Visteon (NASDAQ:VC)
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Visteon to Record Non-Cash Charge to Write-Down Deferred Tax
Assets
DEARBORN, Mich., Sept. 9 /PRNewswire-FirstCall/ -- Visteon Corporation
(NYSE:VC) today announced that it would record a non-cash charge to write- down
its deferred tax assets in the third quarter of 2004. The charge is currently
estimated to be in the range of $825 million to $900 million. The decision to
record the charge was reached following an analysis of the anticipated impact
of Ford's announcement of lower than expected North American production
estimates for fourth quarter and full year 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO )
As a result of this analysis, and considering Visteon's losses in 2002 and
2003, the timing of when Visteon will be able to generate sufficient taxable
income in the United States and other affected jurisdictions to utilize the
company's deferred tax assets is now unclear. In these circumstances, a
write-down of Visteon's deferred tax assets is required under accounting
standards. This non-cash write-down includes deferred tax assets as of the
beginning of the year and income tax benefits recorded during the first half of
2004, offset by a release of related tax reserves. In addition, as a result of
the write-down of deferred tax assets, Visteon will cease recording income tax
benefits against operating results in the affected jurisdictions beginning July
1, 2004 and for the foreseeable future.
Although Visteon has made significant progress in diversifying its sales base,
declining production volumes on vehicles on which Visteon has significant
content continue to adversely affect financial performance.
"As the U.S. economy reacts to the uncertainty of oil prices, interest rates
and the job market, it is difficult to clearly predict the impact of these
items on our customers. Given that difficulty, we recognize we need to take
aggressive actions to structure our business in the U.S. so that we can be
successful in an uncertain market," said Mike Johnston, president and chief
executive officer. "Our top priority over the coming months will be to explore
and pursue strategic and structural changes to our business to achieve a
sustainable and competitive business. These changes will involve Ford and our
legacy businesses. While solutions are being pursued, we will not diminish our
focus on meeting our commitments to all our customers for on-time delivery of
quality parts."
Visteon expects its financial performance for the second half of 2004 and for
the full year will be significantly below previously forecasted results due to
the impact of lower than anticipated Ford North American volume, the write-down
of deferred tax assets, increased steel and fuel costs, which Visteon has not
been able to recover fully, and delays in the benefits that were expected to be
achieved from labor strategies, such as flowbacks and plant-level operating
agreements. As a result of these factors, Visteon expects to evaluate
additional fixed assets for impairment, and may as a result of this evaluation,
be required to write-down certain assets in the second half of 2004. Due to
the uncertainty regarding this asset review, as well as the uncertainty on the
outcome of Ford discussions, Visteon is withdrawing its prior guidance for
third quarter and full-year 2004 revenues, earnings and cash flows.
Visteon is scheduled to release its third quarter earnings on Thursday, October
21, 2004. At that time, updates will be provided on other company matters.
Visteon Corporation is a leading full-service supplier that delivers
consumer-driven technology solutions to automotive manufacturers worldwide and
through multiple channels within the global automotive aftermarket. Visteon
has approximately 72,000 employees and a global delivery system of more than
200 technical, manufacturing, sales and service facilities located in 25
countries.
This press release contains forward-looking statements within the meaning of
the Private Securities Reform Act of 1995. Words such as "anticipate,"
"estimate," "expect," "projects," "outlook" and similar words and phrases
signify forward-looking statements. Forward-looking statements are not
guarantees of future results and conditions but rather are subject to various
factors, risks, and uncertainties which could cause our results to differ
materially from those expressed in these forward-looking statements. These
factors, risks and uncertainties include the automotive vehicle production
volumes and schedules of our customers, unexpected developments arising from
discussions with Ford Motor Company and the related strategic cost structure
review, the effect of pension and other post-employment benefit obligations,
our ability to recover material surcharges from our customers, the need to
recognize restructuring, impairment and other special items, our ability to
reduce costs in accordance with the company's plans, as well as those factors
identified in our filings with the Securities and Exchange Commission
(including our Annual Report on Form 10-K for the year-ended December 31,
2003). We assume no obligation to update these forward-looking statements.
http://www.newscom.com/cgi-bin/prnh/20001201/DEF008LOGO
DATASOURCE: Visteon Corporation
CONTACT: Media Inquiries: Kimberly A. Welch, +1-313-755-3537,
, Jim Fisher, +1-313-755-0635, , or
Investor Inquiries: Derek Fiebig, +1-313-755-3699, , all
of Visteon Corporation
Web site: http://www.visteon.com/