Exhibit 99.3

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

	Page No.
Management's Report on Internal Control Over Financial Reporting	2
Report of Independent Registered Public Accounting Firm	3
Consolidated Statements of Operations for the year ended December 31, 2011, the three months ended December 31, 2010, the nine months ended October 1, 2010 and the year ended December 31, 2009	6
Consolidated Statements of Comprehensive Income for the year ended December 31, 2011, the three months ended December 31, 2010, the nine months ended October 1, 2010 and the year ended December 31, 2009	7
Consolidated Balance Sheets as of December 31, 2011 and 2010	7
Consolidated Statements of Cash Flows for the year ended December 31, 2011, the three months ended December 31, 2010, the nine months ended October 1, 2010 and the year ended December 31, 2009	9
Consolidated Statements of Shareholders’ Equity (Deficit) for the periods ended December 31, 2011, December 31, 2010, October 1, 2010 and December 31, 2009	10
Notes to Consolidated Financial Statements	11

1

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined under Rule 13a-15(f) of the Securities Exchange Act of 1934. Under the supervision and with the participation of the principal executive and financial officers of the Company, an evaluation of the effectiveness of internal control over financial reporting was conducted based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations (“the COSO Framework”) of the Treadway Commission. Based on the evaluation performed under the COSO Framework as of December 31, 2011, management has concluded that the Company’s internal control over financial reporting is effective.

PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2011, as stated in their report which is included herein.

2

Report of Independent Registered Public Accounting Firm

Tothe Board of Directors and Shareholders of Visteon Corporation

In our opinion, the accompanying consolidated balance sheets as of December 31, 2011 and 2010 and the related consolidated statements of operations, comprehensive income, shareholders' equity (deficit) and cash flows for the year ended December 31, 2011 and the three months ended December 31, 2010 present fairly, in all material respects, the financial position of Visteon Corporation and its subsidiaries (Successor Company) at December 31, 2011 and 2010, and the results of their operations and their cash flows for the year ended December 31, 2011 and the three months ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15 (a) (2)for the year ended December 31, 2011 and the three months ended December 31, 2010 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As discussed in Note 1 to the consolidated financial statements, Visteon Corporation and certain of its U.S. subsidiaries (the "Debtors") voluntarily filed a petition on May 28, 2009 with the United States Bankruptcy Court for the District of Delaware for reorganization under Chapter 11 of the Bankruptcy Code. The Company's Fifth Amended Joint Plan of Reorganization (the "Plan") was confirmed on August 31, 2010. Confirmation of the Plan resulted in the discharge of certain claims against the Debtors that arose before May 28, 2009 and substantially alters rights and interests of equity security holders as provided for in the Plan. The Plan was substantially consummated on October 1, 2010 and the Company emerged from bankruptcy. In connection with its emergence from bankruptcy, the Company adopted fresh start accounting on October 1, 2010.

As discussed in Note 5 to the consolidated financial statements, in March 2012, the Company entered into an agreement to sell certain assets and liabilities of the Lighting operation. As the Lighting operation represents a component of the Company's business, the results of operations for the Lighting business have been reclassified to Income (Loss) from Discontinued Operations for the year ended December 31, 2011 and the three-months ended December 31, 2010.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

3

PricewaterhouseCoopers LLP

Detroit, Michigan

February 27, 2012, except with respect to the opinion on the consolidated financial statements insofar as it relates to the effects of the presentation of discontinued operations discussed in Note 5 and the adoption of the new comprehensive income disclosures discussed in Note 1, as to which the date is May 2, 2012.

4

Report of Independent Registered Public Accounting Firm

Tothe Board of Directors and Shareholders of Visteon Corporation

In our opinion, the accompanying consolidated statements of operations, comprehensive income, shareholders' equity (deficit) and cash flows for the nine months ended October 1, 2010 and for the year ended December 31, 2009 present fairly, in all material respects, the results of operations and cash flows of Visteon Corporation and its subsidiaries (Predecessor Company) for the nine-months ended October 1, 2010 and for the year ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15 (a) (2)for the nine months ended October 1, 2010 and for the year ended December 31, 2009 presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. The Company's management is responsible for these financial statements and financial statement schedule. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated financial statements, Visteon Corporation and certain of its U.S. subsidiaries voluntarily filed a petition on May 28, 2009 with the United States Bankruptcy Court for the District of Delaware for reorganization under the provisions of Chapter 11 of the Bankruptcy Code. The Company's Fifth Amended Joint Plan of Reorganization (the "Plan") was confirmed on August 31, 2010. The Plan was substantially consummated on October 1, 2010 and the Company emerged from bankruptcy. In connection with its emergence from bankruptcy, the Company adopted fresh start accounting.

As discussed in Note 5 to the consolidated financial statements, in March 2012, the Company entered into an agreement for the sale of certain assets and liabilities of the Lighting operation. As the Lighting operations represent a component of the Company's business, the results of operations for the Lighting business have been reclassified to Income (Loss) from Discontinued Operations for the nine-months ended October 1, 2010 and the year ended December 31, 2009.

PricewaterhouseCoopers LLP

Detroit, Michigan

March 9, 2011, except with respect to our opinion on the consolidated financial statements insofar as it relates to the effects of the change in reportable segments discussed in Note 23, as to which the date is August 4, 2011, the presentation of the condensed consolidating financial information of the guarantor subsidiaries discussed in Note 24, as to which the date is November 10, 2011, the presentation of discontinued operations discussed in Note 5 and the adoption of the new comprehensive income disclosures discussed in Note 1, as to which the date is May 2, 2012.

5

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Successor					Predecessor
	Year Ended December 31			Three Months Ended December 31		Nine Months Ended October 1			Year Ended December 31
	2011			2010		2010			2009
	(Dollars in Millions, Except Per Share Amounts)
Net sales
Products	$	7,532		$	1,777	$	5,102		$	6,063
Services	—			1		142			265
	$	7,532		$	1,778	$	5,244		$	6,328
Cost of sales
Products	6,914			1,533		4,555			5,449
Services	—			1		140			261
	6,914			1,534		4,695			5,710
Gross margin	618			244		549			618
Selling, general and administrative expenses	387			107		263			321
Asset impairments	—			—		4			10
Restructuring expenses	24			27		14			80
Deconsolidation gains	(8		)	—		—			(95		)
Other (income) expense, net	(5		)	13		22			(20		)
Reorganization expenses, net	—			—		(938		)	60
Reimbursement from escrow account	—			—		—			62
Operating income	220			97		1,184			324
Interest expense	48			15		169			117
Interest income	21			6		10			11
Loss on debt extinguishment	24			—		—			—
Equity in net income of non-consolidated affiliates	168			41		105			81
Income before income taxes	337			129		1,130			299
Provision for income taxes	127			24		148			72
Income from continuing operations	210			105		982			227
(Loss) income from discontinued operations, net of tax	(56		)	—		14			(43		)
Net income	154			105		996			184
Net income attributable to non-controlling interests	74			19		56			56
Net income attributable to Visteon Corporation	$	80		$	86	$	940		$	128
Basic earnings (losses) per share
Continuing operations	$	2.65		$	1.71	$	7.10		$	1.31
Discontinued operations	(1.09		)	—		0.11			(0.33		)
Basic earnings attributable to Visteon Corporation	$	1.56		$	1.71	$	7.21		$	0.98
Diluted earnings (losses) per share
Continuing operations	$	2.62		$	1.66	$	7.10		$	1.31
Discontinued operations	(1.08		)	—		0.11			(0.33		)
Diluted earnings attributable to Visteon Corporation	$	1.54		$	1.66	$	7.21		$	0.98

See accompanying notes to the consolidated financial statements.

6

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009
	(Dollars in Millions, Except Per Share Amounts)
Net income	$	154		$	105		$	996		$	184
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	(53		)	3			20			(108		)
Benefit plans	(26		)	51			(232		)	92
Unrealized hedging (losses) gains and other	(9		)	(1		)	5			10
Other comprehensive (loss) income, net of tax	(88		)	53			(207		)	(6		)
Comprehensive income	66			158			789			178
Comprehensive income attributable to non-controlling interests	61			22			65			65
Comprehensive income attributable to Visteon Corporation	$	5		$	136		$	724		$	113

See accompanying notes to the consolidated financial statements.

7

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31
	2011			2010
	(Dollars in Millions)
ASSETS
Cash and equivalents	$	723		$	905
Restricted cash	23			74
Accounts receivable, net	1,063			1,092
Inventories, net	381			364
Other current assets	304			267
Total current assets	2,494			2,702
Property and equipment, net	1,412			1,576
Equity in net assets of non-consolidated affiliates	644			439
Intangible assets, net	353			402
Other non-current assets	66			89
Total assets	$	4,969		$	5,208
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt, including current portion of long-term debt	$	87		$	78
Accounts payable	1,010			1,203
Accrued employee liabilities	189			196
Other current liabilities	267			365
Total current liabilities	1,553			1,842
Long-term debt	512			483
Employee benefits	495			526
Deferred tax liabilities	187			190
Other non-current liabilities	225			217
Shareholders’ equity:
Preferred stock (par value $0.01, 50 million shares authorized, none outstanding at December 31, 2011 and 2010)	—			—
Common stock (par value $0.01, 250 million shares authorized, 52 million and 51 million shares issued and outstanding at December 31, 2011 and 2010, respectively)	1			1
Stock warrants	13			29
Additional paid-in capital	1,165			1,099
Retained earnings	166			86
Accumulated other comprehensive (loss) income	(25		)	50
Treasury stock	(13		)	(5		)
Total Visteon Corporation shareholders’ equity	1,307			1,260
Non-controlling interests	690			690
Total shareholders’ equity	1,997			1,950
Total liabilities and shareholders’ equity	$	4,969		$	5,208

See accompanying notes to the consolidated financial statements.

8

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009
	(Dollars in Millions)
Operating Activities
Net income	$	154		$	105		$	996		$	184
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation and amortization	316			73			207			352
Asset impairments	66			—			4			9
Equity in net income of non-consolidated affiliates, net of dividends remitted	(122		)	(41		)	(92		)	(38		)
Loss on debt extinguishment	24			—			—			—
Deconsolidation gains	(8		)	—			—			(95		)
Pension and OPEB, net	—			(146		)	(41		)	(215		)
Reorganization items	—			—			(933		)	60
Other non-cash items	35			44			61			(12		)
Changes in assets and liabilities:
Accounts receivable	(102		)	(53		)	(79		)	(127		)
Inventories	(33		)	5			(75		)	33
Accounts payable	(25		)	174			55			79
Income taxes deferred and payable, net	(5		)	—			12			47
Other assets and other liabilities	(125		)	(7		)	(95		)	(136		)
Net cash provided from operating activities	175			154			20			141
Investing Activities
Capital expenditures	(258		)	(92		)	(117		)	(151		)
Cash associated with deconsolidations	(52		)	—			—			(11		)
Acquisitions of joint venture interests	(29		)	—			(3		)	(30		)
Proceeds from divestitures and asset sales	14			16			45			69
Other	(6		)	—			—			—
Net cash used by investing activities	(331		)	(76		)	(75		)	(123		)
Financing Activities
Short-term debt, net	17			6			(9		)	(19		)
Cash restriction, net	51			16			43			(133		)
Proceeds from (payments on) DIP facility, net of issuance costs	—			—			(75		)	71
Proceeds from rights offering, net of issuance costs	(33		)	—			1,190			—
Proceeds from issuance of debt, net of issuance costs	503			—			481			57
Principal payments on debt	(513		)	(61		)	(1,651		)	(173		)
Other	(28		)	(1		)	(21		)	(62		)
Net cash used by financing activities	(3		)	(40		)	(42		)	(259		)
Effect of exchange rate changes on cash	(23		)	1			1			23
Net (decrease) increase in cash and equivalents	(182		)	39			(96		)	(218		)
Cash and equivalents at beginning of period	905			866			962			1,180
Cash and equivalents at end of period	$	723		$	905		$	866		$	962
Supplemental Disclosures:
Cash paid for interest	$	51		$	5		$	179		$	126
Cash paid for income taxes, net of refunds	$	127		$	20		$	83		$	77

See accompanying notes to the consolidated financial statements.

9

VISTEON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT)

	Common Stock			Stock Warrants			Additional Paid-In Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Non-Controlling Interests			Total
	(Dollars in Millions)
Balance at January 1, 2009 - Predecessor	$	131		$	127		$	3,405		$	(4,704	)	$	157		$	(3	)	$	264		$	(623	)
Net income	—			—			—			128			—			—			56			184
Other comprehensive (loss) income	—			—			—			—			(15		)	—			9			(6		)
Stock-based compensation, net	—			—			2			—			—			—			—			2
Cash dividends	—			—			—			—			—			—			(12		)	(12		)
Balance at December 31, 2009 - Predecessor	$	131		$	127		$	3,407		$	(4,576	)	$	142		$	(3	)	$	317		$	(455	)
Net income	—			—			—			940			—			—			56			996
Other comprehensive (loss) income	—			—			—			—			(216		)	—			9			(207		)
Stock-based compensation, net	—			—			1			—			—			—			—			1
Cash dividends	—			—			—			—			—			—			(23		)	(23		)
Reorganization and fresh-start related adjustments	(130		)	(86		)	(2,345		)	3,636			74			3			308			1,460
Balance at October 1, 2010 - Successor	$	1		$	41		$	1,063		$	—		$	—		$	—		$	667		$	1,772
Net income	—			—			—			86			—			—			19			105
Other comprehensive income	—			—			—			—			50			—			3			53
Stock-based compensation, net	—			—			21			—			—			(5		)	—			16
Warrant exercises	—			(12		)	15			—			—			—			—			3
Other	—			—			—			—			—			—			1			1
Balance at December 31, 2010 - Successor	$	1		$	29		$	1,099		$	86		$	50		$	(5	)	$	690		$	1,950
Net income	—			—			—			80			—			—			74			154
Other comprehensive loss	—			—			—			—			(75		)	—			(13		)	(88		)
Stock-based compensation, net	—			—			41			—			—			(8		)	—			33
Warrant exercises	—			(16		)	25			—			—			—			—			9
Cash dividends	—			—			—			—			—			—			(32		)	(32		)
Deconsolidation	—			—			—			—			—			—			(29		)	(29		)
Balance at December 31, 2011 - Successor	$	1		$	13		$	1,165		$	166		$	(25	)	$	(13	)	$	690		$	1,997

See accompanying notes to the consolidated financial statements.

10

VISTEON CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. Basis of Presentation

Visteon Corporation (the “Company” or “Visteon”) is a global supplier of automotive systems, modules and components to global automotive original equipment manufacturers (“OEMs”). The Company’s operations are organized by global product lines including Climate, Electronics and Interiors and are conducted through a network of manufacturing operations, technical centers and joint ventures in every major geographic region of the world.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and all subsidiaries that are more than 50% owned and over which the Company exercises control. Investments in affiliates of greater than 20% and for which the Company does not exercise control are accounted for using the equity method.

The Company’s financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) on a going concern basis, which contemplates the continuity of operations, realization of assets and satisfaction of liabilities in the normal course of business. The preparation of the financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect amounts reported herein. Management believes that such estimates, judgments and assumptions are reasonable and appropriate. However, due to the inherent uncertainty involved, actual results may differ from those provided in the Company’s consolidated financial statements. Certain amounts in 2011 and prior years have been reclassified to conform to current presentation.

The Company adopted fresh-start accounting upon emergence from the Chapter 11 Proceedings and became a new entity for financial reporting purposes as of the Effective Date. Therefore, the consolidated financial statements for the reporting entity subsequent to the Effective Date (the “Successor”) are not comparable to the consolidated financial statements for the reporting entity prior to the Effective Date (the “Predecessor”). Additional details regarding the adoption of fresh-start accounting are included herein under Note 4, “Fresh-Start Accounting.”

Reorganization under Chapter 11 of the U.S. Bankruptcy Code

On May 28, 2009, Visteon and certain of its U.S. subsidiaries (the “Debtors”) filed voluntary petitions for reorganization relief under chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Court”) in response to sudden and severe declines in global automotive production during the latter part of 2008 and early 2009 and the resulting adverse impact on the Company’s cash flows and liquidity. On August 31, 2010 (the “Confirmation Date”), the Court entered an order (the “Confirmation Order”) confirming the Debtors’ joint plan of reorganization (as amended and supplemented, the “Plan”). On October 1, 2010 (the “Effective Date”), all conditions precedent to the effectiveness of the Plan and related documents were satisfied or waived and the Company emerged from bankruptcy. Additional details regarding the status of the Company’s Chapter 11 Proceedings are included herein under Note 3, “Voluntary Reorganization under Chapter 11 of the United States Bankruptcy Code.”

Visteon UK Limited Administration

On March 31, 2009, in accordance with the provisions of the United Kingdom Insolvency Act of 1986 and pursuant to a resolution of the board of directors of Visteon UK Limited, a company organized under the laws of England and Wales (the “UK Debtor”) and an indirect, wholly-owned subsidiary of the Company, representatives from KPMG (the “Administrators”) were appointed as administrators in respect of the UK Debtor (the “UK Administration”). The UK Administration was initiated in response to continuing operating losses of the UK Debtor and mounting labor costs and their related demand on the Company’s cash flows. The effect of the UK Debtor’s entry into administration was to place the management, affairs, business and property of the UK Debtor under the direct control of the Administrators.

As of March 31, 2009, total assets of $64 million, total liabilities of $132 million and related amounts deferred as accumulated other comprehensive income of $84 million, were deconsolidated from the Company’s balance sheet resulting in a deconsolidation gain of $152 million. The Company also recorded $57 million for contingent liabilities related to the UK Administration, including $45 million of costs associated with former employees of the UK Debtor, for which the Company was reimbursed from the escrow account on a 100% basis.

11

Additional amounts related to these items or other contingent liabilities for potential claims under the UK Administration, which may result from (i) negotiations; (ii) actions of the Administrators; (iii) resolution of contractual arrangements, including unexpired leases; (iv) assertions by the UK Pensions Regulator; and, (v) material adverse developments; or other events, may be recorded in future periods. No assurance can be provided that the Company will not be subject to future litigation and/or liabilities related to the UK Administration, including assertions by the UK Pensions Regulator. Additional liabilities, if any, will be recorded when they become probable and estimable and could materially affect the Company’s results of operations and financial condition in future periods.

Transactions with Ford Motor Company

On September 29, 2010, the Company entered into a Global Settlement and Release Agreement (the “Release Agreement”) with Ford and Automotive Components Holdings, LLC (“ACH”) conditioned on the effectiveness of the Company’s Plan. The Release Agreement provides, among other things, for: (i) the termination of the Company’s future obligations to reimburse Ford for certain pension and retiree benefit costs; (ii) the resolution of and release of claims and causes of actions against the Company and certain claims, liabilities, or actions against the Company’s non-debtor affiliates; (iii) withdrawal of all proofs of claim, with a face value of approximately $163 million, including a claim for pension and retiree benefit liabilities described above, filed against the Company by Ford and/or ACH and an agreement to not assert any further claims against the estates, other than with respect to preserved claims; (iv) the rejection of all purchase orders under which the Company is not producing component parts and other agreements which would not provide a benefit to the reorganized Company and waiver of any claims against the Company arising out of such rejected agreements; (v) the reimbursement by Ford of up to $29 million to the Company for costs associated with restructuring initiatives in various parts of the world; and (vi) a commitment by Ford and its affiliates to source the Company new and replacement business totaling approximately $600 million in annual sales for vehicle programs launching through 2013.

In exchange for these benefits, the Company assumed all outstanding purchase orders and related agreements under which the Company is currently producing parts for Ford and/or ACH and agreed to continue to produce and deliver component parts to Ford and ACH in accordance with the terms of such purchase orders to ensure Ford continuity of supply. The Company also agreed to release Ford and ACH from any claims, liabilities, or actions that the Company may potentially assert against Ford and/or ACH.

On July 26, 2010, the Company, Visteon Global Technologies, Inc., ACH and Ford entered into an agreement (the “ACH Termination Agreement”) to terminate each of (i) the Master Services Agreement, dated September 30, 2005 (as amended); (ii) the Visteon Salaried Employee Lease Agreement, dated October 1, 2005 (as amended); and, (iii) the Visteon Hourly Employee Lease Agreement, dated October 1, 2005 (as amended).  On August 17, 2010, the Court approved the ACH Termination Agreement, pursuant to which Ford released Visteon from certain OPEB obligations related to employees previously leased to ACH resulting in a $9 million gain during the third quarter of 2010.

Recent Accounting Pronouncements    

In September 2011, the Financial Accounting Standards Board (“FASB”) issued guidance amending the options for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. This guidance provides an entity with the option to perform a qualitative assessment to determine whether the events or circumstances exist which could lead to the determination that it is more likely than not that the carrying amount of a reporting unit exceeds its fair value, prior to the performing a quantitative assessment as provided for in previous guidance. The Company does not expect this guidance to have a material impact on its consolidated financial statements.

In June 2011, the FASB issued guidance amending comprehensive income disclosures retrospectively, for fiscal years, and interim reporting periods within those years, beginning after December 15, 2011. This guidance requires disclosures of all nonowner changes (components of comprehensive income) in stockholders’ equity to be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company has adopted these disclosure requirements in 2012 and has reflected the changes herein.

In May 2011, the FASB issued guidance amending fair value measurement disclosures for fiscal years, and interim reporting periods within those years, beginning after December 15, 2011. This guidance will increase disclosures and result in common disclosure requirements between GAAP and International Financial Reporting Standards. The Company will adopt these disclosure requirements in 2012.

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NOTE 2. Significant Accounting Policies

Revenue Recognition:  The Company records revenue when persuasive evidence of an arrangement exists, delivery occurs or services are rendered, the sales price or fee is fixed or determinable and collectibility is reasonably assured. The Company ships product and records revenue pursuant to commercial agreements with its customers generally in the form of an approved purchase order, including the effects of contractual customer price productivity. The Company does negotiate discrete price changes with its customers, which are generally the result of unique commercial issues between the Company and its customers. The Company records amounts associated with discrete price changes as a reduction to revenue when specific facts and circumstances indicate that a price reduction is probable and the amounts are reasonably estimable. The Company records amounts associated with discrete price changes as an increase to revenue upon execution of a legally enforceable contractual agreement and when collectibility is reasonably assured.

Services revenues are recognized as services are rendered and associated costs of providing such services are recorded as incurred. Services revenues and related costs included approximately $30 million in 2009 of contractual reimbursement from Ford under the Amended Reimbursement Agreement for costs associated with the separation of ACH leased employees no longer required to provide such services.

Foreign Currency: Assets and liabilities of the Company’s non-U.S. businesses are translated into U.S. Dollars at end-of-period exchange rates and the related translation adjustments are reported in the consolidated balance sheets under the classification of Accumulated other comprehensive (loss) income. The effects of remeasuring assets and liabilities of the Company’s non-U.S. businesses that use the U.S. Dollar as their functional currency are included in the consolidated statements of operations as transaction gains and losses. Income and expense elements of the Company’s non-U.S. businesses are translated into U.S. Dollars at average-period exchange rates and are reflected in the consolidated statements of operations. Additionally, gains and losses resulting from transactions denominated in a currency other than the functional currency are included in the consolidated statements of operations as transaction gains and losses. Net transaction gains and losses decreased net income by $4 million in 2011. Net transaction gains and losses increased net income by less than $1 million in the three months ended December 31, 2010 and $12 million in the nine months ended October 1, 2010. Net transaction gains and losses decreased net income by $18 million in 2009.

Restructuring: The Company defines restructuring expense to include costs directly associated with exit or disposal activities. Such costs include employee severance, special termination benefits, pension and other postretirement benefit plan curtailments and/or settlements, contract termination fees and penalties, and other exit or disposal costs. In general, the Company records employee-related exit and disposal costs when such costs are probable and estimable, with the exception of one-time termination benefits and employee retention costs, which are recorded when earned. Contract termination fees and penalties and other exit and disposal costs are generally recorded when incurred.

Environmental Costs: Costs related to environmental assessments and remediation efforts at operating facilities, previously owned or operated facilities, and Superfund or other waste site locations are accrued when it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated. Estimated costs are recorded at undiscounted amounts, based on experience and assessments and are regularly evaluated. The liabilities are recorded in other current liabilities and other non-current liabilities in the Company’s consolidated balance sheets.

Other Costs: Advertising and sales promotion costs, repair and maintenance costs, research and development costs, and pre-production operating costs are expensed as incurred. Research and development expenses include salary and related employee benefits, contractor fees, information technology, occupancy, telecommunications and depreciation. Advertising costs were not material to the Company's consolidated statements of operations. Research and development costs were $326 million in 2011, $89 million in the three months ended December 31, 2010, $264 million in the nine months ended October 1, 2010, and $328 million in 2009. Shipping and handling costs are recorded in the Company’s consolidated statements of operations as “Cost of sales.”

Cash and Equivalents:  The Company considers all highly liquid investments purchased with a maturity of three months or less, including short-term time deposits, commercial paper, repurchase agreements and money market funds to be cash equivalents.

Restricted Cash: Restricted cash represents amounts designated for uses other than current operations and includes $11 million related to the Letter of Credit Reimbursement and Security Agreement, and $12 million related to cash collateral for other corporate purposes at December 31, 2011. Restricted cash decreased by $51 million during 2011 primarily due to the disbursement of previously escrowed funds to settle reorganization related professional fees.

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Accounts Receivable and Allowance for Doubtful Accounts: Accounts receivable are stated at historical value, which approximates fair value. The Company does not generally require collateral from its customers. Accounts receivable are reduced by an allowance for amounts that may be uncollectible in the future. This estimated allowance is determined by considering factors such as length of time accounts are past due, historical experience of write-offs and customer financial condition. If not reserved through specific examination procedures, the Company’s general policy for uncollectible accounts is to reserve based upon the aging categories of accounts receivable. Past due status is based upon the invoice date of the original amounts outstanding. Included in selling, general and administrative (“SG&A”) expenses are provisions for estimated uncollectible accounts receivable of $8 million, $3 million and $5 million for the year ended December 31, 2011, the nine-month Predecessor period ended October 1, 2010 and the year ended December 31, 2009, respectively, and recoveries in excess of provisions for estimated uncollectible accounts receivable of $4 million for the three–month Successor period ended December 31, 2010. The allowance for doubtful accounts balance was $8 million and $23 million at December 31, 2011 and December 31, 2009, respectively. No reserve for doubtful accounts was recorded at December 31, 2010 primarily due to the adoption of fresh-start accounting on October 1, 2010 (see Note 4, “Fresh-Start Accounting” for additional details).

Inventories: Inventories are stated at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market. Inventories are reduced by an allowance for excess and obsolete inventories based on management’s review of on-hand inventories compared to historical and estimated future sales and usage. Inventory reserves were $24 million and $6 million at as of December 31, 2011 and 2010, respectively. Inventory reserves increased during 2011 as inventory was recorded at fair value in connection with the adoption of fresh-start accounting on October 1, 2010 (see Note 4, “Fresh-Start Accounting” for additional details).

Product Tooling: Product tooling includes molds, dies and other tools used in production of a specific part or parts of the same basic design. It is generally required that non-reimbursable design and development costs for products to be sold under long-term supply arrangements be expensed as incurred and costs incurred for molds, dies and other tools that will be owned by the Company or its customers and used in producing the products under long-term supply arrangements be capitalized and amortized over the shorter of the expected useful life of the assets or the term of the supply arrangement. Contractually reimbursable design and development costs that would otherwise be expensed are recorded as an asset as incurred. Product tooling owned by the Company is capitalized as property and equipment, and amortized to cost of sales over its estimated economic life, generally not exceeding six years. The net book value of product tooling owned by the Company was $80 million and $84 million as of December 31, 2011 and 2010, respectively. The Company had receivables of $30 million and $26 million as of December 31, 2011 and 2010, respectively, related to production tools in progress, which will not be owned by the Company and for which there is a contractual agreement for reimbursement from the customer.

Property and Equipment: Property and equipment are stated at cost or fair value for impaired assets. However, as a result of the adoption of fresh-start accounting property and equipment were re-measured and adjusted to estimated fair value as of October 1, 2010 (see Note 4, “Fresh-Start Accounting”). Depreciation expense is computed principally by the straight-line method over estimated useful lives for financial reporting purposes and by accelerated methods for income tax purposes in certain jurisdictions. See Note 9, “Property and Equipment” for additional details.

Certain costs incurred in the acquisition or development of software for internal use are capitalized. Capitalized software costs are amortized using the straight-line method over estimated useful lives generally ranging from 3 to 8 years. The net book value of capitalized software costs was approximately $20 million and $15 million at December 31, 2011 and 2010, respectively. Related amortization expense was approximately $6 million, $2 million, $18 million, and $27 million for the year ended December 31, 2011, the three-month Successor period ended December 31, 2010, nine-month Predecessor period ended October 1, 2010 and the year ended December 31, 2009, respectively. Amortization expense of approximately $6 million, $5 million, $2 million and $1 million is expected for the annual periods ended December 31, 2012, 2013, 2014 and 2015, respectively.

Asset impairment charges are recorded when events and circumstances indicate that such assets may not be recoverable and the undiscounted net cash flows estimated to be generated by those assets are less than their carrying amounts. If estimated future undiscounted cash flows are not sufficient to recover the carrying value of the assets, an impairment charge is recorded for the amount by which the carrying value of the assets exceeds fair value. The Company classifies assets and liabilities as held for sale when management approves and commits to a formal plan of sale, generally following board of director approval, and it is probable that the sale will be completed within one year. The carrying value of the assets and liabilities held for sale are recorded at the lower of carrying value or fair value less cost to sell, and the recording of depreciation is ceased. For impairment purposes, fair value is determined using appraisals, management estimates or discounted cash flow calculations.

Definite-Lived Intangible Assets: In connection with the adoption of fresh-start accounting identifiable intangible assets were recorded at their estimated fair value as of October 1, 2010 (see Note 4, “Fresh-Start Accounting”). Definite-lived intangible assets, primarily including developed technology and customer-related assets, are amortized on a straight-line basis over estimated useful

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lives. Definite-lived intangible assets must be assessed for impairment when events and circumstances indicate that such assets may not be recoverable and the undiscounted net cash flows estimated to be generated by those assets are less than their carrying amounts. Under such circumstances, an impairment charge is recorded for the amount by which the carrying value of the intangible asset exceeds its estimated fair value. See Note 11, “Intangible Assets” for additional details.

Indefinite-Lived Intangible Assets: In connection with the adoption of fresh-start accounting identifiable intangible assets were recorded at their estimated fair value as of October 1, 2010 (see Note 4, “Fresh-Start Accounting”). Indefinite-lived intangible assets are not amortized, but are tested at least annually for impairment by reporting unit. Impairment testing is also required if an event or circumstance indicates that an impairment is more likely than not to have occurred. In testing for impairment the fair value of each reporting unit is compared to its carrying value. If the carrying value exceeds fair value an impairment loss is measured and recognized. See Note 11, “Intangible Assets” for additional details.

Debt Issuance Costs: The costs related to the issuance or modification of long-term debt are deferred and amortized into interest expense over the life of each respective debt issue. Deferred amounts associated with debt extinguished prior to maturity are expensed.

Pensions and Other Postretirement Employee Benefits: Pensions and other postretirement employee benefit costs and related liabilities and assets are dependent upon assumptions used in calculating such amounts. These assumptions include discount rates, expected return on plan assets, health care cost trends, compensation and other factors. In accordance with GAAP, actual results that differ from the assumptions used are accumulated and amortized into expense over future periods.

Product Warranty: The Company accrues for warranty obligations for products sold based on management estimates, with support from its sales, engineering, quality and legal functions, of the amount that eventually will be required to settle such obligations. This accrual is based on several factors, including contractual arrangements, past experience, current claims, production changes, industry developments and various other considerations.

Product Recall: The Company accrues for product recall claims related to probable financial participation in customers’ actions to provide remedies related primarily to safety concerns as a result of actual or threatened regulatory or court actions or the Company’s determination of the potential for such actions. The Company accrues for recall claims for products sold based on management estimates, with support from the Company’s engineering, quality and legal functions. Amounts accrued are based upon management’s best estimate of the amount that will ultimately be required to settle such claims.

Income Taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company records a valuation allowance to reduce deferred tax assets when it is more likely than not that such assets will not be realized. This assessment requires significant judgment, and must be done on a jurisdiction-by-jurisdiction basis. In determining the need for a valuation allowance, all available positive and negative evidence, including historical and projected financial performance, is considered along with any other pertinent information.

Financial Instruments: The Company uses derivative financial instruments, including forward contracts, swaps and options, to manage exposures to changes in currency exchange rates and interest rates. All derivative financial instruments are classified as “held for purposes other than trading.” The Company’s policy specifically prohibits the use of derivatives for speculative purposes.

Fair Value Measurements: The Company uses fair value measurements in the preparation of its financial statements, which utilize various inputs including those that can be readily observable, corroborated or are generally unobservable. The Company utilizes market-based data and valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Additionally, the Company applies assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.

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NOTE 3. Voluntary Reorganization under Chapter 11 of the United States Bankruptcy Code

The Chapter 11 Proceedings were initiated in response to sudden and severe declines in global automotive production during the latter part of 2008 and early 2009 and the adverse impact on the Company’s cash flows and liquidity. The reorganization cases are being jointly administered as Case No. 09-11786 under the caption “In re Visteon Corporation, et al”. On August 31, 2010, the Court entered the Confirmation Order confirming the Debtors’ Plan and on the Effective Date all conditions precedent to the effectiveness of the Plan and related documents were satisfied or waived and the Company emerged from bankruptcy.

Plan of Reorganization

A plan of reorganization determines the rights and satisfaction of claims of various creditors and security holders, but the ultimate settlement of certain claims will be subject to the uncertain outcome of litigation, negotiations and Court decisions up to and for a period of time after a plan of reorganization is confirmed. The following is a summary of the substantive provisions of the Plan and related transactions and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Plan.

• Cancellation of any shares of Visteon common stock and any options, warrants or rights to purchase shares of Visteon common stock or other equity securities outstanding prior to the Effective Date;

• Issuance of approximately 45,000,000 shares of Successor common stock to certain investors in a private offering (the “Rights Offering”) exempt from registration under the Securities Act for proceeds of approximately $1.25 billion;

• Execution of an exit financing facility including $500 million in funded, secured debt and a $200 million asset-based, secured revolver that was undrawn at the Effective Date; and,

• Application of proceeds from such borrowings and sales of equity along with cash on hand to make settlement distributions contemplated under the Plan, including;

• cash settlement of the pre-petition seven-year secured term loan claims of approximately $1.5 billion, along with interest of approximately $160 million;

• cash settlement of the U.S. asset-backed lending facility (“ABL”) and related letters of credit of approximately $128 million

• establishment of a professional fee escrow account of $68 million; and,

• cash settlement of other claims and fees of approximately $119 million;

• Issuance of approximately 2,500,000 shares of Successor common stock to holders of pre-petition notes, including 7% Senior Notes due 2014, 8.25% Senior Notes due 2010, and 12.25% Senior Notes due 2016; holders of the 12.25% senior notes also received warrants to purchase up to 2,355,000 shares of reorganized Visteon common stock at an exercise price of $9.66 per share;

• Issuance of approximately 1,000,000 shares of Successor common stock and warrants to purchase up to 1,552,774 shares of Successor common stock at an exercise price of $58.80 per share for Predecessor common stock interests;

• Issuance of approximately 1,700,000 shares of restricted stock to management under a post-emergence share-based incentive compensation program; and,

• Reinstatement of certain pre-petition obligations including certain OPEB liabilities and administrative, general and other unsecured claims.

Financial Statement Classification

Financial reporting applicable to a company in chapter 11 of the Bankruptcy Code generally does not change the manner in which financial statements are prepared. However, financial statements for periods including and subsequent to a chapter 11 bankruptcy filing must distinguish between transactions and events that are directly associated with the reorganization proceedings and the ongoing operations of the business. Accordingly, revenues, expenses, realized gains and losses and provisions for losses that can be directly associated with the reorganization of the business have been reported separately as Reorganization items, net in the Company’s statement of operations.

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Reorganization items, net included in the consolidated financial statements, including the amounts associated with the Company's discontinued operations, is comprised of the following:

	Nine Months      Ended October 1			Year Ended      December 31
	2010			2009
	(Dollars in Millions)
Gain on settlement of Liabilities subject to compromise	$	(956	)	$	—
Professional fees and other direct costs, net	129			60
Gain on adoption of fresh-start accounting	(106		)	—
	$	(933	)	$	60
Cash payments for reorganization expenses	$	111		$	26

On the Effective Date and in connection with the Plan, the Company recorded a pre-tax gain of approximately $1.1 billion for reorganization related items. This gain included $956 million related to the cancellation of certain pre-petition obligations previously recorded as liabilities subject to compromise in accordance with terms of the Plan. Additionally, on the Effective Date, the Company became a new entity for financial reporting purposes and adopted fresh-start accounting, which requires, among other things, that all assets and liabilities be recorded at fair value resulting in a gain of $106 million. For additional information regarding fresh-start accounting see Note 4, “Fresh-Start Accounting.”

NOTE 4. Fresh-Start Accounting

The application of fresh-start accounting results in the allocation of reorganization value to the fair value of assets and is permitted only when the reorganization value of assets immediately prior to confirmation of a plan of reorganization is less than the total of all post-petition liabilities and allowed claims and the holders of voting shares immediately prior to the confirmation of the plan of reorganization receive less than 50% of the voting shares of the emerging entity. The Company adopted fresh-start accounting as of the Effective Date, which represents the date that all material conditions precedent to the Plan were resolved, because holders of existing voting shares immediately before filing and confirmation of the plan received less than 50% of the voting shares of the emerging entity and because its reorganization value is less than post-petition liabilities and allowed claims, as shown below:

	October 1, 2010
	(Dollars in Millions)
Post-petition liabilities	$	2,763
Liabilities subject to compromise	3,121
Total post-petition liabilities and allowed claims	5,884
Reorganization value of assets	(5,141		)
Excess post-petition liabilities and allowed claims	$	743

Reorganization Value

The Company’s reorganization value includes an estimated enterprise value of approximately $2.4 billion, which represents management’s best estimate of fair value within the range of enterprise values contemplated by the Court of $2.3 billion to $2.5 billion. The range of enterprise values considered by the Court was determined using certain financial analysis methodologies including the comparable companies analysis, the precedent transactions analysis and the discounted cash flow analysis. The application of these methodologies requires certain key judgments and assumptions, including financial projections, the amount of cash available to fund operations and current market conditions.

The comparable companies analysis estimates the value of a company based on a comparison of such company’s financial statistics with the financial statistics of publicly-traded companies with similar characteristics. Criteria for selecting comparable companies for this analysis included, among other relevant characteristics, similar lines of business, geographic presence, business risks, growth prospects, maturity of businesses, market presence, size and scale of operations. The comparable companies analysis established benchmarks for valuation by deriving financial multiples and ratios for the comparable companies, standardized using common metrics of (i) EBITDAP (Earnings Before Interest, Taxes, Depreciation, Amortization and Pension expense) and (ii) EBITDAP minus capital expenditures. EBITDAP based metrics were utilized to

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ensure that the analysis allowed for valuation comparability between companies which sponsor pensions and those that do not. The calculated range of multiples for the comparable companies was used to estimate a range which was applied to the Company’s projected EBITDAP and projected EBITDAP minus capital expenditures to determine a range of enterprise values. The multiples ranged from 4.6 to 7.8 depending on the comparable company for EBITDAP and from 6.1 to 14.6 for EBITDAP minus capital expenditures. Because the multiples derived excluded pension expense, the analysis further deducted an estimated amount of pension underfunding totaling $455 million from the resulting enterprise value.

The precedent transactions analysis is based on the enterprise values of companies involved in public or private merger and acquisition transactions that have operating and financial characteristics similar to Visteon. Under this methodology, the enterprise value of such companies is determined by an analysis of the consideration paid and the debt assumed in the merger, acquisition or restructuring transaction. As in a comparable companies valuation analysis, the precedent transactions analysis establishes benchmarks for valuation by deriving financial multiples and ratios, standardized using common variables such as revenue or EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization). In performing the precedent transactions analysis an EBITDAP metric was not able to be used due to the unavailability of pension expense information for the transactions analyzed. Therefore, the precedent transactions analysis relied on derived EBITDA multiples, which were then applied to the Company’s operating statistics to determine enterprise value. Different than the comparable companies analysis in that the EBITDA metric is already burdened by pension costs, the precedent transactions analysis did not need to separately deduct pension underfunding in order to calculate enterprise value. The calculated multiples used to estimate a range of enterprise values for the Company, ranged from 4.0 to 7.1 depending on the transaction.

The discounted cash flow analysis estimates the value of a business by calculating the present value of expected future cash flows to be generated by such business. This analysis discounts the expected cash flows by an estimated discount rate. This approach has three components: (i) calculating the present value of the projected unlevered after-tax free cash flows for a determined period of time, (ii) adding the present value of the terminal value of the cash flows and (iii) subtracting the present value of projected pension payments in excess of the terminal year pension expense through 2017, due to the underfunded status of such pension plans. These calculations were performed on unlevered after-tax free cash flows, using an estimated tax rate of 35%, for the period beginning July 1, 2010 through December 31, 2013 (the “Projection Period”), discounted to the assumed effective date of June 30, 2010.

The discounted cash flow analysis was based on financial projections as included in the Fourth Amended Disclosure Statement (the “Financial Projections”) and included assumptions for the weighted average cost of capital (the “Discount Rate”), which was used to calculate the present value of future cash flows and a perpetuity growth rate for the future cash flows, which was used to determine the enterprise value represented by the time period beyond the Projection Period. The Discount Rate was calculated using the capital asset pricing model resulting in Discount Rates ranging from 14% to 16%, which reflects a number of Company and market-specific factors. The perpetuity growth rate was calculated using the perpetuity growth rate method resulting in a perpetuity growth rate for free cash flow of 0% to 2%. Projected pension payments were discounted on a similar basis as the overall discounted cash flow Discount Rate range.

The estimated enterprise value was based upon an equally weighted average of the values resulting from the comparable companies, precedent transactions and discounted cash flow analyses, as discussed above, and was further adjusted for the estimated value of non-consolidated joint ventures and the estimated amounts of available cash (i.e. cash in excess of estimated minimum operating requirements). The value of non-consolidated joint ventures was calculated using a discounted cash flow analysis of the dividends projected to be received from these operations and also includes a terminal value based on the perpetuity growth method, where the dividend is assumed to continue into perpetuity at an assumed growth rate. This discounted cash flow analysis utilized a discount rate based on the cost of equity range of 13% to 21% and a perpetuity growth rate after 2013 of 2% to 4%. Application of this valuation methodology resulted in an estimated value of non-consolidated joint ventures of $195 million, which was incremental to the estimated enterprise value. Projected global cash balances were utilized to determine the estimated amount of available cash of $242 million, which was incremental to the estimated enterprise value. Amounts of cash expected to be used for settlements under the terms of the Plan and the estimated minimum level of cash required for ongoing operations were deducted from total projected cash to arrive at an amount of remaining or available cash. The estimated enterprise value, after adjusting for the estimated fair values of non-debt liabilities, is intended to approximate the reorganization value, or the amount a willing buyer would pay for the assets of the company immediately after restructuring.

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A reconciliation of the reorganization value is provided in the table below.

Components of Reorganization Value
	October 1, 2010
	(Dollars in Millions)
Enterprise value	$	2,390
Non-debt liabilities	2,751
Reorganization value	$	5,141

The value of a business is subject to uncertainties and contingencies that are difficult to predict and will fluctuate with changes in factors affecting the prospects of such a business. As a result, the estimates set forth herein are not necessarily indicative of actual outcomes, which may be significantly more or less favorable than those set forth herein. These estimates assume that the Company will continue as the owner and operator of these businesses and related assets and that such businesses and assets will be operated in accordance with the business plan, which is the basis for Financial Projections. The Financial Projections are based on projected market conditions and other estimates and assumptions including, but not limited to, general business, economic, competitive, regulatory, market and financial conditions, all of which are difficult to predict and generally beyond the Company’s control. Depending on the actual results of such factors, operations or changes in financial markets, these valuation estimates may differ significantly from that disclosed herein.

The Company’s reorganization value was first allocated to its tangible assets and identifiable intangible assets and the excess of reorganization value over the fair value of tangible and identifiable intangible assets was recorded as goodwill. Liabilities existing as of the Effective Date, other than deferred taxes, were recorded at the present value of amounts expected to be paid using appropriate risk adjusted interest rates. Deferred taxes were determined in conformity with applicable income tax accounting standards. Accumulated depreciation, accumulated amortization, retained deficit, common stock and accumulated other comprehensive loss attributable to the predecessor entity were eliminated.

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Adjustments recorded to the predecessor entity to give effect to the Plan and to record assets and liabilities at fair value pursuant to the adoption of fresh-start accounting, including amounts associated with the Company's discontinued operations, are summarized below (dollars in millions):

	Predecessor			Reorganization				Fair Value				Successor
	10/1/2010			Adjustments (a)				Adjustments (b)				10/1/2010
Assets
Cash and equivalents	$	918		$	(52	)	(c)	$	—			$	866
Restricted cash	195			(105		)	(d)	—				90
Accounts receivable, net	1,086			(4		)	(e)	—				1,082
Inventories, net	395			—				4			(q)	399
Other current assets	283			(11		)	(f)	(14		)	(r), (aa)	258
Total current assets	2,877			(172		)		(10		)		2,695
Property and equipment, net	1,812			—				(240		)	(s)	1,572
Equity in net assets of non-consolidated affiliates	378			5			(g)	13			(t)	396
Intangible assets, net	6			—				361			(u)	367
Goodwill	—			—				38			(v)	38
Other non-current assets	74			13			(h)	(14		)	(w), (aa)	73
Total assets	$	5,147		$	(154	)		$	148			$	5,141
Liabilities and Stockholders’ (Deficit) Equity
Short-term debt, including current portion of long-term debt	$	128		$	5		(k)	$	—			$	133
Accounts payable	1,043			—				—				1,043
Accrued employee liabilities	196			19			(i)	3			(x)	218
Other current liabilities	326			95			(j)	(58		)	(y)	363
Total current liabilities	1,693			119				(55		)		1,757
Long-term debt	12			473			(k)	—				485
Employee benefits	632			154			(l)	(63		)	(x)	723
Deferred income taxes	175			(5		)	(m)	27			(aa)	197
Other non-current liabilities	251			(5		)	(n)	(39		)	(y), (aa)	207
Liabilities subject to compromise	3,121			(3,121		)	(o)	—				—
Common stock — Successor	—			1			(p)	—				1
Stock warrants — Successor	—			41			(p)	—				41
Common stock — Predecessor	131			(131		)	(p)	—				—
Stock warrants — Predecessor	127			(127		)	(p)	—				—
Additional paid-in capital	3,407			(2,175		)	(p)	(169		)	(p)	1,063
Accumulated deficit	(4,684		)	4,619			(p)	65			(p)	—
Accumulated other comprehensive loss	(74		)	—				74			(p)	—
Treasury stock	(3		)	3			(p)	—				—
Total Visteon shareholders’ (deficit) equity	(1,096		)	2,231				(30		)		1,105
Non-controlling interests	359			—				308			(z)	667
Total shareholders’ (deficit) equity	(737		)	2,231				278				1,772
Total liabilities and shareholders’ (deficit) equity	$	5,147		$	(154	)		$	148			$	5,141

Explanatory Notes

a. Records adjustments necessary to give effect to the Plan, including the receipt of cash proceeds associated with the Rights Offering and Exit Facility, settlement of liabilities subject to compromise, elimination of Predecessor equity and other transactions as contemplated under the Plan. These adjustments resulted in a pre-tax gain on the settlement of liabilities

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subject to compromise of $956 million in the nine-month Predecessor period ended October 1, 2010 (see explanatory note o., as follows). The Company recorded a $5 million income tax benefit attributable to cancellation of inter-company indebtedness with foreign affiliates pursuant to the Plan.

b. Records adjustments necessary to reflect assets and liabilities at fair value and to eliminate Accumulated deficit and Accumulated other comprehensive income/(loss). These adjustments resulted in a pre-tax gain of $106 million in the nine-month Predecessor period ended October 1, 2010. Adjustments to record assets and liabilities at fair value on the Effective Date are as follows (dollars in millions):

Inventory	$	4
Property and equipment	(240		)
Equity in net assets of non-consolidated affiliates	13
Intangible assets	361
Goodwill	38
Other assets	(14		)
Employee benefits	60
Other liabilities	97
Non-controlling interests	(308		)
Elimination of Predecessor accumulated other comprehensive loss and other equity	95
Pre-tax gain on fair value adjustments	$	106
Net tax expense related to fresh-start adjustments	(41		)
Net income on fresh-start adjustments	$	65

c. This adjustment reflects the net use of cash on the Effective Date and in accordance with the Plan (dollars in millions):

Rights offering proceeds	$	1,250
Exit financing proceeds, net	482
Net release of restricted cash	105
Total sources	1,837
Seven year secured term loan and interest	1,660
ABL and letters of credit	128
Rights offering fees	49
Payment of administrative and professional claims	23
Debt issue fees	10
Claim settlements and other	19
Total uses	1,889
Net decrease in cash	$	(52	)

d. The decrease in restricted cash reflects the release of $173 million of cash that was restricted under various orders of the Bankruptcy Court, partially offset by the establishment of a professional fee escrow account of $68 million.    

e. This adjustment reflects the settlement of a receivable in connection with the Release Agreement.

f. This adjustment relates to the Rights Offering commitment premium deposit paid in July 2010.

g. This adjustment records additional equity in net income of non-consolidated affiliates related to the nine-month Predecessor period ended October 1, 2010.

h. This adjustment records $13 million of estimated debt issuance costs capitalized in connection with the exit financing facility.

i. This adjustment reflects the reinstatement of OPEB and non-qualified pension obligations expected to be paid within 12 months.

j. This adjustment reflects the establishment of a liability for the payment of $122 million of allowed general unsecured and other claims in accordance with the Plan partially offset by $23 million of accrued reorganization items that were paid on the Effective Date and $4 million for amounts settled in connection with the Release Agreement.

k. This adjustment reflects the new $500 million secured term loan, net of $10 million original issuance discount and $12

21

million of fees paid to the lenders.

l. This adjustment represents the reinstatement of $154 million of other postretirement employee benefit (“OPEB”) and non-qualified pension obligations from Liabilities subject to compromise in accordance with the terms of the Plan.

m. This adjustment reflects the deferred tax impact of certain intercompany liabilities subject to compromise that were cancelled in accordance with the Plan.

n. This adjustment eliminates incentive compensation accruals for terminated Predecessor compensation plans.

o. This adjustment reflects the settlement of liabilities subject to compromise (“LSC”) in accordance with the Plan, as shown below (dollars in millions):

	LSC September 30, 2010		Settlement per Fifth Amended Plan		Gain on Settlement of LSC
Debt	$	2,490	$	1,717	$	773
Employee liabilities	324		218		106
Interest payable	183		160		23
Other claims	124		70		54
	$	3,121	$	2,165	$	956
Income tax benefit					5
After-tax gain on settlement of LSC					$	961

p. The cancellation of Predecessor Visteon common stock in accordance with the Plan and elimination of corresponding shareholders’ deficit balances, are shown below (dollars in millions):

	Predecessor Shareholders’ Deficit September 30, 2010			Reorganization Adjustments			Fresh-Start Adjustments			Successor Shareholders’ Equity October 1, 2010
Common stock
Predecessor	$	131		$	(131	)	$	—		$	—
Successor	—			1			—			1
Stock warrants
Predecessor	127			(127		)	—			—
Successor	—			41			—			41
Additional paid-in capital
Predecessor	3,407			(3,407		)	—			—
Successor	—			1,232			(169		)	1,063
Accumulated deficit	(4,684		)	4,619			65			—
Accumulated other comprehensive loss	(74		)	—			74			—
Treasury stock	(3		)	3			—			—
Visteon Shareholders’ (deficit) equity	$	(1,096	)	$	2,231		$	(30	)	$	1,105

This adjustment also reflects the issuance of Successor common stock.

22

A reconciliation of the reorganization value of assets to the Successor’s common stock is shown below (dollars in millions, except per share amounts):

Reorganization value of assets	$	5,141
Less: fair value of debt	(618		)
Less: fair value of non-controlling interests	(667		)
Less: fair value of liabilities (excluding debt)	(2,751		)
Successor common stock and warrants	$	1,105
Less: fair value of warrants	(41		)
Successor common stock	$	1,064
Shares outstanding at October 1, 2010	48,642,520
Per share value	$	21.87

The per-share value of $21.87 was utilized to determine the value of shares issued for settlement of allowed claims.

q. Inventory was recorded at fair value and was estimated to exceed book value by approximately $26 million. Raw materials were valued at current replacement cost. Work-in-process was valued at estimated finished goods selling price less estimated disposal costs, completion costs and a reasonable profit allowance for selling effort. Finished goods were valued at estimated selling price less estimated disposal costs and a reasonable profit allowance for selling effort. Additionally, fresh-start accounting adjustments for supply and spare parts inventory items of $22 million were a partial offset.

r. The adjustment to other current assets includes a $7 million prepaid insurance balance and $2 million of other deferred fee amounts with no future benefit to the Successor. Additionally, this adjustment includes a $5 million decrease in deferred tax assets associated with fair value adjustments (see explanatory note aa for additional details related to deferred tax adjustments).

s. The Company estimates that the book value of property and equipment exceeds the fair value by $240 million after giving consideration to the highest and best use of the assets. Fair value estimates were based on a combination of the cost or market approach, as appropriate. Fair value under the market approach was based on recent sale transactions for similar assets, while fair value under the cost approach was based on the amount required to construct or purchase an asset of equal utility, considering physical deterioration, functional obsolescence and economic obsolescence.

t. Investments in non-consolidated affiliates were recorded at fair value primarily based on an income approach utilizing the dividend discount model. Significant assumptions included estimated future dividends for each applicable non-consolidated affiliate and discount rates.

u. Identifiable intangible assets are primarily comprised of developed technology, customer-related intangibles and trade names. Fair value estimates of intangible assets were based on income approaches utilizing projected financial information consistent with the Fourth Amended Disclosure Statement, as described below:

• Developed technology and trade name intangible assets were valued using the relief from royalty method, which estimates the value of an intangible asset to be equal to the present value of future royalties that would be paid for the right to use the asset if it were not owned. Significant assumptions included estimated future revenues for each technology category and trade name, royalty rates, tax rates and discount rates.

• Customer related intangible assets were valued using the multi-period excess earnings method, which estimates the value of an intangible asset to be equal to the present value of future earnings attributable to the asset group after recognition of required returns to other contributory assets. Significant assumptions included estimated future revenues for existing customers, retention rates based on historical experience, tax rates, discount rates, and contributory asset charges including employee intangibles.

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v. Reorganization value in excess of the fair value allocated to identifiable tangible and intangible assets was recorded as goodwill. In adjusting the balance sheet accounts to fair value, the Company estimated excess reorganization value of approximately $38 million, which has been reflected as goodwill and was determined as follows (dollars in millions):

Enterprise value	$	2,390
Add: Estimated fair value of non-debt liabilities	2,751
Reorganization value	5,141
Less: Estimated fair value of assets	5,103
Reorganization value in excess of fair value of assets	$	38

w. Adjustments to other non-current assets included a decrease of $10 million related to deferred tax assets associated with fair value adjustments and a decrease of $4 million related to discounting of amounts due in future periods (see explanatory note aa for additional details related to deferred tax adjustments).

x. The adjustments to accrued employee liabilities and employee benefits are related to the remeasurement of pension and OPEB obligations at the Effective Date, based on certain assumptions including discount rates.

y. The adjustments to other current and other non-current liabilities include decreases of $51 million and $31 million, respectively, to eliminate deferred revenue, which was initially recorded in connection with payments received from customers under various support and accommodation agreements. The decrease in other current liabilities also includes $5 million for discounting of future obligations, while the decrease in non-current liabilities also includes $8 million for non-income tax liabilities and $5 million for tax liabilities, partially offset by $6 million related to leasehold intangibles (see explanatory note aa for additional details related to deferred tax adjustments).

z. Non-controlling interests are recorded at fair value based on publicly available market values, where possible, and based on other customary valuation methodologies where publicly available market values are not possible, including comparable company and discounted cash flow models. The Company estimates that the fair value of non-controlling interests exceeds book value by $308 million.

aa. Deferred tax impacts associated with fresh-start adjustments result from changes in the book values of tangible and intangible assets while the tax basis in such assets remains unchanged. The Company anticipates that a full valuation allowance will be maintained in the U.S.; accordingly this adjustment relates to the portion of fresh-start adjustments applicable to certain non-U.S. jurisdictions where the Company is subject to and pays income taxes. Additionally, the amount of non-U.S. accumulated earnings considered permanently reinvested was modified in connection with the adoption of fresh-start accounting, resulting in a decrease in deferred tax liabilities associated with foreign withholding taxes of approximately $30 million. Deferred tax adjustments include the following (dollars in millions):

Balance Sheet Account Classification:
Other current assets	$	2
Other non-current assets	10
Deferred income taxes	27
Net increase in deferred tax liabilities	39
Other balance sheet adjustments	2
Net tax expense related to fresh-start adjustments	$	41

NOTE 5. Discontinued Operations

In March 2012, the Company entered into an agreement for the sale of certain assets and liabilities associated with the Company's Lighting operations to Varroccorp Holding BV and Varroc Engineering Pvt. Ltd. (together, "Varroc Group") for proceeds of approximately $92 million, including $20 million related to the Company's 50% equity interest in Visteon TYC Corporation ("VTYC") (collectively the "Lighting Transaction"). The Company's Lighting operations manufacture front and rear lighting systems, auxiliary lamps and key subcomponents such as projectors and electronic modules through facilities located in Novy Jicin and Rychvald, Czech Republic, Monterrey, Mexico and Pune, India. The Company's Lighting business recorded sales for the year ended December 31, 2011 of $531 million.

The Company determined that the assets and liabilities subject to the Lighting Transaction met the "held for sale" criteria during the quarter ended March 31, 2012.   Further, because the Lighting operations represent a component of the Company's business, the results of operations of the Lighting business have been reclassified to "Income (Loss) from Discontinued Operations, net of tax" in the Consolidated  Statement of Operations for all periods presented. Additionally, the footnotes to the Consolidated Financial Statements have been updated to reflect the Company's continuing operations except where noted.

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The results of operations of the Lighting business as reclassified to “Income (loss) from discontinued operations, net of tax” in the Consolidated Statements of Operations are provided in the table below.

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009
	(Dollars in Millions)
Sales	$	515		$	109		$	335		$	357
Cost of sales	490			109			319			378
Gross margin	25			—			16			(21		)
Selling, general and administrative expenses	11			3			8			10
Asset impairments	66			—			—			(1		)
Restructuring expenses	—			1			6			4
Other expense (income), net	2			—			(1		)	—
Reorganization expenses, net	—			—			5			—
Operating loss	(54		)	(4		)	(2		)	(34		)
Interest expense	2			1			1			—
Equity in net income of non-consolidated Affiliates	—			—			—			(1		)
Loss before income taxes	(56		)	(5		)	(3		)	(35		)
(Benefit) provision for income taxes	—			(5		)	(17		)	8
Net (loss) income from discontinued operations attributable to Visteon Corporation	$	(56	)	$	—		$	14		$	(43	)

In connection with the preparation of the December 31, 2011 financial statements, the Company concluded that it had an indicator that the carrying value of the Company's Lighting assets may not be recoverable. Accordingly, the Company performed a recoverability test utilizing a probability weighted analysis of cash flows associated with continuing to run and operate the Lighting business and cash flows associated with other alternatives. As a result of the analysis the Company recorded a $66 million impairment charge in the fourth quarter of 2011, which was primarily related to property and equipment and was measured under a market approach. After giving effect to the impairment charge, the carrying value of the Lighting assets, principally property and equipment, approximated $47 million.As of December 31, 2011 the Company did not meet the specific criteria necessary for the Lighting assets to be considered held for sale.

NOTE 6. Asset Impairments and Restructuring

Asset Impairments

In November 2011, Visteon and Yanfeng Visteon Automotive Trim Systems, Co. Ltd., a 50% owned non-consolidated affiliate of the Company, signed a non-binding memorandum of understanding ("MOU") with respect to a potential transaction that would combine the majority of Visteon's global interiors business with YFV. Although the MOU sets forth basic terms of the proposed transaction, definitive agreements for the proposed sale, which would be subject to regulatory and other approvals, remain subject to significant uncertainties and there can be no assurance that definitive agreements will be entered into or that such a transaction will be completed in the timetable or on the terms referenced in the MOU.  In connection with the preparation of the December 31, 2011 financial statements, the Company concluded that proceeds associated with the potential sale transaction indicated that the carrying value of the Company's Interiors assets, which approximated $182 million as of December 31, 2011, may not be recoverable.  Accordingly, the Company performed a recoverability test utilizing a probability weighted analysis of cash flows associated with continuing to run and operate the Interiors business and cash flows associated with the potential sale of the Interiors business. As a result of the analysis, the Company concluded that no impairment existed as of December 31, 2011.  As of December 31, 2011 the Company did not meet the specific criteria necessary for the Interiors assets to be considered held for sale.

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Restructuring

The Company has undertaken various restructuring activities to achieve its strategic and financial objectives. Restructuring activities include, but are not limited to, plant closures, production relocation, administrative cost structure realignment and consolidation of available capacity and resources. The Company expects to finance restructuring programs through cash on hand, cash generated from its ongoing operations, reimbursements pursuant to customer accommodation and support agreements or through cash available under its existing debt agreements, subject to the terms of applicable covenants. Restructuring costs are recorded as elements of a plan are finalized and the timing of activities and the amount of related costs are not likely to change. However, such costs are estimated based on information available at the time such charges are recorded. In general, management anticipates that restructuring activities will be completed within a time frame such that significant changes to the plan are not likely. Due to the inherent uncertainty involved in estimating restructuring expenses, actual amounts paid for such activities may differ from amounts initially estimated.

Given the economically-sensitive and highly competitive nature of the automotive industry, the Company continues to closely monitor current market factors and industry trends taking action as necessary, including but not limited to, additional restructuring actions. However, there can be no assurance that any such actions will be sufficient to fully offset the impact of adverse factors on the Company or its results of operations, financial position and cash flows.

Restructuring reserve balances of $26 million and $43 million at December 31, 2011 and 2010, respectively, are classified as Other current liabilities on the consolidated balance sheets. The Company anticipates that the activities associated with the restructuring reserve balance as of December 31, 2011 will be substantially completed by the end of 2012. The following is a summary of the Company’s consolidated restructuring reserves and related activity. Substantially all of the Company’s restructuring expenses are related to employee severance and termination benefit costs. Information in the table below includes amounts associated with the Company's discontinued operations.

	Interiors			Climate			Electronics			Central			Total
	(Dollars in Millions)
Predecessor – December 31, 2008	$	49		$	3		$	4		$	8		$	64
Expenses	22			5			13			44			84
Utilization	(50		)	(8		)	(4		)	(47		)	(109		)
Predecessor – December 31, 2009	$	21		$	—		$	13		$	5		$	39
Expenses	6			1			2			11			20
Exchange	(1		)	—			—			—			(1		)
Utilization	(9		)	(1		)	(13		)	(14		)	(37		)
Predecessor – October 1, 2010	$	17		$	—		$	2		$	2		$	21
Expenses	24			2			1			1			28
Exchange	(1		)	—			—			—			(1		)
Utilization	(3		)	—			—			(2		)	(5		)
Successor – December 31, 2010	$	37		$	2		$	3		$	1		$	43
Expenses	7			3			24			—			34
Reversals	(7		)	(1		)	(2		)	—			(10		)
Exchange	2			—			(2		)	—			—
Utilization	(33		)	(3		)	(4		)	(1		)	(41		)
Successor – December 31, 2011	$	6		$	1		$	19		$	—		$	26

During the year ended December 31, 2011 the Company recorded restructuring expenses of $34 million, including the following actions:

• During the fourth quarter of 2011 the Company commenced a program designed to commonize global business systems and processes across its Climate operations for the purpose of reducing costs. Related employee severance and termination benefit costs of $3 million were recorded during 2011 associated with approximately 50 salaried and 130 hourly employees, for which severance and termination benefits were deemed probable and estimable. The Company anticipates that this program could result in the separation of approximately 500 employees at an additional cash cost of approximately $20 million in future periods when elements of the plan are finalized and the timing of activities and amount of related costs are not likely to change.

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• The Company informed employees at its Cadiz Electronics operation in El Puerto de Santa Maria, Spain of its intention to permanently cease production and close the facility. The Company recorded $24 million primarily related to severance and termination benefits representing the minimum amount of employee separation costs pursuant to statutory regulations, all of which are expected to be cash separation payments. During January 2012 the Company reached agreements with the local unions and Spanish government for the closure of the Cadiz operation, which were subsequently ratified by the employees in February 2012. Pursuant to the agreements, the Company agreed to pay one-time termination benefits, in excess of the statutory minimum requirement, of approximately $29 million and agreed to transfer land, building and machinery with a net book value of approximately $14 million for the benefit of the employees. The Company expects to record additional charges during the first quarter of 2012 approximating $47 million in connection with the execution of these agreements. Additionally, pursuant to the Release Agreement with Ford, the Company anticipates recovery of approximately $19 million of such costs in 2012, which is in addition to approximately $4 million recovered in 2011.

• Additional severance and termination associated with previously announced actions at two European Interiors facilities resulting in $7 million of incremental employee-related cash costs.

The Company reversed approximately $7 million of previously established accruals for employee severance and termination benefits at a European Interiors facility pursuant to a March 2011 contractual agreement to cancel the related social plan. The Company also reversed approximately $2 million of previously recorded restructuring accruals due to lower than estimated severance and termination benefit costs associated with the consolidation of the Company’s Electronics operations in South America. Utilization during the year ended December 31, 2011 is principally related to payments for severance and other employee termination benefits.

During the three-month Successor period ended December 31, 2010 the Company recorded restructuring expenses of $28 million, including $24 million for employee severance and termination costs at a European Interiors facility pursuant to customer sourcing actions and a related business transfer agreement. In connection with this business transfer the Company announced a voluntary workforce reduction program and related severance and termination benefit costs were recorded as employees executed separation agreements. The Company recovered approximately $18 million of such costs during 2011 in accordance with a customer support agreement. Amounts recovered have been recorded as deferred revenue on the Company's consolidated balance sheet and are being amortized into Product sales on a straight-line basis over the remaining life of supply contracts with the customer, or approximately 6 years. Utilization during the three-month Successor period ended December 31, 2010 includes $4 million in payments for severance and other employee termination benefits and $1 million in payments related to contract termination and equipment relocation costs.

During the nine-month Predecessor period ended October 1, 2010, the Company recorded $20 million of restructuring expenses, including $14 million of employee severance and termination benefits and $6 million for equipment relocation costs. Employee severance and termination benefits were attributable to the closure of a European Interiors facility, the closure of a North America Electronics facility pursuant to a customer accommodation agreement, and the realignment of corporate administrative and support functions. Equipment relocation costs were attributable to the consolidation of certain North America production facilities pursuant to a customer accommodation agreement. Utilization for the nine-month Predecessor period ended October 1, 2010 includes $26 million for payments of severance and other employee termination benefits, $9 million of payments related to contract termination and equipment relocation costs, and $2 million of special termination benefits reclassified to pension and other postretirement employee benefit liabilities, where such payments are made from the Company’s benefit plans. 

The Company recorded restructuring expenses of $84 million during the twelve months ended December 31, 2009 including amounts related to administrative cost reductions to fundamentally re-align corporate support functions with underlying operations in connection with the Company’s reorganization efforts and in response to recessionary economic conditions and related negative impact on the automotive sector and the Company’s results of operations and cash flows. During the first half of 2009, the Company recorded $34 million of employee severance and termination benefit costs related to approximately 300 salaried employees in the United States and 180 salaried employees in other countries, primarily in Europe and $4 million related to approximately 200 employees associated with the consolidation of the Company’s Electronics operations in South America. In connection with the Chapter 11 Proceedings, the Company entered into various support and accommodation agreements with its customers as more fully described above. These actions included:

• $13 million of employee severance and termination benefit costs associated with approximately 170 employees at two European Interiors facilities.

• $11 million of employee severance and termination benefit costs associated with approximately 300 employees related to the announced closure of a North American Electronics facility.

• $10 million of employee severance and termination benefit costs related to approximately 120 salaried employees who were located primarily at the Company’s North American headquarters.

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• $4 million of employee severance and termination benefit costs associated with approximately 550 employees related to the consolidation of the Company’s North American Lighting operations.

Utilization for 2009 includes $81 million of payments for severance and other employee termination benefits and $28 million of special termination benefits reclassified to pension and other postretirement employee benefit liabilities, where such payments are made from the Company’s benefit plans.

NOTE 7. Inventories

Inventories consist of the following components:

	December 31
	2011			2010
	(Dollars in Millions)
Raw materials	$	167		$	120
Work-in-process	174			174
Finished products	64			76
	405			370
Valuation reserves	(24		)	(6		)
	$	381		$	364

Effective October 1, 2010, the Company adjusted inventory to fair value in accordance with the adoption of fresh-start accounting (see Note 4, “Fresh-Start Accounting”), resulting in an increase of $26 million, which was subsequently expensed in cost of sales on the Company’s statement of operations for the three-month Successor period ended December 31, 2010. Inventory reserves increased during 2011 as inventory was recorded at fair value in connection with the adoption of fresh-start accounting on October 1, 2010 (see Note 4, “Fresh-Start Accounting” for additional details).

NOTE 8. Other Assets

Other current assets are summarized as follows:

	December 31
	2011		2010
	(Dollars in Millions)
Recoverable taxes	$	99	$	80
Pledged accounts receivable	82		90
Deposits	40		35
Deferred tax assets	30		33
Prepaid assets	17		16
Other	36		13
	$	304	$	267

Other non-current assets are summarized as follows:

	December 31
	2011		2010
	(Dollars in Millions)
Deferred tax assets	$	18	$	13
Income tax receivable	11		14
Deposits	7		24
Other	30		38
	$	66	$	89

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NOTE 9. Property and Equipment

Property and equipment, net consists of the following:

	December 31
	2011			2010
	(Dollars in Millions)
Land	$	184		$	207
Buildings and improvements	311			312
Machinery, equipment and other	985			935
Construction in progress	106			93
Total property and equipment	1,586			1,547
Accumulated depreciation	(254		)	(55		)
	1,332			1,492
Product tooling, net of amortization	80			84
Property and equipment, net	$	1,412		$	1,576

Property and equipment is depreciated principally using the straight-line method of depreciation over an estimated useful life. Generally, buildings and improvements are depreciated over a 40-year estimated useful life and machinery, equipment and other assets are depreciated over estimated useful lives ranging from 3 to 15 years. Product tooling is amortized using the straight-line method over the estimated life of the tool, generally not exceeding six years.

The Company recorded asset impairment charges for Lighting property and equipment of $60 million , which is reported in the results of discontinued operations for the year ended December 31, 2011. (See Note 5. "Discontinued Operations" for further details).

Depreciation and amortization expenses are summarized as follows:

	Successor				Predecessor
	Year EndedDecember 31		Three Months Ended December 31		Nine Months Ended October 1		Year Ended December 31
	2011		2010		2010		2009
	(Dollars in Millions)
Depreciation	$	254	$	55	$	191	$	326
Amortization	17		7		16		26
	$	271	$	62	$	207	$	352

Depreciation and amortization for the Lighting segment reclassified as discontinued operations include expenses of $19 million, $3 million, $22 million and $45 million for the year ended December 31, 2011, the three months ended December 31, 2010, the nine months ended October 1, 2010, and the year ended December 31, 2009, respectively.

In connection with the adoption of fresh-start accounting the Company adjusted the carrying value of property and equipment to its estimated fair value at October 1, 2010. The Company recorded $53 million of accelerated depreciation expense for the year ended December 31, 2009, representing the shortening of estimated useful lives of certain assets (primarily machinery and equipment) in connection with the Company’s restructuring activities.

NOTE 10. Non-Consolidated Affiliates

Investments in the net assets of non-consolidated affiliates were $644 million and $439 million at December 31, 2011 and 2010, respectively. The Company recorded equity in the net income of non-consolidated affiliates of $168 million for the year ended

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December 31, 2011, $41 million in the three-month Successor period ended December 31, 2010, $105 million in the nine-month Predecessor period ended October 1, 2010 and $81 million for the year ended December 31, 2009. The Company’s investment in the net assets and equity in the net income of non-consolidated affiliates is reported in the consolidated financial statements as Equity in net assets of non-consolidated affiliates on the consolidated balance sheets and Equity in net income of non-consolidated affiliates on the consolidated statements of operations. Included in the Company’s retained earnings is undistributed income of non-consolidated affiliates accounted for under the equity method of approximately $165 million and $41 million at December 31, 2011 and 2010, respectively.

In November 2011 the Company acquired, through its 70% owned and consolidated affiliate Halla Climate Control Corporation, a 37.5% non-controlling interest in Wuhu Bonaire Auto Electrical Systems Co., Ltd. ("Bonaire"), for $26 million. Bonaire develops and manufactures heating, ventilation and air conditioning systems and engine cooling systems and is a major supplier to Chinese vehicle manufacturer Chery Automobile Co., Ltd.

The Company’s investments in the net assets of non-consolidated affiliates were adjusted to fair value as a result of the adoption of fresh-start accounting on October 1, 2010 (see Note 4, “Fresh-Start Accounting”). Fair value estimates were primarily based on an income approach utilizing the discounted dividend model. The carrying value of the investments at December 31, 2011 was approximately $50 million more than the Company's share of the affiliates' book value. The difference between the investment carrying value and the amount of underlying equity in net assets is amortized on a straight line basis over the underlying assets' estimated useful lives of 10 to 15 years. Additionally, the Company monitors its investments in affiliates for indicators of other-than-temporary declines in value on an ongoing basis. If the Company determines that an “other-than-temporary” decline in value has occurred, an impairment loss will be recorded, which is measured as the difference between the recorded book value and the fair value of the investment with fair value generally determined under applicable income approaches previously described.

The following table presents summarized financial data for the Company’s non-consolidated affiliates. The amounts included in the table below represent 100% of the results of operations of such non-consolidated affiliates accounted for under the equity method. Yanfeng Visteon Automotive Trim Systems Co., Ltd (“Yanfeng”), of which the Company owns a 50% interest, is considered a significant non-consolidated affiliate and is shown separately below.

Summarized balance sheet data as of December 31 is as follows:

	Yanfeng				All Others
	2011		2010		2011		2010
	(Dollars in Millions)
Current assets	$	1,282	$	1,066	$	652	$	319
Other assets	637		502		290		195
Total assets	$	1,919	$	1,568	$	942	$	514
Current liabilities	$	995	$	884	$	574	$	287
Other liabilities	15		19		24		16
Shareholders’ equity	909		665		344		211
Total liabilities and shareholders’ equity	$	1,919	$	1,568	$	942	$	514

Summarized statement of operations data for the years ended December 31 is as follows:

	Net  Sales						Gross  Margin						Net  Income
	2011		2010		2009		2011		2010		2009		2011		2010		2009
	(Dollars in Millions)
Yanfeng	$	3,014	$	2,573	$	1,452	$	473	$	398	$	217	$	246	$	218	$	118
All other	1,681		893		711		176		142		109		90		71		42
	$	4,695	$	3,466	$	2,163	$	649	$	540	$	326	$	336	$	289	$	160

Restricted net assets related to the Company’s consolidated subsidiaries were approximately $135 million and $117 million, respectively as of December 31, 2011 and 2010. Restricted net assets related to the Company’s non-consolidated affiliates were approximately $644 million and $439 million, respectively, as of December 31, 2011 and 2010. Restricted net assets of consolidated subsidiaries are attributable to the Company’s operations in China, where certain regulatory requirements and governmental restraints result in significant restrictions on the Company’s consolidated subsidiaries ability to transfer funds to the Company.

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NOTE 11. Intangible Assets

In connection with the adoption of fresh-start accounting identifiable intangible assets were recorded at their estimated fair value as of October 1, 2010 (see Note 4, “Fresh-Start Accounting”). Intangible assets at December 31, 2011 and 2010 are as follows:

	December 31
	2011						2010
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Weighted Average Useful Life     (years)
	(Dollars in Millions)
Definite-lived intangible assets
Developed technology	$	204	$	32	$	172	$	214	$	7	$	207	8
Customer related	119		16		103		121		3		118		9
Other	20		3		17		15		1		14		33
	$	343	$	51	$	292	$	350	$	11	$	339
Goodwill and indefinite-lived intangible assets
Goodwill					$	36					$	38
Trade names					25						25
					$	61					$	63

The Company recorded approximately $45 million (including $2 million reclassified as discontinued operations) and $11 million (including $1 million reclassified as discontinued operations) of amortization expense related to definite-lived intangible assets for the year ended December 31, 2011 and the three-month Successor period ended December 31, 2010, respectively. The Company currently estimates annual amortization expense to be $41 million for 2012 and $40 million annually from 2013 through 2015 and $39 million for 2016. Goodwill and trade names, substantially all of which relate to the Company's Climate reporting unit, are not amortized but are tested for impairment at least annually. Impairment testing is required more often if an event or circumstance indicates that an impairment is more likely than not to have occurred. In conducting impairment testing, the fair value of the reporting unit is compared to the net book value of the reporting unit. If the net book value exceeds the fair value, an impairment loss is measured and recognized. The Company conducted the annual impairment test of goodwill and indefinite-lived trade names during the fourth quarter using data as of October 1, 2011 and no impairment was identified.

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NOTE 12. Other Liabilities

Other current liabilities are summarized as follows:

	December 31
	2011		2010
	(Dollars in Millions)
Product warranty and recall reserves	$	42	$	44
Non-income taxes payable	41		41
Income taxes payable	29		38
Restructuring reserves	26		43
Payables to related parties	24		8
Deferred income	21		6
Foreign currency hedges	16		—
Accrued reorganization items	9		97
Accrued interest payable	7		11
Other accrued liabilities	52		77
	$	267	$	365

Other non-current liabilities are summarized as follows:

	December 31
	2011		2010
	(Dollars in Millions)
Income tax reserves	$	97	$	96
Deferred income	42		20
Non-income taxes payable	41		43
Product warranty and recall reserves	24		31
Other accrued liabilities	21		27
	$	225	$	217

Current and non-current deferred income of $14 million and $37 million, respectively, relate to various customer accommodation, support and other agreements. Revenue associated with these agreements is being recorded in relation to the delivery of associated products. In accordance with the terms of the underlying agreement or over the estimated period of benefit to the customer, generally representing the duration of remaining production on current vehicle platforms. The Company recorded $23 million of revenue associated with these payments during the year ended December 31, 2011. The Company expects to record approximately $14 million, $12 million, $11 million, $8 million and $5 million of deferred amounts in the annual periods of 2012, 2013, 2014, 2015 and 2016, respectively.

NOTE 13. Debt

As of December 31, 2011, the Company had $87 million and $512 million of debt outstanding classified as short-term debt and long-term debt, respectively. The Company’s short and long-term debt balances consist of the following:

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		Weighted Average Interest Rate				Carrying Value
	Maturity	2011		2010		2011		2010
						(Dollars in Millions)
Short-term debt
Current portion of long-term debt		5.3	%	6.1	%	$	1	$	7
Other – short-term		4.1	%	3.4	%	86		71
Total short-term debt						87		78
Long-term debt
6.75% senior notes due April 15, 2019	2019	6.75	%	—	%	494		—
Term loan	2017	—	%	8.0	%	—		472
Other	2013-2017	10.2	%	11.2	%	18		11
Total long-term debt						512		483
Total debt						$	599	$	561

6.75% Senior Notes due April 15, 2019

On April 6, 2011, the Company completed the sale of $500 million aggregate principal amount of 6.75% senior notes due April 15, 2019 (the “Original Senior Notes”). The Original Senior Notes were used to repay the obligations under the Term Loan Credit Agreement (“Term Loan”) which the Company entered into on October 1, 2010, with Morgan Stanley Senior Funding, Inc., as lead arranger, collateral agent and administrative agent. The Term Loan obligations were represented by the outstanding principal amount of $498 million, which was included as a financing activity in the Company’s consolidated statements of cash flows. During the second quarter of 2011, the Company recorded $24 million of losses on the early extinguishment of the Term Loan including $21 million of unamortized original issuance discount and debt fees that were recorded net of the Term Loan principal on the face of the Company’s consolidated balance sheets immediately prior to extinguishment.

The Original Senior Notes were sold to the initial purchasers who are party to a certain purchase agreement (the “Initial Purchasers”) for resale to qualified institutional buyers under Rule 144A and to persons outside the United States under Regulation S. In accordance with a registration rights agreement, in January 2012 the Company exchanged substantially identical senior notes (the "Senior Notes") that have been registered under the Securities Act of 1933, as amended, for all of the Original Senior Notes.

The Senior Notes were issued under an Indenture (the “Indenture”) among the Company, the subsidiary guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Indenture and the form of Senior Notes provide, among other things, that the Senior Notes will be senior unsecured obligations of the Company. Interest is payable on the Senior Notes on April 15 and October 15 of each year beginning on October 15, 2011 until maturity. Each of the Company’s existing and future 100% owned domestic restricted subsidiaries that guarantee debt under the Company’s asset-based credit facility guarantee the Senior Notes.

The terms of the Indenture, among other things, limit the ability of the Company and certain of its subsidiaries to make restricted payments; restrict dividends or other payments of subsidiaries; incur additional debt; engage in transactions with affiliates; create liens on assets; engage in sale and leaseback transactions; and consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. The Indenture provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others: nonpayment of principal or interest; breach of other agreements in the Indenture; defaults in failure to pay certain other indebtedness; the rendering of judgments to pay certain amounts of money against the Company and its subsidiaries; the failure of certain guarantees to be enforceable; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is not cured within the time periods specified, the Trustee or the holders of at least 25% in principal amount of the then outstanding series of Senior Notes may declare all the Senior Notes of such series to be due and payable immediately.

In addition, the Company and certain of its domestic subsidiaries entered into a second amendment (the “Amendment”) to the Revolving Loan Credit Agreement (the “Revolver”) whereby the Revolver was amended and restated. The Amendment, among other things, reduces the commitment fee on undrawn amounts, decreases certain applicable margins and modifies or replaces certain of the covenants and other provisions. On April 1, 2011 the Company and certain of its domestic subsidiaries entered an incremental revolving loan amendment, whereby the commitment amounts under the Revolver were increased by $20 million, to

33

a total facility size of $220 million, subject to borrowing base requirements. As of December 31, 2011, there were no amounts outstanding under Revolver and the amount available for borrowing was $220 million.

Letter of Credit Agreement

On September 27, 2011 the Company extended its $15 million Letter of Credit ("LOC") Facility with US Bank National Association to September 30, 2013. The facility was originally entered in on November 16, 2009 with a facility size of $40 million and reduced on September 30, 2010 to $15 million. The Company must continue to maintain a collateral account equal to 103% of the aggregated stated amount of the LOCs with reimbursement of any draws. As of December 31, 2011 and 2010, the Company had $11 million and $15 million, respectively, of outstanding letters of credit issued under this facility and secured by restricted cash.

Other Debt

As of December 31, 2011, the Company had affiliate debt outstanding of $105 million, with $87 million and $18 million classified in short-term and long-term debt, respectively. These balances are primarily related to the Company’s non-U.S. operations and are payable in non-U.S. currencies including, but not limited to the Euro, Chinese Yuan, and Korean Won. Remaining availability on outstanding affiliate credit facilities is approximately $200 million and certain of these facilities have pledged receivables, inventory or equipment as security. As of December 31, 2010, the Company had affiliate debt outstanding of $84 million, with $73 million and $11 million classified in short-term and long-term debt, respectively.

Included in the Company's affiliate debt is an arrangement, through a subsidiary in France, to sell accounts receivable on an uncommitted basis. The amount of financing available is contingent upon the amount of receivables less certain reserves. The Company pays a 30 basis points servicing fee on all receivables sold, as well as a financing fee of 3-month Euribor plus 75 basis points on the advanced portion. At December 31, 2011 there were $8 million outstanding borrowings under the facility with $82 million of receivables pledged as security, which are recorded as Other current assets on the consolidated balance sheet. At December 31, 2010 there were no outstanding borrowings under the facility with $90 million of receivables pledged as security.

The DIP Credit Agreement, a $150 million Senior Secured Super Priority Priming Debtor in Possession Credit and Guaranty Agreement between certain subsidiaries of the Company, a syndicate of lenders and Wilmington Trust FSB, as administrative agent, matured on August 18, 2010, at which time the Company repaid the full $75 million outstanding balance, which was included as a financing activity in the Company’s consolidated statements of cash flows.

Maturities

Debt obligations, at December 31, 2011, included maturities as follows: 2012 — $87 million; 2013 — $9 million; 2014 — $3 million; 2015 — $4 million; 2016 — $1 million; thereafter — $495 million

Fair Value

The fair value of debt was approximately $587 million and $566 million at December 31, 2011 and December 31, 2010, respectively. Fair value estimates were based on quoted market prices or current rates for the same or similar issues, or on the current rates offered to the Company for debt of the same remaining maturities.

NOTE 14. Employee Retirement Benefits

Employee Retirement Plans

In the U.S., the Company’s salaried employees earn noncontributory pay related benefits, while the Company’s former hourly employees represented by certain collective bargaining groups earn noncontributory benefits based on employee service. Effective December 31, 2011, active salaried employees in the U.S. ceased to accrue benefits under the defined benefit pension plan. Certain of the Company’s non-U.S. subsidiaries sponsor separate plans that provide similar types of benefits to their employees. The Company’s defined benefit plans are partially funded with the exception of certain supplemental benefit plans for executives and certain non-U.S. plans, primarily in Germany, which are unfunded.

Most U.S. salaried employees and certain non-U.S. employees are eligible to participate in defined contribution plans by contributing a portion of their compensation, which is partially matched by the Company. Effective January 1, 2012, matching contributions for the U.S. defined contribution plan will be 100% on the first 6% of pay contributed. The expense related to matching contributions

34

was approximately $5 million in 2011, $1 million for the three-month Successor period ended December 31, 2010, $3 million for the nine-month Predecessor period ended October 1, 2010, and $4 million in 2009.

Postretirement Employee Health Care and Life Insurance Benefits

In the U.S. and Canada, the Company has a financial obligation for the cost of providing other postretirement health care and life insurance benefits (“OPEB”) to its employees under Company-sponsored plans. These plans generally pay for the cost of health care and life insurance for retirees and dependents, less retiree contributions and co-pays. During 2009 and 2010, the Company eliminated company paid OPEB under certain U.S. plans pursuant to various Court orders. In July 2010, the United States Court of Appeals for the Third Circuit (the "Circuit Court") reversed previous orders of the Court and the District Court for the District of Delaware (the "District Court") authorizing the Company to eliminate such OPEB benefits without complying with the requirements of Bankruptcy Code Section 1114. In August 2010, the Court issued an order requiring the Company to retroactively restore certain terminated or modified benefits. In September 2010, the Court issued an order approving the Memorandum of Agreement between the IUE-CWA and the Company pursuant to which the parties agreed that $12 million would be paid in full settlement of the OPEB obligations for the former Connersville and Bedford hourly employees under Section 1114 of the Bankruptcy Code. In October 2010, the Company notified the participants of the remaining OPEB plans that company paid benefits would be eliminated on November 1, 2010.

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The table below summarizes the impact of these OPEB terminations and reinstatements on the Company's consolidated statements of operations.

	Successor			Predecessor
	Three Months Ended December 31			Nine Months  Ended October 1			Twelve Months  Ended December 31
	2010			2010			2009
	(Dollars in Millions)
Connersville/Bedford
Termination	$	(1	)	$	(206	)	$	(42	)
Reinstatement	—			150			—
North Penn
Termination	(56		)	(125		)	—
Reinstatement	—			62			—
Salaried/Other
Termination	(89		)	(1		)	(153		)
Reinstatement	—			94			—
Net reduction to postretirement expense	$	(146	)	$	(26	)	$	(195	)

The Patient Protection and Affordable Care Act and the Health Care Education and Affordability Reconciliation Act

In March 2010, the Patient Protection and Affordable Care Act and the Health Care Education and Affordability Reconciliation Act (the “Acts”) were signed into law. The Acts contain provisions which could impact the Company’s accounting for retiree medical benefits. Accordingly, the Company completed an assessment of the Acts in connection with the reinstatement of other postretirement employee benefits for certain former employees of the Company’s Connersville and Bedford facilities in the second quarter of 2010 and all other reinstated plans in the third quarter of 2010 and increased the related benefit liabilities by approximately $6 million, based upon the Company’s current interpretation of the Acts. These amounts are included in the reinstatement charges discussed above.

Ford Sponsored Retirement Benefits

Prior to emergence from bankruptcy, Ford charged Visteon for OPEB provided by Ford to certain Company salaried employees who retired after May 24, 2005. OPEB payables to Ford were reclassified to Liabilities subject to compromise in connection with the Chapter 11 Proceedings. During the third quarter of 2010 the OPEB payable balance was reduced by $9 million in connection with the August 17, 2010 Court approval of the ACH Termination Agreement. Additionally, on the Effective Date and pursuant to the Release Agreement, Ford released Visteon from the remaining OPEB and pension payables approximating $100 million and withdrew their claim for recovery of such amounts.

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Benefit Expenses

The Company’s expense for retirement benefits is as follows:

	Retirement Plans
	U.S Plans												Non-U.S Plans
	Successor						Predecessor						Successor						Predecessor
	Year Ended			Three Months Ended			Nine Months Ended			Year Ended			Year Ended			Three Months Ended			Nine Months Ended			Year Ended
	December 31						October 1			December 31			December 31						October 1			December 31
	2011			2010			2010			2009			2011			2010			2010			2009
	(Dollars in Millions, Except Percentages)
Costs Recognized in Income
Service cost	$	5		$	2		$	7		$	13		$	6		$	2		$	4		$	7
Interest cost	73			18			56			74			28			6			19			31
Expected return on plan assets	(75		)	(19		)	(55		)	(79		)	(18		)	(5		)	(14		)	(26		)
Amortization of:
Plan amendments	—			—			(2		)	(2		)	—			—			1			2
Losses and other	—			—			2			1			—			—			—			—
Special termination benefits	3			—			1			6			—			—			—			—
Curtailments	(1		)	—			(14		)	(2		)	—			—			—			5
Visteon sponsored plan net pension expense/(income)	5			1			(5		)	11			16			3			10			19
Expense for certain salaried employees whose pensions are partially covered by Ford	—			—			1			10			—			—			—			—
Employee retirement benefit expense/(income) excluding restructuring	$	5		$	1		$	(4	)	$	21		$	16		$	3		$	10		$	19
Retirement benefit related restructuring expenses
Special termination benefits	$	—		$	—		$	2		$	12		$	—		$	—		$	—		$	9
Other	—			—			—			7			—			—			—			—
Total employee retirement benefit related restructuring expenses	$	—		$	—		$	2		$	19		$	—		$	—		$	—		$	9
Fresh-start accounting adjustments	$	—		$	—		$	(138	)	$	—		$	—		$	—		$	(107	)	$	—
Weighted Average Assumptions Used for Expenses
Discount rate for expense	5.50		%	5.30		%	5.90		%	6.35		%	5.95		%	5.40		%	6.10		%	6.05		%
Rate of increase in compensation	3.50		%	3.50		%	3.50		%	3.25		%	3.55		%	3.40		%	3.50		%	3.15		%
Assumed long-term rate of return on assets	7.50		%	7.70		%	7.70		%	8.10		%	5.40		%	5.60		%	6.00		%	6.70		%

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The Company’s expense for health care and life insurance benefits is as follows:

	Health Care and Life Insurance Benefits
	Successor						Predecessor
	Year Ended			Three Months Ended			Nine Months Ended			Year Ended
	December 31						October 1			December 31
	2011			2010			2010			2009
Costs Recognized in Income
Service cost	$	—		$	—		$	—		$	1
Interest cost	—			—			3			18
Plan termination income	(2		)	(146		)	—			—
Reinstatement of benefits	—			—			306			—
Amortization of:
Plan amendments	—			—			(374		)	(75		)
Losses and other	—			—			43			18
Curtailments	—			—			—			(161		)
Settlements	—			—			(1		)	—
Visteon sponsored plan net   postretirement (income)	(2		)	(146		)	(23		)	(199		)
(Income) for certain salaried employees whose benefits are covered by Ford	—			—			(15		)	(8		)
Employee postretirement (income)	$	(2	)	$	(146	)	$	(38	)	$	(207	)
Fresh-start accounting adjustments	$	—		$	—		$	128		$	—
Weighted Average Assumptions Used for Expense
Discount rate for expense	5.00		%	4.65		%	5.65		%	6.05		%
Initial health care cost trend rate	8.50		%	8.00		%	9.00		%	8.33		%
Ultimate health care cost trend rate	5.00		%	5.10		%	5.00		%	5.00		%
Year ultimate health care cost trend rate reached	2017			2015			2017			2014

Curtailments and Settlements

Curtailment and settlement gains and losses are classified in the Company’s consolidated statements of operations as Cost of sales or Selling, general and administrative expenses, as appropriate. During the nine-month Predecessor period ended October 1, 2010 the Company recorded curtailment gains of $14 million in connection with the termination of the salaried employees formerly leased to ACH and other on-going U.S. headcount reductions.

During 2009 the Company recorded significant curtailments and settlements of its employee retirement benefit plans as follows:

• Curtailment gains of $153 million related to the OPEB plans in connection with the elimination of Company-paid medical, prescription drug and life insurance coverage. This plan change eliminated future service for active plan participants, as such the amounts in accumulated other comprehensive income relating to prior plan changes were recognized as curtailment gains.

• Curtailment gains of $10 million associated with the U.S. salaried pension and OPEB plans in connection with employee headcount reductions under previously announced restructuring actions.

• Curtailment losses of $6 million related to the reduction of future service in the UK pension plans in connection with employee headcount reductions in the UK. These losses were partially offset by a $1 million curtailment gain in Mexico related to employee headcount reductions under previously announced restructuring actions. These curtailments reduced the benefit obligations by $2 million.

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Retirement Benefit Related Restructuring Expenses

In addition to normal employee retirement benefit expenses, the Company recorded $2 million for the nine-month Predecessor period ending October 1, 2010 and $28 million for the year ended December 31, 2009, for retirement benefit related restructuring charges. Such charges generally relate to special termination benefits, voluntary termination incentives and pension losses and are the result of various restructuring actions as described in Note 6 “Asset Impairments and Restructuring.”

Benefit Obligations

The Company’s obligation for retirement benefits is as follows:

	Retirement Plans																		Health Care and Life
	U.S. Plans									Non-U.S. Plans									Insurance Benefits
	Successor						Predecessor			Successor						Predecessor			Successor						Predecessor
	Year Ended			Three Months Ended			Nine Months Ended			Year Ended			Three Months Ended			Nine Months Ended			Year Ended			Three Months Ended			Nine Months Ended
	December 31						October 1			December 31						October 1			December 31						October 1
	2011			2010			2010			2011			2010			2010			2011			2010			2010
Change in Benefit Obligation
Benefit obligation — beginning	$	1,360		$	1,407		$	1,301		$	445		$	486		$	435		$	17		$	171		$	66
Service cost	5			2			7			6			2			4			—			—			—
Interest cost	73			18			56			28			6			19			—			—			3
Participant contributions	—			—			—			1			—			—			—			—			—
Reinstatement of liability	—			—			—			—			—			—			—			—			305
Amendments/other	—			—			(21		)	—			—			1			(2		)	(145		)	(187		)
Actuarial loss/(gain)	141			(44		)	136			3			(39		)	49			—			(1		)	(4		)
Special termination benefits	3			—			3			—			—			—			—			—			—
Curtailments, net	(26		)	—			(22		)	—			—			(1		)	—			—			—
Settlements	—			—			(2		)	(1		)	—			—			—			—			—
Foreign exchange translation	—			—			—			(15		)	(6		)	(10		)	—			—			—
Transfers In	—			—			—			17			—			—			—			—			—
Benefits paid	(76		)	(23		)	(51		)	(18		)	(4		)	(11		)	(5		)	(8		)	(12		)
Benefit obligation — ending	$	1,480		$	1,360		$	1,407		$	466		$	445		$	486		$	10		$	17		$	171
Change in Plan Assets
Plan assets — beginning	$	996		$	1,035		$	913		$	337		$	330		$	315		$	—		$	—		$	—
Actual return on plan assets	172			(14		)	174			20			8			23			—			—			—
Sponsor contributions	63			—			1			19			6			11			5			8			12
Participant contributions	—			—			—			1			—			—			—			—			—
Foreign exchange translation	—			—			—			(14		)	(3		)	(8		)	—			—			—
Settlements	—			—			—			(1		)	—			—			—			—			—
Transfers In	—			—			—			4			—			—			—			—			—
Benefits paid/other	(80		)	(25		)	(53		)	(18		)	(4		)	(11		)	(5		)	(8		)	(12		)
Plan assets — ending	$	1,151		$	996		$	1,035		$	348		$	337		$	330		$	—		$	—		$	—
Funded status at end of period	$	(329	)	$	(364	)	$	(372	)	$	(118	)	$	(108	)	$	(156	)	$	(10	)	$	(17	)	$	(171	)
Balance Sheet Classification
Other non-current assets	$	—		$	—		$	—		$	4		$	6		$	5		$	—		$	—		$	—
Accrued employee liabilities	(3		)	(2		)	(2		)	(3		)	(3		)	(3		)	(2		)	(3		)	(31		)
Employee benefits	(326		)	(362		)	(370		)	(119		)	(111		)	(158		)	(8		)	(8		)	(140		)
Other current liabilities	—			—			—			—			—			—			—			(6		)	—
Accumulated other comprehensive (loss) income:
Actuarial loss/(gain)	15			(9		)	—			(40		)	(42		)	—			—			—			—
	$	15		$	(9	)	$	—		$	(40	)	$	(42	)	$	—		$	—		$	—		$	—

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The accumulated benefit obligation for all defined benefit pension plans was $1.90 billion, $1.74 billion, and $1.82 billion at the December 31, 2011, December 31, 2010, and October 1, 2010 measurement dates. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for employee retirement plans with accumulated benefit obligations in excess of plan assets were $1.62 billion, $1.61 billion and $1.19 billion, respectively, at December 31, 2011 and $1.61 billion, $1.56 billion and $1.14 billion, respectively, at December 31, 2010.

Assumptions used by the Company in determining its benefit obligations as of December 31, 2011, December 31, 2010, and October 1, 2010 are summarized in the following table.

	Retirement Plans												Health Care and Life Insurance Benefits
	U.S. Plans						Non-U.S. Plans
	Successor				Predecessor		Successor				Predecessor		Successor				Predecessor
	2011		2010		2010		2011		2010		2010		2011		2010		2010
Weighted Average Assumptions
Discount rate	4.85	%	5.55	%	5.30	%	5.85	%	5.95	%	5.40	%	4.10	%	5.00	%	4.65	%
Expected rate of return on assets	7.00	%	7.50	%	7.70	%	5.05	%	5.40	%	5.55	%	N/A		N/A		N/A
Rate of increase in compensation	N/A		3.50	%	3.50	%	3.45	%	3.55	%	3.45	%	N/A		N/A		N/A
Initial health care cost trend rate	N/A		N/A		N/A		N/A		N/A		N/A		8.00	%	8.50	%	8.00	%
Ultimate health care cost trend rate	N/A		N/A		N/A		N/A		N/A		N/A		5.00	%	5.00	%	5.10	%
Year ultimate health care cost trend rate reached	N/A		N/A		N/A		N/A		N/A		N/A		2018		2017		2015

Accumulated Other Comprehensive (Loss) Income

Components of the net change in Accumulated other comprehensive (loss) income related to the Company’s retirement, health care and life insurance benefit plans on the Company’s consolidated statements of shareholders’ equity for the year ended December 31, 2011, the three months ended December 31, 2010, and the nine months ended October 1, 2010 are as follows:

	Retirement Plans																Health Care and Life Insurance Benefits
	U.S. Plans								Non-U.S. Plans
	Successor					Predecessor			Successor					Predecessor			Successor					Predecessor
	2011		2010			2010			2011		2010			2010			2011		2010			2010
	(Dollars in Millions)
Actuarial loss (gain)	$	23	$	(9	)	$	(5	)	$	2	$	(42	)	$	41		$	—	$	(1	)	$	(4	)
Prior service (credit)/cost	—		—			(21		)	—		—			1			—		(150		)	(187		)
Fresh-start adjustments	—		—			(138		)	—		—			(107		)	—		—			128
Reclassification to net income	1		—			14			—		—			(1		)	—		151			332
	$	24	$	(9	)	$	(150	)	$	2	$	(42	)	$	(66	)	$	—	$	—		$	269

Due to the adoption of fresh-start accounting effective October 1, 2010, there are no amounts included in Accumulated other comprehensive (loss) income as of December 31, 2011 that are expected to be realized in 2012.

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Contributions

During January 2009, the Company reached an agreement with the Pension Benefit Guaranty Corporation (“PBGC”) pursuant to U.S. federal pension law provisions that permit the PBGC to seek protection when a plant closing results in termination of employment for more than 20 percent of employees covered by a pension plan (the “PBGC Agreement”). Under the PBGC Agreement, the Company agreed to accelerate payment of a $10.5 million cash contribution, provide a $15 million letter of credit and provide for a guarantee by certain affiliates of certain contingent pension obligations of up to $30 million. During September 2009 a letter of credit draw event was triggered under the PBGC Agreement and resulted in the draw down of the full $15 million. In December 2011, the Company reached an agreement with the PBGC whereby the $15 million was returned to the Company and immediately contributed to the respective retirement plan. The $15 million cash contribution is designated as a pre-funding amount that will be used to offset the plan's funding needs after June 2013.

On January 9, 2012 the Company completed a contribution of approximately 1.5 million shares of Visteon Corporation common stock valued at approximately $70 million to its two largest U.S. defined benefit plans. This contribution was in excess of the calendar 2012 minimum required contributions for those plans by approximately $10 million.

Additionally, the Company expects to make cash contributions to its U.S. retirement plans and OPEB plans of $3 million and $2 million, respectively. Contributions to non-U.S. retirement plans are expected to be $16 million during 2012. The Company’s expected 2012 contributions may be revised.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the Company plans:

	Pension Benefits				Retirement Health and Life Payments
	U.S.		Non-U.S.
	(Dollars in Millions)
2012	$	72	$	15	$	2
2013	69		17		—
2014	69		17		—
2015	68		18		—
2016	68		19		—
Years 2017 — 2021	354		116		1

Plan Assets and Investment Strategy

Substantially all of the Company’s pension assets are managed by external investment managers and held in trust by third-party custodians. The selection and oversight of these external service providers is the responsibility of the investment committees and their advisors. The selection of specific securities is at the discretion of the investment manager and is subject to the provisions set forth by written investment management agreements and related policy guidelines regarding permissible investments, risk management practices and the use of derivative securities. Derivative securities may be used by investment managers as efficient substitutes for traditional securities, to reduce portfolio risks or to hedge identifiable economic exposures. The use of derivative securities to create economic leverage to engage in unrelated speculation is expressly prohibited. External investment managers are prohibited from investing in any debt or equity securities related to the Company or its affiliates. The Company's equity is permitted when it is the result of a corporate contribution to the plan.

The primary objective of the pension funds is to pay the plans’ benefit and expense obligations when due. Given the relatively long time horizon of these obligations and their sensitivity to interest rates, the investment strategy is intended to improve the funded status of its U.S. and non-U.S. plans over time while maintaining a prudent level of risk. Risk is managed primarily by diversifying each plan’s target asset allocation across equity, fixed income securities and alternative investment strategies, and then maintaining the allocation within a specified range of its target. In addition, diversification across various investment subcategories within each plan is also maintained within specified ranges.

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The Company’s retirement plan asset allocation at December 31, 2011 and 2010 and target allocation for 2012 are as follows:

	Target Allocation				Percentage of Plan Assets
	U.S.		Non-U.S.		U.S.				Non-U.S.
	2012		2012		2011		2010		2011		2010
Equity securities	40	%	9	%	38	%	41	%	9	%	14	%
Fixed income	30	%	83	%	22	%	24	%	83	%	78	%
Alternative strategies	30	%	5	%	34	%	33	%	5	%	5	%
Cash	—	%	3	%	6	%	2	%	3	%	3	%
	100	%	100	%	100	%	100	%	100	%	100	%

The expected long-term rate of return for pension assets has been chosen based on various inputs, including returns projected by various external sources for the different asset classes held by and to be held by the Company’s trusts and its targeted asset allocation. These projections incorporate both historical returns and forward looking views regarding capital market returns, inflation and other variables.

Fair Value Measurements

Retirement plan assets are valued at fair value using various inputs and valuation techniques. A description of the inputs and valuation techniques used to measure the fair value for each class of plan assets is included in Note 20 “Fair Value Measurements.”

NOTE 15. Stock-Based Compensation

Successor Stock-Based Compensation Plans

The Visteon Corporation 2010 Incentive Plan (the “2010 Incentive Plan”), was adopted on the Effective Date and provides for the grant of up to 5.6 million shares of Successor common stock as incentive and nonqualified stock options ("stock options"), stock appreciation rights (“SARs”), performance stock rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and stock and various other rights based on common stock. Additionally, the Company adopted the Visteon Corporation Non-Employee Director Stock Unit Plan, which provides for the automatic annual grant of RSUs to non-employee directors. RSUs awarded under the Non-Employee Director Stock Unit Plan vest immediately but are not paid out until after the participant terminates service as a non-employee director of the Company.

Upon exercise of stock based compensation awards that settle in shares of Company stock, the Company's policy is to deliver such shares utilizing available treasury shares, purchasing treasury shares or issuing new shares. Delivery of shares may be on a gross settlement basis or on a net settlement basis, as determined by the recipient.

Restricted Stock Awards and Restricted Stock Units

The grant date fair value of RSAs and RSUs is the average of the highest and lowest prices at which the Company's common stock was traded on the New York Stock Exchange on the date of grant. RSAs are settled in shares of the Company's common stock upon the lapse of restrictions on the underlying shares while RSUs are generally settled in cash upon scheduled vesting dates and are recorded as a liability representing only the vested portion of the obligation, based on the period-ending market prices of the Company's common stock.

The Company granted 1,246,000 shares of restricted common stock during the fourth quarter of 2010, under the 2010 Incentive Plan at a grant date fair value of $57.93 per share. The grant date fair value was estimated based on the weighted average trading prices of the Company’s common stock for the five business days immediately following the Effective Date. The Company recorded compensation expense of $31 million and $20 million for the year ended December 31, 2011 and the three-month Successor period ended December 31, 2010, respectively. Unrecognized compensation expense at December 31, 2011 was $21 million for non-vested RSAs and will be recognized on a weighted average basis over the remaining vesting period of approximately 1.75 years.

The Company granted 1,000 and 421,000 restricted stock units under the 2010 Incentive Plan during the year ended December 31, 2011 and the three months ended December 31, 2010, respectively, at weighted average grant date fair values $49.83 per share and $57.93 per share, respectively. The Company recorded compensation expense of $7 million and $9 million for the year ended

42

December 31, 2011 and the three-month Successor period ended December 31, 2010, respectively with cash payments of $4 million during the year ended December 31, 2011. At December 31, 2011 approximately $4 million and $5 million is recorded under the captions Accrued employee liabilities and Employee benefits relating to RSUs. Unrecognized compensation expense at December 31, 2011 was $3 million for non-vested RSUs and will be recognized on a weighted average basis over the remaining vesting period or approximately 1.35 years.

A summary of activity, including award grants, vesting and forfeitures is provided below.

	RSAs		RSUs		Weighted Average Grant Date Fair Value
	(In Thousands)
Non-vested at October 1, 2010	—		—		$	—
Granted	1,246		421		$	57.93
Vested	(211	)	(64	)	$	57.93
Forfeited	—		—		$	—
Non-vested at December 31, 2010	1,035		357		$	57.93
Granted	—		1		$	49.83
Vested	(345	)	(93	)	$	57.93
Forfeited	(34	)	(8	)	$	57.93
Non-vested at December 31, 2011	656		257		$	57.92

Stock Options and Stock Appreciation Rights

Stock options and SARs have an exercise price equal to the average of the highest and lowest prices at which the Company's common stock was traded on the New York Stock Exchange on the date of grant. The fair value of stock options is determined at the date of grant using the Black-Scholes option pricing model and the fair value of SARs is determined at each period-end using the Black-Scholes option pricing model. Stock options are settled in shares of the Company's common stock upon exercise and are recorded in the Company's consolidated balance sheets under the caption Additional paid-in capital. SARs are settled in cash and result in the recognition of a liability representing the vested portion of the obligation.

The Black-Scholes option pricing model requires management to make various assumptions including the expected term, expected volatility, risk free interest rate and dividend yield. The expected term represents the period of time that granted stock based compensation awards are expected to be outstanding and is estimated based on considerations including the vesting period, contractual term and anticipated employee exercise patterns. Expected volatility is calculated based on a rolling average of the daily stock closing prices of a peer group of companies with a period equal to the expected life of the award. The peer group of companies was used due to the relatively short history of the Company's common stock. The peer group was established using the criteria of similar industry (utilizing product mix), size (measured by market capitalization), leverage (measured using debt to equity ratio) and length of history. The risk-free rate is based on the U.S. Treasury yield curve in relation to the contractual life of the stock-based compensation instrument. The dividend yield is based on historical patterns and future expectations for Company dividends. Stock options become exercisable on a ratable basis of the vesting period and will expire 10 years after the grant date. Weighted average assumptions used to estimate fair value of awards during the year ended and as of December 31, 2011 are as follows:

	Stock Options		SARs
Expected term (in years)	6		6
Expected volatility	46.37	%	50.30	%
Risk-free interest rate	2.59	%	0.98	%
Expected dividend yield	—	%	—	%

During 2011 the Company granted 482,000 non-qualified stock options under the 2010 Incentive Plan. These stock options have a 3 year vesting period and an expiration date 10 years from the date of grant. The weighted average grant date fair value of the stock options granted during 2011 was $34.45. The Company recorded compensation expense of $8 million for the year ended December 31, 2011. Unrecognized compensation expense for non-vested stock options at December 31, 2011 was $9 million and

43

will be recognized on a weighted average basis over the remaining vesting period of approximately 1.80 years.

During 2011, the Company granted 94,000 SARs under the 2010 Incentive Plan. These SARs have a 3 year vesting period and an expiration date 10 years from the date of grant. The weighted average fair value of SARs granted during 2011 was $17.58. At December 31, 2011 the Company recorded approximately $1 million under the caption Employee benefits. During the year ended December 31, 2011, the Company recorded compensation expense of $1 million. Unrecognized compensation expense at December 31, 2011 was less than $1 million for non-vested SARs and will be recognized on a weighted average basis over the remaining vesting period of approximately 1.45 years.

A summary of activity, including award grants, vesting and forfeitures is provided below.

	Stock Options		Weighted Average Exercise Price		SARs		Weighted Average Exercise Price
	(In Thousands)				(In Thousands)
Outstanding at December 31, 2010	—		$	—	—		$	—
Granted	482		$	72.60	94		$	74.08
Exercised	—		$	—	—		$	—
Forfeited or expired	(92	)	$	74.08	(10	)	$	74.08
Outstanding at December 31, 2011	390		$	72.26	84		$	74.08

	Stock Options and SARs Outstanding
	Number Outstanding	Weighted Average Remaining Life	Weighted Average Exercise Price
	(In Thousands)	(In Years)
$45.01 - $55.00	15	9.81	$	48.85
$55.01 - $65.00	24	9.45	$	60.97
$65.01 - $75.08	435	9.25	$	74.08
	474

Predecessor Stock-Based Compensation

Pursuant to the Plan, any shares of Predecessor common stock and any options, warrants or rights to purchase shares of Predecessor common stock or other equity securities outstanding prior to the Effective Date were canceled. Prior to cancellation, the Company recorded stock-based compensation expense for Predecessor stock-based compensation plans of $1 million during both the nine-month Predecessor period ended October 1, 2010 and the year ended December 31, 2009. Various stock-based compensation awards were granted under Predecessor plans, including stock options, SARs, RSAs and RSUs.

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A summary of activity, including award grants, exercises and forfeitures is provided below for stock options and SARs.

	Stock Options		Weighted Average Exercise Price		SARs		Weighted Average Exercise Price
	(In Thousands)				(In Thousands)
Outstanding at December 31, 2008	11,999		$	10.70	12,897		$	6.07
Granted	—		$	—	—		$	—
Exercised	—		$	—	—		$	—
Forfeited or expired	(1,493	)	$	10.64	(2,355	)	$	8.27
Outstanding at December 31, 2009	10,506		$	10.70	10,542		$	5.60
Forfeited, expired or cancelled	(10,506	)	$	10.70	(10,542	)	$	5.60
Outstanding at October 1, 2010	—		$	—	—		$	—

A summary of activity, including award grants, vesting and forfeitures is provided below for RSAs and RSUs.

	RSAs		RSUs		Weighted Average Grant Date Fair Value
	(In Thousands)
Non-vested at December 31, 2008	1,180		4,146		$	4.60
Granted	—		—		$	—
Vested	(42	)	(1,678	)	$	6.08
Forfeited	(204	)	(357	)	$	4.49
Non-vested at December 31, 2009	934		2,111		$	3.80
Vested	(15	)	(5	)	$	7.05
Forfeited or cancelled	(919	)	(2,106	)	$	3.39
Non-vested at October 1, 2010	—		—		$	—

Note 16. Other (Income) Expense, Net

Other (income) expense, net consists of the following:

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months  Ended October 1		Year Ended December 31
	2011			2010			2010		2009
	(Dollars in Millions)
UK Administration recovery	$	(18	)	$	—		$	—	$	—
Transformation costs	7			—			—		—
Reorganization-related costs, net	8			14			—		—
(Gain) loss on sale of assets	(2		)	(1		)	22		—
Gain on sale-leaseback	—			—			—		(20		)
	$	(5	)	$	13		$	22	$	(20	)

Twelve Months Ended December 31, 2011

In December 2011, the Company received an initial distribution of $18 million, in connection with the liquidation and recovery process under the UK Administration, these amounts primarily represented recoveries on amounts owed to Visteon for various trade and loan receivables due from the UK Debtor. During 2011, the Company continued its efforts to transform its business portfolio and to rationalize its cost structure including, among other things, the investigation of potential transactions for the sale,

45

merger or other combination of certain businesses. Business transformation costs of $7 million incurred during 2011 relate principally to financial and advisory fees. The Company recorded reorganization-related costs of $8 million for the year ended December 31, 2011, which are comprised of amounts directly associated with the reorganization under Chapter 11, primarily related to professional service fees.

Three Month Successor Ended December 31, 2010

The Company recorded reorganization-related costs of $14 million for the year ended December 31, 2011, which are comprised of amounts directly associated with the reorganization under Chapter 11, primarily related to professional service fees.

Nine Month Predecessor Period Ended October 1, 2010

On March 8, 2010, the Company completed the sale of substantially all of the assets of Atlantic Automotive Components, L.L.C., (“Atlantic”), to JVIS Manufacturing LLC, an affiliate of Mayco International LLC. The Company recorded losses of approximately $21 million in connection with the sale of Atlantic assets.

Twelve Months Ended December 31, 2009

During 2009 and pursuant to Section 365 of the Bankruptcy Code, the Company rejected a lease arrangement that was subject to a previous sale-leaseback transaction for which the recognition of transaction gains was deferred due to the Company’s continuing involvement with the associated property. The Company’s continuing involvement was effectively ceased in connection with the December 24, 2009 lease termination resulting in recognition of the deferred gain of $30 million, which was partially offset by a loss of $10 million associated with the remaining net book value of leasehold improvements associated with the facility.

NOTE 17. Income Taxes

Details of the Company's income tax provision, including amounts associated with the Company's discontinued operations of $5 million, $17 million, and $8 million for the three-month Successor period ended December 31, 2010, nine-month Predecessor period ended October 1, 2010 and the year ended December 31, 2009, respectively, are provided in the table below:

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009
	(Dollars in Millions)
U.S	$	(141	)	$	21		$	425		$	(1,250	)
Non-U.S	254			62			597			1,434
Total income before income taxes	$	113		$	83		$	1,022		$	184
Current tax provision
U.S. federal	$	1		$	1		$	5		$	4
Non-U.S	126			28			80			90
U.S. state and local	1			(1		)	3			1
Total current	128			28			88			95
Deferred tax provision (benefit)
U.S. federal	1			(1		)	2			5
Non-U.S	(2		)	(8		)	42			(16		)
U.S. state and local	—			—			(1		)	(4		)
Total deferred	(1		)	(9		)	43			(15		)
Total provision for income taxes	$	127		$	19		$	131		$	80

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A summary of the differences between the provision for income taxes (including amounts associated with the Company's discontinued operations) calculated at the U.S. statutory tax rate of 35% and the consolidated provision for income taxes is shown below:

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009
	(Dollars in Millions)
Income before income taxes, excluding equity in net income of non-consolidated affiliates, multiplied by the U.S. statutory rate of 35%	$	40		$	29		$	358		$	64
Effect of:
Impact of foreign operations, including withholding taxes	52			(4		)	(4		)	(3		)
State and local income taxes	4			(1		)	1			(22		)
Tax reserve adjustments	22			1			(1		)	(52		)
Impact of U.K. Administration	—			—			—			(444		)
Change in valuation allowance	202			(6		)	(753		)	521
Fresh-start accounting adjustments and reorganization items, net	(215		)	—			553			22
Impact of tax law change	18			—			—			10
Liquidation of consolidated foreign affiliate	—			—			—			(17		)
Other	4			—			(23		)	1
Provision for income taxes	$	127		$	19		$	131		$	80

The Company’s provision for income tax for continuing operations was $127 million for year ended December 31, 2011 and reflects income tax expense related to those countries where the Company is profitable, accrued withholding taxes, ongoing assessments related to the recognition and measurement of uncertain tax benefits, the inability to record a tax benefit for pre-tax losses in the U.S. and certain other jurisdictions, and other non-recurring tax items. Included in the impact of foreign operations items are non-U.S. withholding taxes of $34 million, U.S. and non-U.S. income taxes related to the planned repatriation of earnings from its unconsolidated and certain consolidated foreign affiliates of $55 million, offset by favorable foreign rate differentials of $37 million. The U.S. income tax consequences in connection with the Company's earnings from these affiliates of approximately $56 million were offset with the U.S. valuation allowance. The fresh-start accounting adjustments and reorganization items include true-up adjustments to the net deferred tax assets related to the derecognition of U.S. tax loss and credit carryforwards as a result of the annual limitation imposed under IRC Sections 382 and 383, the legal entity restructuring approved as part of the Plan of Reorganization which utilized U.S. tax loss and credit carryforwards pre-emergence and other matters, all of which impact both the underlying deferred taxes and the related valuation allowances. The impact of tax law changes reflects an increase in the tax rate in Korea which increased the Company's net deferred tax liabilities by $6 million, as well as tax law changes in Michigan resulting in the elimination of $12 million in net operating loss carryforwards which were fully offset by the related valuation allowance.

The Company’s provision for income tax for continuing operations was $24 million for the three-month Successor period ended December 31, 2010 and was $148 million for the nine-month Predecessor period ended October 1, 2010. Income tax provisions for both the Successor and the Predecessor periods during 2010 reflect income tax expense related to those countries where the Company is profitable, accrued withholding taxes, ongoing assessments related to the recognition and measurement of uncertain tax benefits, the inability to record a tax benefit for pre-tax losses in the U.S. and certain other jurisdictions, and other non-recurring tax items. The 2010 Predecessor period includes $47 million of deferred tax expense associated with the adoption of fresh-start accounting, (see Note 4, “Fresh-Start Accounting”). Included in the fresh-start accounting adjustments and reorganization items are net deferred tax adjustments primarily related to the derecognition of U.S. tax loss and credit carryforwards as a result of the annual limitation imposed under IRC Sections 382 and 383, a legal entity restructuring approved as part of the Plan of Reorganization which utilized U.S. tax loss and credit carryforwards pre-emergence and other matters, all of which impact both the underlying deferred taxes and the related valuation allowances.

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The Company’s 2009 income tax provision for continuing operations includes income tax of $72 million related to certain countries where the Company is profitable, accrued withholding taxes and the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign countries to the extent not offset by other categories of income. The 2009 income tax provision also includes a $56 million benefit associated with a decrease in unrecognized tax benefits, including interest and penalties, as a result of closing audits in Portugal related to the 2006 and 2007 tax years which resulted in a cash settlement of approximately $3 million, completing transfer pricing studies in Asia and reflecting the expiration of various legal statutes of limitations. Included in the deconsolidation gain related to the UK Administration is $18 million of tax expense representing the elimination of disproportionate tax effects in other comprehensive income as all items of other comprehensive income related to Visteon UK Limited have been derecognized. Additionally, as a result of the UK Administration, approximately $1.3 billion of income attributed to the UK jurisdiction is not subject to tax in the UK and further, the Company’s UK tax attributes carrying a full valuation allowance have been effectively transferred to the UK Administrators. In the U.S. jurisdiction, the tax benefits from the approximately $1.2 billion of losses attributable to the UK Administration, and the liquidation of the Company’s affiliate in Italy, were offset with U.S. valuation allowances.

Deferred income taxes and related valuation allowances

Deferred income taxes are provided for temporary differences between amounts of assets and liabilities for financial reporting purposes and the basis of such assets and liabilities as measured by tax laws and regulations, as well as net operating loss, tax credit and other carryforwards. The Company has recorded a deferred tax liability, net of valuation allowances, for U.S. and non-U.S. income taxes and non-U.S. withholding taxes of approximately $74 million as of December 31, 2011 on the undistributed earnings of certain consolidated and unconsolidated foreign affiliates as such earnings are intended to be repatriated in the foreseeable future. The Company has not provided for deferred income taxes or foreign withholding taxes on the remainder of undistributed earnings from certain consolidated foreign affiliates because such earnings are considered to be permanently reinvested. It is not practicable to determine the amount of deferred tax liability on such earnings as the actual tax liability, if any, is dependent on circumstances existing when remittance occurs.

Deferred tax assets are required to be reduced by a valuation allowance if, based on all available evidence, both positive and negative, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. Significant management judgment is required in determining the Company’s valuation allowance. In making this assessment, management considers evidence including, historical and projected financial performance, as well as the nature, frequency and severity of recent losses along with any other pertinent information.

In determining the need for a valuation allowance, the Company also evaluates existing valuation allowances. Based upon this assessment, it is reasonably possible that the existing valuation allowance on approximately $18 million of deferred tax assets could be eliminated during 2012. Any decrease in the valuation allowance would result in a reduction in income tax expense in the quarter in which it is recorded. During the third quarter of 2011, the Company recorded a tax benefit of $8 million related to the reversal of a full valuation allowance with respect to the deferred tax assets of a foreign subsidiary. During the fourth quarter of 2011, the Company recorded a $66 million impairment charge attributable to the Company's Lighting assets. Approximately $16 million of the impairment charge related to jurisdictions where deferred tax assets are fully offset by a valuation allowance. The remaining $50 million related to other foreign jurisdictions where the Company concluded, based on the available evidence, it was more likely than not that the deferred tax assets associated with these jurisdictions would not be realized. During the fourth quarter of 2009, the Company concluded, based on the weight of available evidence that the deferred tax assets associated with its operations in Spain required a full valuation allowance which resulted in a charge to income tax expense of $12 million.

The need to maintain valuation allowances against deferred tax assets in the U.S. and other affected countries will cause variability in the Company’s effective tax rate. The Company will maintain full valuation allowances against deferred tax assets in the U.S. and applicable foreign countries, including Germany and France, until sufficient positive evidence exists to reduce or eliminate the valuation allowances. At December 31, 2011, the Company had net deferred tax assets, net of valuation allowances, of approximately $31 million in certain foreign jurisdictions, the realization of which is dependent on generating sufficient taxable income in future periods. While the Company believes it is more likely than not that these deferred tax assets will be realized, failure to achieve taxable income targets which considers, among other sources, future reversals of existing taxable temporary differences, would likely result in an increase in the valuation allowance in the applicable period.

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The components of deferred income tax assets and liabilities are as follows:

	December 31
	2011			2010
	(Dollars in Millions)
Deferred tax assets
Employee benefit plans	$	134		$	139
Capitalized expenditures for tax reporting	111			135
Net operating losses and carryforwards	1,174			1,097
All other	253			279
Subtotal	1,672			1,650
Valuation allowance	(1,657		)	(1,463		)
Total deferred tax assets	$	15		$	187
Deferred tax liabilities
Depreciation and amortization	$	1		$	74
All other	153			257
Total deferred tax liabilities	154			331
Net deferred tax liabilities	$	139		$	144

At December 31, 2011, the Company had available non-U.S. net operating loss carryforwards and tax credit carryforwards of $1.3 billion and $9 million, respectively, which have carryforward periods ranging from 5 years to indefinite. The Company had available U.S. federal net operating loss carryforwards of $1.2 billion at December 31, 2011, which will expire at various dates between 2028 and 2031. U.S. foreign tax credit carryforwards are $320 million at December 31, 2011. These credits will begin to expire in 2015. The Company had available tax-effected U.S. state operating loss carryforwards of $19 million at December 31, 2011, which will expire at various dates between 2016 and 2031.

As a result of the annual limitation imposed under IRC Sections 382 and 383 on the utilization of net operating losses, credit carryforwards and certain built-in losses (collectively referred to as “tax attributes”) following an ownership change, it was determined that approximately $825 million of U.S. tax attributes will expire unutilized. The U.S. tax attributes are presented net of these limitations and uncertain tax positions. In addition, subsequent changes in ownership for purposes of IRC Sections 382 and 383 could further diminish the Company’s use of remaining U.S. tax attributes. As of the end of 2011, valuation allowances totaling $1.7 billion have been recorded against the Company’s deferred tax assets where recovery of the deferred tax assets is unlikely. Of this amount, $1.2 billion relates to the Company’s deferred tax assets in the U.S. and $486 million relates to deferred tax assets in certain foreign jurisdictions, including Germany, a pass-through entity for U.S. tax purposes.

Unrecognized Tax Benefits

As of December 31, 2011 and 2010, the Company’s gross unrecognized tax benefits were $123 million and $131 million, respectively, of which the amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate were approximately $69 million and $74 million, respectively. The gross unrecognized tax benefit differs from that which would impact the effective tax rate due to uncertain tax positions embedded in other deferred tax attributes carrying a full valuation allowance. Since the uncertainty is expected to be resolved while a full valuation allowance is maintained, these uncertain tax positions should not impact the effective tax rate in current or future periods. During 2011, the Company decreased its gross unrecognized tax benefits to reflect the remeasurement of uncertain tax positions related to ongoing audits in Europe, the closing of statutes for certain tax positions taken in prior years, and foreign currency. These decreases were partially offset by new tax positions expected to be taken in future tax filings, primarily related to the allocation of costs among the Company's global operations.

The Company recognizes interest and penalties with respect to unrecognized tax benefits as a component of income tax expense. Accrued interest and penalties were $28 million and $22 million as of December 31, 2011 and 2010, respectively. Estimated interest and penalties related to the underpayment of income taxes represented a net tax benefit of $3 million during the three-month Successor period ended December 31, 2010.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits (including amounts related to the discontinued operations) is as follows:

	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1
	2011			2010			2010
	(Dollars in Millions)
Beginning balance	$	131		$	126		$	190
Tax positions related to current period
Additions	17			7			13
Tax positions related to prior periods
Additions	3			3			2
Reductions	(21		)	(1		)	(58		)
Settlements with tax authorities	(1		)	(1		)	—
Lapses in statute of limitations	(1		)	(2		)	(18		)
Effect of exchange rate changes	(5		)	(1		)	(3		)
Ending balance	$	123		$	131		$	126

The Company and its subsidiaries have operations in every major geographic region of the world and are subject to income taxes in the U.S. and numerous foreign jurisdictions. Accordingly, the Company files tax returns and is subject to examination by taxing authorities throughout the world, including such significant jurisdictions as Korea, India, Portugal, Spain, Czech Republic, Hungary, Mexico, China, Brazil, Germany, France and the United States. With certain exceptions, the Company is no longer subject to U.S. federal tax examinations for years before 2008 or state and local, or non-U.S. income tax examinations for years before 2002.

It is reasonably possible that the amount of the Company’s unrecognized tax benefits may change within the next twelve months as a result of settlement of ongoing audits, for changes in judgment as new information becomes available related to positions both already taken and those expected to be taken in tax returns, primarily related to transfer pricing-related initiatives, or from the closure of tax statutes. Given the number of years, jurisdictions and positions subject to examination, the Company is unable to estimate the full range of possible adjustments to the balance of unrecognized tax benefits. However, the Company believes it is reasonably possible it will reduce the amount of its existing unrecognized tax benefits impacting the effective tax rate by $1 million to $3 million million due to the lapse of statute of limitations.

Emergence from Chapter 11 Proceedings in 2010

Pursuant to the Plan, certain elements of the Company’s pre-petition indebtedness were extinguished. Absent an exception, the discharge of a debt obligation in a bankruptcy proceeding for an amount less than its adjusted issue price (as defined for tax purposes) creates cancellation of indebtedness income (“CODI”) that is excludable from taxable income for U.S. tax purposes. However, certain income tax attributes are reduced by the amount of CODI in prescribed order as follows: (a) net operating losses (“NOL”) for the year of discharge and NOL carryforwards; (b) most credit carryforwards, including the general business credit and the minimum tax credit; (c) net capital losses for the year of discharge and capital loss carryforwards; (d) the tax basis of the debtor’s assets.

Internal Revenue Code (“IRC”) Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. Generally, under a special rule applicable to ownership changes occurring in connection with a Chapter 11 plan of reorganization, the annual limitation amount is equal to the value of the company as of the date of emergence multiplied by a long-term tax exempt federal rate. With the filing of the 2010 federal U.S. tax return, the Company reported excludable CODI that reduced its tax attributes by approximately $60 million and expects an annual limitation under IRC Sections 382 and 383 as a result of an ownership change of approximately $120 million. As a result, the Company’s future U.S. taxable income may not be fully offset by its pre-emergence net operating losses and other tax attributes if such income exceeds the annual limitation, and the Company may incur a tax liability with respect to such income. In addition, subsequent changes in ownership for purposes of IRC Sections 382 and 383 could further diminish the Company’s use of net operating losses and other tax attributes.

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NOTE 18. Shareholders’ Equity and Non-controlling Interests

On October 1, 2010 and in connection with the Plan, the Company cancelled all outstanding shares of Predecessor common stock and any options, warrants or rights to purchase shares of such common stock or other equity securities outstanding prior to the Effective Date. Additionally, the Company issued shares of Successor common stock on the Effective Date and in accordance with the Plan, as follows:

• Approximately 45,000,000 shares of Successor common stock to certain investors in a private offering exempt from registration under the Securities Act for proceeds of approximately $1.25 billion;

•     Approximately 2,500,000 shares of Successor common stock to holders of pre-petition notes, including 7% Senior Notes due 2014, 8.25% Senior Notes due 2010, and 12.25% Senior Notes due 2016; holders of the 12.25% senior notes also received warrants, which expire ten years from issuance, to purchase up to 2,355,000 shares of Successor common stock at an exercise price of $9.66 per share (“Ten Year Warrants”);

•     Approximately 1,000,000 shares of Successor common stock and warrants, which expire five years from issuance, to purchase up to 1,552,774 shares of Successor common stock at an exercise price of $58.80 per share (“Five Year Warrants”) for Predecessor common stock interests;

•     Approximately 1,200,000 shares of Successor restricted stock issued to management under a post-emergence share-based incentive compensation program.

Treasury Stock

The Company held approximately 500,000 shares of Successor common stock in treasury at December 31, 2010 for use in satisfying obligations under employee incentive compensation arrangements. This amount increased to approximately 640,000 at December 31, 2011, primarily due to the net settlement of shares following employee vesting's of restricted stock awards. The Company values common stock held in treasury using the average cost method.

Warrants

The Ten Year Warrants may be net share settled and are recorded as permanent equity in the Company’s consolidated balance sheets with 476,034 warrants outstanding at December 31, 2011. The Ten Year Warrants were valued at $15.00 per share on October 1, 2010 using the Black-Scholes valuation model. Significant assumptions used in determining the fair value of such warrants at issuance included share price volatility and risk-free rate of return. The volatility assumption was based on the implied volatility and historical realized volatility for comparable companies. The risk-free rate assumption was based on U.S. Treasury bond yields.

The Five Year Warrants may be net share settled and are recorded as permanent equity in the Company’s consolidated balance sheets with 1,549,345 warrants outstanding at December 31, 2011. The Five Year Warrants were valued at $3.62 per share on October 1, 2010 using the Black-Scholes valuation model. Significant assumptions used in determining the fair value of such warrants at issuance included share price volatility and risk-free rate of return. The volatility assumption was based on the implied volatility and historical realized volatility for comparable companies. The risk-free rate assumption was based on U.S. Treasury bond yields.

If the Company pays or declares a dividend or makes a distribution on common stock payable in shares of its common stock, the number of shares of common stock or other shares of common stock for which a Warrant (the Five Year Warrants and Ten Year Warrants, collectively) is exercisable shall be adjusted so that the holder of each Warrant shall be entitled upon exercise to receive the number of shares of common stock that such warrant holder would have owned or have been entitled to receive after the happening of any of the events described above, had such Warrant been exercised immediately prior to the happening of such event. In addition, if the Company pays to holders of the Successor common stock an extraordinary dividend (as defined in each Warrant Agreement), then the Exercise Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, dollar-for-dollar by the fair market value of any securities or other assets paid or distributed on each share of Successor common stock in respect of such extraordinary dividend.

Other

On January 9, 2012, the Company contributed 1,453,489 shares of company stock valued at approximately $70 million into its two largest U.S. defined benefit pension plans.

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Accumulated Other Comprehensive (Loss) Income

The Accumulated other comprehensive (loss) income (“AOCI”) category of Shareholders’ equity, net of tax, includes:

	December 31
	2011			2010
	(Dollars in Millions)
Foreign currency translation adjustments	$	(41	)	$	1
Pension and other postretirement benefit adjustments	25			51
Unrealized hedging losses and other	(9		)	(2		)
Total accumulated other comprehensive (loss) income	$	(25	)	$	50

Non-controlling Interests

Non-controlling interests in the Visteon Corporation economic entity are as follows:

	December 31
	2011		2010
	(Dollars in Millions)
Halla Climate Control Corporation	$	660	$	633
Duckyang Industry Co. Ltd	—		28
Visteon Interiors Korea Ltd	20		19
Other	10		10
Total noncontrolling interests	$	690	$	690

The Company holds a 70% interest in Halla Climate Control Corporation (“Halla”), a consolidated subsidiary. Halla is headquartered in South Korea with operations in North America, Europe and Asia. Halla designs, develops and manufactures automotive climate control products, including air-conditioning systems, modules, compressors, and heat exchangers for sale to global OEMs.

Duckyang Industry Co., Ltd, Share Sale

On October 31, 2011, Visteon sold a 1% interest in Duckyang Industry Co., Ltd. ("Duckyang") and conveyed a board seat to the other partner (the "Transaction") . Prior to the Transaction, Visteon held approximately 51% of Duckyang's total shares outstanding and maintained board control. As a result of the Transaction, Visteon no longer controls the business and therefore, total assets of $217 million, total liabilities of $159 million, non-controlling interest of $29 million and related amounts deferred as accumulated other comprehensive income of $1 million, were deconsolidated from the Company's balance sheet. The Company's remaining 50% interest was recorded as equity in net assets of non-consolidated affiliates at a fair value of $33 million as of the Transaction date, which resulted in a $4 million remeasurement gain. The fair value was determined using certain financial analysis methodologies including the comparable companies analysis and the discounted cash flow analysis. The fair value measurement is classified within level 3 of the fair value hierarchy. The net impact of the deconsolidation and establishing the fair value of the outstanding ownership interest resulted in an $8 million deconsolidation gain. The consolidated statement of operations includes net sales of $588 million and cost of sales of $580 million associated with Duckyang for the first ten months that they were consolidated in 2011.

NOTE 19. Earnings Per Share

Basic net earnings per share of common stock is calculated by dividing reported net income attributable to Visteon by the average number of shares of common stock outstanding during the applicable period.

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	Successor					Predecessor
	Year  Ended December 31			Three Months Ended December 31		Nine Months Ended October 1		Year Ended December 31
	2011			2010		2010		2009
	(Dollars in Millions, Except Per Share Amounts)
Numerator:
Income from continuing operations	$	136		$	86	$	926	$	171
Loss (income) from discontinued operations	(56		)	—		14		(43		)
Net income attributable to Visteon Corporation	$	80		$	86	$	940	$	128
Denominator:
Average common stock outstanding	51.2			50.2		130.3		130.4
Dilutive effect of warrants	0.8			1.5		—		—
Diluted shares	52.0			51.7		130.3		130.4
Basic and Diluted Per Share Data:
Earnings per share attributable to Visteon Corporation:
Basic earnings per share
Continuing operations	$	2.65		$	1.71	$	7.10	$	1.31
Discontinued operations	(1.09		)	—		0.11		(0.33		)
Basic earnings attributable to Visteon Corporation	$	1.56		$	1.71	$	7.21	$	0.98
Diluted earnings per share
Continuing operations	$	2.62		$	1.66	$	7.10	$	1.31
Discontinued operations	(1.08		)	—		0.11		(0.33		)
Diluted earnings attributable to Visteon Corporation	$	1.54		$	1.66	$	7.21	$	0.98

Successor

Unvested restricted stock is a participating security and is therefore included in the computation of basic earnings per share under the two-class method. Options to purchase less than 1 million shares of common stock at exercise prices ranging from $44.55 per share to $74.08 per share were outstanding, but were not included in the computation of diluted earnings per share as inclusion of such items would be anti-dilutive.

Diluted earnings per share is computed using the treasury stock method, dividing net income by the average number of shares of common stock outstanding, including the dilutive effect of the Warrants, using the average share price during the period. There is no difference in diluted earnings per share between the two-class and treasury stock method.

Predecessor

Options to purchase 10 million shares of common stock at exercise prices ranging from $3.63 per share to $17.46 per share and warrants to purchase 25 million shares were outstanding for 2009 but were not included in the computation of diluted earnings per share as inclusion of such items would be anti-dilutive. The options were cancelled effective October 1, 2010.

NOTE 20. Fair Value Measurements

Fair Value Hierarchy

Financial assets and liabilities are categorized, based on the inputs to the valuation technique, into a three-level fair value hierarchy. The fair value hierarchy gives the highest priority to the quoted prices in active markets for identical assets and liabilities and lowest priority to unobservable inputs.

• Level 1 – Financial assets and liabilities whose values are based on unadjusted quoted market prices for identical assets and

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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.

The following tables present the Company’s fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis:

	December 31, 2011
	(Dollars in Millions)
Asset Category	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Retirement plan assets	$	474	$	560	$	466	$	1,500
Liability Category
Foreign currency instruments	$	—	$	16	$	—	$	16

	December 31, 2010
	(Dollars in Millions)
Asset Category	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Retirement plan assets	$	383	$	488	$	462	$	1,333
Foreign currency instruments	—		1		—		1
Total	$	383	$	489	$	462	$	1,334
Liability Category
Interest rate swaps	$	—	$	1	$	—	$	1

Interest Rate Swaps and Foreign Currency Instruments

These financial instruments are valued under an income approach using industry-standard models that consider various assumptions, including time value, volatility factors, current market and contractual prices for the underlying and non-performance risk. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Other Financial Instruments

The carrying amounts of all other financial instruments approximate their fair values because of the relatively short-term maturity of these instruments.

Items Measured at Fair Value on a Non-recurring Basis

In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. Assets measured at fair value on a non-recurring basis during the year ended December 31, 2011 include the retained interest in Duckyang and the Lighting assets subject to the impairment analysis, refer to Note 18, “Shareholders' Equity and Non-controlling Interests" and Note 6, "Asset Impairments and Restructuring”, respectively for further information on these events. For further information on the assets and liabilities measured at fair value on a non-recurring basis during the Predecessor period ended October 1, 2010, refer to Note 4, “Fresh-Start Accounting.”

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Retirement Plan Assets

Retirement plan assets categorized as Level 1 include the following:

• Cash and cash equivalents, which consist of U.S. and foreign currencies held by designated trustees. Foreign currencies held are reported in terms of U.S. dollars based on currency exchange rates readily available in active markets.

• Registered investment companies are mutual funds that are registered with the Securities and Exchange Commission. Mutual fund shares are traded actively on public exchanges. The share prices for mutual funds are published at the close of each business day. Mutual funds contain both equity and fixed income securities.

• Common and preferred stock include equity securities issued by U.S. and non-U.S. corporations. Common and preferred securities are traded actively on exchanges and price quotes for these shares are readily available.

• Other investments include several miscellaneous assets and liabilities and are primarily comprised of liabilities related to pending trades and collateral settlements.

Retirement plan assets categorized as Level 2 include the following:

• Treasury and government securities consist of bills, notes, bonds, and other fixed income securities issued directly by a non-U.S. treasury or by government-sponsored enterprises. These assets are valued using observable inputs.

• Common trust funds are comprised of shares or units in commingled funds that are not publicly traded. The underlying assets in these funds (equity securities, fixed income securities and commodity-related securities) are publicly traded on exchanges and price quotes for the assets held by these funds are readily available.

• Liability Driven Investing (“LDI”) is an investment strategy that utilizes swaps to hedge discount rate volatility. The swaps are collateralized on a daily basis resulting in counterparty exposure that is limited to one day’s activity. Swaps are a derivative product, utilizing a pricing model to calculate market value.

• Corporate debt securities consist of fixed income securities issued by non-U.S. corporations. These assets are valued using a bid evaluation process with bid data provided by independent pricing sources.

Retirement plan assets categorized as Level 3 include the following:

• Global tactical asset allocation funds (“GTAA”) are common trust funds comprised of shares or units in commingled funds that are not publicly traded. GTAA managers primarily invest in equity, fixed income and cash instruments, with the ability to change the allocation mix based on market conditions while remaining within their specific strategy guidelines. The underlying assets in these funds may be publicly traded (equities and fixed income) and price quotes may be readily available. Assets may also be invested in various derivative products whose prices cannot be readily determined.

• Limited partnership hedge fund of funds (“HFF”) directly invest in a variety of hedge funds. The investment strategies of the underlying hedge funds are primarily focused on fixed income and equity based investments. There is currently minimal exposure to less liquid assets such as real estate or private equity in the portfolio. However, due to the private nature of the partnership investments, pricing inputs are not readily observable. Asset valuations are developed by the general partners that manage the partnerships.

• Insurance contracts are reported at cash surrender value and have no observable inputs.

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The fair values of the Company’s U.S. retirement plan assets are as follows:

	December 31, 2011
Asset Category	Quoted Prices in Active Markets for Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)	Total
	(Dollars in Millions)
Registered investment companies	$	176	$	—	—	$	176
Common trust funds	—		216		—	216
LDI	—		256		—	256
GTAA	—		—		142	142
Common and preferred stock	150		—		—	150
HFF	—		—		128	128
Cash and cash equivalents	74		—		—	74
Insurance contracts	—		—		10	10
Total	$	400	$	472	280	$	1,152

	December 31, 2010
Asset Category	Quoted Prices in Active Markets for Identical Assets  (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(Dollars in Millions)
Registered investment companies	$	140	$	—	$	—	$	140
Common trust funds	—		205		—		205
LDI	—		208		—		208
GTAA	—		—		150		150
Common and preferred stock	139		—		—		139
HFF	—		—		119		119
Cash and cash equivalents	26		—		—		26
Insurance contracts	—		—		9		9
Total	$	305	$	413	$	278	$	996

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The fair value measurements which used significant unobservable inputs are as follows:

	GTAA			HFF			Insurance contracts
	(Dollars in Millions)
Predecessor – Ending balance at December 31, 2009	$	130		$	113		$	10
Actual return on plan assets:
Relating to assets still held at the reporting date	11			3			1
Purchases, sales and settlements	—			—			(1		)
Predecessor – Ending balance at October 1, 2010	$	141		$	116		$	10
Actual return on plan assets:
Relating to assets still held at the reporting date	9			3			(1		)
Successor – Ending balance at December 31, 2010	$	150		$	119		$	9
Actual return on plan assets:
Relating to assets still held at the reporting date	(8		)	(1		)	1
Purchases, sales and settlements	—			10			—
Successor – Ending balance at December 31, 2011	$	142		$	128		$	10

The fair values of the Company’s Non-U.S. retirement plan assets are as follows:

	December 31, 2011
Asset Category	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(Dollars in Millions)
Insurance contracts	$	—	$	—	$	180	$	180
Treasury and government securities	—		58		—		58
Registered investment companies	53		—		—		53
Cash and cash equivalents	12		—		—		12
Corporate debt securities	—		14		—		14
Common trust funds	—		6		—		6
Limited partnerships (HFF)	—		—		6		6
Common and preferred stock	2		—		—		2
Other	7		10		—		17
Total	$	74	$	88	$	186	$	348

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	December 31, 2010
Asset Category	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(Dollars in Millions)
Insurance contracts	$	—	$	—	$	179	$	179
Treasury and government securities	—		51		—		51
Registered investment companies	62		—		—		62
Cash and cash equivalents	13		—		—		13
Corporate debt securities	—		8		—		8
Common trust funds	—		6		—		6
Limited partnerships (HFF)	—		—		5		5
Common and preferred stock	3		—		—		3
Other	—		10		—		10
Total	$	78	$	75	$	184	$	337

Fair value measurements which used significant unobservable inputs are as follows:

	Insurance contracts			HFF
	(Dollars in Millions)
Predecessor – Ending balance at December 31, 2009	$	180		$	4
Actual return on plan assets:
Relating to assets held at the reporting date	(1		)	—
Purchases, sales and settlements	(1		)	—
Predecessor – Ending balance at October 1, 2010	$	178		$	4
Actual return on plan assets:
Relating to assets held at the reporting date	(1		)	—
Purchases, sales and settlements	2			1
Successor – Ending balance at December 31, 2010	$	179		$	5
Actual return on plan assets:
Relating to assets held at the reporting date	4			—
Purchases, sales and settlements	(3		)	1
Successor – Ending balance at December 31, 2011	$	180		$	6

NOTE 21. Financial Instruments

The Company is exposed to various market risks including, but not limited to, changes in foreign currency exchange rates and market interest rates. The Company manages these risks through the use of derivative financial instruments. The Company’s use of derivative financial instruments is limited to hedging activities and such instruments are not used for speculative or trading purposes. The maximum length of time over which the Company hedges the variability in the future cash flows for forecasted transactions excluding those forecasted transactions related to the payment of variable interest on existing debt is up to one year from the date of the forecasted transaction. The maximum length of time over which the Company hedges forecasted transactions related to the payment of variable interest on existing debt is the term of the underlying debt.

The use of derivative financial instruments creates exposure to credit loss in the event of nonperformance by the counterparty to the derivative financial instruments. The Company limits this exposure by entering into agreements directly with a variety of major financial institutions with high credit standards that are expected to fully satisfy their obligations under the contracts. Additionally, the Company’s ability to utilize derivatives to manage risks is dependent on credit and market conditions.

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Accounting for Derivative Financial Instruments

Derivative financial instruments are recorded as assets or liabilities in the consolidated balance sheets at fair value. The fair values of derivatives used to hedge the Company’s risks fluctuate over time, generally in relation to the fair values or cash flows of the underlying hedged transactions or exposures. The accounting for changes in fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship.

At inception, the Company formally designates and documents the financial instrument as a hedge of a specific underlying exposure, as well as the risk management objectives and strategies for undertaking the hedge transaction, including designation of the instrument as a fair value hedge, a cash flow hedge or a hedge of a net investment in a foreign operation. Additionally, at inception and at least quarterly thereafter, the Company formally assesses whether the financial instruments that are used in hedging transactions are effective at offsetting changes in either the fair value or cash flows of the related underlying exposure.

For a designated cash flow hedge, the effective portion of the change in the fair value of the derivative instrument is recorded in Accumulated other comprehensive (loss) income in the consolidated balance sheet. When the underlying hedged transaction is realized, the gain or loss included in Accumulated other comprehensive (loss) income is recorded in earnings and reflected in the consolidated statement of operations on the same line as the gain or loss on the hedged item attributable to the hedged risk. Any ineffective portion of a financial instrument's change in fair value is immediately recognized in operating results. For a designated fair value hedge, both the effective and ineffective portions of the change in the fair value of the derivative instrument are recorded in earnings and reflected in the consolidated statement of operations on the same line as the gain or loss on the hedged item attributable to the hedged risk. For a designated net investment hedge, the effective portion of the change in the fair value of the derivative instrument is recorded as a cumulative translation adjustment in Accumulated other comprehensive (loss) income in the consolidated balance sheet. Cash flows associated with designated hedges are reported in the same category as the underlying hedged item. Derivatives not designated as a hedge are adjusted to fair value through operating results. Cash flows associated with non-designated derivatives are reported in Net cash provided from operating activities in the Company’s consolidated statements of cash flows.

Foreign Currency Exchange Rate Risk

The Company’s net cash inflows and outflows exposed to the risk of changes in foreign currency exchange rates arise from the sale of products in countries other than the manufacturing source, foreign currency denominated supplier payments, debt and other payables, subsidiary dividends and investments in subsidiaries. Where possible, the Company utilizes derivative financial instruments, including forward and option contracts, to protect the Company’s cash flow from changes in exchange rates. Foreign currency exposures are reviewed monthly and any natural offsets are considered prior to entering into a derivative financial instrument. The Company’s primary foreign currency exposures include the Euro, Korean Won, Czech Koruna, Hungarian Forint and Mexican Peso. Where possible, the Company utilizes a strategy of partial coverage for transactions in these currencies.

As of December 31, 2011 and 2010, the Company had forward contracts to hedge changes in foreign currency exchange rates with notional amounts of approximately $741 million and $529 million, respectively. Fair value estimates of these contracts are based on quoted market prices. A portion of these instruments have been designated as cash flow hedges with the effective portion of the gain or loss reported in the Accumulated other comprehensive (loss) income component of Shareholders’ equity in the Company’s consolidated balance sheet. The ineffective portion of these instruments is recorded as Cost of sales in the Company’s consolidated statement of operations.

Interest Rate Risk

As of December 31, 2011, the Company has no outstanding interest rate swaps. On April 6, 2011, the Company refinanced its variable rate Term Loan with a fixed rate bond and as of December 31, 2011, the Company holds primarily fixed rate debt. In conjunction with the refinancing of the Term Loan, the Company terminated outstanding interest rate swaps with a notional amount of $250 million for a loss of less than $1 million, which was recorded as interest expense. Approximately 50% and 87% of the Company's borrowings were effectively on a fixed rate basis as of December 31, 2010 and December 31, 2011, respectively. As of December 31, 2010, the net fair value of interest rate swaps was a liability of $1 million.

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Financial Statement Presentation

The Company presents its derivative positions and any related material collateral under master netting agreements on a net basis. Derivative financial instruments designated and non-designated as hedging instruments are included in the Company’s consolidated balance sheets at December 31, 2011 and 2010 as follows (dollars in millions):

	Assets					Liabilities
Risk Hedged	Classification	2011		2010		Classification	2011		2010
Designated
Foreign currency	Other current assets	$	—	$	—	Other current assets	$	—	$	1
Foreign currency	Other current liabilities	8		1		Other current liabilities	24		2
Interest rates	Other non-current assets	—		—		Other non-current assets	—		1
Non-designated
Foreign currency	Other current assets	—		2		Other current assets	—		—
Foreign currency	Other current liabilities	—		2		Other current liabilities	—		1
		$	8	$	5		$	24	$	5

Gains and losses associated with derivative financial instruments recorded in Cost of sales and Interest expense for the year ended December 31, 2011, the three-month Successor period ended December 31, 2010, and the nine–month Predecessor period ended October 1, 2010 are as follows:

	Amount of Gain (Loss)
	Recorded in AOCI								AOCI into Income						Recorded in Income
	Successor						Predecessor		Successor				Predecessor		Successor					Predecessor
	2011			2010			2010		2011		2010		2010		2011			2010		2010
Foreign currency risk – Cost of sales
Cash flow hedges	$	(8	)	$	(1	)	$	—	$	5	$	1	$	6	$	—		$	—	$	—
Non-designated cash flow hedges	—			—			—		—		—		—		(4		)	3		(1		)
	$	(8	)	$	(1	)	$	—	$	5	$	1	$	6	$	(4	)	$	3	$	(1	)
Interest rate risk – Interest expense
Cash flow hedges	$	1		$	(1	)	$	—	$	—	$	—	$	—	$	—		$	—	$	—

Concentrations of Credit Risk

Financial instruments, including cash equivalents, marketable securities, derivative contracts and accounts receivable, expose the Company to counterparty credit risk for non-performance. The Company’s counterparties for cash equivalents, marketable securities and derivative contracts are banks and financial institutions that meet the Company’s requirement of high credit standing. The Company’s counterparties for derivative contracts are substantial investment and commercial banks with significant experience using such derivatives. The Company manages its credit risk through policies requiring minimum credit standing and limiting credit exposure to any one counterparty and through monitoring counterparty credit risks. The Company’s concentration of credit risk related to derivative contracts at December 31, 2011 and December 31, 2010 is not significant.

With the exception of the customers below, the Company’s credit risk with any individual customer does not exceed ten percent of total accounts receivable at December 31, 2011 and 2010, respectively.

	2011	2010
Ford and affiliates	24%	22%
Hyundai Motor Company	10%	17%
Hyundai Mobis Company	14%	14%

Management periodically performs credit evaluations of its customers and generally does not require collateral.

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NOTE 22. Commitments and Contingencies

Guarantees and Commitments

The Company has guaranteed approximately $36 million for lease payments related to its subsidiaries for between one and ten years. In connection with the January 2009 PBGC Agreement, the Company agreed to provide a guarantee by certain affiliates of certain contingent pension obligations of up to $30 million, the term of this guarantee is dependent upon certain contingent events as set forth in the PBGC Agreement.

Purchase Obligations

In December 2010, the Company entered into a stipulation agreement obligating the Company to purchase certain professional services totaling $14 million on or before February 29, 2012 or to make payment of such amount on such date. This agreement was contingent on Court approval and was subsequently re-negotiated in March 2011, whereby the obligation was reduced to $13 million. This agreement was approved by the Court in April 2011. During 2011, the parties agreed that the date by which the services must be purchased was extended to August 29, 2012 in order to be credited against the $13 million payment required to be made on February 29, 2012. As of December 31, 2011, approximately $4 million of these professional services have been recognized.

In January 2003, the Company commenced a 10-year outsourcing agreement with International Business Machines (“IBM”) pursuant to which the Company outsources most of its information technology needs on a global basis, including mainframe support services, data centers, customer support centers, application development and maintenance, data network management, desktop support, disaster recovery and web hosting (“IBM Outsourcing Agreement”). During 2006, the IBM Outsourcing Agreement was modified to change the service delivery model and related service charges. Expenses incurred under the IBM Outsourcing Agreement were approximately $13 million during the year ended December 31, 2011, $4 million during the three–month Successor period ended December 31, 2010, $18 million during the nine–month Predecessor period ended October 1, 2010, and $80 million during 2009.

Effective February 18, 2010, the date of the Court order, the Debtors entered into a settlement agreement with IBM (the “Settlement Agreement”), assumed the IBM Outsourcing Agreement, as amended and restated pursuant to the Settlement Agreement and agreed to the payment of cure amounts totaling approximately $11 million in connection therewith. The service charges under the IBM Outsourcing Agreement as amended and restated pursuant to the Settlement Agreement are expected to aggregate approximately $22 million during the remaining term of the agreement, subject to changes based on the Company’s actual consumption of services to meet its then current business needs. The outsourcing agreement may also be terminated for the Company’s business convenience under the agreement for a scheduled termination fee.

Operating Leases

At December 31, 2011, the Company had the following minimum rental commitments under non-cancelable operating leases: 2012 — $31 million; 2013 — $24 million; 2014 — $18 million; 2015 — $12 million; 2016 — $9 million; thereafter — $31 million. Rent expense was $44 million for the year ended December 31, 2011, $11 million for the three-month Successor period ended December 31, 2010, $33 million for the nine-month Predecessor period ended October 1, 2010, and $64 million for 2009.

Litigation and Claims

On May 28, 2009, the Debtors filed voluntary petitions in the Court seeking reorganization relief under the provisions of chapter 11 of the Bankruptcy Code. The Debtors’ chapter 11 cases have been assigned to the Honorable Christopher S. Sontchi and are being jointly administered as Case No. 09-11786. The Debtors continued to operate their business as debtors-in-possession under the jurisdiction of the Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Court until their emergence on October 1, 2010.

In December of 2009, the Court granted the Debtors' motion in part authorizing them to terminate or amend certain other postretirement employee benefits, including health care and life insurance. On December 29, 2009, the IUE-CWA, the Industrial Division of the Communications Workers of America, AFL-CIO, CLC, filed a notice of appeal of the Court's order with the District Court. By order dated March 31, 2010, the District Court affirmed the Court's order in all respects. On April 1, 2010, the IUE filed a notice of appeal. On July 13, 2010, the Circuit Court reversed the order of the District Court as to the IUE-CWA and directed the District Court to, among other things, direct the Court to order the Company to take whatever action is necessary to immediately restore terminated or modified benefits to their pre-termination/modification levels. On July 27, 2010, the Company filed a Petition

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for Rehearing or Rehearing En Banc requesting that the Circuit Court review the panel’s decision, which was denied. By orders dated August 30, 2010, the Court ruled that the Company should restore certain other postretirement employee benefits to the appellant-retirees and also to salaried retirees and certain retirees of the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (“UAW”). On September 1, 2010, the Company filed a Notice of Appeal to the District Court of the Court's decision to include non-appealing retirees, and on September 15, 2010 the UAW filed a Notice of Cross-Appeal. The appeals process includes mandatory mediation of the dispute. The Company subsequently reached an agreement with the original appellants in late-September 2010, which resulted in the Company not restoring other postretirement employee benefits of such retirees. On September 30, 2010, the UAW filed a complaint, which it amended on October 1, 2010, in the United States District Court for the Eastern District of Michigan seeking, among other things, a declaratory judgment to prohibit the Company from terminating certain other postretirement employee benefits for UAW retirees after the Effective Date. The Company has filed a motion to dismiss the UAW's complaint and a motion to transfer the case to the District of Delaware, which motions are pending. In July 2011, the Company engaged in mediation with the UAW, which was not successful. The parties have established a briefing schedule on the Company's motions pending in the Eastern District of Michigan and the court have scheduled a hearing for May 2012. The parties will also establish a briefing schedule on the parties' appeals pending in the District of Delaware.

On March 31, 2009, Visteon UK Limited, a company organized under the laws of England and Wales and an indirect, wholly-owned subsidiary of the Company (the “UK Debtor”), filed for administration under the United Kingdom Insolvency Act of 1986 with the High Court of Justice, Chancery division in London, England (the “UK Administration”). The UK Administration does not include the Company or any of the Company’s other subsidiaries.

In June of 2009, the UK Pensions Regulator advised the Administrators of the UK Debtor that it was investigating whether there were grounds for regulatory intervention under various provisions of the UK Pensions Act 2004 in relation to an alleged funding deficiency in respect of the UK Debtor pension plan. In October of 2009, the trustee of the UK Debtor pension plan filed proofs of claim against each of the Debtors asserting contingent and unliquidated claims pursuant to the UK Pensions Act 2004 and the UK Pensions Act 1995 for liabilities related to a funding deficiency of the UK Debtor pension plan of approximately $555 million as of March 31, 2009. The trustee of the Visteon Engineering Services Limited (“VES”) pension plan also submitted proofs of claim against each of the Debtors asserting contingent and unliquidated claims pursuant to the UK Pensions Act 2004 and the UK Pensions Act 1995 for liabilities related to an alleged funding deficiency of the VES pension plan of approximately $118 million as of March 31, 2009. On May 11, 2010, the UK Debtor Pension Trustees Limited, the creditors’ committee, and the Debtors entered in a stipulation whereby the UK Debtor Pension Trustees Limited agreed to withdraw all claims asserted against the Debtors with prejudice, which the Court approved on May 12, 2010. The trustee of the VES pension plan also agreed to withdraw all claims against each of the Debtors. The UK Pensions Regulator has notified the trustee directors of the UK Debtor pension plan that it has concluded not to seek contribution or financial support from any of the affiliated entities outside the UK with respect to their claims.

On October 28, 2011, Cadiz Electronica, S.A., an indirect, wholly-owned subsidiary of the Company organized under the laws of Spain ("Cadiz"), filed an application with the Commercial Court of Cadiz to commence a pre-insolvency proceeding under the Insolvency Law of Spain. Under the pre-insolvency proceeding, Cadiz continues to manage its business and assets, but has up to four months to reach an arrangement with its creditors to avoid an insolvency proceeding or before an involuntary insolvency proceeding can be commenced. Cadiz announced its intention to permanently cease production and close its facility in El Puerto de Santa Maria, Cadiz, Spain during the second quarter of 2011. In January 2012, Cadiz's sole shareholder resolved to commence the dissolution of Cadiz in accordance with applicable Spanish corporate laws. Following discussions with local unions, works committee and appropriate public authorities, Cadiz tentatively agreed to contribute its land, buildings and machinery to the local municipality, and settled with the local unions and works committee on employee severance matters. See Note 6, "Asset Impairments and Restructuring."

Several current and former employees of Visteon Deutschland GmbH (“Visteon Germany”) filed civil actions against Visteon Germany in various German courts beginning in August 2007 seeking damages for the alleged violation of German pension laws that prohibit the use of pension benefit formulas that differ for salaried and hourly employees without adequate justification. Several of these actions have been joined as pilot cases. In a written decision issued in April 2010, the Federal Labor Court issued a declaratory judgment in favor of the plaintiffs in the pilot cases. To date, more than 600 current and former employees have filed similar actions or have inquired as to or been granted additional benefits, and an additional 750 current and former employees are similarly situated. The Company's remaining reserve for unsettled cases is approximately $8 million and is based on the Company’s best estimate as to the number and value of the claims that will be made in connection with the pension plan. However, the Company’s estimate is subject to many uncertainties which could result in Visteon Germany incurring amounts in excess of the reserved amount of up to approximately $8 million.

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During the third quarter of 2011, the Company received a formal request from the competition unit of the European Commission for documents and information in connection with its on-going investigation into alleged anti-competitive behavior relating to specific automotive electronic components in the European Union/European Economic Area. The Company has responded to request. The Company's policy is to comply with all laws and regulations, including all antitrust and competition laws, and it intends to cooperate fully with the European Commission in the context of its ongoing investigation.

Product Warranty and Recall

Amounts accrued for product warranty and recall claims are based on management’s best estimates of the amounts that will ultimately be required to settle such items. The Company’s estimates for product warranty and recall obligations are developed with support from its sales, engineering, quality and legal functions and include due consideration of contractual arrangements, past experience, current claims and related information, production changes, industry and regulatory developments and various other considerations. The Company can provide no assurances that it will not experience material claims in the future or that it will not incur significant costs to defend or settle such claims beyond the amounts accrued or beyond what the Company may recover from its suppliers. The following table provides a reconciliation of changes in the product warranty and recall claims liability, inclusive of amounts of discontinued operations for the selected periods:

	Successor						Predecessor
	Year Ended			Three Months Ended			Nine Months Ended
	December 31			December 31			October 1
	2011			2010			2010
	(Dollars in Millions)
Beginning balance	$	75		$	76		$	79
Accruals for products shipped	21			7			19
Changes in estimates	(12		)	(2		)	(4		)
Settlements	(19		)	(6		)	(18		)
Ending balance	$	65		$	75		$	76

Environmental Matters

The Company is subject to the requirements of federal, state, local and foreign environmental and occupational safety and health laws and regulations and ordinances. These include laws regulating air emissions, water discharge and waste management. The Company is also subject to environmental laws requiring the investigation and cleanup of environmental contamination at properties it presently owns or operates and at third-party disposal or treatment facilities to which these sites send or arranged to send hazardous waste. The Company is aware of contamination at some of its properties. These sites are in various stages of investigation and cleanup. The Company currently is, has been, and in the future may become the subject of formal or informal enforcement actions or procedures.

Costs related to environmental assessments and remediation efforts at operating facilities, previously owned or operated facilities, or other waste site locations are accrued when it is probable that a liability has been incurred and the amount of that liability can be reasonably estimated. Estimated costs are recorded at undiscounted amounts, based on experience and assessments, and are regularly evaluated. The liabilities are recorded in Other current liabilities and Other non-current liabilities in the consolidated balance sheets. At December 31, 2011, the Company had recorded a reserve of approximately $1 million for environmental matters. However, estimating liabilities for environmental investigation and cleanup is complex and dependent upon a number of factors beyond the Company’s control and which may change dramatically. Accordingly, although the Company believes its reserve is adequate based on current information, the Company cannot provide any assurance that its ultimate environmental investigation and cleanup costs and liabilities will not exceed the amount of its current reserve.

Other Contingent Matters

Various legal actions, governmental investigations and proceedings and claims are pending or may be instituted or asserted in the future against the Company, including those arising out of alleged defects in the Company’s products; governmental regulations relating to safety; employment-related matters; customer, supplier and other contractual relationships; intellectual property rights; product warranties; product recalls; and environmental matters. Some of the foregoing matters may involve compensatory, punitive

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or antitrust or other treble damage claims in very large amounts, or demands for recall campaigns, environmental remediation programs, sanctions, or other relief which, if granted, would require very large expenditures. The Company enters into agreements that contain indemnification provisions in the normal course of business for which the risks are considered nominal and impracticable to estimate.

Contingencies are subject to many uncertainties, and the outcome of individual litigated matters is not predictable with assurance. Reserves have been established by the Company for matters discussed in the immediately foregoing paragraph where losses are deemed probable and reasonably estimable. It is possible, however, that some of the matters discussed in the foregoing paragraph could be decided unfavorably to the Company and could require the Company to pay damages or make other expenditures in amounts, or a range of amounts, that cannot be estimated at December 31, 2011 and that are in excess of established reserves. The Company does not reasonably expect, except as otherwise described herein, based on its analysis, that any adverse outcome from such matters would have a material effect on the Company’s financial condition, results of operations or cash flows, although such an outcome is possible.

Under section 362 of the Bankruptcy Code, the filing of a bankruptcy petition automatically stayed most actions against a debtor, including most actions to collect pre-petition indebtedness or to exercise control over the property of the debtor’s estate. Substantially all pre-petition liabilities and claims relating to rejected executory contracts and unexpired leases have been settled under the Debtor’s plan of reorganization, however, the ultimate amounts to be paid in settlement of each those claims will continue to be subject to the uncertain outcome of litigation, negotiations and Court decisions for a period of time after the Effective Date.

NOTE 23. Segment Information

Segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision-maker, or a decision-making group, in deciding the allocation of resources and in assessing performance. The Company’s chief operating decision making group, comprised of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluates the performance of the Company’s segments primarily based on net sales, before elimination of inter-company shipments, gross margin and operating assets. Gross margin is defined as total sales less costs to manufacture and product development and engineering expenses. Operating assets include inventories and property and equipment utilized in the manufacture of the segments’ products.

In April 2011, the Company announced a new operating structure for use by the CODM Group in managing the business based on specific global product lines rather than reporting at a broader global product group level as was historically utilized by the CODM Group. Under the historical global product group reporting, the results of each of the Company’s facilities were grouped for reporting purposes into segments based on the predominant product line offering of the respective facility, as separate product line results within each facility were not historically available. During the second quarter of 2011 the Company completed the process of realigning systems and reporting structures to facilitate financial reporting under the revised organizational structure such that the results for each product line within each facility can be separately identified. The information reviewed by the CODM Group has been updated to reflect the new structure. The financial results included below have been recast for all periods to reflect the updated structure.

The Company’s new operating structure is organized by global product lines, including: Climate, Electronics and Interiors. These global product lines have financial and operating responsibility over the design, development and manufacture of the Company’s product portfolio. Global customer groups are responsible for the business development of the Company’s product portfolio and overall customer relationships. Certain functions such as procurement, information technology and other administrative activities are managed on a global basis with regional deployment.

The Company’s reportable segments are as follows:

• Climate — The Company’s Climate product line includes climate air handling modules, powertrain cooling modules, heat exchangers, compressors, fluid transport and engine induction systems. Climate accounted for approximately 52%, 52%, 51%, and 46% of the Company’s total product sales, excluding intra-product line eliminations, for the year ended December 31, 2011, the three-month Successor period ended December 31, 2010, the nine–month Predecessor period ended October 1, 2010 and the year ended December 31, 2009, respectively.

• Electronics — The Company’s Electronics product line includes audio systems, infotainment systems, driver information systems, powertrain and feature control modules, climate controls, and electronic control modules. Electronics accounted for approximately 18%, 18%, 18%, and 19% of the Company’s total product sales, excluding intra-product line eliminations, for the year ended December 31, 2011, the three-month Successor period ended December 31, 2010, the nine–month Predecessor

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period ended October 1, 2010 and the year ended December 31, 2009, respectively.

• Interiors — The Company’s Interiors product line includes instrument panels, cockpit modules, door trim and floor consoles. Interiors accounted for approximately 30%, 30%, 31%, and 35% of the Company’s total product sales, excluding intra-product line eliminations, for the year ended December 31, 2011, the three-month Successor period ended December 31, 2010, the nine-month Predecessor period ended October 1, 2010 and the years ended December 31, 2009, respectively.

• Services — The Company’s Services operations provide various transition services in support of divestiture transactions, principally related to the ACH Transactions. The Company supplied leased personnel and transition services as required by certain agreements entered into by the Company with ACH as a part of the ACH Transactions and as amended in 2008. As of August 31, 2010, the Company ceased providing substantially all transition and other services or leasing employees to ACH. Services to ACH were provided at a rate approximately equal to the Company’s cost.

The accounting policies for the reportable segments are the same as those described in the Note 2 "Significant Accounting Policies” to the Company’s consolidated financial statements. Key financial measures reviewed by the Company’s chief operating decision makers are as follows (dollars in millions):

	Net Sales												Gross Margin
	Successor						Predecessor						Successor				Predecessor
	Year Ended			Three Months Ended			Nine Months Ended			Year Ended			Year Ended		Three Months Ended		Nine Months Ended		Year Ended
	December 31						October 1			December 31			December 31				October 1		December 31
	2011			2010			2010			2009			2011		2010		2010		2009
Climate	$	4,053		$	954		$	2,660		$	2,835		$	351	$	118	$	322	$	374
Electronics	1,367			326			935			1,208			128		89		136		125
Interiors	2,285			554			1,641			2,137			139		37		89		115
Eliminations	(173		)	(57		)	(134		)	(117		)	—		—		—		—
Total Products	7,532			1,777			5,102			6,063			618		244		547		614
Services	—			1			142			265			—		—		2		4
Total consolidated	$	7,532		$	1,778		$	5,244		$	6,328		$	618	$	244	$	549	$	618

The above amounts include product sales of $2.0 billion during the year ended December 31, 2011, $398 million during the three–month Successor period ended December 31, 2010, $1.4 billion during the nine-month Predecessor period ended October 1, 2010 and $1.7 billion during 2009 to Ford Motor Company and $2.5 billion during the year ended December 31, 2011, $591 million during the three–month Successor period ended December 31, 2010, $1.5 billion during the nine–month Predecessor period ended October 1, 2010 and $1.7 billion during 2009 to Hyundai Kia Automotive Group.

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Segment Operating Assets    

	Inventories, net				Property and Equipment, net
	2011		2010		2011		2010
	(Dollars in Millions)
Climate	$	236	$	214	$	934	$	968
Electronics	66		73		144		159
Interiors	47		50		171		212
Other	32		27		42		109
Total Products	381		364		1,291		1,448
Corporate	—		—		121		128
Total consolidated	$	381	$	364	$	1,412	$	1,576

Other includes inventories, net and property and equipment, net associated with the Company's discontinued operations.

Segment Expenditures    

	Depreciation and Amortization								Capital Expenditures
	Successor				Predecessor				Successor				Predecessor
	Year Ended		Three Months Ended		Nine Months Ended		Year Ended		Year Ended		Three Months Ended		Nine Months Ended		Year Ended
	December 31				October 1		December 31		December 31				October 1		December 31
	2011		2010		2010		2009		2011		2010		2010		2009
	(Dollars in Millions)
Climate	$	187	$	46	$	102	$	137	$	168	$	56	$	60	$	74
Electronics	40		8		20		44		26		11		12		19
Interiors	37		8		27		49		38		14		20		34
Other	—		—		—		—		18		7		17		16
Total Products	264		62		149		230		250		88		109		143
Corporate	31		7		36		77		8		4		8		8
Total consolidated	$	295	$	69	$	185	$	307	$	258	$	92	$	117	$	151

Other includes capital expenditures associated with the Company's discontinued operations.

Certain adjustments are necessary to reconcile segment financial information to the Company’s consolidated amounts. Corporate reconciling items are related to the Company’s technical centers, corporate headquarters and other administrative and support functions.

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Financial Information by Geographic Region

	Net Sales												Property and Equipment, net
	Successor						Predecessor
	Year Ended December 31			Three Months Ended December 31			Nine Months Ended October 1			Year Ended December 31
	2011			2010			2010			2009			2011		2010
				(Dollars in Millions)
Geographic region:
United States	$	1,104		$	237		$	1,005		$	1,549		$	199	$	240
Mexico	15			4			22			16			26		27
Canada	105			21			61			46			29		31
Intra-region eliminations	(6		)	(4		)	(26		)	(21		)	—		—
North America	1,218			258			1,062			1,590			254		298
Germany	199			40			129			158			20		26
France	713			177			512			609			96		101
United Kingdom	—			—			—			34			3		4
Portugal	468			91			304			441			78		80
Spain	421			115			311			287			42		45
Czech Republic	246			61			195			234			67		121
Hungary	321			82			258			315			63		65
Other Europe	517			125			292			293			70		63
Intra-region eliminations	(114		)	(29		)	(80		)	(93		)	—		—
Europe	2,771			662			1,921			2,278			439		505
Korea	2,488			583			1,520			1,589			428		476
China	555			125			325			380			116		90
India	341			82			216			213			80		96
Japan	221			62			152			138			13		14
Other Asia	244			71			177			142			27		33
Intra-region eliminations	(304		)	(66		)	(166		)	(158		)	—		—
Asia	3,545			857			2,224			2,304			664		709
South America	511			123			386			427			55		64
Inter-region eliminations	(513		)	(122		)	(349		)	(271		)	—		—
	$	7,532		$	1,778		$	5,244		$	6,328		$	1,412	$	1,576

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NOTE 24. Condensed Consolidating Financial Information of Guarantor Subsidiaries

On April 6, 2011, the Company completed the sale of the Senior Notes. The Senior Notes were issued under an Indenture, dated April 6, 2011 (the “Indenture”), among the Company, the subsidiary guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Indenture and the form of Senior Notes provide, among other things, that the Senior Notes are be senior unsecured obligations of the Company. Interest is payable on the Senior Notes on April 15 and October 15 of each year beginning on October 15, 2011 until maturity. Each of the Company’s existing and future wholly owned domestic restricted subsidiaries that guarantee debt under the Company’s asset based credit facility guarantee the Senior Notes.

Guarantor Financial Statements

Certain subsidiaries of the Company (as listed below, collectively the “Guarantor Subsidiaries”) have guaranteed fully and unconditionally, on a joint and several basis, the obligation to pay principal and interest under the Company’s Senior Credit Agreements. The Guarantor Subsidiaries include: Visteon Electronics Corporation; Visteon European Holdings, Inc.; Visteon Global Treasury, Inc.; Visteon International Business Development, Inc.; Visteon International Holdings, Inc.; Visteon Global Technologies, Inc.; Visteon Systems, LLC; and VC Aviation Services, LLC.

The guarantor financial statements are comprised of the following condensed consolidating financial information:

• The Parent Company, the issuer of the guaranteed obligations;

• Guarantor subsidiaries, on a combined basis, as specified in the indentures related to the Senior Notes;

• Non-guarantor subsidiaries, on a combined basis;

• Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in subsidiaries, and (c) record consolidating entries.

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VISTEON CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

	Successor - Year Ended December 31, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net sales	$	194		$	1,497		$	7,045		$	(1,204	)	$	7,532
Cost of sales	391			1,200			6,527			(1,204		)	6,914
Gross margin	(197		)	297			518			—			618
Selling, general and administrative expenses	102			67			218			—			387
Restructuring expenses	—			—			24			—			24
Other expense (income), net	3			(6		)	(2		)	—			(5		)
Deconsolidation gains	—			—			(8		)	—			(8		)
Operating (loss) income	(302		)	236			286			—			220
Interest expense (income), net	38			(12		)	1			—			27
Loss on debt extinguishment	24			—			—			—			24
Equity in net income of non-consolidated affiliates	—			—			168			—			168
(Loss) income before income taxes and earnings of subsidiaries	(364		)	248			453			—			337
Provision for income taxes	—			—			127			—			127
(Loss) income before earnings of subsidiaries	(364		)	248			326			—			210
Equity in earnings of consolidated subsidiaries	490			172			—			(662		)	—
Income from continuing operations	126			420			326			(662		)	210
Loss from discontinued operations, net of tax	(46		)	57			(67		)	—			(56		)
Net income	80			477			259			(662		)	154
Net income attributable to non-controlling interests	—			—			74			—			74
Net income attributable to Visteon Corporation	$	80		$	477		$	185		$	(662	)	$	80

	Successor - Three Months Ended December 31, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net sales
Products	$	28		$	315		$	1,679		$	(245	)	$	1,777
Services	1			—			—			—			1
	29			315			1,679			(245		)	1,778
Cost of sales
Products	381			124			1,273			(245		)	1,533
Services	1			—			—			—			1
Cost of sales	382			124			1,273			(245		)	1,534
Gross margin	(353		)	191			406			—			244
Selling, general and administrative expenses	37			25			45			—			107
Restructuring expenses	1			—			26			—			27
Other expense (income), net	14			—			(1		)	—			13
Operating (loss) income	(405		)	166			336			—			97
Interest expense (income), net	13			(4		)	—			—			9
Equity in net income of non-consolidated affiliates	—			—			41			—			41
(Loss) income before income taxes and earnings of subsidiaries	(418		)	170			377			—			129
Provision for income taxes	(3		)	1			26			—			24
(Loss) income before earnings of subsidiaries	(415		)	169			351			—			105
Equity in earnings of consolidated subsidiaries	507			58			—			(565		)	—
Income from continuing operations	92			227			351			(565		)	105
Loss from discontinued operations, net of tax	(6		)	7			(1		)	—			—
Net income	86			234			350			(565		)	105
Net income attributable to non-controlling interests	—			—			19			—			19
Net income attributable to Visteon Corporation	$	86		$	234		$	331		$	(565	)	$	86

69

	Predecessor - Nine Months Ended October 1, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net sales
Products	$	172		$	1,009		$	4,698		$	(777	)	$	5,102
Services	142			—			—			—			142
	314			1,009			4,698			(777		)	5,244
Cost of sales
Products	214			637			4,481			(777		)	4,555
Services	140			—			—			—			140
	354			637			4,481			(777		)	4,695
Gross margin	(40		)	372			217			—			549
Selling, general and administrative expenses	83			44			136			—			263
Restructuring expenses	5			1			8			—			14
Reorganization items, net	(8,594		)	9,402			(1,746		)	—			(938		)
Asset impairments	4			—			—			—			4
Other expense (income), net	21			(1		)	2			—			22
Operating income (loss)	8,441			(9,074		)	1,817			—			1,184
Interest expense (income), net	181			(19		)	(3		)	—			159
Equity in net income of non-consolidated affiliates	1			—			104			—			105
Income (loss) before income taxes and earnings of subsidiaries	8,261			(9,055		)	1,924			—			1,130
Provision for income taxes	2			—			146			—			148
Income (loss) before earnings of subsidiaries	8,259			(9,055		)	1,778			—			982
Equity in earnings of consolidated subsidiaries	(7,273		)	1,371			—			5,902			—
Income (loss) from continuing operations	986			(7,684		)	1,778			5,902			982
Income from discontinued operations, net of tax	(46		)	63			(3		)	—			14
Net income (loss)	940			(7,621		)	1,775			5,902			996
Net income attributable to non-controlling interests	—			—			56			—			56
Net income attributable to Visteon Corporation	$	940		$	(7,621	)	$	1,719		$	5,902		$	940

	Predecessor - Year Ended December 31, 2009
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net sales
Products	$	221		$	1,334		$	5,432		$	(924	)	$	6,063
Services	265			—			—			—			265
	486			1,334			5,432			(924		)	6,328
Cost of sales
Products	408			912			5,053			(924		)	5,449
Services	261			—			—			—			261
	669			912			5,053			(924		)	5,710
Gross margin	(183		)	422			379			—			618
Selling, general and administrative expenses	80			62			179			—			321
Restructuring expenses	33			8			39			—			80
Reimbursement from escrow account	62			—			—			—			62
Reorganization items	60			—			—			—			60
Deconsolidation gain	(95		)	—			—			—			(95		)
Asset impairments	—			5			5			—			10
Other (income) expense, net	(20		)	—			—			—			(20		)
Operating (loss) income	(179		)	347			156			—			324
Interest expense (income), net	109			(9		)	6			—			106
Equity in net (loss) income of non-consolidated affiliates	(1		)	—			82			—			81
(Loss) income before income taxes and earnings of subsidiaries	(289		)	356			232			—			299
(Benefit from) provision for income taxes	(3		)	1			74			—			72
(Loss) income before earnings of subsidiaries	(286		)	355			158			—			227
Equity in earnings of consolidated subsidiaries	445			477			—			(922		)	—
Income from continuing operations	159			832			158			(922		)	227
Loss from discontinued operations, net of tax	(31		)	9			(21		)	—			(43		)
Net income	128			841			137			(922		)	184
Net income attributable to non-controlling interests	—			—			56			—			56
Net income attributable to Visteon Corporation	$	128		$	841		$	81		$	(922	)	$	128

70

VISTEON CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

	Successor - Year Ended December 31, 2011
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net income	$	80		$	477		$	259		$	(662	)	$	154
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	(42		)	(47		)	(67		)	103			(53		)
Benefit plans	(26		)	(3		)	(5		)	8			(26		)
Unrealized hedging (losses) gains and other	(7		)	(8		)	(10		)	16			(9		)
Other comprehensive (loss) income, net of tax	(75		)	(58		)	(82		)	127			(88		)
Comprehensive income	5			419			177			(535		)	66
Comprehensive income attributable to non-controlling interests	—			—			61			—			61
Comprehensive income (loss) attributable to Visteon Corporation	$	5		$	419		$	116		$	(535	)	$	5

	Successor - Three Months Ended December 31, 2010
	Parent Company			Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(Dollars in Millions)
Net income	$	86		$	234	$	350	$	(565	)	$	105
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments	1			—		12		(10		)	3
Benefit plans	50			44		41		(84		)	51
Unrealized hedging (losses) gains and other	(1		)	—		—		—			(1		)
Other comprehensive income (loss), net of tax	50			44		53		(94		)	53
Comprehensive income	136			278		403		(659		)	158
Comprehensive income attributable to non-controlling interests	—			—		22		—			22
Comprehensive income (loss) attributable to Visteon Corporation	$	136		$	278	$	381	$	(659	)	$	136

71

	Predecessor - Nine Months Ended October 1, 2010
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net income (loss)	$	940		$	(7,621	)	$	1,775		$	5,902		$	996
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	14			(248		)	7			247			20
Benefit plans	(232		)	(138		)	(8		)	146			(232		)
Unrealized hedging gains and other	2			—			5			(2		)	5
Other comprehensive (loss) income, net of tax	(216		)	(386		)	4			391			(207		)
Comprehensive income (loss)	724			(8,007		)	1,779			6,293			789
Comprehensive income attributable to non-controlling interests	—			—			65			—			65
Comprehensive income (loss) attributable to Visteon Corporation	$	724		$	(8,007	)	$	1,714		$	6,293		$	724

	Predecessor - Year Ended December 31, 2009
	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net income	$	128		$	841		$	137		$	(922	)	$	184
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustments	(119		)	(116		)	(106		)	233			(108		)
Benefit plans	92			196			100			(296		)	92
Unrealized hedging gains and other	12			7			—			(9		)	10
Other comprehensive (loss) income, net of tax	(15		)	87			(6		)	(72		)	(6		)
Comprehensive income	113			928			131			(994		)	178
Comprehensive income attributable to non-controlling interests	—			—			65			—			65
Comprehensive income attributable to Visteon Corporation	$	113		$	928		$	66		$	(994	)	$	113

72

VISTEON CORPORATION

CONDENSED CONSOLIDATING BALANCE SHEETS

	December 31, 2011
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(Dollars in Millions)
ASSETS
Cash and equivalents	$	114	$	55	$	554	$	—		$	723
Accounts receivable, net	235		540		1,007		(719		)	1,063
Inventories, net	18		25		338		—			381
Other current assets	29		53		245		—			327
Total current assets	396		673		2,144		(719		)	2,494
Property and equipment, net	89		81		1,242		—			1,412
Investment in affiliates	1,873		1,533		—		(3,406		)	—
Equity in net assets of non-consolidated affiliates	—		—		644		—			644
Intangible assets, net	82		59		212		—			353
Other non-current assets	14		23		55		(26		)	66
Total assets	$	2,454	$	2,369	$	4,297	$	(4,151	)	$	4,969
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt, including current portion of long-term debt	$	90	$	13	$	217	$	(233	)	$	87
Accounts payable	170		210		1,116		(486		)	1,010
Other current liabilities	70		21		365		—			456
Total current liabilities	330		244		1,698		(719		)	1,553
Long-term debt	497		—		41		(26		)	512
Employee benefits	301		47		147		—			495
Other non-current liabilities	19		5		388		—			412
Shareholders’ equity:
Total Visteon Corporation shareholders’ equity	1,307		2,073		1,333		(3,406		)	1,307
Non-controlling interests	—		—		690		—			690
Total shareholders’ equity	1,307		2,073		2,023		(3,406		)	1,997
Total liabilities and shareholders’ equity	$	2,454	$	2,369	$	4,297	$	(4,151	)	$	4,969

73

	December 31, 2010
	Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
	(Dollars in Millions)
ASSETS
Cash and equivalents	$	153	$	81	$	671	$	—		$	905
Accounts receivable, net	160		956		1,204		(1,228		)	1,092
Inventories, net	16		25		323		—			364
Other current assets	93		28		220		—			341
Total current assets	422		1,090		2,418		(1,228		)	2,702
Property and equipment, net	104		105		1,367		—			1,576
Investment in affiliates	2,357		1,193		—		(3,550		)	—
Equity in net assets of non-consolidated affiliates	—		—		439		—			439
Intangible assets, net	90		76		236		—			402
Other non-current assets	65		439		55		(470		)	89
Total assets	$	3,038	$	2,903	$	4,515	$	(5,248	)	$	5,208
LIABILITIES AND SHAREHOLDERS’ EQUITY
Short-term debt, including current portion of long-term debt	$	644	$	10	$	247	$	(823	)	$	78
Accounts payable	186		198		1,218		(399		)	1,203
Other current liabilities	142		34		391		(6		)	561
Total current liabilities	972		242		1,856		(1,228		)	1,842
Long-term debt	472		—		481		(470		)	483
Employee benefits	307		74		145		—			526
Other non-current liabilities	27		5		375		—			407
										—
Shareholders’ equity:										—
Total Visteon Corporation shareholders’ equity	1,260		2,582		968		(3,550		)	1,260
Non-controlling interests	—		—		690		—			690
Total shareholders’ equity	1,260		2,582		1,658		(3,550		)	1,950
Total liabilities and shareholders’ equity	$	3,038	$	2,903	$	4,515	$	(5,248	)	$	5,208

74

VISTEON CORPORATION

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

	Successor - Year Ended December 31, 2011
	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net cash provided from operating activities	$	(163	)	$	(75	)	$	413		$	—		$	175
Investing activities
Capital expenditures	(4		)	(12		)	(242		)	—			(258		)
Dividends received from consolidated affiliates	109			173			—			(282		)	—
Cash associated with deconsolidations	—			—			(52		)	—			(52		)
Acquisitions of joint venture interests	—			—			(29		)	—			(29		)
Proceeds from divestitures and asset sales	—			—			14			—			14
Other	—			—			(6		)	—			(6		)
Net cash used by investing activities	105			161			(315		)	(282		)	(331		)
Financing activities
Cash restriction, net	58			—			(7		)	—			51
Short term debt, net	—			—			17			—			17
Proceeds from issuance of debt, net of issuance costs	492			—			11			—			503
Principal payments on debt	(501		)	—			(12		)	—			(513		)
Rights offering fees	(33		)	—			—			—			(33		)
Dividends paid to consolidated affiliates	—			(109		)	(173		)	282			—
Other	3			—			(31		)	—			(28		)
Net cash provided from (used by) financing activities	19			(109		)	(195		)	282			(3		)
Effect of exchange rate changes on cash and equivalents	—			(3		)	(20		)	—			(23		)
Net increase (decrease) in cash and equivalents	(39		)	(26		)	(117		)	—			(182		)
Cash and equivalents at beginning of period	153			81			671			—			905
Cash and equivalents at end of period	$	114		$	55		$	554		$	—		$	723

		Successor - Three Months Ended December 31, 2010
		Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net cash provided from operating activities		$	79		$	21		$	54		$	—		$	154
Investing activities
Capital expenditures		(2		)	(2		)	(88		)	—			(92		)
Dividends received from consolidated affiliates		—			8			—			(8		)	—
Proceeds from divestitures and asset sales		—			—			16			—			16
Net cash (used by) provided from investing activities		(2		)	6			(72		)	(8		)	(76		)
Financing activities
Cash restriction, net		11			—			5			—			16
Short term debt, net		—			—			6			—			6
Principal payments on debt		(1		)	—			(60		)	—			(61		)
Dividends paid to consolidated affiliates		—			—			(8		)	8			—
Other		2			—			(3		)	—			(1		)
Net cash provided from (used by) financing activities		12			—			(60		)	8			(40		)
Effect of exchange rate changes on cash and equivalents		—			(1		)	2			—			1
Net increase (decrease) in cash and equivalents		89			26			(76		)	—			39
Cash and equivalents at beginning of period		64			55			747			—			866
Cash and equivalents at end of period		$	153		$	81		$	671		$	—		$	905

75

	Predecessor - Nine Months Ended October 1, 2010
	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net cash (used by) provided from operating activities	$	(309	)	$	(99	)	$	428		$	—		$	20
Investing activities
Capital expenditures	(4		)	(5		)	(108		)	—			(117		)
Proceeds from divestitures and asset sales	11			1			33			—			45
Dividends received from consolidated affiliates	44			129			—			(173		)	—
Acquisitions of joint venture interests	—			—			(3		)	—			(3		)
Net cash provided from (used by) investing activities	51			125			(78		)	(173		)	(75		)
Financing activities
Cash restriction, net	12			—			31			—			43
Short term debt, net	—			—			(9		)	—			(9		)
Payment of DIP facility	(75		)	—			—			—			(75		)
Proceeds from issuance of debt, net of issuance costs	472			—			9			—			481
Proceeds from rights offering, net of issuance costs	1,190			—			—			—			1,190
Principal payments on debt	(1,628		)	—			(23		)	—			(1,651		)
Dividends paid to consolidated affiliates	—			(44		)	(129		)	173			—
Other	(2		)	—			(19		)	—			(21		)
Net cash used by financing activities	(31		)	(44		)	(140		)	173			(42		)
Effect of exchange rate changes on cash and equivalents	—			(3		)	4			—			1
Net (decrease) increase in cash and equivalents	(289		)	(21		)	214			—			(96		)
Cash and equivalents at beginning of period	353			76			533			—			962
Cash and equivalents at end of period	$	64		$	55		$	747		$	—		$	866

		Predecessor - Year Ended December 31, 2009
		Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
	(Dollars in Millions)
Net cash (used by) provided from operating activities		$	(223	)	$	(68	)	$	432		$	—		$	141
Investing activities
Capital expenditures		(11		)	(7		)	(133		)	—			(151		)
Proceeds from divestitures and asset sales		1			1			67			—			69
Acquisitions of joint venture interests		—			—			(30		)	—			(30		)
Dividends received from consolidated affiliates		—			103			—			(103		)	—
Cash associated with deconsolidation		—			—			(11		)	—			(11		)
Net cash (used by) provided from investing activities		(10		)	97			(107		)	(103		)	(123		)
Financing activities
Cash restriction, net		(94		)	—			(39		)	—			(133		)
Short term debt, net		—			—			(19		)	—			(19		)
Proceeds from DIP facility, net of issuance costs		71			—			—			—			71
Proceeds from issuance of debt, net of issuance costs		30			—			27			—			57
Principal payments on debt		(21		)	—			(152		)	—			(173		)
Dividends paid to consolidated affiliates		—			—			(103		)	103			—
Other		(47		)	7			(22		)	—			(62		)
Net cash (used by) provided from financing activities		(61		)	7			(308		)	103			(259		)
Effect of exchange rate changes on cash and equivalents		—			—			23			—			23
Net (decrease) increase in cash and equivalents		(294		)	36			40			—			(218		)
Cash and equivalents at beginning of period		647			40			493			—			1,180
Cash and equivalents at end of period		$	353		$	76		$	533		$	—		$	962

76

NOTE 25. Summary Quarterly Financial Data (Unaudited)

The following table presents summary quarterly financial data for continuing operations.

	Successor										Predecessor
	2011								2010		2010
	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Fourth Quarter		First Quarter		Second Quarter			Third Quarter			Fourth Quarter
	(Dollars in Millions, Except Per Share Amounts)
Net sales	$	1,850	$	2,046	$	1,909	$	1,727	$	1,778	$	1,778	$	1,834		$	1,632		$	—
Gross margin	143		192		139		144		244		408		102			36			3
Income (loss) from continuing operations before income taxes	80		78		81		98		129		266		(125		)	(101		)	1,090
Income (loss) from continuing operations	52		44		56		58		105		240		(174		)	(147		)	1,063
Net income (loss) from continuing operations attributable to Visteon Corporation	$	35	$	26	$	37	$	38	$	86	$	225	$	(198	)	$	(164	)	$	1,063
Per Share Data
Basic earnings (losses) from continuing operations attributable to Visteon Corporation	$	0.69	$	0.51	$	0.72	$	0.75	$	1.71	$	1.73	$	(1.53	)	$	(1.27	)
Diluted earnings (losses) from continuing operations attributable to Visteon Corporation	$	0.67	$	0.50	$	0.71	$	0.75	$	1.66	$	1.73	$	(1.53	)	$	(1.27	)

2010 Quarterly Financial Data

In connection with the implementation of the Plan on October 1, 2010, the Company recorded a pre-tax gain of approximately $1.1 billion for reorganization related items. This gain included $956 million related to the cancellation of certain pre-petition obligations in accordance with the terms of the Plan. Immediately prior to the Effective Date of the Plan, the Company had $3.1 billion of pre-petition obligations recorded as “Liabilities subject to compromise” that were addressed through the Company’s Plan. On the October 1, 2010 Chapter 11 emergence effective date, the Company became a new entity for financial reporting purposes and adopted fresh-start accounting. The Company recorded a gain of $106 million on the adoption of fresh-start accounting, including the amounts associated with the Company's discontinued operations, which requires, among other things, that all assets and liabilities be recorded at fair value. Therefore, the consolidated financial statements subsequent to the Effective Date will not be comparable to the consolidated financial statements prior to the Effective Date. Accordingly, the financial results for the three-month period ended December 31, 2010 and for the nine-month period ended October 1, 2010 are presented separately herein and are labeled and referred to as “Successor” and “Predecessor”, respectively.

77