exv99w1
Exhibit 99.1
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NEWS RELEASE
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Visteon Announces First-Quarter 2011 Results
First-Quarter Financial Summary
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Product sales of $1.97 billion, up $127 million from first quarter 2010 |
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Net income of $39 million, or $0.75 per diluted share |
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Adjusted EBITDA of $159 million |
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Cash balances of $901 million; total debt of $566 million |
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Completed $500 million debt refinancing on April 6 |
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2011 full-year sales and earnings guidance increased |
VAN BUREN TOWNSHIP, Mich., May 5, 2011 Visteon Corporation (NYSE: VC) today announced
first-quarter 2011 results, reporting net income of $39 million, or $0.75 per diluted share, on
product sales of $1.97 billion, compared with net income of $233 million on product sales of $1.85
billion for the first quarter of 2010. Net income of $233 million for first quarter 2010 included a
$237 million net gain related to the termination of company-paid medical, prescription drug and
life insurance coverage benefits under certain U.S. other post-retirement employee benefit (OPEB)
plans. Adjusted EBITDA, as defined below, for first quarter 2011 was $159 million, compared with
$161 million in first quarter 2010.
Our first-quarter results reflect higher sales resulting from increased vehicle production volumes
across all products, regions and major customers, said Donald J. Stebbins, chairman, chief
executive officer and president. Visteons global footprint, strong product and technology
portfolio and customer focus continue to drive our new business wins, as our customers awarded Visteon
more than $300 million in new business in the first quarter.
First Quarter 2011 Results
Hyundai-Kia and Ford Motor Co. each accounted for approximately 28 percent of Visteons
first-quarter product sales of $1.97 billion, with Renault-Nissan accounting for 8 percent and PSA
Peugeot-Citroën 7 percent. On a regional basis, Asia accounted for 40 percent of total product
sales up from 35 percent a year earlier while Europe represented 39 percent, North America 16
percent and South America 5 percent.
Product sales increased by $127 million compared with first quarter 2010. The impact of
divestitures and closures from prior actions lowered sales on a year-over-year basis by $88
million. Excluding the impact of divestitures and closures, sales increased $215 million, or about
12 percent, compared with a year earlier, principally reflecting higher production volumes across
all major customers.
Product gross margin for first quarter 2011 was $149 million, compared with $417 million a year
earlier. Adjusting for a $251 million gain related to OPEB termination in first quarter 2010,
gross margin decreased $17 million year-over-year as benefits from higher production volumes and
currency were offset by divestitures and closures, customer
agreements, and net cost performance.
Selling, general and administrative (SG&A) expense of $102 million for first quarter 2011 decreased
$11 million, to 5.2 percent of product sales, compared with 6.1 percent in first quarter 2010.
Benefits from actions in managing SG&A expense continued to provide the company the ability to
maintain its achieved cost structure in a growing sales environment.
During first quarter 2011, Visteon recognized $44 million of equity in the net income of
non-consolidated affiliates, compared with $30 million in 2010, for an increase of $14 million or
47 percent. Yanfeng Visteon Automotive Trim Systems Ltd. (YFV) and related affiliate interests
contributed $41 million in equity income, an increase of $11 million compared with a year earlier.
On a U.S. GAAP basis, YFVs first-quarter 2011 sales totaled $720 million, compared with $526
million a year earlier a 37 percent increase. Visteon holds a 50 percent ownership interest in
YFV; the remaining 50 percent is owned by HUAYU Automotive Systems Co., Ltd., a subsidiary of SAIC
Group.
For first quarter 2011, the company reported net income of $39 million, or $0.75 per diluted share,
compared with net income of $233 million, including a $237 million net OPEB termination gain, in
the same period in 2010. Adjusted EBITDA (a non-GAAP financial measure, as defined below) for first
quarter 2011 was $159 million, compared with $161 million for the same period a year earlier.
On a year-over-year basis, increases in adjusted EBITDA from higher sales volume, equity in the net
income of non-consolidated affiliates and currency were offset by the impact of divestitures and
closures, customer agreements, and net cost performance.
During first quarter 2011, Visteon won a substantial amount of new business, with the majority to
be manufactured in Asia. Annual sales from these new business wins are expected to be more than
$300 million.
Cash and Debt Balances
As of March 31, 2011, Visteon had global cash balances of $901 million, including $70 million of
restricted cash, compared with $979 million and $74 million, respectively, at the end of 2010.
Total debt was $566 million as of March 31, 2011.
Visteon used $50 million in cash from operations in first quarter 2011, reflecting normal working
capital seasonality and payments related to 2010 employee performance incentives and restructuring
actions. Capital expenditures totaled $55 million for first quarter 2011, about $30 million more
than a year earlier, as the company invested to meet future customer program requirements,
primarily in Asia. Free cash flow (a non-GAAP financial measure, as defined below) was negative
$105 million in first quarter 2011, compared with positive $15 million in first quarter 2010.
On April 6, Visteon successfully refinanced $500 million in term debt with $500 million of
eightyear, 6.75 percent senior unsecured notes. Through the refinancing, Visteon lowered its
interest rate by 125 basis points for an estimated annual interest savings of approximately $6
million, extended the term of its debt from seven years to eight years, and obtained a more
favorable covenant structure. Visteon also increased the borrowing capacity under its secured,
asset-based revolving facility to $220 million from $200 million, and, among other things, amended
certain provisions to conform to the new senior unsecured notes.
- 2 -
Increased Sales and Earnings Guidance for 2011
Visteon increased its sales and earnings guidance for full year 2011. The company expects full-year
2011 product sales in the range of $7.75 billion to $7.85 billion and adjusted EBITDA in the range
of $640 million to $680 million. Free cash flow is expected to be a use of approximately $175
million.
Visteon operates two manufacturing facilities and three customer service centers in Japan. While
the effects of the earthquakes and tsunami in Japan did not materially impact Visteons
first-quarter results, customer production schedules remain fluid and subject to change.
Additionally, the ability of vehicle manufacturers to compensate for lost production depends on the
availability of components to supply increased output and the ability of labor structures to handle
overtime, with the most significantly impacted commodities including semiconductors, electronics
components and displays. Visteon anticipates production disruptions to continue through the second
and into the third quarter of 2011 and is working closely with its customers and suppliers to
minimize the impact of such disruptions. As events in Japan continue to evolve, the companys
full-year 2011 outlook remains subject to change.
Visteon is a leading global automotive supplier that designs, engineers and manufactures
innovative climate, interior, electronic and lighting products for vehicle manufacturers. With
corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; the
company has facilities in 26 countries and employs approximately 26,500 people. Learn more at
www.visteon.com.
Forward-looking Information
This press release contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future
results and conditions but rather are subject to various factors, risks and uncertainties that
could cause our actual results to differ materially from those expressed in these forward-looking
statements, including, but not limited to:
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our ability to satisfy future capital and liquidity requirements; including
our ability to access the credit and capital markets at the times and in the amounts needed
and on terms acceptable to us; our ability to comply with financial and other covenants in
our credit agreements; and the continuation of acceptable supplier payment terms; |
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our ability to satisfy pension and other post-employment benefit obligations; |
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our ability to access funds generated by foreign subsidiaries and joint
ventures on a timely and cost-effective basis; |
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conditions within the automotive industry, including (i) the automotive
vehicle production volumes and schedules of our customers, and in particular Fords and
Hyundai-Kias vehicle production volumes, (ii) the financial condition of our customers or
suppliers and the effects of any restructuring or reorganization plans that may be
undertaken by our customers or suppliers or work stoppages at our customers or suppliers,
and (iii) possible disruptions in the supply of commodities to us or our customers due to
financial distress, work stoppages, natural disasters or civil unrest; |
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new business wins and re-wins do not represent firm orders or firm commitments
from customers, but are based on various assumptions, including the timing and duration of
product launches, vehicle productions levels, customer price reductions and currency
exchange rates; |
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general economic conditions, including changes in interest rates, currency
exchange rates and fuel prices; the timing and expenses related to internal restructurings,
employee reductions, |
- 3 -
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acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations; |
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increases in raw material and energy costs and our ability to offset or
recover these costs, increases in our warranty, product liability and recall costs or the
outcome of legal or regulatory proceedings to which we are or may become a party; and |
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those factors identified in our filings with the SEC (including our Annual
Report on Form 10-K for the fiscal year ended Dec. 31, 2010). |
Caution should be taken not to place undue reliance on our forward-looking statements, which
represent our view only as of the date of this release, and which we assume no obligation to
update. The financial results presented herein are preliminary and unaudited; final interim
financial results will be included in the companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2011.
Use of Non-GAAP Financial Information
This press release contains information about Visteons financial results which is not presented in
accordance with accounting principles generally accepted in the United States (GAAP). Such
non-GAAP financial measures are reconciled to their closest GAAP financial measures at the end of
this press release. The provision of these comparable GAAP financial measures for full-year 2011 is
not intended to indicate that Visteon is explicitly or implicitly providing projections on those
GAAP financial measures, and actual results for such measures are likely to vary from those
presented. The reconciliations include all information reasonably available to the company at the
date of this press release and the adjustments that management can reasonably predict.
###
Contact:
Media:
Jim Fisher
734-710-5557
jfishe89@visteon.com
Investors:
Michael Lewis
734-710-5800
investor@visteon.com
- 4 -
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions, Except Per Share Data)
(Unaudited)
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Three Months Ended |
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March 31 |
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2011 |
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2010 |
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Successor |
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Predecessor |
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Net Sales |
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Products |
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$ |
1,973 |
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$ |
1,846 |
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Services |
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58 |
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1,973 |
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1,904 |
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Cost of sales |
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Products |
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1,824 |
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1,429 |
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Services |
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57 |
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1,824 |
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1,486 |
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Gross margin |
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149 |
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418 |
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Selling, general and administrative expenses |
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102 |
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113 |
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Reorganization items, net |
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30 |
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Other (income) expense, net |
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(2 |
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29 |
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Operating income |
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49 |
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246 |
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Interest expense, net |
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9 |
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3 |
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Equity in net income of non-consolidated affiliates |
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44 |
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30 |
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Income before income taxes |
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84 |
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273 |
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Provision for income taxes |
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28 |
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25 |
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Net income |
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56 |
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248 |
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Net income attributable to noncontrolling interests |
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17 |
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15 |
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Net income attributable to Visteon Corporation |
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$ |
39 |
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$ |
233 |
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Per share data: |
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Net Income attributable to Visteon |
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Basic |
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$ |
0.77 |
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$ |
1.79 |
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Diluted |
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$ |
0.75 |
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$ |
1.79 |
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Average shares outstanding (in millions) |
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Basic |
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50.7 |
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130.3 |
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Diluted |
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52.0 |
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130.3 |
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Page 1
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
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Successor |
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March 31 |
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December 31 |
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2011 |
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2010 |
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ASSETS |
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Cash and equivalents |
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$ |
831 |
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$ |
905 |
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Restricted cash |
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70 |
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74 |
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Accounts receivable, net |
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1,240 |
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1,092 |
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Inventories, net |
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414 |
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364 |
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Other current assets |
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305 |
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267 |
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Total current assets |
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2,860 |
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2,702 |
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Property and equipment, net |
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1,618 |
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1,582 |
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Equity in net assets of non-consolidated affiliates |
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488 |
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439 |
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Intangible assets, net |
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391 |
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396 |
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Other non-current assets |
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92 |
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89 |
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Total assets |
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$ |
5,449 |
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$ |
5,208 |
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LIABILITIES AND SHAREHOLDERS EQUITY |
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Short-term debt, including current portion of long-term debt |
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$ |
80 |
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$ |
78 |
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Accounts payable |
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1,314 |
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1,203 |
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Accrued employee liabilities |
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182 |
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196 |
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Other current liabilities |
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360 |
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365 |
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Total current liabilities |
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1,936 |
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1,842 |
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Long-term debt |
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486 |
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483 |
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Employee benefits |
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544 |
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526 |
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Deferred income taxes |
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200 |
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|
190 |
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Other non-current liabilities |
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|
225 |
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217 |
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Shareholders equity: |
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Preferred stock |
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Common stock |
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1 |
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1 |
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Stock warrants |
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24 |
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29 |
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Additional paid-in capital |
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1,117 |
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|
1,099 |
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Retained earnings |
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125 |
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|
86 |
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Accumulated other comprehensive income |
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103 |
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50 |
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Treasury stock |
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(5 |
) |
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(5 |
) |
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Total Visteon shareholders equity |
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1,365 |
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|
1,260 |
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Noncontrolling interests |
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|
693 |
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|
690 |
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Total shareholders equity |
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2,058 |
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|
1,950 |
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Total liabilities and shareholders equity |
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$ |
5,449 |
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$ |
5,208 |
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Page 2
VISTEON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(Unaudited)
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Three Months Ended |
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March 31 |
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2011 |
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2010 |
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Successor |
|
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Predecessor |
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Operating Activities |
|
|
|
|
|
|
|
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|
|
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|
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Net income |
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$ |
56 |
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$ |
248 |
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Adjustments to reconcile Net Income to
net cash (used by) provided from Operating Activities: |
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Depreciation and amortization |
|
|
77 |
|
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|
73 |
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Pension and OPEB, net |
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(240 |
) |
Loss on sale of assets |
|
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21 |
|
Equity earnings, net of dividends remitted |
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(44 |
) |
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|
(29 |
) |
Reorganization items, net |
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|
|
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30 |
|
Other non-cash items |
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|
10 |
|
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|
11 |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
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Accounts receivable |
|
|
(122 |
) |
|
|
(95 |
) |
Inventories |
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|
(41 |
) |
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|
(38 |
) |
Accounts payable |
|
|
77 |
|
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|
49 |
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Other |
|
|
(63 |
) |
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|
10 |
|
|
|
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Net cash (used by) provided from from Operating Activities |
|
|
(50 |
) |
|
|
40 |
|
|
|
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|
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Investing Activities |
|
|
|
|
|
|
|
|
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|
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|
|
|
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Capital expenditures |
|
|
(55 |
) |
|
|
(25 |
) |
Proceeds from asset sales |
|
|
1 |
|
|
|
1 |
|
|
|
|
|
|
|
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Net cash used by Investing Activities |
|
|
(54 |
) |
|
|
(24 |
) |
|
|
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|
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Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Cash restriction, net |
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|
4 |
|
|
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(2 |
) |
Short term debt, net |
|
|
3 |
|
|
|
|
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Debt proceeds, net |
|
|
|
|
|
|
4 |
|
Principal payments on debt |
|
|
(3 |
) |
|
|
(12 |
) |
Other |
|
|
5 |
|
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(1 |
) |
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Net cash from (used by) Financing Activities |
|
|
9 |
|
|
|
(11 |
) |
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|
|
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Effect of exchange rates on cash |
|
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21 |
|
|
|
(3 |
) |
|
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|
|
|
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Net (decrease) increase in cash |
|
|
(74 |
) |
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|
2 |
|
|
|
|
|
|
|
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Cash at beginning of period |
|
|
905 |
|
|
|
962 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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Cash at end of period |
|
$ |
831 |
|
|
$ |
964 |
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Page 3
VISTEON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Dollars in Millions)
(Unaudited)
In this press release the Company has provided information regarding certain non-GAAP financial
measures including Adjusted EBITDA and free cash flow. Such non-GAAP financial measures are
reconciled to their closest GAAP financial measure in the schedules below.
Adjusted EBITDA: Adjusted EBITDA is presented as a supplemental measure of the Companys
performance that management believes is useful to investors because the excluded items may vary
significantly in timing or amounts and/or may obscure trends useful in evaluating and comparing the
Companys continuing operating activities across reporting periods. The Company defines Adjusted
EBITDA as net income attributable to Visteon, plus net interest expense, provision for income taxes
and depreciation and amortization, as further adjusted to eliminate the impact of asset
impairments, gains or losses on divestitures, net restructuring expenses and other reimbursable
costs, certain non-recurring employee charges and benefits, reorganization items, and other
non-operating gains and losses. Because not all companies use identical calculations this
presentation of Adjusted EBITDA may not be comparable to other similarly titled measures of other
companies.
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Three Months Ended |
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Estimated |
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March 31 |
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Full Year |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
|
Successor |
|
|
Predecessor |
|
|
Successor |
|
Net Income attributable to Visteon |
|
$ |
39 |
|
|
$ |
233 |
|
|
$ |
35 - 75 |
|
Interest expense, net |
|
|
9 |
|
|
|
3 |
|
|
|
60 |
|
Provision for income taxes |
|
|
28 |
|
|
|
25 |
|
|
|
140 |
|
Depreciation and amortization |
|
|
77 |
|
|
|
73 |
|
|
|
320 |
|
Loss on sale of assets |
|
|
|
|
|
|
21 |
|
|
|
|
|
Restructuring and other related costs, net |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
60 |
|
OPEB termination and other employee costs |
|
|
5 |
|
|
|
(220 |
) |
|
|
10 |
|
Reorganization and other related items |
|
|
3 |
|
|
|
30 |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
159 |
|
|
$ |
161 |
|
|
$ |
640 - 680 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is not a recognized term under GAAP and does not purport to be a substitute for
net income as an indicator of operating performance or cash flows from operating activities as a
measure of liquidity. Adjusted EBITDA has limitations as an analytical tool and is not intended to
be a measure of cash flow available for managements discretionary use, as it does not consider
certain cash requirements such as interest payments, tax payments and debt service requirements.
In addition, the Company uses Adjusted EBITDA (i) as a factor in incentive compensation decisions,
(ii) to evaluate the effectiveness of the Companys business strategies, and (iii) the Companys
credit agreements use measures similar to Adjusted EBITDA to measure compliance with certain
covenants.
Free Cash Flow: Free cash flow is presented as a supplemental measure of the Companys
liquidity that management believes is useful to investors in analyzing the Companys ability to
service and repay its debt. The Company defines free cash flow as cash flow from operating
activities less capital expenditures. Because not all companies use identical calculations, this
presentation of free cash flow may not be comparable to other similarly titled measures of other
companies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Estimated |
|
|
|
March 31 |
|
|
Full Year |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
|
Successor |
|
|
Predecessor |
|
|
Successor |
|
Cash (used by) provided from Operating Activities |
|
$ |
(50 |
) |
|
$ |
40 |
|
|
$ |
90 |
|
Capital expenditures |
|
|
(55 |
) |
|
|
(25 |
) |
|
|
(265 |
) |
|
|
|
|
|
|
|
|
|
|
Free Cash Flow |
|
$ |
(105 |
) |
|
$ |
15 |
|
|
$ |
(175 |
) |
|
|
|
|
|
|
|
|
|
|
Free cash flow is not a recognized term under GAAP and does not purport to be a substitute for cash
flows from operating activities as a measure of liquidity. Free cash flow has limitations as an
analytical tool and does not reflect cash used to service debt and does not reflect funds available
for investment or other discretionary uses. In addition, the Company uses free cash flow (i) as a
factor in incentive compensation decisions, and (ii) for planning and forecasting future periods.
Page 4