
|
|
|
PSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
||||||
|
(In Thousands)
|
|
|
|||
Non-vested as of December 31, 2015
|
662
|
|
|
$
|
37.92
|
|
Granted
|
82
|
|
|
89.79
|
|
|
Vested
|
(324
|
)
|
|
32.58
|
|
|
Forfeited
|
(6
|
)
|
|
68.70
|
|
|
Non-vested as of December 31, 2016
|
414
|
|
|
51.94
|
|
|
Granted
|
78
|
|
|
110.66
|
|
|
Vested
|
(16
|
)
|
|
90.45
|
|
|
Forfeited
|
(15
|
)
|
|
103.72
|
|
|
Non-vested as of December 31, 2017
|
461
|
|
|
58.76
|
|
|
Granted
|
87
|
|
|
124.90
|
|
|
Vested
|
(63
|
)
|
|
105.29
|
|
|
Forfeited
|
(290
|
)
|
|
33.85
|
|
|
Non-vested as of December 31, 2018
|
195
|
|
|
$
|
110.42
|
|
|
Year Ended December 31
|
||||
|
2018
|
|
2017
|
||
Expected volatility
|
24.1
|
%
|
|
23.8
|
%
|
Risk-free rate
|
2.33
|
%
|
|
1.59
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
|
|||
Non-vested as of December 31, 2015
|
86
|
|
|
$
|
84.26
|
|
Granted
|
112
|
|
|
81.05
|
|
|
Vested
|
(17
|
)
|
|
90.45
|
|
|
Forfeited
|
(11
|
)
|
|
79.11
|
|
|
Non-vested as of December 31, 2016
|
170
|
|
|
83.30
|
|
|
Granted
|
99
|
|
|
94.73
|
|
|
Vested
|
(29
|
)
|
|
83.46
|
|
|
Forfeited
|
(10
|
)
|
|
83.66
|
|
|
Non-vested as of December 31, 2017
|
230
|
|
|
87.09
|
|
|
Granted
|
70
|
|
|
123.52
|
|
|
Vested
|
(102
|
)
|
|
96.34
|
|
|
Forfeited
|
(34
|
)
|
|
61.69
|
|
|
Non-vested as of December 31, 2018
|
164
|
|
|
$
|
105.24
|
|
|
Stock Options
|
|
SARs
|
||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
Expected term (in years)
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
|
—
|
|
|
5.00
|
|
|
4.50
|
|
Expected volatility
|
22.95
|
%
|
|
27.31
|
%
|
|
36.84
|
%
|
|
—
|
%
|
|
27.31
|
%
|
|
34.65
|
%
|
Risk-free interest rate
|
2.58
|
%
|
|
2.03
|
%
|
|
1.37
|
%
|
|
—
|
%
|
|
2.03
|
%
|
|
1.83
|
%
|
|
Stock Options
|
|
Weighted Average
Exercise Price
|
|
SARs
|
|
Weighted Average
Exercise Price
|
||||||
|
(In Thousands)
|
|
|
|
(In Thousands)
|
|
|
||||||
December 31, 2015
|
48
|
|
|
$
|
59.41
|
|
|
15
|
|
|
$
|
44.36
|
|
Granted
|
96
|
|
|
73.02
|
|
|
2
|
|
|
78.24
|
|
||
Exercised
|
(6
|
)
|
|
57.46
|
|
|
(3
|
)
|
|
31.28
|
|
||
Forfeited or expired
|
(23
|
)
|
|
72.01
|
|
|
(1
|
)
|
|
59.59
|
|
||
December 31, 2016
|
115
|
|
|
68.37
|
|
|
13
|
|
|
51.10
|
|
||
Granted
|
84
|
|
|
94.77
|
|
|
2
|
|
|
94.77
|
|
||
Exercised
|
(26
|
)
|
|
65.79
|
|
|
(7
|
)
|
|
44.33
|
|
||
Forfeited or expired
|
(7
|
)
|
|
77.36
|
|
|
—
|
|
|
59.59
|
|
||
December 31, 2017
|
166
|
|
|
81.72
|
|
|
8
|
|
|
69.21
|
|
||
Granted
|
78
|
|
|
124.35
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(31
|
)
|
|
68.02
|
|
|
(1
|
)
|
|
51.25
|
|
||
December 31, 2018
|
213
|
|
|
$
|
99.36
|
|
|
7
|
|
|
$
|
72.84
|
|
|
|
|
|
|
|
|
|
||||||
Exercisable at December 31, 2018
|
57
|
|
|
$
|
80.39
|
|
|
5
|
|
|
$
|
64.23
|
|
|
|
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
|
|
9
|
|
|
3.0
|
|
$
|
50.11
|
|
$60.01 - $80.00
|
|
51
|
|
|
4.3
|
|
$
|
73.06
|
|
$80.01 - $100.00
|
|
82
|
|
|
5.3
|
|
$
|
96.51
|
|
$100.01 - $130.00
|
|
78
|
|
|
6.3
|
|
$
|
124.35
|
|
|
|
220
|
|
|
|
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Income (Loss) Before Income Taxes:
(a)
|
|
|
|
|
|
||||||
U.S
|
$
|
76
|
|
|
$
|
84
|
|
|
$
|
41
|
|
Non-U.S
|
127
|
|
|
132
|
|
|
118
|
|
|||
Total income before income taxes
|
$
|
203
|
|
|
$
|
216
|
|
|
$
|
159
|
|
Current Tax Provision:
|
|
|
|
|
|
||||||
U.S. federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11
|
)
|
Non-U.S
|
42
|
|
|
42
|
|
|
54
|
|
|||
Total current tax provision
|
42
|
|
|
42
|
|
|
43
|
|
|||
Deferred Tax Provision (Benefit):
|
|
|
|
|
|
||||||
Non-U.S
|
1
|
|
|
6
|
|
|
(13
|
)
|
|||
Total deferred tax provision (benefit)
|
1
|
|
|
6
|
|
|
(13
|
)
|
|||
Provision for income taxes
|
$
|
43
|
|
|
$
|
48
|
|
|
$
|
30
|
|
|
|
|
|
|
|
||||||
(a)
Income (loss) before income taxes excludes equity in net income of non-consolidated affiliates.
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Tax provision (benefit) at U.S. statutory rate of 21% for 2018 and 35% for 2017 and 2016
|
$
|
43
|
|
|
$
|
76
|
|
|
$
|
56
|
|
Impact of foreign operations
|
16
|
|
|
(5
|
)
|
|
(26
|
)
|
|||
Non-U.S withholding taxes
|
14
|
|
|
15
|
|
|
13
|
|
|||
Tax holidays in foreign operations
|
(5
|
)
|
|
(7
|
)
|
|
(7
|
)
|
|||
State and local income taxes
|
3
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Tax reserve adjustments
|
(6
|
)
|
|
(14
|
)
|
|
5
|
|
|||
Change in valuation allowance
|
(81
|
)
|
|
(270
|
)
|
|
25
|
|
|||
Impact of U.S. tax reform
|
33
|
|
|
250
|
|
|
—
|
|
|||
Impact of tax law change
|
35
|
|
|
5
|
|
|
26
|
|
|||
Worthless stock deduction
|
—
|
|
|
—
|
|
|
(58
|
)
|
|||
Research credits
|
(5
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Other
|
(4
|
)
|
|
—
|
|
|
—
|
|
|||
Provision for income taxes
|
$
|
43
|
|
|
$
|
48
|
|
|
$
|
30
|
|
•
|
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
$267 million
(less than
$1 million
income tax charge in 2018 and
$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
$52 million
(
$33 million
in 2018 and
$19 million
charge in 2017) related to the one-time transition tax, which was partially offset by the
$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
$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
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Employee benefit plans
|
$
|
64
|
|
|
$
|
74
|
|
Capitalized expenditures for tax reporting
|
3
|
|
|
3
|
|
||
Net operating losses and credit carryforwards
|
1,090
|
|
|
1,178
|
|
||
Fixed assets and intangibles
|
9
|
|
|
10
|
|
||
Restructuring
|
8
|
|
|
7
|
|
||
Inventory
|
9
|
|
|
7
|
|
||
Deferred income
|
5
|
|
|
9
|
|
||
Warranty
|
10
|
|
|
13
|
|
||
Other
|
57
|
|
|
39
|
|
||
Valuation allowance
|
(1,144
|
)
|
|
(1,242
|
)
|
||
Total deferred tax assets
|
$
|
111
|
|
|
$
|
98
|
|
Deferred Tax Liabilities:
|
|
|
|
||||
Fixed assets and intangibles
|
$
|
17
|
|
|
$
|
15
|
|
Outside basis investment differences, including withholding tax
|
57
|
|
|
54
|
|
||
All other
|
15
|
|
|
6
|
|
||
Total deferred tax liabilities
|
$
|
89
|
|
|
$
|
75
|
|
Net deferred tax assets (liabilities)
|
$
|
22
|
|
|
$
|
23
|
|
Consolidated Balance Sheet Classification:
|
|
|
|
||||
Other non-current assets
|
45
|
|
|
46
|
|
||
Deferred tax liabilities non-current
|
23
|
|
|
23
|
|
||
Net deferred tax assets (liabilities)
|
$
|
22
|
|
|
$
|
23
|
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Beginning balance
|
$
|
18
|
|
|
$
|
35
|
|
Tax positions related to current period
|
|
|
|
||||
Additions
|
—
|
|
|
3
|
|
||
Tax positions related to prior periods
|
|
|
|
||||
Reductions
|
(4
|
)
|
|
(18
|
)
|
||
Settlements with tax authorities
|
—
|
|
|
(3
|
)
|
||
Lapses in statute of limitations
|
(4
|
)
|
|
—
|
|
||
Effect of exchange rate changes
|
—
|
|
|
1
|
|
||
Ending balance
|
$
|
10
|
|
|
$
|
18
|
|
•
|
On March 6, 2018 the Company entered into an accelerated stock buyback ("ASB") program with a third-party financial institution to purchase shares of Visteon common stock for an aggregate purchase price of
$150 million
with an initial delivery on March 7, 2018. The program concluded on July 20, 2018, in total the Company purchased
1,218,372
shares at an average price of
$123.12
under this ASB program.
|
•
|
During 2018 the Company entered into various share repurchase programs to purchase shares of the Company's common stock for an aggregate purchase price of
$150 million
. Under these programs the Company purchased
1,587,159
shares at an average price of
$94.49
.
|
|
December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Yanfeng Visteon Automotive Electronics Co., Ltd.
|
$
|
56
|
|
|
$
|
77
|
|
Shanghai Visteon Automotive Electronics Co., Ltd.
|
43
|
|
|
44
|
|
||
Changchun Visteon FAWAY Automotive Electronics Co., Ltd.
|
15
|
|
|
—
|
|
||
Other
|
3
|
|
|
3
|
|
||
Total non-controlling interests
|
$
|
117
|
|
|
$
|
124
|
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Changes in AOCI:
|
|
|
|
||||
Beginning balance
|
$
|
(174
|
)
|
|
$
|
(233
|
)
|
Other comprehensive income (loss) before reclassification, net of tax
|
(42
|
)
|
|
49
|
|
||
Amounts reclassified from AOCI
|
—
|
|
|
5
|
|
||
Divestitures
|
—
|
|
|
5
|
|
||
Ending balance
|
$
|
(216
|
)
|
|
$
|
(174
|
)
|
Changes in AOCI by component:
|
|
|
|||||
Foreign currency translation adjustments
|
|
|
|
||||
Beginning balance
|
$
|
(100
|
)
|
|
$
|
(163
|
)
|
Other comprehensive income (loss) before reclassification (a)
|
(42
|
)
|
|
62
|
|
||
Divestitures (b)
|
—
|
|
|
1
|
|
||
Ending balance
|
(142
|
)
|
|
(100
|
)
|
||
Net investment hedge
|
|
|
|
||||
Beginning balance
|
(12
|
)
|
|
10
|
|
||
Other comprehensive income (loss) before reclassification (a)
|
9
|
|
|
(22
|
)
|
||
Amounts reclassified from AOCI (c)
|
(2
|
)
|
|
—
|
|
||
Ending balance
|
(5
|
)
|
|
(12
|
)
|
||
Benefit plans
|
|
|
|
||||
Beginning balance
|
(63
|
)
|
|
(75
|
)
|
||
Other comprehensive income (loss) before reclassification, net of tax (d)
|
(10
|
)
|
|
10
|
|
||
Amounts reclassified from AOCI
|
2
|
|
|
(2
|
)
|
||
Divestitures (b)
|
—
|
|
|
4
|
|
||
Ending balance
|
(71
|
)
|
|
(63
|
)
|
||
Unrealized hedging gain (loss)
|
|
|
|
||||
Beginning balance
|
1
|
|
|
(5
|
)
|
||
Other comprehensive income (loss) before reclassification, net of tax (e)
|
1
|
|
|
(1
|
)
|
||
Amounts reclassified from AOCI (f)
|
—
|
|
|
7
|
|
||
Ending balance
|
2
|
|
|
1
|
|
||
AOCI ending balance
|
$
|
(216
|
)
|
|
$
|
(174
|
)
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(In Millions, Except Per Share Amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income from continuing operations attributable to Visteon
|
$
|
163
|
|
|
$
|
159
|
|
|
$
|
115
|
|
Net income (loss) from discontinued operations attributable to Visteon
|
1
|
|
|
17
|
|
|
(40
|
)
|
|||
Net income attributable to Visteon
|
$
|
164
|
|
|
$
|
176
|
|
|
$
|
75
|
|
Denominator:
|
|
|
|
|
|
||||||
Average common stock outstanding - basic
|
29.5
|
|
|
31.6
|
|
|
35.0
|
|
|||
Dilutive effect of performance based share units and other
|
0.2
|
|
|
0.6
|
|
|
0.4
|
|
|||
Diluted shares
|
29.7
|
|
|
32.2
|
|
|
35.4
|
|
|||
|
|
|
|
|
|
||||||
Basic and Diluted Per Share Data:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share attributable to Visteon:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.53
|
|
|
$
|
5.03
|
|
|
$
|
3.28
|
|
Discontinued operations
|
0.03
|
|
|
0.54
|
|
|
(1.14
|
)
|
|||
|
$
|
5.56
|
|
|
$
|
5.57
|
|
|
$
|
2.14
|
|
Diluted earnings (loss) per share attributable to Visteon:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
5.49
|
|
|
$
|
4.94
|
|
|
$
|
3.25
|
|
Discontinued operations
|
0.03
|
|
|
0.53
|
|
|
(1.13
|
)
|
|||
|
$
|
5.52
|
|
|
$
|
5.47
|
|
|
$
|
2.12
|
|
•
|
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.
|
|
|
December 31, 2018
|
||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
|
|
(Dollars in Millions)
|
||||||||||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Retirement plan assets
|
|
$
|
112
|
|
|
$
|
271
|
|
|
$
|
14
|
|
|
$
|
370
|
|
|
$
|
767
|
|
Foreign currency instruments
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Liability Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency instruments
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16
|
|
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
December 31, 2017
|
||||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
|
|
(Dollars in Millions)
|
||||||||||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Retirement plan assets
|
|
$
|
139
|
|
|
$
|
366
|
|
|
$
|
13
|
|
|
$
|
349
|
|
|
$
|
867
|
|
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Liability Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency instruments
|
|
$
|
—
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25
|
|
•
|
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.
|
|
|
December 31, 2018
|
||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
NAV
|
|
Total
|
||||||||
|
|
(Dollars in Millions)
|
||||||||||||||
Registered investment companies
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Common and preferred stocks
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Common trust funds
|
|
—
|
|
|
100
|
|
|
127
|
|
|
227
|
|
||||
LDI
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Limited partnerships and hedge funds
|
|
—
|
|
|
—
|
|
|
205
|
|
|
205
|
|
||||
Cash and cash equivalents
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Total
|
|
$
|
25
|
|
|
$
|
210
|
|
|
$
|
332
|
|
|
$
|
567
|
|
|
|
December 31, 2017
|
||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
NAV
|
|
Total
|
||||||||
|
|
(Dollars in Millions)
|
||||||||||||||
Registered investment companies
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Common trust funds
|
|
—
|
|
|
185
|
|
|
94
|
|
|
279
|
|
||||
LDI
|
|
—
|
|
|
103
|
|
|
—
|
|
|
103
|
|
||||
Common and preferred stock
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Limited partnerships and hedge funds
|
|
—
|
|
|
—
|
|
|
226
|
|
|
226
|
|
||||
Cash and cash equivalents
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Total
|
|
$
|
30
|
|
|
$
|
297
|
|
|
$
|
320
|
|
|
$
|
647
|
|
|
|
December 31, 2018
|
||||||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
|
|
(Dollars in Millions)
|
||||||||||||||||||
Registered investment companies
|
|
$
|
29
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
Treasury and government securities
|
|
50
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
74
|
|
|||||
Cash and cash equivalents
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Corporate debt securities
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Common and preferred stock
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Common trust funds
|
|
—
|
|
|
22
|
|
|
—
|
|
|
21
|
|
|
43
|
|
|||||
Limited partnerships
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17
|
|
|
17
|
|
|||||
Insurance contracts
|
|
—
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||
Derivative instruments
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Total
|
|
$
|
87
|
|
|
$
|
61
|
|
|
$
|
14
|
|
|
$
|
38
|
|
|
$
|
200
|
|
|
|
December 31, 2017
|
||||||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
|
|
(Dollars in Millions)
|
||||||||||||||||||
Registered investment companies
|
|
$
|
52
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70
|
|
Treasury and government securities
|
|
45
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
69
|
|
|||||
Cash and cash equivalents
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Corporate debt securities
|
|
3
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Common and preferred stock
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||
Common trust funds
|
|
—
|
|
|
20
|
|
|
—
|
|
|
14
|
|
|
34
|
|
|||||
Limited partnerships
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|||||
Insurance contracts
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|||||
Derivative instruments
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Total
|
|
$
|
109
|
|
|
$
|
69
|
|
|
$
|
13
|
|
|
$
|
29
|
|
|
$
|
220
|
|
|
|
Insurance Contracts
|
||
|
|
(Dollars in Millions)
|
||
December 31, 2015
|
|
$
|
10
|
|
Purchases, sales and settlements
|
|
1
|
|
|
December 31, 2016
|
|
$
|
11
|
|
Return on assets held at the reporting date, including currency impacts
|
|
1
|
|
|
Purchases
|
|
1
|
|
|
December 31, 2017
|
|
$
|
13
|
|
Purchases
|
|
1
|
|
|
December 31, 2018
|
|
$
|
14
|
|
|
Amount of Gain (Loss)
|
||||||||||||||||||||||
|
Recorded Income (Loss) in AOCI, net of tax
|
|
Reclassified from AOCI into Income (Loss)
|
|
Recorded in Income (Loss)
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||||||
Foreign currency risk – Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flow hedges
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-designated cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Interest rate risk - Interest expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net investment hedges
|
9
|
|
|
(22
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate swap
|
1
|
|
|
1
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
|
$
|
10
|
|
|
$
|
(23
|
)
|
|
$
|
2
|
|
|
$
|
(7
|
)
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Percentage of Total Net Sales
|
|
Percentage of Total Accounts Receivable
|
|||||||||||
|
December 31,
|
|
December 31, 2018
|
|
December 31, 2017
|
|||||||||
|
2018
|
|
2017
|
|
2016
|
|
||||||||
Ford
|
26
|
%
|
|
28
|
%
|
|
30
|
%
|
|
14
|
%
|
|
14
|
%
|
Mazda
|
18
|
%
|
|
17
|
%
|
|
17
|
%
|
|
9
|
%
|
|
10
|
%
|
Renault/Nissan
|
12
|
%
|
|
14
|
%
|
|
15
|
%
|
|
11
|
%
|
|
10
|
%
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Beginning balance
|
$
|
49
|
|
|
$
|
55
|
|
Accruals for products shipped
|
19
|
|
|
20
|
|
||
Change in estimates
|
(5
|
)
|
|
4
|
|
||
Specific cause actions
|
9
|
|
|
6
|
|
||
Recoverable warranty/recalls
|
2
|
|
|
3
|
|
||
Currency/other
|
—
|
|
|
2
|
|
||
Settlements
|
(26
|
)
|
|
(41
|
)
|
||
Ending balance
|
$
|
48
|
|
|
$
|
49
|
|
|
2018
|
||
|
(Dollars in Millions)
|
||
Geographical Markets (a)
|
|
||
Europe
|
$
|
981
|
|
Americas
|
800
|
|
|
China Domestic
|
405
|
|
|
China Export
|
309
|
|
|
Other Asia-Pacific
|
678
|
|
|
Eliminations
|
(189
|
)
|
|
|
$
|
2,984
|
|
(a) Company sales based on geographic region where sale originates and not where customer is located.
|
|
2018
|
||
|
(Dollars in Millions)
|
||
Product Lines
|
|
||
Instrument clusters
|
$
|
1,209
|
|
Audio and infotainment
|
772
|
|
|
Information displays
|
509
|
|
|
Climate controls
|
122
|
|
|
Body and security
|
110
|
|
|
Telematics
|
68
|
|
|
Other (includes HUD)
|
194
|
|
|
|
$
|
2,984
|
|
|
Year Ended December 31
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(Dollars in Millions)
|
||||||||||
Electronics
|
$
|
2,984
|
|
|
$
|
3,146
|
|
|
$
|
3,107
|
|
Other
|
—
|
|
|
—
|
|
|
54
|
|
|||
Total consolidated sales
|
$
|
2,984
|
|
|
$
|
3,146
|
|
|
$
|
3,161
|
|
|
2018
|
|
2017
|
||||||||||||||||||||||||||||
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||
|
(Dollars in Millions, Except Per Share Amounts)
|
||||||||||||||||||||||||||||||
Sales
|
$
|
814
|
|
|
$
|
758
|
|
|
$
|
681
|
|
|
$
|
731
|
|
|
$
|
810
|
|
|
$
|
774
|
|
|
$
|
765
|
|
|
$
|
797
|
|
Gross margin
|
129
|
|
|
104
|
|
|
82
|
|
|
96
|
|
|
129
|
|
|
111
|
|
|
114
|
|
|
137
|
|
||||||||
Income from continuing operations before income taxes
|
88
|
|
|
49
|
|
|
32
|
|
|
47
|
|
|
75
|
|
|
58
|
|
|
55
|
|
|
35
|
|
||||||||
Net income from continuing operations
|
67
|
|
|
37
|
|
|
23
|
|
|
46
|
|
|
59
|
|
|
48
|
|
|
47
|
|
|
21
|
|
||||||||
Net income
|
69
|
|
|
36
|
|
|
24
|
|
|
45
|
|
|
67
|
|
|
48
|
|
|
47
|
|
|
30
|
|
||||||||
Net income attributable to Visteon Corporation
|
$
|
65
|
|
|
$
|
35
|
|
|
$
|
21
|
|
|
$
|
43
|
|
|
$
|
63
|
|
|
$
|
45
|
|
|
$
|
43
|
|
|
$
|
25
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per share attributable to Visteon Corporation
|
$
|
2.14
|
|
|
$
|
1.19
|
|
|
$
|
0.71
|
|
|
$
|
1.50
|
|
|
$
|
1.94
|
|
|
$
|
1.43
|
|
|
$
|
1.38
|
|
|
$
|
0.81
|
|
Diluted earnings per share attributable to Visteon Corporation
|
$
|
2.11
|
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
|
$
|
1.49
|
|
|
$
|
1.91
|
|
|
$
|
1.41
|
|
|
$
|
1.35
|
|
|
$
|
0.79
|
|
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)(2)
|
||||
Equity compensation plans approved by security holders
|
|
589,917
|
|
|
$
|
98.54
|
|
|
1,996,811
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
|
589,917
|
|
|
$
|
98.54
|
|
|
1,996,811
|
|
(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 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.
|
(2)
|
Excludes an indefinite number of stock units that may be awarded under the Visteon Corporation Non-Employee Director Stock Unit Plan, which units may be settled in cash or shares of the Company’s common stock. Such plan provides for an annual, automatic grant of stock units worth $105,000 to each non-employee director of the Company. There is no maximum number of securities that may be issued under this Plan; however, the Plan will terminate on December 15, 2020 unless earlier terminated by the Board of Directors.
|
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
|
|
Balance at
Beginning
of Period
|
|
(Benefits)/
Charges to
Income
|
|
Deductions(a)
|
|
Other( b)
|
|
Balance
at End
of Period
|
||||||||||
|
(Dollars in Millions)
|
||||||||||||||||||
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
|
|
|||||
Year Ended December 31, 2016:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
14
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
|
$
|
10
|
|
Valuation allowance for deferred taxes
|
1,498
|
|
|
25
|
|
|
—
|
|
|
9
|
|
|
1,532
|
|
(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 2018, the
$17 million
overall decrease in the valuation allowance for deferred taxes is comprised of
$18 million
related to exchange, partially offset by
$1 million
related to other comprehensive income. In 2017, the
$20 million
overall decrease in the valuation allowance for deferred taxes is comprised of
$38 million
related to adjusting outside basis differences associated with the Company's investment in a U.S. partnership and
$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
$44 million
related to exchange. In 2016, the
$9 million
overall increase in the valuation allowance for deferred taxes is comprised of
$10 million
related to other comprehensive income and
$23 million
for various tax return true-up adjustments and other items. These increases were partially offset by
$13 million
related to exchange and
$11 million
related to valuation allowance benefits allocated to discontinued operations.
|
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
|
|
||
|
Form of Terms and Conditions of Nonqualified Stock Options (2018) under the Visteon Corporation 2010 Incentive Plan.*
|
|
|
Form of Performance Stock Unit Grant Agreement (2018) under the Visteon Corporation 2010 Incentive Plan.*
|
|
|
Form of Restricted Stock Unit Grant Agreement (2018) under the Visteon Corporation 2010 Incentive Plan.*
|
|
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
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:
|
/s/ Christian A. Garcia
|
|
|
Christian A. Garcia
|
|
|
Executive Vice President and Chief Financial Officer
|
Signature
|
Title
|
|
/s/ SACHIN LAWANDE
|
Director, President and Chief Executive Officer
|
|
Sachin Lawande
|
(Principal Executive Officer)
|
|
|
|
|
/s/ CHRISTIAN A. GARCIA
|
Executive Vice President and Chief Financial Officer
|
|
Christian A. Garcia
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
/s/ JAMES J. BARRESE*
|
Director
|
|
James J. Barrese
|
|
|
|
|
|
/s/ NAOMI M. BERGMAN*
|
Director
|
|
Naomi M. Bergman
|
|
|
|
|
|
/s/ JEFFREY D. JONES*
|
Director
|
|
Jeffrey D. Jones
|
|
|
|
|
|
/s/ JOANNE M. MAGUIRE*
|
Director
|
|
Joanne M. Maguire
|
|
|
|
|
|
/s/ ROBERT MANZO*
|
Director
|
|
Robert Manzo
|
|
|
|
|
|
/s/ FRANCIS M. SCRICCO*
|
Director
|
|
Francis M. Scricco
|
|
|
|
|
|
/s/ DAVID L. TREADWELL*
|
Director
|
|
David L. Treadwell
|
|
|
|
|
|
/s/ HARRY J. WILSON*
|
Director
|
|
Harry J. Wilson
|
|
|
|
|
|
/s/ ROUZBEH YASSINI-FARD*
|
Director
|
|
Rouzbeh Yassini-Fard
|
|
|
|
|
|
*By:
|
/s/ BRETT PYNNONEN
|
|
|
Brett Pynnonen
|
|
|
Attorney-in-Fact
|
|
1 Year Visteon Chart |
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