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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-0.57 | -0.49% | 114.72 | 104.46 | 119.76 | 117.63 | 113.38 | 116.58 | 249,162 | 01:00:00 |
☑
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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
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Delaware
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38-3519512
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(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,
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Michigan
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48111
|
(Address of principal executive offices)
|
(Zip code)
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Title of Each Class
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Trading Symbol(s)
|
Name of Each Exchange on which Registered
|
Common Stock, par value $0.01 per share
|
VC
|
The NASDAQ Stock Market LLC
|
Warrants, each exercisable for 1.4 shares of Common Stock at an exercise price of $0.01 (expiring October 1, 2020)
|
(Title of class)
|
Document
|
Where Incorporated
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2020 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 multi-displays systems incorporating larger, curved and complex displays and the consolidation of discrete electronic control units into a multi-core domain controller.
|
•
|
Advanced driver assistance systems ("ADAS") and autonomous driving - The industry continues to advance toward semi-autonomous and autonomous vehicles. The Society of Automotive Engineers has defined five levels of autonomy ranging from levels one and two with driver-assist functions whereby the driver is responsible for monitoring the environment, to level five with full autonomy under all conditions. Levels one and two are already popular in the market while levels three and above require a combination of sensors, radars, camera and LiDARs, requiring sensor fusion and machine learning technologies, as the system assumes the role of monitoring the environment. Level three includes features such as highway pilot and parking assist technology, for which a increased market penetration rate is expected over the next several years.
|
•
|
Safety and security - Governments continue to focus regulatory efforts on safer transportation. Accordingly, Original Equipment Manufacturers ("OEMs") are working to improve occupant and pedestrian safety by incorporating more safety-oriented technology in their vehicles. Additionally, in-vehicle connectivity has increased the need for robust cybersecurity systems to protect data, applications and associated infrastructure. Security features are evolving with advances in sensors and silicon. Suppliers must enable the security/safety initiatives of their customers including the development of new technologies.
|
•
|
Vehicle standardization - OEMs continue to standardize vehicle platforms on a global basis, resulting in a lower number of individual vehicle platforms, design cost savings and further scale of economies through the production of a greater number of models from each platform. Having operations in the geographic markets in which OEMs produce global platforms enables suppliers to meet OEMs’ needs more economically and efficiently, thus making global coverage a source of significant competitive advantage for suppliers with a diversified global footprint. Additionally, OEMs are looking to suppliers for increased collaboration to lower costs, reduce risks and decrease overall time to market. Suppliers that can provide fully engineered solutions, systems and pre-assembled combinations of component parts are positioned to leverage the trend toward system sourcing. As vehicles become more connected and cockpits more digitized, suppliers that can deliver modular hardware architectures, “open” software architectures and a software platform approach will be poised to help OEMs achieve greater reuse of validated hardware circuitry, design scalability and faster development cycles.
|
•
|
Compute - A modular and scalable computing hardware platform designed to be adapted to Level 2-plus and above levels of automated driving;
|
•
|
Runtime - In-vehicle middleware that provides a secure framework enabling applications and algorithms to communicate in a real time, high-performance environment; and
|
•
|
Studio - A PC and cloud based development environment that enables automakers to create an ecosystem of developers for rapid algorithm development. Visteon's updated DriveCore Studio development environment allows developers to leverage Microsoft's global, hyper-scale intelligent cloud solution to develop, test and validate autonomous driving algorithms.
|
Item 1A.
|
Risk Factors
|
•
|
changes to international trade agreements;
|
•
|
local economic conditions, expropriation and nationalization, foreign exchange rate fluctuations and currency controls;
|
•
|
withholding, border and other taxes on remittances and other payments by subsidiaries;
|
•
|
investment restrictions or requirements;
|
•
|
export and import restrictions, including increases in border tariffs;
|
•
|
the ability to effectively enforce intellectual property rights;
|
•
|
new or additional U.S. sanctions on doing business with or in certain countries or with certain persons; and
|
•
|
increases in working capital requirements related to long supply chains.
|
Item 1B.
|
Unresolved Staff Comments
|
•
|
30 corporate offices, technical and engineering centers and customer service centers in fourteen countries around the world, of which all were leased.
|
•
|
14 Electronics manufacturing and/or assembly facilities in Mexico, Portugal, Russia, Slovakia, Tunisia, India, Japan, China, Thailand and Brazil, of which 11 were leased and 3 were owned.
|
Name
|
|
Age
|
|
Position
|
Sachin S. Lawande
|
|
52
|
|
Director, President and Chief Executive Officer
|
William M. Robertson
|
|
58
|
|
Vice President and Interim Chief Financial Officer
|
Sunil K. Bilolikar
|
|
58
|
|
Senior Vice President, Manufacturing Operations and Supply Chain
|
Matthew M. Cole
|
|
50
|
|
Senior Vice President, Product Delivery
|
Jochen Ladwig
|
|
46
|
|
Senior Vice President, Global Quality and Procurement
|
Brett D. Pynnonen
|
|
51
|
|
Senior Vice President and General Counsel
|
Jerome J. Rouquet
|
|
52
|
|
Senior Vice President, Finance
|
Markus J. Schupfner
|
|
50
|
|
Senior Vice President and Chief Technology Officer
|
Kristin E. Trecker
|
|
54
|
|
Senior Vice President and Chief Human Resources Officer
|
Robert R. Vallance
|
|
59
|
|
Senior Vice President, Customer Business Groups
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
December 31, 2014
|
December 31, 2015
|
December 31, 2016
|
December 31, 2017
|
December 31, 2018
|
December 31, 2019
|
Visteon Corporation
|
$100.00
|
$107.15
|
$127.71
|
$198.92
|
$95.82
|
$137.64
|
Dow Jones U.S. Auto & Parts Index
|
$100.00
|
$97.26
|
$99.06
|
$121.50
|
$94.24
|
$116.97
|
S&P 500
|
$100.00
|
$101.37
|
$113.49
|
$138.26
|
$132.19
|
$173.80
|
Item 6.
|
Selected Financial Data
|
|
Year Ended December 31
|
|
Year Ended December 31
|
|
Year Ended December 31
|
|
Year Ended December 31
|
|
Year Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
|
(Dollars in Millions, Except Per Share Amounts)
|
||||||||||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
2,945
|
|
|
$
|
2,984
|
|
|
$
|
3,146
|
|
|
$
|
3,161
|
|
|
$
|
3,245
|
|
Net income from continuing operations
|
82
|
|
|
173
|
|
|
175
|
|
|
131
|
|
|
42
|
|
|||||
Net income (loss) from discontinued operations, net of tax
|
(1
|
)
|
|
1
|
|
|
17
|
|
|
(40
|
)
|
|
2,286
|
|
|||||
Net income attributable to Visteon Corporation
|
$
|
70
|
|
|
$
|
164
|
|
|
$
|
176
|
|
|
$
|
75
|
|
|
$
|
2,284
|
|
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
2.53
|
|
|
$
|
5.53
|
|
|
$
|
5.03
|
|
|
$
|
3.28
|
|
|
$
|
0.52
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.54
|
|
|
(1.14
|
)
|
|
53.48
|
|
|||||
Basic earnings per share attributable to Visteon Corporation
|
$
|
2.49
|
|
|
$
|
5.56
|
|
|
$
|
5.57
|
|
|
$
|
2.14
|
|
|
$
|
54.00
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
2.52
|
|
|
$
|
5.49
|
|
|
$
|
4.94
|
|
|
$
|
3.25
|
|
|
$
|
0.51
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.53
|
|
|
(1.13
|
)
|
|
52.12
|
|
|||||
Diluted earnings per share attributable to Visteon Corporation
|
$
|
2.48
|
|
|
$
|
5.52
|
|
|
$
|
5.47
|
|
|
$
|
2.12
|
|
|
$
|
52.63
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
2,271
|
|
|
$
|
2,007
|
|
|
$
|
2,304
|
|
|
$
|
2,373
|
|
|
$
|
4,681
|
|
Total debt, excluding held for sale
|
$
|
385
|
|
|
$
|
405
|
|
|
$
|
393
|
|
|
$
|
382
|
|
|
$
|
383
|
|
Total Visteon Corporation stockholders' equity
|
$
|
480
|
|
|
$
|
465
|
|
|
$
|
637
|
|
|
$
|
586
|
|
|
$
|
1,057
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided from operating activities
|
$
|
183
|
|
|
$
|
204
|
|
|
$
|
215
|
|
|
$
|
116
|
|
|
$
|
338
|
|
Cash provided from (used by) investing activities
|
$
|
(128
|
)
|
|
$
|
(98
|
)
|
|
$
|
(173
|
)
|
|
$
|
302
|
|
|
$
|
2,358
|
|
Cash used by financing activities
|
$
|
(49
|
)
|
|
$
|
(335
|
)
|
|
$
|
(234
|
)
|
|
$
|
(2,262
|
)
|
|
$
|
(774
|
)
|
•
|
Technology Innovation - The Company is an established global leader in cockpit electronics and is positioned to provide solutions as the industry transitions to the next generation automotive cockpit experience. The cockpit is becoming fully digital, connected, automated, learning, and voice enabled. Visteon's broad portfolio of cockpit electronics technology and the development of the DriveCore™ advanced safety platform positions Visteon to support these macro trends in automotive.
|
•
|
Long-Term Growth and Margin Expansion - Visteon has continued to win an elevated level of business by demonstrating product quality, technical and development capability, new product innovation, reliability, timeliness, product design, manufacturing capability and flexibility, as well as overall customer service.
|
•
|
Enhance Shareholder Returns - The Company has returned approximately $3.3 billion to shareholders since 2015 through a combination of ongoing share repurchases and a one time $1.75 billion special dividend in 2016. The Company has $380 million of remaining authorization from the Board of Directors. This authorization is in place through the end of 2020.
|
|
Light Vehicle Production
|
|||||
|
2019
|
|
2018
|
|
Change
|
|
Global
|
88.9
|
|
94.2
|
|
(5.6
|
)%
|
China
|
24.7
|
|
26.8
|
|
(8.1
|
)%
|
Other Asia-Pacific
|
21.5
|
|
22.4
|
|
(3.8
|
)%
|
Europe
|
21.1
|
|
22.0
|
|
(4.0
|
)%
|
Americas
|
19.6
|
|
20.4
|
|
(3.9
|
)%
|
Other
|
2.0
|
|
2.6
|
|
(22.3
|
)%
|
Source: IHS Automotive
|
•
|
The Company recorded sales of $2,945 million representing a decrease of $39 million compared with the year ended December 31, 2018.
|
•
|
Gross margin was $324 million or 11.0% of sales for the year ended December 31, 2019 , compared to $411 million or 13.8% of sales for the same period of 2018.
|
•
|
Net income attributable to Visteon was $70 million for the year ended December 31, 2019 , compared to net income of $164 million for the same period of 2018.
|
•
|
Total cash was $469 million, including $3 million of restricted cash as of December 31, 2019, $2 million higher than $467 million, including $4 million of restricted cash as of December 31, 2018.
|
•
|
In the fourth quarter of 2019, the Company's sales growth, excluding currency and acquisitions, as compared to 2018, outperformed the market by 7%.
|
(In millions)
|
Sales
|
|
Cost of Sales
|
||||
December 31, 2018
|
$
|
2,984
|
|
|
$
|
(2,573
|
)
|
Volume, mix, and net new business
|
22
|
|
|
(91
|
)
|
||
Currency
|
(59
|
)
|
|
47
|
|
||
VFAE consolidation
|
38
|
|
|
(32
|
)
|
||
Customer pricing, net
|
(71
|
)
|
|
—
|
|
||
Engineering costs, net*
|
—
|
|
|
(21
|
)
|
||
Cost performance, design changes and other
|
31
|
|
|
49
|
|
||
December 31, 2019
|
$
|
2,945
|
|
|
$
|
(2,621
|
)
|
|
|
|
|
||||
* Excludes the impact of currency and the consolidation of VFAE.
|
|
|
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Gross engineering costs
|
$
|
(440
|
)
|
|
$
|
(431
|
)
|
Engineering recoveries
|
140
|
|
|
145
|
|
||
Engineering costs, net
|
$
|
(300
|
)
|
|
$
|
(286
|
)
|
|
Year Ended December 31
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
||||||||||
|
|
|
% of Sales
|
|
|
|
% of Sales
|
||||||
Sales
|
$
|
2,945
|
|
|
|
|
$
|
2,984
|
|
|
|
||
Cost of sales, excluding engineering costs
|
(2,321
|
)
|
|
78.8
|
%
|
|
(2,287
|
)
|
|
76.6
|
%
|
||
Engineering costs, net
|
(300
|
)
|
|
10.2
|
%
|
|
(286
|
)
|
|
9.6
|
%
|
||
Gross margin
|
$
|
324
|
|
|
11.0
|
%
|
|
$
|
411
|
|
|
13.8
|
%
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Pension financing benefits, net
|
$
|
10
|
|
|
$
|
13
|
|
Transformation initiatives
|
—
|
|
|
4
|
|
||
Gain on non-consolidated affiliate transactions, net
|
—
|
|
|
4
|
|
||
|
$
|
10
|
|
|
$
|
21
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
Change
|
||||||
Net income attributable to Visteon Corporation
|
$
|
70
|
|
|
$
|
164
|
|
|
$
|
(94
|
)
|
Depreciation and amortization
|
100
|
|
|
91
|
|
|
9
|
|
|||
Restructuring expense, net
|
4
|
|
|
29
|
|
|
(25
|
)
|
|||
Interest expense, net
|
9
|
|
|
7
|
|
|
2
|
|
|||
Equity in net income of non-consolidated affiliates
|
(6
|
)
|
|
(13
|
)
|
|
7
|
|
|||
Provision for income taxes
|
24
|
|
|
43
|
|
|
(19
|
)
|
|||
Net (income) loss from discontinued operations, net of tax
|
1
|
|
|
(1
|
)
|
|
2
|
|
|||
Net income attributable to non-controlling interests
|
11
|
|
|
10
|
|
|
1
|
|
|||
Non-cash, stock-based compensation expense
|
17
|
|
|
8
|
|
|
9
|
|
|||
Other
|
4
|
|
|
(8
|
)
|
|
12
|
|
|||
Adjusted EBITDA
|
$
|
234
|
|
|
$
|
330
|
|
|
$
|
(96
|
)
|
(In millions)
|
Sales
|
|
Cost of Sales
|
||||
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
|
)
|
||
Cost performance
|
—
|
|
|
101
|
|
||
December 31, 2018
|
$
|
2,984
|
|
|
$
|
(2,573
|
)
|
|
Year Ended December 31
|
||||||
|
2018
|
|
2017
|
||||
|
(Dollars in Millions)
|
||||||
Gross engineering costs
|
$
|
(431
|
)
|
|
$
|
(392
|
)
|
Engineering recoveries
|
145
|
|
|
133
|
|
||
Engineering costs, net
|
$
|
(286
|
)
|
|
$
|
(259
|
)
|
|
Year Ended December 31
|
||||||||||||
(In millions)
|
2018
|
|
2017
|
||||||||||
|
|
|
% of Sales
|
|
|
|
% of Sales
|
||||||
Sales
|
$
|
2,984
|
|
|
|
|
$
|
3,146
|
|
|
|
||
Cost of sales, excluding engineering costs
|
(2,287
|
)
|
|
76.6
|
%
|
|
(2,396
|
)
|
|
76.2
|
%
|
||
Engineering costs, net
|
(286
|
)
|
|
9.6
|
%
|
|
(259
|
)
|
|
8.2
|
%
|
||
Gross margin
|
$
|
411
|
|
|
13.8
|
%
|
|
$
|
491
|
|
|
15.6
|
%
|
|
Year Ended December 31
|
||||||
(In millions)
|
2018
|
|
2017
|
||||
Pension financing benefits, net
|
$
|
13
|
|
|
$
|
12
|
|
Transformation initiatives
|
4
|
|
|
(2
|
)
|
||
Gain on non-consolidated affiliate transactions, net
|
4
|
|
|
4
|
|
||
|
$
|
21
|
|
|
$
|
14
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2018
|
|
2017
|
|
Change
|
||||||
Net income attributable to Visteon Corporation
|
$
|
164
|
|
|
$
|
176
|
|
|
$
|
(12
|
)
|
Depreciation and amortization
|
91
|
|
|
87
|
|
|
4
|
|
|||
Restructuring expense, net
|
29
|
|
|
14
|
|
|
15
|
|
|||
Interest expense, net
|
7
|
|
|
16
|
|
|
(9
|
)
|
|||
Equity in net income of non-consolidated affiliates
|
(13
|
)
|
|
(7
|
)
|
|
(6
|
)
|
|||
Loss on divestiture
|
—
|
|
|
33
|
|
|
(33
|
)
|
|||
Provision for income taxes
|
43
|
|
|
48
|
|
|
(5
|
)
|
|||
Net (income) loss from discontinued operations, net of tax
|
(1
|
)
|
|
(17
|
)
|
|
16
|
|
|||
Net income attributable to non-controlling interests
|
10
|
|
|
16
|
|
|
(6
|
)
|
|||
Non-cash, stock-based compensation expense
|
8
|
|
|
12
|
|
|
(4
|
)
|
|||
Other
|
(8
|
)
|
|
(8
|
)
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
330
|
|
|
$
|
370
|
|
|
$
|
(40
|
)
|
(In millions)
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Debt
|
$
|
387
|
|
|
$
|
37
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
350
|
|
Purchase obligations
|
97
|
|
|
54
|
|
|
39
|
|
|
4
|
|
|
—
|
|
|||||
Interest payments on long-term debt
|
44
|
|
|
10
|
|
|
21
|
|
|
13
|
|
|
—
|
|
|||||
Operating leases, including imputed interest
|
195
|
|
|
36
|
|
|
55
|
|
|
46
|
|
|
58
|
|
|||||
Total contractual obligations
|
$
|
723
|
|
|
$
|
137
|
|
|
$
|
115
|
|
|
$
|
63
|
|
|
$
|
408
|
|
•
|
Long-term rate of return on plan assets: The expected long-term rate of return is used to calculate net periodic pension cost. The required use of the expected long-term rate of return on plan assets may result in recognized returns that are greater or less than the actual returns on those plan assets in any given year. Over time the expected long-term rate of return on plan assets is designed to approximate actual returns. The expected long-term rate of return for pension assets has been estimated based on various inputs, including historical returns for the different asset classes held by the Company’s trusts and its asset allocation, as well as inputs from internal and external sources regarding expected capital market returns, inflation and other variables.
|
•
|
Discount rate: The Company uses the spot rate method to estimate the service and interest components of net periodic benefit cost for pension benefits for its U.S. and certain non-U.S. plans. The Company has elected to utilize an approach that discounts individual expected cash flows underlying interest and service costs using the applicable spot rates derived from the yield curve used to determine the benefit obligation to the relevant projected cash flows. The discount rate assumption is based on market rates for a hypothetical portfolio of high-quality corporate bonds rated Aa or better with maturities closely matched to the timing of projected benefit payments for each plan at its annual measurement date. The Company used discount rates ranging from 0.45% to 8.95% to determine its pension and other benefit obligations as of December 31, 2019, including weighted average discount rates of 3.34% for U.S. pension plans and 2.39% for non-U.S. pension plan.
|
•
|
Visteon’s ability to satisfy its future capital and liquidity requirements; Visteon’s ability to access the credit and capital markets at the times and in the amounts needed and on terms acceptable to Visteon; Visteon’s ability to comply with covenants applicable to it; and the continuation of acceptable supplier payment terms.
|
•
|
Visteon’s ability to satisfy its pension and other postretirement employee benefit obligations, and to retire outstanding debt and satisfy other contractual commitments, all at the levels and times planned by management.
|
•
|
Visteon’s ability to access funds generated by its foreign subsidiaries and joint ventures on a timely and cost-effective basis.
|
•
|
Changes in the operations (including products, product planning and part sourcing), financial condition, results of operations or market share of Visteon’s customers.
|
•
|
Changes in vehicle production volume of Visteon’s customers in the markets where it operates.
|
•
|
Increases in commodity costs or disruptions in the supply of commodities, including resins, copper, fuel and natural gas.
|
•
|
Visteon’s ability to generate cost savings to offset or exceed agreed-upon price reductions or price reductions to win additional business and, in general, improve its operating performance; to achieve the benefits of its restructuring actions; and to recover engineering and tooling costs and capital investments.
|
•
|
Visteon’s ability to compete favorably with automotive parts suppliers with lower cost structures and greater ability to rationalize operations; and to exit non-performing businesses on satisfactory terms, particularly due to limited flexibility under existing labor agreements.
|
•
|
Restrictions in labor contracts with unions that restrict Visteon’s ability to close plants, divest unprofitable, noncompetitive businesses, change local work rules and practices at a number of facilities and implement cost-saving measures.
|
•
|
The costs and timing of facility closures or dispositions, business or product realignments, or similar restructuring actions, including potential asset impairment or other charges related to the implementation of these actions or other adverse industry conditions and contingent liabilities.
|
•
|
Significant changes in the competitive environment in the major markets where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold.
|
•
|
Legal and administrative proceedings, investigations and claims, including shareholder class actions, inquiries by regulatory agencies, product liability, warranty, employee-related, environmental and safety claims and any recalls of products manufactured or sold by Visteon.
|
•
|
Changes in economic conditions, currency exchange rates, changes in foreign laws, regulations or trade policies or political stability in foreign countries where Visteon procures materials, components or supplies or where its products are manufactured, distributed or sold.
|
•
|
Shortages of materials or interruptions in transportation systems, labor strikes, work stoppages or other interruptions to or difficulties in the employment of labor in the major markets where Visteon purchases materials, components or supplies to manufacture its products or where its products are manufactured, distributed or sold.
|
•
|
Changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, domestic and foreign, that may tax or otherwise increase the cost of, or otherwise affect, the manufacture, licensing, distribution, sale, ownership or use of Visteon’s products or assets.
|
•
|
Possible terrorist attacks or acts of war, which could exacerbate other risks such as slowed vehicle production, interruptions in the transportation system or fuel prices and supply.
|
•
|
The cyclical and seasonal nature of the automotive industry.
|
•
|
Visteon’s ability to comply with environmental, safety and other regulations applicable to it and any increase in the requirements, responsibilities and associated expenses and expenditures of these regulations.
|
•
|
Visteon’s ability to protect its intellectual property rights, and to respond to changes in technology and technological risks and to claims by others that Visteon infringes their intellectual property rights.
|
•
|
Visteon’s ability to quickly and adequately remediate control deficiencies in its internal control over financial reporting.
|
•
|
Impact of the coronavirus on our suppliers, our manufacturing facilities and automotive sales in China.
|
•
|
Other factors, risks and uncertainties detailed from time to time in Visteon’s Securities and Exchange Commission filings.
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page No.
|
|
|
Revenue Recognition
|
Description of the Matter
|
|
As discussed in Note 1, Summary of Significant Accounting Policies, the Company’s sales contracts with its customers may provide for discrete price adjustments during the vehicle production period in order for the Company to remain competitive with market prices or based on changes in production specifications. Some of these price adjustments are non-routine in nature and require estimation. In the event the Company concludes that a portion of the revenue for a given part may vary from the purchase order, the Company records consideration at the most likely amount to which the Company expects to be entitled based on historical experience and input from customer negotiations.
Auditing the consideration the Company expects to be entitled to in exchange for certain of its products which are subject to non-routine price adjustments is highly judgmental due to changes in production specifications and commercial negotiations with customers throughout the life of the production periods.
|
How We Addressed the Matter in Our Audit
|
|
We identified and tested controls relating to the identification and evaluation of non-routine pricing adjustments including management’s evaluation of the commercial facts and circumstances to support the most likely consideration to which the Company expects to be entitled.
Our audit procedures included, among others, inspecting communications between the Company and its customers related to the pricing arrangements, making inquiries of the sales representatives who are responsible for negotiations with customers, testing any subsequent adjustments for appropriate amount and timing, obtaining written representations from management regarding customer agreements, and performing retrospective reviews of management’s estimates to identify any contrary evidence.
|
|
|
Income Taxes - Realizability of Deferred Tax Assets
|
Description of the Matter
|
|
As more fully described in Note 15, Income Taxes, as of December 31, 2019, the Company had deferred tax assets of $198 million (net of valuation allowances totaling $1,132 million, comprised of $768 million in the U.S. and $364 million in foreign jurisdictions, primarily Germany and France). Deferred tax assets are reduced by a valuation allowance if, based upon the weight of all available evidence, it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.
Management’s analysis of the realizability of its deferred tax assets was critical to our audit because the assessment process by jurisdiction is complex, involves judgment, and includes assumptions that may be affected by future market or economic conditions.
|
How We Addressed the Matter in Our Audit
|
|
We tested controls that address the risks of material misstatement relating to the realizability of deferred tax assets, including controls over management’s projections of future taxable income, the future reversal of existing taxable temporary differences, and management’s identification and use of tax planning strategies.
We evaluated the Company’s assessment of the realizability of deferred tax assets and the resulting valuation allowance. Our audit procedures included testing the calculations of existing temporary book-tax differences. We also tested the Company’s scheduling of the reversal of existing temporary taxable differences by jurisdiction and of the appropriate character of income. We evaluated the assumptions used by the Company to develop projections of future taxable income by jurisdiction and tested the completeness and accuracy of the underlying data used in its projections. For example, we compared the projections of future taxable income with the actual results of prior periods as well as management’s consideration of current industry and economic trends. We also assessed the historical accuracy of management’s projections and reconciled the projections of future income with other forecasted financial information prepared by the Company. Lastly, we involved our tax specialists to evaluate the application of tax law in the Company’s use of tax planning strategies.
|
|
Year Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
2,945
|
|
|
$
|
2,984
|
|
|
$
|
3,146
|
|
Cost of sales
|
(2,621
|
)
|
|
(2,573
|
)
|
|
(2,655
|
)
|
|||
Gross margin
|
324
|
|
|
411
|
|
|
491
|
|
|||
Selling, general and administrative expenses
|
(221
|
)
|
|
(193
|
)
|
|
(226
|
)
|
|||
Restructuring expense, net
|
(4
|
)
|
|
(29
|
)
|
|
(14
|
)
|
|||
Interest expense
|
(13
|
)
|
|
(14
|
)
|
|
(21
|
)
|
|||
Interest income
|
4
|
|
|
7
|
|
|
5
|
|
|||
Equity in net income of non-consolidated affiliates
|
6
|
|
|
13
|
|
|
7
|
|
|||
Loss on divestiture
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||
Other income, net
|
10
|
|
|
21
|
|
|
14
|
|
|||
Income before income taxes
|
106
|
|
|
216
|
|
|
223
|
|
|||
Provision for income taxes
|
(24
|
)
|
|
(43
|
)
|
|
(48
|
)
|
|||
Net income from continuing operations
|
82
|
|
|
173
|
|
|
175
|
|
|||
Net income (loss) from discontinued operations, net of tax
|
(1
|
)
|
|
1
|
|
|
17
|
|
|||
Net income
|
81
|
|
|
174
|
|
|
192
|
|
|||
Net income attributable to non-controlling interests
|
(11
|
)
|
|
(10
|
)
|
|
(16
|
)
|
|||
Net income attributable to Visteon Corporation
|
$
|
70
|
|
|
$
|
164
|
|
|
$
|
176
|
|
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.53
|
|
|
$
|
5.53
|
|
|
$
|
5.03
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.54
|
|
|||
Basic earnings per share attributable to Visteon Corporation
|
$
|
2.49
|
|
|
$
|
5.56
|
|
|
$
|
5.57
|
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.52
|
|
|
$
|
5.49
|
|
|
$
|
4.94
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.53
|
|
|||
Diluted earnings per share attributable to Visteon Corporation
|
$
|
2.48
|
|
|
$
|
5.52
|
|
|
$
|
5.47
|
|
|
Year Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income
|
$
|
81
|
|
|
$
|
174
|
|
|
$
|
192
|
|
Foreign currency translation adjustments
|
(13
|
)
|
|
(46
|
)
|
|
68
|
|
|||
Net investment hedge
|
9
|
|
|
7
|
|
|
(22
|
)
|
|||
Benefit plans, net of tax (a)
|
(43
|
)
|
|
(8
|
)
|
|
12
|
|
|||
Unrealized hedging gains (losses), net of tax (b)
|
(6
|
)
|
|
1
|
|
|
6
|
|
|||
Other comprehensive income (loss), net of tax
|
(53
|
)
|
|
(46
|
)
|
|
64
|
|
|||
Comprehensive income
|
28
|
|
|
128
|
|
|
256
|
|
|||
Comprehensive income attributable to non-controlling interests
|
9
|
|
|
6
|
|
|
21
|
|
|||
Comprehensive income attributable to Visteon Corporation
|
$
|
19
|
|
|
$
|
122
|
|
|
$
|
235
|
|
|
December 31
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|||||||
Cash and equivalents
|
$
|
466
|
|
|
$
|
463
|
|
Restricted cash
|
3
|
|
|
4
|
|
||
Accounts receivable, net
|
514
|
|
|
486
|
|
||
Inventories, net
|
169
|
|
|
184
|
|
||
Other current assets
|
193
|
|
|
159
|
|
||
Total current assets
|
1,345
|
|
|
1,296
|
|
||
Property and equipment, net
|
436
|
|
|
397
|
|
||
Intangible assets, net
|
127
|
|
|
129
|
|
||
Right-of-use assets
|
165
|
|
|
—
|
|
||
Investments in non-consolidated affiliates
|
48
|
|
|
42
|
|
||
Other non-current assets
|
150
|
|
|
143
|
|
||
Total assets
|
$
|
2,271
|
|
|
$
|
2,007
|
|
LIABILITIES AND EQUITY
|
|||||||
Short-term debt
|
$
|
37
|
|
|
$
|
57
|
|
Accounts payable
|
511
|
|
|
436
|
|
||
Accrued employee liabilities
|
73
|
|
|
67
|
|
||
Current lease liability
|
30
|
|
|
—
|
|
||
Other current liabilities
|
147
|
|
|
161
|
|
||
Total current liabilities
|
798
|
|
|
721
|
|
||
Long-term debt
|
348
|
|
|
348
|
|
||
Employee benefits
|
292
|
|
|
257
|
|
||
Non-current lease liability
|
139
|
|
|
—
|
|
||
Deferred tax liabilities
|
27
|
|
|
23
|
|
||
Other non-current liabilities
|
72
|
|
|
76
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding as of December 31, 2019 and 2018)
|
—
|
|
|
—
|
|
||
Common stock (par value $0.01, 250 million shares authorized, 55 million shares issued, 28 million shares outstanding as of December 31, 2019 and 2018)
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
1,342
|
|
|
1,335
|
|
||
Retained earnings
|
1,679
|
|
|
1,609
|
|
||
Accumulated other comprehensive loss
|
(267
|
)
|
|
(216
|
)
|
||
Treasury stock
|
(2,275
|
)
|
|
(2,264
|
)
|
||
Total Visteon Corporation stockholders’ equity
|
480
|
|
|
465
|
|
||
Non-controlling interests
|
115
|
|
|
117
|
|
||
Total equity
|
595
|
|
|
582
|
|
||
Total liabilities and equity
|
$
|
2,271
|
|
|
$
|
2,007
|
|
|
Year Ended December 31
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Operating Activities
|
|
|
|
|
|
||||||
Net income
|
$
|
81
|
|
|
$
|
174
|
|
|
$
|
192
|
|
Adjustments to reconcile net income to net cash provided from operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
100
|
|
|
91
|
|
|
87
|
|
|||
Non-cash stock-based compensation
|
17
|
|
|
8
|
|
|
12
|
|
|||
Losses on divestitures and impairments
|
—
|
|
|
—
|
|
|
33
|
|
|||
Transaction gains
|
—
|
|
|
(8
|
)
|
|
(11
|
)
|
|||
Equity in net income of non-consolidated affiliates, net of dividends remitted
|
(6
|
)
|
|
(13
|
)
|
|
(7
|
)
|
|||
Other non-cash items
|
8
|
|
|
3
|
|
|
1
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(33
|
)
|
|
44
|
|
|
10
|
|
|||
Inventories
|
13
|
|
|
1
|
|
|
(3
|
)
|
|||
Accounts payable
|
73
|
|
|
(19
|
)
|
|
(54
|
)
|
|||
Other assets and other liabilities
|
(70
|
)
|
|
(77
|
)
|
|
(45
|
)
|
|||
Net cash provided from operating activities
|
183
|
|
|
204
|
|
|
215
|
|
|||
Investing Activities
|
|
|
|
|
|
||||||
Capital expenditures, including intangibles
|
(142
|
)
|
|
(127
|
)
|
|
(99
|
)
|
|||
Loans to non-consolidated affiliate, net of repayments
|
11
|
|
|
—
|
|
|
—
|
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
16
|
|
|
(47
|
)
|
|||
Payments on divestiture of businesses
|
—
|
|
|
—
|
|
|
(48
|
)
|
|||
Proceeds from asset sales and business divestitures
|
—
|
|
|
—
|
|
|
15
|
|
|||
Other, net
|
3
|
|
|
13
|
|
|
6
|
|
|||
Net cash used by investing activities
|
(128
|
)
|
|
(98
|
)
|
|
(173
|
)
|
|||
Financing Activities
|
|
|
|
|
|
||||||
Repurchase of common stock
|
(20
|
)
|
|
(300
|
)
|
|
(200
|
)
|
|||
Short-term debt, net
|
(19
|
)
|
|
12
|
|
|
10
|
|
|||
Dividends paid to non-controlling interests
|
(9
|
)
|
|
(28
|
)
|
|
(38
|
)
|
|||
Distribution payments
|
—
|
|
|
(14
|
)
|
|
(1
|
)
|
|||
Stock based compensation tax withholding payments
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|||
Principal payments on debt
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Other
|
(1
|
)
|
|
2
|
|
|
(2
|
)
|
|||
Net cash used by financing activities
|
(49
|
)
|
|
(335
|
)
|
|
(234
|
)
|
|||
Effect of exchange rate changes on cash and equivalents
|
(4
|
)
|
|
(13
|
)
|
|
19
|
|
|||
Net increase (decrease) in cash and equivalents
|
2
|
|
|
(242
|
)
|
|
(173
|
)
|
|||
Cash and equivalents at beginning of the year
|
467
|
|
|
709
|
|
|
882
|
|
|||
Cash and equivalents at end of the year
|
$
|
469
|
|
|
$
|
467
|
|
|
$
|
709
|
|
Supplemental Disclosures:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
14
|
|
|
$
|
15
|
|
|
$
|
16
|
|
Cash paid for income taxes, net of refunds
|
$
|
40
|
|
|
$
|
47
|
|
|
$
|
49
|
|
|
Total Visteon Corporation Stockholders' Equity
|
|
|
|
|
||||||||||||||||||||||||||||||
|
Common
Stock
|
|
Stock
Warrants
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
Total Visteon Corporation Stockholders' Equity
|
|
Non-Controlling Interests
|
|
Total Equity
|
||||||||||||||||||
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
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
—
|
|
|
—
|
|
|
70
|
|
|
11
|
|
|
81
|
|
|||||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
—
|
|
|
(51
|
)
|
|
(2
|
)
|
|
(53
|
)
|
|||||||||
Stock-based compensation, net
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
14
|
|
|
—
|
|
|
14
|
|
|||||||||
Repurchase of shares of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20
|
)
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
|||||||||
Cash dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(9
|
)
|
|||||||||
Acquisition of non-controlling interest
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|||||||||
December 31, 2019
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1,342
|
|
|
$
|
1,679
|
|
|
$
|
(267
|
)
|
|
$
|
(2,275
|
)
|
|
$
|
480
|
|
|
$
|
115
|
|
|
$
|
595
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Pension financing benefits, net
|
$
|
10
|
|
|
$
|
13
|
|
|
$
|
12
|
|
Transformation initiatives
|
—
|
|
|
4
|
|
|
(2
|
)
|
|||
Gain on non-consolidated transactions, net
|
—
|
|
|
4
|
|
|
4
|
|
|||
|
$
|
10
|
|
|
$
|
21
|
|
|
$
|
14
|
|
•
|
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.
|
|
Year Ended December 31
|
|||||
(In millions)
|
2019
|
2018
|
||||
Geographical Markets (a)
|
|
|
||||
Europe
|
$
|
978
|
|
$
|
981
|
|
Americas
|
792
|
|
800
|
|
||
China Domestic
|
527
|
|
405
|
|
||
China Export
|
262
|
|
309
|
|
||
Other Asia-Pacific
|
560
|
|
678
|
|
||
Eliminations
|
(174
|
)
|
(189
|
)
|
||
|
$
|
2,945
|
|
$
|
2,984
|
|
(a) Company sales based on geographic region where sale originates and not where customer is located.
|
|
Year Ended December 31
|
|||||
(In millions)
|
2019
|
2018
|
||||
Product Lines
|
|
|
||||
Instrument clusters
|
$
|
1,314
|
|
$
|
1,209
|
|
Audio and infotainment
|
721
|
|
772
|
|
||
Information displays
|
486
|
|
509
|
|
||
Body and security
|
117
|
|
110
|
|
||
Telematics
|
76
|
|
68
|
|
||
Climate controls
|
72
|
|
122
|
|
||
Other (includes HUD)
|
159
|
|
194
|
|
||
|
$
|
2,945
|
|
$
|
2,984
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Net income attributable to Visteon Corporation
|
$
|
70
|
|
|
$
|
164
|
|
|
$
|
176
|
|
Depreciation and amortization
|
100
|
|
|
91
|
|
|
87
|
|
|||
Restructuring expense, net
|
4
|
|
|
29
|
|
|
14
|
|
|||
Interest expense, net
|
9
|
|
|
7
|
|
|
16
|
|
|||
Equity in net income of non-consolidated affiliates
|
(6
|
)
|
|
(13
|
)
|
|
(7
|
)
|
|||
Loss on divestiture
|
—
|
|
|
—
|
|
|
33
|
|
|||
Provision for income taxes
|
24
|
|
|
43
|
|
|
48
|
|
|||
Net (income) loss from discontinued operations, net of tax
|
1
|
|
|
(1
|
)
|
|
(17
|
)
|
|||
Net income attributable to non-controlling interests
|
11
|
|
|
10
|
|
|
16
|
|
|||
Non-cash, stock-based compensation expense
|
17
|
|
|
8
|
|
|
12
|
|
|||
Other
|
4
|
|
|
(8
|
)
|
|
(8
|
)
|
|||
Adjusted EBITDA
|
$
|
234
|
|
|
$
|
330
|
|
|
$
|
370
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
663
|
|
|
$
|
654
|
|
|
$
|
776
|
|
Mexico
|
38
|
|
|
67
|
|
|
70
|
|
|||
Total North America
|
701
|
|
|
721
|
|
|
846
|
|
|||
Portugal
|
602
|
|
|
563
|
|
|
508
|
|
|||
Slovakia
|
237
|
|
|
235
|
|
|
294
|
|
|||
Tunisia
|
71
|
|
|
96
|
|
|
109
|
|
|||
France
|
53
|
|
|
70
|
|
|
84
|
|
|||
Other Europe
|
16
|
|
|
20
|
|
|
20
|
|
|||
Intra-region eliminations
|
(1
|
)
|
|
(3
|
)
|
|
(11
|
)
|
|||
Total Europe
|
978
|
|
|
981
|
|
|
1,004
|
|
|||
China Domestic
|
527
|
|
|
405
|
|
|
381
|
|
|||
China Export
|
262
|
|
|
309
|
|
|
363
|
|
|||
Total China
|
789
|
|
|
714
|
|
|
744
|
|
|||
Japan
|
393
|
|
|
494
|
|
|
495
|
|
|||
India
|
110
|
|
|
114
|
|
|
92
|
|
|||
Thailand
|
57
|
|
|
69
|
|
|
81
|
|
|||
Korea
|
—
|
|
|
2
|
|
|
12
|
|
|||
Intra-region eliminations
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total Other Asia-Pacific
|
560
|
|
|
678
|
|
|
679
|
|
|||
South America
|
91
|
|
|
79
|
|
|
68
|
|
|||
Inter-region eliminations
|
(174
|
)
|
|
(189
|
)
|
|
(195
|
)
|
|||
|
$
|
2,945
|
|
|
$
|
2,984
|
|
|
$
|
3,146
|
|
Company sales based on geographic region where sale originates and not where customer is located.
|
|
Year Ended December 31
|
||||||||||
(In millions, except per share amounts)
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income from continuing operations attributable to Visteon
|
$
|
71
|
|
|
$
|
163
|
|
|
$
|
159
|
|
Net income (loss) from discontinued operations attributable to Visteon
|
(1
|
)
|
|
1
|
|
|
17
|
|
|||
Net income attributable to Visteon
|
$
|
70
|
|
|
$
|
164
|
|
|
$
|
176
|
|
Denominator:
|
|
|
|
|
|
||||||
Average common stock outstanding - basic
|
28.1
|
|
|
29.5
|
|
|
31.6
|
|
|||
Dilutive effect of performance based share units and other
|
0.1
|
|
|
0.2
|
|
|
0.6
|
|
|||
Diluted shares
|
28.2
|
|
|
29.7
|
|
|
32.2
|
|
|||
|
|
|
|
|
|
||||||
Basic and Diluted Per Share Data:
|
|
|
|
|
|
||||||
Basic earnings (loss) per share attributable to Visteon:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.53
|
|
|
$
|
5.53
|
|
|
$
|
5.03
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.54
|
|
|||
|
$
|
2.49
|
|
|
$
|
5.56
|
|
|
$
|
5.57
|
|
Diluted earnings (loss) per share attributable to Visteon:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.52
|
|
|
$
|
5.49
|
|
|
$
|
4.94
|
|
Discontinued operations
|
(0.04
|
)
|
|
0.03
|
|
|
0.53
|
|
|||
|
$
|
2.48
|
|
|
$
|
5.52
|
|
|
$
|
5.47
|
|
(In millions)
|
Electronics
|
|
Other
|
|
Total
|
||||||
December 31, 2016
|
$
|
31
|
|
|
$
|
9
|
|
|
$
|
40
|
|
Expense
|
7
|
|
|
—
|
|
|
7
|
|
|||
Change in estimates
|
8
|
|
|
(1
|
)
|
|
7
|
|
|||
Utilization
|
(30
|
)
|
|
(2
|
)
|
|
(32
|
)
|
|||
Foreign currency
|
2
|
|
|
—
|
|
|
2
|
|
|||
December 31, 2017
|
18
|
|
|
6
|
|
|
24
|
|
|||
Expense
|
24
|
|
|
—
|
|
|
24
|
|
|||
Change in estimates
|
5
|
|
|
1
|
|
|
6
|
|
|||
Utilization
|
(26
|
)
|
|
(4
|
)
|
|
(30
|
)
|
|||
Foreign currency
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
December 31, 2018
|
20
|
|
|
3
|
|
|
23
|
|
|||
Expense
|
5
|
|
|
—
|
|
|
5
|
|
|||
Change in estimates
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Utilization
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|||
Foreign currency
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|||
December 31, 2019
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
10
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
YFVIC (50%)
|
$
|
43
|
|
|
$
|
38
|
|
Others
|
5
|
|
|
4
|
|
||
Total investments in non-consolidated affiliates
|
$
|
48
|
|
|
$
|
42
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Payables due to YFVIC
|
$
|
9
|
|
|
$
|
17
|
|
Exposure to loss in YFVIC
|
|
|
|
||||
Investment in YFVIC
|
$
|
43
|
|
|
$
|
38
|
|
Receivables due from YFVIC
|
41
|
|
|
36
|
|
||
Subordinated loan receivable
|
8
|
|
|
20
|
|
||
Loan guarantee
|
—
|
|
|
11
|
|
||
Maximum exposure to loss in YFVIC
|
$
|
92
|
|
|
$
|
105
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
100
|
|
|
$
|
124
|
|
Work-in-process
|
28
|
|
|
26
|
|
||
Finished products
|
41
|
|
|
34
|
|
||
|
$
|
169
|
|
|
$
|
184
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Land
|
$
|
12
|
|
|
$
|
13
|
|
Buildings and improvements
|
83
|
|
|
76
|
|
||
Machinery, equipment and other
|
599
|
|
|
531
|
|
||
Construction in progress
|
80
|
|
|
56
|
|
||
Total property and equipment
|
774
|
|
|
676
|
|
||
Accumulated depreciation
|
(362
|
)
|
|
(303
|
)
|
||
|
412
|
|
|
373
|
|
||
Product tooling, net of amortization
|
24
|
|
|
24
|
|
||
Property and equipment, net
|
$
|
436
|
|
|
$
|
397
|
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Depreciation
|
$
|
78
|
|
|
$
|
73
|
|
|
$
|
71
|
|
Amortization
|
6
|
|
|
3
|
|
|
3
|
|
|||
|
$
|
84
|
|
|
$
|
76
|
|
|
$
|
74
|
|
|
|
|
December 31, 2019
|
||||||||||
(In millions)
|
Estimated Weighted Average Useful Life (years)
|
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangibles
|
||||||
Definite-Lived:
|
|
|
|||||||||||
Developed technology
|
7
|
|
$
|
40
|
|
|
$
|
(35
|
)
|
|
$
|
5
|
|
Customer related
|
10
|
|
89
|
|
|
(51
|
)
|
|
38
|
|
|||
Capitalized software development
|
4
|
|
32
|
|
|
(5
|
)
|
|
27
|
|
|||
Other
|
20
|
|
15
|
|
|
(4
|
)
|
|
11
|
|
|||
Subtotal
|
|
|
176
|
|
|
(95
|
)
|
|
81
|
|
|||
Indefinite-Lived:
|
|
|
|||||||||||
Goodwill
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|||
Total
|
|
|
$
|
222
|
|
|
$
|
(95
|
)
|
|
$
|
127
|
|
|
December 31, 2018
|
|
December 31, 2019
|
||||||||||||||||||||||||
(In millions)
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangible
|
|
Additions
|
|
Foreign Currency
|
|
Amortization Expense
|
|
Net Intangibles
|
||||||||||||||
Definite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Developed technology
|
$
|
40
|
|
|
$
|
(31
|
)
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
5
|
|
Customer related
|
90
|
|
|
(42
|
)
|
|
48
|
|
|
—
|
|
|
(1
|
)
|
|
(9
|
)
|
|
38
|
|
|||||||
Capitalized software development
|
16
|
|
|
(3
|
)
|
|
13
|
|
|
16
|
|
|
—
|
|
|
(2
|
)
|
|
27
|
|
|||||||
Other
|
14
|
|
|
(2
|
)
|
|
12
|
|
|
1
|
|
|
—
|
|
|
(2
|
)
|
|
11
|
|
|||||||
Subtotal
|
160
|
|
|
(78
|
)
|
|
82
|
|
|
17
|
|
|
(2
|
)
|
|
(16
|
)
|
|
81
|
|
|||||||
Indefinite-Lived:
|
|
|
|
|
|||||||||||||||||||||||
Goodwill
|
47
|
|
|
—
|
|
|
47
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
46
|
|
|||||||
Total
|
$
|
207
|
|
|
$
|
(78
|
)
|
|
$
|
129
|
|
|
$
|
17
|
|
|
$
|
(3
|
)
|
|
$
|
(16
|
)
|
|
$
|
127
|
|
|
December 31, 2017
|
|
December 31, 2018
|
||||||||||||||||||||||||
(In millions)
|
Gross Intangibles
|
|
Accumulated Amortization
|
|
Net Intangibles
|
|
Additions
|
|
Foreign Currency
|
|
Amortization Expense
|
|
Net Intangibles
|
||||||||||||||
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
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Recoverable taxes
|
$
|
61
|
|
|
$
|
46
|
|
Joint venture receivables
|
41
|
|
|
37
|
|
||
Contractually reimbursable engineering costs
|
29
|
|
|
40
|
|
||
Prepaid assets and deposits
|
22
|
|
|
20
|
|
||
Royalty agreements
|
17
|
|
|
—
|
|
||
China bank notes
|
16
|
|
|
12
|
|
||
Other
|
7
|
|
|
4
|
|
||
|
$
|
193
|
|
|
$
|
159
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Deferred tax assets
|
$
|
59
|
|
|
$
|
45
|
|
Recoverable taxes
|
28
|
|
|
33
|
|
||
Contractually reimbursable engineering costs
|
24
|
|
|
29
|
|
||
Royalty agreements
|
11
|
|
|
—
|
|
||
Joint venture note receivables
|
8
|
|
|
20
|
|
||
Other
|
20
|
|
|
16
|
|
||
|
$
|
150
|
|
|
$
|
143
|
|
|
Year Ended
December 31 |
||
(In millions)
|
2019
|
||
Operating lease cost (includes immaterial variable lease costs)
|
$
|
(41
|
)
|
Short-term lease cost
|
(1
|
)
|
|
Sublease income
|
5
|
|
|
Total lease cost
|
$
|
(37
|
)
|
|
Year Ended
December 31 |
||
(In millions)
|
2019
|
||
Cash out flows from operating leases
|
$
|
38
|
|
Right-of-use assets obtained in exchange for lease obligations
|
$
|
38
|
|
(In millions)
|
|
||
2020
|
$
|
36
|
|
2021
|
29
|
|
|
2022
|
26
|
|
|
2023
|
24
|
|
|
2024
|
22
|
|
|
2025 and thereafter
|
58
|
|
|
Total future minimum lease payments
|
195
|
|
|
Less imputed interest
|
(26
|
)
|
|
Total lease liabilities
|
$
|
169
|
|
|
|
|
Weighted Average
Interest Rate
|
|
Carrying Value
|
||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Short-Term Debt:
|
|
|
|
|
|
|
|
||||
Short-term borrowings
|
4.3%
|
|
4.8%
|
|
$
|
37
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
||||
Long-Term Debt:
|
|
|
|
|
|
|
|
||||
Term facility due March 24, 2024
|
3.2%
|
|
3.2%
|
|
$
|
348
|
|
|
$
|
348
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Product warranty and recall accruals
|
$
|
34
|
|
|
$
|
34
|
|
Deferred income
|
22
|
|
|
16
|
|
||
Rents and royalties
|
19
|
|
|
14
|
|
||
Non-income taxes payable
|
17
|
|
|
13
|
|
||
Restructuring reserves
|
10
|
|
|
23
|
|
||
Joint venture payables
|
9
|
|
|
17
|
|
||
Income taxes payable
|
7
|
|
|
15
|
|
||
Dividends payable
|
3
|
|
|
3
|
|
||
Other
|
26
|
|
|
26
|
|
||
|
$
|
147
|
|
|
$
|
161
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Product warranty and recall accruals
|
$
|
15
|
|
|
$
|
14
|
|
Foreign currency hedges
|
14
|
|
|
18
|
|
||
Royalty agreements
|
13
|
|
|
—
|
|
||
Deferred income
|
9
|
|
|
14
|
|
||
Income tax reserves
|
5
|
|
|
6
|
|
||
Non-income tax reserves
|
1
|
|
|
5
|
|
||
Other
|
15
|
|
|
19
|
|
||
|
$
|
72
|
|
|
$
|
76
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||||||||||
|
Year Ended December 31
|
|
Year Ended December 31
|
||||||||||||||||||||
(In millions, except percentages)
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
Costs Recognized in Income:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pension service cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Pension financing benefit (cost):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest cost
|
(30
|
)
|
|
(27
|
)
|
|
(29
|
)
|
|
(8
|
)
|
|
(8
|
)
|
|
(9
|
)
|
||||||
Expected return on plan assets
|
40
|
|
|
41
|
|
|
41
|
|
|
10
|
|
|
9
|
|
|
9
|
|
||||||
Amortization of losses and other
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Settlements and curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Restructuring related pension cost:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Special termination benefits (a)
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||||
Net pension income (expense)
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
(4
|
)
|
Weighted Average Assumptions:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Discount rate
|
4.33
|
%
|
|
3.65
|
%
|
|
4.12
|
%
|
|
3.34
|
%
|
|
3.28
|
%
|
|
3.51
|
%
|
||||||
Compensation increase
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
3.51
|
%
|
|
3.62
|
%
|
|
3.66
|
%
|
||||||
Long-term return on assets
|
6.78
|
%
|
|
6.74
|
%
|
|
6.73
|
%
|
|
4.73
|
%
|
|
4.86
|
%
|
|
5.24
|
%
|
||||||
(a) Primarily related to restructuring actions
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Accumulated benefit obligation
|
$
|
1,088
|
|
|
$
|
813
|
|
Projected benefit obligation
|
$
|
1,107
|
|
|
$
|
818
|
|
Fair value of plan assets
|
$
|
830
|
|
|
$
|
582
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||
Weighted Average Assumptions
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Discount rate
|
|
3.34
|
%
|
|
4.33
|
%
|
|
2.39
|
%
|
|
3.34
|
%
|
Rate of increase in compensation
|
|
N/A
|
|
|
N/A
|
|
|
3.16
|
%
|
|
3.51
|
%
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
|
Year Ended December 31
|
|
Year Ended December 31
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Change in Benefit Obligation:
|
|
|
|
|
|
|
|
||||||||
Benefit obligation — beginning
|
$
|
760
|
|
|
$
|
840
|
|
|
$
|
250
|
|
|
$
|
281
|
|
Service cost
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||
Interest cost
|
30
|
|
|
27
|
|
|
8
|
|
|
8
|
|
||||
Actuarial loss (gain)
|
88
|
|
|
(63
|
)
|
|
40
|
|
|
(17
|
)
|
||||
Special termination benefits
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
4
|
|
|
(16
|
)
|
||||
Benefits paid and other
|
(40
|
)
|
|
(46
|
)
|
|
(5
|
)
|
|
(8
|
)
|
||||
Benefit obligation — ending
|
$
|
838
|
|
|
$
|
760
|
|
|
$
|
300
|
|
|
$
|
250
|
|
Change in Plan Assets:
|
|
|
|
|
|
|
|
|
|
||||||
Plan assets — beginning
|
$
|
567
|
|
|
$
|
647
|
|
|
$
|
200
|
|
|
$
|
220
|
|
Actual return on plan assets
|
102
|
|
|
(35
|
)
|
|
26
|
|
|
(5
|
)
|
||||
Sponsor contributions
|
1
|
|
|
1
|
|
|
7
|
|
|
7
|
|
||||
Foreign exchange translation
|
—
|
|
|
—
|
|
|
4
|
|
|
(14
|
)
|
||||
Benefits paid and other
|
(40
|
)
|
|
(46
|
)
|
|
(5
|
)
|
|
(8
|
)
|
||||
Plan assets — ending
|
$
|
630
|
|
|
$
|
567
|
|
|
$
|
232
|
|
|
$
|
200
|
|
Total funded status at end of period
|
$
|
(208
|
)
|
|
$
|
(193
|
)
|
|
$
|
(68
|
)
|
|
$
|
(50
|
)
|
Balance Sheet Classification:
|
|
|
|
|
|
|
|
|
|
||||||
Other non-current assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Accrued employee liabilities
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
||||
Employee benefits
|
(208
|
)
|
|
(193
|
)
|
|
(69
|
)
|
|
(53
|
)
|
||||
Accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
||||||||
Actuarial loss
|
79
|
|
|
53
|
|
|
50
|
|
|
27
|
|
||||
Tax effects/other
|
(1
|
)
|
|
—
|
|
|
(14
|
)
|
|
(9
|
)
|
||||
|
$
|
78
|
|
|
$
|
53
|
|
|
$
|
36
|
|
|
$
|
18
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Actuarial loss (gain)
|
$
|
26
|
|
|
$
|
13
|
|
|
$
|
23
|
|
|
$
|
(4
|
)
|
Deferred taxes
|
(1
|
)
|
|
—
|
|
|
(5
|
)
|
|
1
|
|
||||
Currency/other
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Reclassification to net income
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
|
$
|
25
|
|
|
$
|
13
|
|
|
$
|
18
|
|
|
$
|
(5
|
)
|
(In millions)
|
U.S. Plans
|
|
Non-U.S. Plans
|
||||
2020
|
$
|
40
|
|
|
$
|
6
|
|
2021
|
39
|
|
|
6
|
|
||
2022
|
40
|
|
|
7
|
|
||
2023
|
41
|
|
|
8
|
|
||
2024
|
40
|
|
|
10
|
|
||
Years 2025 - 2029
|
217
|
|
|
54
|
|
|
Target Allocation
|
|
Percentage of Plan Assets
|
||||||||||||||
|
U.S.
|
|
Non-U.S.
|
|
U.S.
|
|
Non-U.S.
|
||||||||||
|
2020
|
|
2020
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||
Equity securities
|
38
|
%
|
|
34
|
%
|
|
37
|
%
|
|
30
|
%
|
|
38
|
%
|
|
27
|
%
|
Fixed income
|
15
|
%
|
|
43
|
%
|
|
18
|
%
|
|
18
|
%
|
|
39
|
%
|
|
41
|
%
|
Alternative strategies
|
46
|
%
|
|
14
|
%
|
|
44
|
%
|
|
51
|
%
|
|
14
|
%
|
|
19
|
%
|
Cash
|
1
|
%
|
|
3
|
%
|
|
1
|
%
|
|
1
|
%
|
|
4
|
%
|
|
8
|
%
|
Other
|
—
|
%
|
|
6
|
%
|
|
—
|
%
|
|
—
|
%
|
|
5
|
%
|
|
5
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Income (Loss) Before Income Taxes: (a)
|
|
|
|
|
|
||||||
U.S
|
$
|
5
|
|
|
$
|
76
|
|
|
$
|
84
|
|
Non-U.S
|
95
|
|
|
127
|
|
|
132
|
|
|||
Total income before income taxes
|
$
|
100
|
|
|
$
|
203
|
|
|
$
|
216
|
|
Current Tax Provision:
|
|
|
|
|
|
||||||
Non-U.S
|
$
|
29
|
|
|
42
|
|
|
$
|
42
|
|
|
Deferred Tax Provision (Benefit):
|
|
|
|
|
|
||||||
Non-U.S
|
(5
|
)
|
|
1
|
|
|
6
|
|
|||
Total deferred tax provision (benefit)
|
(5
|
)
|
|
1
|
|
|
6
|
|
|||
Provision for income taxes
|
$
|
24
|
|
|
$
|
43
|
|
|
$
|
48
|
|
|
|
|
|
|
|
||||||
(a) Income (loss) before income taxes excludes equity in net income of non-consolidated affiliates.
|
|
Year Ended December 31
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Tax provision (benefit) at U.S. statutory rate of 21% for 2019 and 2018, and 35% for 2017
|
$
|
21
|
|
|
$
|
43
|
|
|
$
|
76
|
|
Impact of foreign operations
|
23
|
|
|
16
|
|
|
(5
|
)
|
|||
Non-U.S withholding taxes
|
10
|
|
|
14
|
|
|
15
|
|
|||
Tax holidays in foreign operations
|
(5
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|||
State and local income taxes
|
—
|
|
|
3
|
|
|
(1
|
)
|
|||
Tax reserve adjustments
|
2
|
|
|
(6
|
)
|
|
(14
|
)
|
|||
Change in valuation allowance
|
(10
|
)
|
|
(81
|
)
|
|
(270
|
)
|
|||
Impact of U.S. tax reform
|
(18
|
)
|
|
33
|
|
|
250
|
|
|||
Impact of tax law change
|
—
|
|
|
35
|
|
|
5
|
|
|||
Research credits
|
(1
|
)
|
|
(5
|
)
|
|
(1
|
)
|
|||
Other
|
2
|
|
|
(4
|
)
|
|
—
|
|
|||
Provision for income taxes
|
$
|
24
|
|
|
$
|
43
|
|
|
$
|
48
|
|
•
|
As a result of the Act, the Company remeasured its U.S. federal deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. The Company recorded a cumulative income tax charge of $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
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Net operating losses and credit carryforwards
|
$
|
1,099
|
|
|
$
|
1,090
|
|
Employee benefit plans
|
73
|
|
|
64
|
|
||
Lease liability
|
55
|
|
|
—
|
|
||
Fixed assets and intangibles
|
14
|
|
|
9
|
|
||
Warranty
|
11
|
|
|
10
|
|
||
Inventory
|
9
|
|
|
9
|
|
||
Restructuring
|
5
|
|
|
8
|
|
||
Capitalized expenditures for tax reporting
|
5
|
|
|
3
|
|
||
Deferred income
|
4
|
|
|
5
|
|
||
Other
|
55
|
|
|
57
|
|
||
Valuation allowance
|
(1,132
|
)
|
|
(1,144
|
)
|
||
Total deferred tax assets
|
$
|
198
|
|
|
$
|
111
|
|
Deferred Tax Liabilities:
|
|
|
|
||||
Outside basis investment differences, including withholding tax
|
$
|
64
|
|
|
$
|
57
|
|
Right-of-use assets
|
54
|
|
|
—
|
|
||
Fixed assets and intangibles
|
16
|
|
|
17
|
|
||
All other
|
32
|
|
|
15
|
|
||
Total deferred tax liabilities
|
166
|
|
|
89
|
|
||
Net deferred tax assets (liabilities)
|
$
|
32
|
|
|
$
|
22
|
|
Consolidated Balance Sheet Classification:
|
|
|
|
||||
Other non-current assets
|
$
|
59
|
|
|
$
|
45
|
|
Deferred tax liabilities non-current
|
27
|
|
|
23
|
|
||
Net deferred tax assets (liabilities)
|
$
|
32
|
|
|
$
|
22
|
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
10
|
|
|
$
|
18
|
|
Tax positions related to current period
|
|
|
|
||||
Additions
|
3
|
|
|
—
|
|
||
Tax positions related to prior periods
|
|
|
|
||||
Additions
|
1
|
|
|
—
|
|
||
Reductions
|
(1
|
)
|
|
(4
|
)
|
||
Lapses in statute of limitations
|
—
|
|
|
(4
|
)
|
||
Ending balance
|
$
|
13
|
|
|
$
|
10
|
|
|
December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Yanfeng Visteon Automotive Electronics Co., Ltd.
|
$
|
56
|
|
|
$
|
56
|
|
Shanghai Visteon Automotive Electronics Co., Ltd.
|
41
|
|
|
43
|
|
||
Changchun Visteon FAWAY Automotive Electronics Co., Ltd.
|
17
|
|
|
15
|
|
||
Other
|
1
|
|
|
3
|
|
||
|
$
|
115
|
|
|
$
|
117
|
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Changes in AOCI:
|
|
|
|
||||
Beginning balance
|
$
|
(216
|
)
|
|
$
|
(174
|
)
|
Other comprehensive loss before reclassification, net of tax
|
(46
|
)
|
|
(42
|
)
|
||
Amounts reclassified from AOCI
|
(5
|
)
|
|
—
|
|
||
Ending balance
|
$
|
(267
|
)
|
|
$
|
(216
|
)
|
Changes in AOCI by component:
|
|
|
|||||
Foreign currency translation adjustments
|
|
|
|
||||
Beginning balance
|
$
|
(142
|
)
|
|
$
|
(100
|
)
|
Other comprehensive loss before reclassification (a)
|
(11
|
)
|
|
(42
|
)
|
||
Ending balance
|
(153
|
)
|
|
(142
|
)
|
||
Net investment hedge
|
|
|
|
||||
Beginning balance
|
(5
|
)
|
|
(12
|
)
|
||
Other comprehensive income before reclassification (a)
|
15
|
|
|
9
|
|
||
Amounts reclassified from AOCI (b)
|
(6
|
)
|
|
(2
|
)
|
||
Ending balance
|
4
|
|
|
(5
|
)
|
||
Benefit plans
|
|
|
|
||||
Beginning balance
|
(71
|
)
|
|
(63
|
)
|
||
Other comprehensive loss before reclassification, net of tax (c)
|
(44
|
)
|
|
(10
|
)
|
||
Amounts reclassified from AOCI
|
1
|
|
|
2
|
|
||
Ending balance
|
(114
|
)
|
|
(71
|
)
|
||
Unrealized hedging gain (loss)
|
|
|
|
||||
Beginning balance
|
2
|
|
|
1
|
|
||
Other comprehensive income (loss) before reclassification, net of tax (d)
|
(6
|
)
|
|
1
|
|
||
Ending balance
|
(4
|
)
|
|
2
|
|
||
AOCI ending balance
|
$
|
(267
|
)
|
|
$
|
(216
|
)
|
•
|
For equity settled stock-based compensation instruments, compensation cost is measured based on grant date fair value of the award and is recognized over the applicable service period. For equity settled stock-based compensation instruments, the delivery of Company shares may be on a gross settlement basis or on a net settlement basis, as determined by the recipient. The Company's policy is to deliver such shares using treasury shares or issuing new shares.
|
•
|
Cash settled stock-based compensation instruments are subject to liability accounting. At the end of each reporting period, the vested portion of the obligation for cash settled stock-based compensation instruments is adjusted to fair value based on the period-ending market prices of the Company's common stock. Related compensation expense is recognized based on changes to the fair value over the applicable service period.
|
|
Year Ended December 31
|
|
Unrecognized Stock-Based Compensation Expense
|
||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
|
December 31, 2019
|
||||||||
Performance based share units
|
$
|
6
|
|
|
$
|
(2
|
)
|
|
$
|
6
|
|
|
$
|
8
|
|
Restricted stock units
|
9
|
|
|
8
|
|
|
11
|
|
|
8
|
|
||||
Stock options
|
2
|
|
|
2
|
|
|
2
|
|
|
1
|
|
||||
Total stock-based compensation expense
|
$
|
17
|
|
|
$
|
8
|
|
|
$
|
19
|
|
|
$
|
17
|
|
|
PSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
||||||
|
(In thousands)
|
|
|
|||
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
|
|
|
Granted
|
71
|
|
|
111.98
|
|
|
Vested
|
(73
|
)
|
|
89.74
|
|
|
Forfeited
|
(23
|
)
|
|
118.87
|
|
|
Non-vested as of December 31, 2019
|
170
|
|
|
$
|
118.77
|
|
|
Year Ended December 31
|
||||
|
2019
|
|
2018
|
||
Expected volatility
|
31.2
|
%
|
|
24.1
|
%
|
Risk-free rate
|
2.43
|
%
|
|
2.33
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|||
|
|
|
|
|||
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
|
|
|
Granted
|
141
|
|
|
79.61
|
|
|
Vested
|
(71
|
)
|
|
93.60
|
|
|
Forfeited
|
(18
|
)
|
|
92.18
|
|
|
Non-vested as of December 31, 2019
|
216
|
|
|
$
|
90.98
|
|
|
Stock Options
|
|
SARs
|
||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
||||
Expected term (in years)
|
5
|
|
|
5
|
|
|
5
|
|
|
N/A
|
|
N/A
|
|
5
|
|
Expected volatility
|
27.69
|
%
|
|
22.95
|
%
|
|
27.31
|
%
|
|
N/A
|
|
N/A
|
|
27.31
|
%
|
Risk-free interest rate
|
2.43
|
%
|
|
2.58
|
%
|
|
2.03
|
%
|
|
N/A
|
|
N/A
|
|
2.03
|
%
|
|
Stock Options
|
|
Weighted Average
Exercise Price
|
|
SARs
|
|
Weighted Average
Exercise Price
|
||||||
|
(In thousands)
|
|
|
|
(In thousands)
|
|
|
||||||
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
|
|
||
Granted
|
106
|
|
|
80.97
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(4
|
)
|
|
59.37
|
|
|
—
|
|
|
—
|
|
||
Forfeited or expired
|
(32
|
)
|
|
96.02
|
|
|
—
|
|
|
—
|
|
||
December 31, 2019
|
283
|
|
|
$
|
93.51
|
|
|
7
|
|
|
$
|
72.84
|
|
|
|
|
|
|
|
|
|
||||||
Exercisable at December 31, 2019
|
129
|
|
|
$
|
91.65
|
|
|
6
|
|
|
$
|
70.05
|
|
|
|
Stock Options and SARs Outstanding
|
|||||||
Exercise Price
|
|
Number Outstanding
|
|
Weighted
Average
Remaining Life
|
|
Weighted
Average
Exercise Price
|
|||
|
|
(In thousands)
|
|
(In years)
|
|
|
|||
$10.00 - $60.00
|
|
7
|
|
|
2.1
|
|
$
|
54.80
|
|
$60.01 - $80.00
|
|
48
|
|
|
3.3
|
|
$
|
72.89
|
|
$80.01 - $100.00
|
|
166
|
|
|
5.3
|
|
$
|
87.40
|
|
$100.01 - $130.00
|
|
69
|
|
|
5.3
|
|
$
|
124.35
|
|
|
|
290
|
|
|
|
|
|
•
|
Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.
|
•
|
Level 2 – Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable for substantially the full term of the asset or liability.
|
•
|
Level 3 – Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement.
|
|
|
December 31, 2019
|
||||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
Asset Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Retirement plan assets
|
|
$
|
131
|
|
|
$
|
353
|
|
|
$
|
15
|
|
|
$
|
363
|
|
|
$
|
862
|
|
Foreign currency instruments
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liability Category:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency instruments
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6
|
|
Interest rate swaps
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
|
December 31, 2018
|
||||||||||||||||||
(In millions)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
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
|
|
•
|
Short-term investments, such as cash and cash equivalents, are immediately available or are highly liquid and not subject to significant market risk. Assets comprised of cash, short-term sovereign debt, or high credit-quality money market securities and instruments held directly by the plan are categorized as Level 1. Assets in a registered money market fund are reported as registered investment companies. Assets in a short-term investment fund ("STIF") are categorized as Level 2. Cash and cash equivalent assets denominated in currencies other than the U.S. dollar are reflected in U.S. dollar terms at the exchange rate prevailing at the balance sheet dates.
|
•
|
Registered investment companies are mutual funds that are registered with the Securities and Exchange Commission. Mutual funds may invest in various types of securities or combinations thereof including equities, fixed income securities, and other assets that are subject to varying levels of market risk and are categorized as Level 1. The share prices for mutual funds are published at the close of each business day.
|
•
|
Treasury and government securities consist of debt securities issued by the U.S. and non-U.S. sovereign governments and agencies, thereof. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 1 while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are categorized as Level 2.
|
•
|
Corporate debt securities consist of fixed income securities issued by corporations. Assets with a high degree of liquidity and frequent trading activity are categorized as Level 1 while others are valued by independent valuation firms that employ standard methodologies associated with valuing fixed-income securities and are categorized as Level 2.
|
•
|
Common and preferred stocks consist of shares of equity securities. These are directly-held assets that are generally publicly traded in regulated markets that provide readily available market prices and are categorized as Level 1.
|
•
|
Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds, including equities and fixed income securities, are generally publicly traded in regulated markets that provide readily available market prices. The entire balance of an investment in a common trust fund that does not have a readily observable market prices as available on a third-party information source, notwithstanding whether the investment has daily liquidity, is categorized as Level 2; unless the investment fund has investment holdings significant to its valuation that are considered as Level 3; or the fund is considered as an alternative strategy (including hedge and diversifying strategies) for which valuation is established by NAV as a practical expedient.
|
•
|
Liability Driven Investing (“LDI”) is an investment strategy that utilizes certain instruments and securities, interest-rate swaps and other financial derivative instruments intended to hedge a portion of the changes in pension liabilities associated with changes in the actuarial discount rate as applied to the plan’s liabilities. The instruments and securities used typically include total return swaps and other financial derivative instruments. The valuation methodology of the financial derivative instruments contained in this category of assets utilizes standard pricing models associated with fixed income derivative instruments and are categorized as Level 2.
|
•
|
Other investments include miscellaneous assets and liabilities and are primarily comprised of pending transactions and collateral settlements and are categorized as Level 2.
|
•
|
Limited partnerships and hedge funds represent investment vehicles with underlying exposures in alternative credit, hedge and diversifying strategies (including hedge fund of funds), real assets, and certain equity exposures. The underlying assets in these funds may include securities transacted in active markets as well as other assets that have values less readily observable and may require valuation techniques that require inputs that are not readily observable. Investment in these funds may be subject to a specific notice period prior to the intended transaction date. In addition, transactions in these funds may require longer settlement terms than traditional mutual funds. These assets are valued based on their respective NAV as a practical expedient to estimate fair value due to the absence of readily available market prices.
|
•
|
Insurance contracts are reported at cash surrender value and have significant unobservable inputs and are categorized as Level 3.
|
(In millions)
|
|
December 31, 2019
|
||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
NAV
|
|
Total
|
||||||||
Registered investment companies
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Common and preferred stocks
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
||||
Common trust funds
|
|
—
|
|
|
152
|
|
|
123
|
|
|
275
|
|
||||
LDI
|
|
—
|
|
|
111
|
|
|
—
|
|
|
111
|
|
||||
Limited partnerships and hedge funds
|
|
—
|
|
|
—
|
|
|
206
|
|
|
206
|
|
||||
Cash and cash equivalents
|
|
1
|
|
|
7
|
|
|
—
|
|
|
8
|
|
||||
Total
|
|
$
|
31
|
|
|
$
|
270
|
|
|
$
|
329
|
|
|
$
|
630
|
|
(In millions)
|
|
December 31, 2018
|
||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
NAV
|
|
Total
|
||||||||
Registered investment companies
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Common trust funds
|
|
—
|
|
|
100
|
|
|
127
|
|
|
227
|
|
||||
LDI
|
|
—
|
|
|
104
|
|
|
—
|
|
|
104
|
|
||||
Common and preferred stock
|
|
22
|
|
|
—
|
|
|
—
|
|
|
22
|
|
||||
Limited partnerships and hedge funds
|
|
—
|
|
|
—
|
|
|
205
|
|
|
205
|
|
||||
Cash and cash equivalents
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Total
|
|
$
|
25
|
|
|
$
|
210
|
|
|
$
|
332
|
|
|
$
|
567
|
|
(In millions)
|
|
December 31, 2019
|
||||||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
Registered investment companies
|
|
$
|
59
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
83
|
|
Treasury and government securities
|
|
34
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|||||
Cash and cash equivalents
|
|
4
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Corporate debt securities
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Common and preferred stock
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Common trust funds
|
|
—
|
|
|
35
|
|
|
—
|
|
|
18
|
|
|
53
|
|
|||||
Limited partnerships
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
16
|
|
|||||
Insurance contracts
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
|||||
Derivative instruments
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Total
|
|
$
|
100
|
|
|
$
|
83
|
|
|
$
|
15
|
|
|
$
|
34
|
|
|
$
|
232
|
|
(In millions)
|
|
December 31, 2018
|
||||||||||||||||||
Asset Category
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
|
Total
|
||||||||||
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
|
|
|
Amount of Gain (Loss)
|
||||||||||||||||||||||
|
Recorded Income (Loss) in AOCI, net of tax
|
|
Reclassified from AOCI into Income (Loss)
|
|
Recorded in Income (Loss)
|
||||||||||||||||||
(In millions)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||||||
Foreign currency risk – Sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Non-designated cash flow hedges
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Foreign currency risk – Cost of sales:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||||
Non-designated cash flow hedges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
2
|
|
||||||
Interest rate risk - Interest expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net investment hedges
|
15
|
|
|
9
|
|
|
6
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||||
Interest rate swap
|
(6
|
)
|
|
1
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
|
$
|
9
|
|
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
Percentage of Total Net Sales
|
|
Percentage of Total Accounts Receivable
|
|||||||||||
|
December 31,
|
|
December 31, 2019
|
|
December 31, 2018
|
|||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||
Ford
|
22
|
%
|
|
26
|
%
|
|
28
|
%
|
|
12
|
%
|
|
14
|
%
|
Mazda
|
14
|
%
|
|
18
|
%
|
|
17
|
%
|
|
5
|
%
|
|
9
|
%
|
Renault/Nissan
|
13
|
%
|
|
12
|
%
|
|
14
|
%
|
|
13
|
%
|
|
11
|
%
|
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
|
||||||||||
(In millions)
|
2019
|
|
2018
|
|
2017
|
||||||
Sales
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cost of sales
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Gross margin
|
(2
|
)
|
|
(5
|
)
|
|
—
|
|
|||
Selling, general and administrative expenses
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
Gain on Climate Transaction
|
—
|
|
|
4
|
|
|
7
|
|
|||
Gain on Interiors Divestiture
|
—
|
|
|
—
|
|
|
8
|
|
|||
Restructuring expense
|
1
|
|
|
(1
|
)
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
(1
|
)
|
|
(3
|
)
|
|
15
|
|
|||
Benefit for income taxes
|
—
|
|
|
4
|
|
|
2
|
|
|||
Net income (loss) from discontinued operations attributable to Visteon
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
17
|
|
|
Year Ended December 31
|
||||||
(In millions)
|
2019
|
|
2018
|
||||
Beginning balance
|
$
|
48
|
|
|
$
|
49
|
|
Accruals for products shipped
|
20
|
|
|
19
|
|
||
Change in estimates
|
(2
|
)
|
|
(5
|
)
|
||
Specific cause actions
|
6
|
|
|
9
|
|
||
Currency/other
|
(1
|
)
|
|
2
|
|
||
Settlements
|
(22
|
)
|
|
(26
|
)
|
||
Ending balance
|
$
|
49
|
|
|
$
|
48
|
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(In millions, except per share amounts)
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||||||||||
Sales
|
$
|
737
|
|
|
$
|
733
|
|
|
$
|
731
|
|
|
$
|
744
|
|
|
$
|
814
|
|
|
$
|
758
|
|
|
$
|
681
|
|
|
$
|
731
|
|
Gross margin
|
66
|
|
|
70
|
|
|
84
|
|
|
104
|
|
|
129
|
|
|
104
|
|
|
82
|
|
|
96
|
|
||||||||
Income from continuing operations before income taxes
|
11
|
|
|
16
|
|
|
31
|
|
|
48
|
|
|
88
|
|
|
49
|
|
|
32
|
|
|
47
|
|
||||||||
Net income from continuing operations
|
16
|
|
|
8
|
|
|
18
|
|
|
40
|
|
|
67
|
|
|
37
|
|
|
23
|
|
|
46
|
|
||||||||
Net income
|
16
|
|
|
8
|
|
|
18
|
|
|
39
|
|
|
69
|
|
|
36
|
|
|
24
|
|
|
45
|
|
||||||||
Net income attributable to Visteon Corporation
|
$
|
14
|
|
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
35
|
|
|
$
|
65
|
|
|
$
|
35
|
|
|
$
|
21
|
|
|
$
|
43
|
|
Per Share Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings per share attributable to Visteon Corporation
|
$
|
0.50
|
|
|
$
|
0.25
|
|
|
$
|
0.50
|
|
|
$
|
1.24
|
|
|
$
|
2.14
|
|
|
$
|
1.19
|
|
|
$
|
0.71
|
|
|
$
|
1.50
|
|
Diluted earnings per share attributable to Visteon Corporation
|
$
|
0.49
|
|
|
$
|
0.25
|
|
|
$
|
0.50
|
|
|
$
|
1.24
|
|
|
$
|
2.11
|
|
|
$
|
1.17
|
|
|
$
|
0.71
|
|
|
$
|
1.49
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)(1)
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)(1)
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a)) (c)
|
||||
Equity compensation plans approved by security holders
|
|
769,080
|
|
|
$
|
93.03
|
|
|
1,379,391
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
|
769,080
|
|
|
$
|
93.03
|
|
|
1,379,391
|
|
(1)
|
Comprised of stock options, stock appreciation rights, which may be settled in stock or cash at the election of the Company, and outstanding restricted stock and performance stock units, which may be settled in stock or cash at the election of the Company without further payment by the holder, granted pursuant to the Visteon Corporation 2010 Incentive Plan, the Non-Employee Director Stock Unit Plan, and the Deferred Compensation Plan for Non-Employee Directors. The weighted-average exercise price of outstanding options, warrants and rights does not take into account restricted stock or performance stock units that will be settled without any further payment by the holder.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
The following documents are filed as part of this report:
|
1.
|
Financial Statements
|
2.
|
Financial Statement Schedules
|
(In millions)
|
Balance at
Beginning
of Period
|
|
(Benefits)/
Charges to
Income
|
|
Deductions(a)
|
|
Other( b)
|
|
Balance
at End
of Period
|
||||||||||
Year Ended December 31, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
10
|
|
Valuation allowance for deferred taxes
|
1,144
|
|
|
(10
|
)
|
|
—
|
|
|
(2
|
)
|
|
1,132
|
|
|||||
Year Ended December 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(4
|
)
|
|
$
|
—
|
|
|
$
|
6
|
|
Valuation allowance for deferred taxes
|
1,242
|
|
|
(81
|
)
|
|
—
|
|
|
(17
|
)
|
|
1,144
|
|
|||||
Year Ended December 31, 2017:
|
|
|
|
|
|
|
|
|
|
||||||||||
Allowance for doubtful accounts
|
$
|
10
|
|
|
$
|
3
|
|
|
$
|
(5
|
)
|
|
$
|
—
|
|
|
$
|
8
|
|
Valuation allowance for deferred taxes
|
1,532
|
|
|
(270
|
)
|
|
—
|
|
|
(20
|
)
|
|
1,242
|
|
(a)
|
Deductions represent uncollectible accounts charged off.
|
(b)
|
Deferred taxes valuation allowance - represents adjustments recorded through other comprehensive income, exchange, expiration of tax attribute carryforwards, and various tax return true-up adjustments, all of which impact deferred taxes and the related valuation allowances. In 2019, the $2 million overall decrease in the valuation allowance for deferred taxes is comprised of $7 million related to exchange, partially offset by $5 million related to other comprehensive income. 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.
|
Exhibit No.
|
|
Description
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
|
|
|
|
Amendment No. 4 to Credit Agreement, dated as of May 30, 2018, by and among Visteon Corporation, the guarantors party thereto, each lender party thereto and Citibank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Visteon Corporation filed on June 1, 2018).
|
|
|
Exhibit No.
|
|
Description
|
|
||
|
|
|
|
|
|
|
|
|
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Exhibit No.
|
|
Description
|
|
||
|
||
|
||
|
||
101.INS
|
|
XBRL Instance Document.**
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.**
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.**
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.**
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.**
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.**
|
*
|
Indicates that exhibit is a management contract or compensatory plan or arrangement.
|
|
VISTEON CORPORATION
|
|
|
|
|
|
By:
|
/s/ WILLIAM M. ROBERTSON
|
|
|
William M. Robertson
|
|
|
Interim Chief Financial Officer
|
Signature
|
Title
|
|
/s/ SACHIN LAWANDE
|
Director, President and Chief Executive Officer
|
|
Sachin Lawande
|
(Principal Executive Officer)
|
|
|
|
|
/s/ WILLIAM M. ROBERTSON
|
Interim Chief Financial Officer
|
|
William M. Robertson
|
(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 J. MANZO*
|
Director
|
|
Robert J. 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
|
|
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