EX-99.1 2 ex991.htm EXHIBIT 99.1 EX 99.1


Exhibit 99.1

VISTEON CORPORATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

On August 12, 2013, VIHI, LLC, a wholly owned subsidiary of Visteon Corporation (together with VIHI, "Visteon"), Huayu Automotive Systems Company Limited ("HASCO"), Yanfeng Visteon Automotive Trim Systems Co., Ltd. ("YFV") and Yanfeng Visteon Automotive Electronics Co., Ltd. ("YFVE") entered into a Master Agreement (the "Master Agreement"), pursuant to which, among other things, Visteon and HASCO agreed to modify their existing ownership interests in their automobile interiors and electronics joint ventures in the People's Republic of China, including YFV and YFVE.

Pursuant to the Master Agreement, among other transactions, Visteon agreed to sell its 50% ownership interest in YFV to HASCO for pre-tax proceeds of $928 million and to sell its ownership interests in other YFV-related interiors joint ventures to YFV for additional pre-tax proceeds of approximately $96 million. Visteon also agreed to make a cash contribution of $58 million into YFVE in exchange for an additional 11% ownership interest therein, resulting in a 51% controlling ownership interest in YFVE. Pursuant to the Master Agreement, YFVE will sell its ownership interests in certain of its subsidiaries to a new holding company that will be owned 50% by Visteon and 50% by YFV. Visteon and YFV have each agreed to contribute approximately $48 million into the holding company, and may make and/or guarantee loans or additional contributions to the holding company to enable it to purchase these equity interests.

Visteon will receive distributions approximating $115 million in respect of the 2012 earnings of YFV, YFVE and certain other YFV-related entities. In addition, YFV has agreed to distribute $69 million to Visteon in respect of YFV's 2013 earnings. Pursuant to the Master Agreement, Visteon is also entitled to an additional $14 million distribution on each of June 30, 2014 and June 30, 2015 in respect of the earnings of a YFV-related interiors joint venture whose equity interests Visteon has agreed to transfer to YFV.
 
On December 17, 2013, Visteon completed the sale of its 50% ownership interest in YFV to HASCO and received net after-tax cash proceeds of $842 million. Dividends of $69 million in respect of YFV's 2013 earnings are expected to be received by December 31, 2013.

Unaudited Pro Forma Financial Information

The unaudited pro forma financial information contained herein includes consolidated statements of operations of Visteon for the twelve months ended December 31, 2012 and for the nine months ended September 30, 2013 and a consolidated balance sheet as of September 30, 2013. The unaudited pro forma consolidated statements of operations illustrate the results of operations as if the sale of the Company's 50% ownership interest in YFV had occurred on January 1, 2012. The following unaudited pro forma consolidated balance sheet illustrates the financial position as of September 30, 2013 as if the sale of the Company's 50% ownership interest in YFV had occurred on September 30, 2013.

Pro forma adjustments are described in the accompanying notes to the unaudited pro forma financial information and are based upon information available at the time of preparation and reflect certain assumptions that the Company believes are reasonable under the circumstances. Accordingly, the pro forma adjustments reflected in the unaudited pro forma financial information are preliminary and subject to revision and the actual amounts ultimately reported could differ from these estimates. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the operating results or financial position that would be achieved had the Company's sale of its 50% equity ownership interest in YFV been consummated on the dates indicated and should not be construed as being representative of the Company's future results of operations or financial position.

The unaudited pro forma financial information contained herein should be read in conjunction with the financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations included in the Company's Annual Report on Form 10-K for the year ended December 31, 2012, Current Report on Form 8-K dated August 16, 2013, and Quarterly Report on Form 10-Q for the nine months ended September 30, 2013.







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VISTEON CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share amounts)

 
Nine Months Ended September 30, 2013
 
As Reported
 
Adjustments
 
Notes
 
Pro Forma
Sales
$
5,481

 
$
—

 
 
 
$
5,481

Cost of sales
4,999

 
—

 
 
 
4,999

Gross margin
482

 
—

 
 
 
482

Selling, general and administrative expenses
264

 
—

 
 
 
264

Equity in net income of non-consolidated affiliates
134

 
(100
)
 
(a)
 
34

Restructuring expense
33

 
—

 
 
 
33

Interest expense
36

 
—

 
 
 
36

Interest income
(8
)
 
—

 
 
 
(8
)
Other expense (income), net
20

 
—

 
 
 
20

Income before income taxes
271

 
(100
)
 
 
 
171

Provision for income taxes
41

 
(10
)
 
(b)
 
31

Net income
230

 
(90
)
 
 
 
140

Net income attributable to non-controlling interests
53

 
—

 
 
 
53

Net income attributable to Visteon Corporation
$
177

 
$
(90
)
 
 
 
$
87

 
 
 
 
 
 
 
 
Basic and diluted per share data:
 
 
 
 
 
 
 
Basic earnings per share attributable to Visteon Corporation
3.51

 
(1.79
)
 
 
 
1.72

Diluted earnings per share attributable to Visteon Corporation
3.44

 
(1.75
)
 
 
 
1.69


See accompanying notes to the unaudited pro forma consolidated financial statements.



























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VISTEON CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in millions, except per share amounts)

 
Year Ended December 31, 2012
 
As Reported
 
Adjustments
 
Notes
 
Pro Forma
Sales
$
6,857

 
$
—

 
 
 
$
6,857

Cost of sales
6,268

 
—

 
 
 
6,268

Gross margin
589

 
—

 
 
 
589

Selling, general and administrative expenses
369

 
—

 
 
 
369

Equity in net income of non-consolidated affiliates
226

 
(181
)
 
(a)
 
45

Restructuring expense
79

 
—

 
 
 
79

Interest expense
49

 
—

 
 
 
49

Interest income
(14
)
 
—

 
 
 
(14
)
Other expense (income), net
41

 
(536
)
 
(c)
 
(495
)
Income before income taxes
291

 
355

 
 
 
646

Provision for income taxes
121

 
36

 
(b)
 
157

Net income from continuing operations
170

 
319

 
 
 
489

Loss from discontinued operations, net of tax
(3
)
 
—

 
 
 
(3
)
Net income
167

 
319

 
 
 
486

Net income attributable to non-controlling interests
67

 
—

 
 
 
67

Net income attributable to Visteon Corporation
$
100

 
$
319

 
 
 
$
419

 
 
 
 
 
 
 
 
Basic and diluted per share data:
 
 
 
 
 
 
 
Basic earnings per share attributable to Visteon Corporation
1.89

 
6.03

 
 
 
7.92

Diluted earnings per share attributable to Visteon Corporation
1.88

 
5.98

 
 
 
7.86


See accompanying notes to the unaudited pro forma consolidated financial statements.




















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VISTEON CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
(Dollars in millions)
 
September 30, 2013
 
As Reported
 
Adjustments
 
Notes
 
Pro Forma
ASSETS
 
 
 
 
 
 
 
Cash and equivalents
$
837

 
$
842

 
(d)
 
$
1,679

Restricted cash
25

 
—

 
 
 
25

Accounts receivable, net
1,139

 
—

 
 
 
1,139

Inventories
454

 
—

 
 
 
454

Other current assets
269

 
—

 
 
 
269

Total current assets
2,724

 
842

 
 
 
3,566

 
 
 
 
 
 
 

Property and equipment, net
1,307

 
—

 
 
 
1,307

Equity in net assets of non-consolidated affiliates
837

 
(639
)
 
(e)
 
198

Intangible assets, net
300

 
—

 
 
 
300

Other non-current assets
136

 
—

 
 
 
136

Total assets
$
5,304

 
$
203

 
 
 
$
5,507

 
 
 
 
 
 
 

LIABILITIES AND EQUITY
 
 
 
 
 
 
 
Short-term debt, including current portion of long-term debt
$
130

 
$
—

 
 
 
$
130

Accounts payable
1,056

 
—

 
 
 
1,056

Accrued employee liabilities
193

 
—

 
 
 
193

Other current liabilities
254

 
—

 
 
 
254

Total current liabilities
1,633

 
—

 
 
 
1,633

 
 
 
 
 
 
 
 
Long-term debt
677

 
—

 
 
 
677

Employee benefits
571

 
—

 
 
 
571

Deferred tax liabilities
177

 
—

 
 
 
177

Other non-current liabilities
161

 
(52
)
 
(f)
 
109

 
 
 
 
 
 
 
 
Stockholders' equity:
 
 
 
 
 
 
 
Preferred stock (par value $0.01, 50 million shares authorized, non outstanding at September 30, 2013)
—

 
—

 
 
 
—

Common stock (par value $0.01, 250 million shares authorized, 54 million shares issued, 49 million shares outstanding at September 30, 2013)
1

 
—

 
 
 
1

    Stock warrants
6

 
—

 
 
 
6

    Additional paid-in capital
1,265

 
—

 
 
 
1,265

    Retained earnings
443

 
286

 
(g)
 
729

    Accumulated other comprehensive loss
(106
)
 
(31
)
 
(h)
 
(137
)
    Treasury stock
(296
)
 
—

 
 
 
(296
)
Total Visteon Corporation stockholders' equity
1,313

 
255

 
 
 
1,568

Non-controlling interests
772

 
—

 
 
 
772

Total equity
2,085

 
255

 
 
 
2,340

Total liabilities and equity
$
5,304

 
$
203

 
 
 
$
5,507


See accompanying notes to the unaudited pro forma consolidated financial statements.

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VISTEON CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Overview of Proforma Financial Statements

The unaudited pro forma consolidated statements of operations illustrate the results of operations as if the sale of the Company's 50% ownership interest in YFV had occurred on January 1, 2012. The unaudited pro forma consolidated balance sheet illustrates the financial position as of September 30, 2013 as if the sale of the Company's 50% ownership interest in YFV had occurred on September 30, 2013. The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the operating results or financial position that would be achieved had the Company's sale of its 50% equity ownership interest in YFV been consummated on the dates indicated and should not be construed as being representative of the Company's future results of operations or financial position.

Proforma Adjustments

Pro forma adjustments are based upon information available at the time of preparation and reflect certain assumptions that the Company believes are reasonable under the circumstances. Accordingly, the pro forma adjustments are preliminary and subject to revision and the actual amounts ultimately reported could differ from these estimates. The following pro forma adjustments were made to reflect the sale of the Company's 50% equity ownership interest in YFV:
(a)
Adjustment reflects the exclusion of equity earnings from YFV for the periods presented.
 
 
 
 
(b)
Provision for income taxes were adjusted as follows:
 
 
Twelve Months
 
Nine Months
 
 
Ended
 
Ended
 
 
December 31, 2012
 
September 30, 2013
 
 
 
 
 
 
Eliminate dividend withholding tax on excluded equity earnings of YFV
$
(18
)
 
$
(10
)
 
Capital gain tax on proceeds from sale of 50% ownership interest in YFV
86

 
—

 
Eliminate accrued taxes on undistributed equity earnings of YFV
(32
)
 
—

 
     Total
$
36

 
$
(10
)
 
 
 
 
(c)
Adjustment reflects the estimated gain on sale of the Company's 50% ownership interest in YFV.
 
 
 
 
Twelve Months
 
 
 
 
Ended
 
 
 
 
December 31, 2012
 
 
 
 
 
 
  Cash proceeds received from the sale of the Company's 50% ownership interest in YFV
 
$
928

 
  Net book value of the Company's investment in YFV at 1/1/2012
 
(408
)
 
  Reclassification of foreign currency translation adjustments attributable to YFV
 
16

 
     Total estimated pre-tax gain
 
$
536

 
 
 
 
 
(d)
Adjustment reflects $928 million of cash proceeds received from the sale of the Company's 50% ownership interest in YFV, net of estimated capital gain tax withheld of $86 million.
 
 
 
 
(e)
Adjustment reflects the elimination of the $639 million carrying value of the Company's investment in the net assets of YFV at September 30, 2013.
 
 
 
 
(f)
Adjustment reflects changes in non-current deferred tax liabilities associated with the sale of the Company's 50% equity ownership interest in YFV.
 
 
 
 
(g)
Adjustment reflects the net impact of the Company's sale of its 50% equity ownership interest in YFV.
 
 
 
 
(h)
Adjustment reflects the reclassification of foreign currency translation adjustments attributable to the Company's investment in YFV.



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